10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

	(Mark One)
☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended March 31, 2016.
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Commission File Number: 001-34930

EXAMWORKS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	27-2909425
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

3280 PEACHTREE ROAD, N.E., SUITE 2625

ATLANTA, GEORGIA 30305

(Address of principal executive offices)

Telephone Number (404) 952-2400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes☒ No☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes☐ No☒

As of May 6, 2016, ExamWorks Group, Inc. had 41,654,000 shares of Common Stock outstanding.

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

March 31, 2016

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

		Page
PART I – Financial Information
Item 1.	Financial Statements	1
	Consolidated Balance Sheets as of December 31, 2015 and March 31, 2016 (Unaudited)	1
	Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2015 and 2016 (Unaudited)	2
	Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2016 (Unaudited)	3
	Notes to Consolidated Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	42
PART II – Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		45

 i

PART 1. FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

	December 31,			March 31,
	2015			2016
Assets
Current assets:
Cash and cash equivalents	$	47,865		$	15,999
Accounts receivable, net		245,449			249,062
Prepaid expenses		16,809			19,914
Other current assets		1,958			1,078
Total current assets		312,081			286,053
Property, equipment and leasehold improvements, net		20,145			22,264
Goodwill		508,297			581,379
Intangible assets, net		84,673			109,409
Long-term accounts receivable, less current portion		62,717			67,495
Deferred tax assets		50,405			40,596
Deferred financing costs, net		2,520			2,386
Other assets		3,969			4,178
Total assets	$	1,044,807		$	1,113,760
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	60,599		$	65,948
Accrued expenses		60,748			55,261
Accrued interest expense		6,245			13,414
Deferred revenue		3,684			3,498
Current portion of contingent earnout obligation		—			2,556
Other current liabilities		9,056			7,282
Total current liabilities		140,332			147,959
Notes payable		493,126			493,359
Senior secured revolving credit facility and working capital facilities		35,243			82,578
Long-term contingent earnout obligation, less current portion		—			5,079
Deferred tax liabilities		3,333			3,250
Other long-term liabilities		12,738			14,225
Total liabilities		684,772			746,450
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; Authorized 50,000 shares; no shares issued and outstanding at December 31, 2015 and March 31, 2016		—			—
Common stock, $0.0001 par value; Authorized 250,000 shares; issued 42,983 and 43,222 shares at December 31, 2015 and March 31, 2016, respectively		4			4
Additional paid-in capital		446,409			457,193
Accumulated other comprehensive loss		(26,003	)		(24,766	)
Accumulated deficit		(30,619	)		(27,359	)
Treasury stock, at cost; Outstanding 1,705 and 2,015 shares at
December 31, 2015 and March 31, 2016, respectively		(29,756	)		(37,762	)
Total stockholders’ equity		360,035			367,310
Total liabilities and stockholders' equity	$	1,044,807		$	1,113,760

The accompanying notes are an integral part of these consolidated financial statements.

1

 EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(In thousands, except per share amounts)

(Unaudited)

	For the three months ended March 31,
	2015			2016
Revenues	$	196,316		$	226,503
Costs and expenses:
Costs of revenues		128,176			149,126
Selling, general and administrative expenses		42,152			47,339
Depreciation and amortization		14,848			16,636
Total costs and expenses		185,176			213,101
Income from operations		11,140			13,402
Interest and other expenses, net:
Interest expense, net		8,004			8,399
Total interest and other expenses, net		8,004			8,399
Income before income taxes		3,136			5,003
Provision for income taxes		1,112			1,743
Net income	$	2,024		$	3,260
Comprehensive Income (Loss):
Net income	$	2,024		$	3,260
Foreign currency translation adjustments, net of tax		(5,877	)		1,237
Total comprehensive income (loss)	$	(3,853	)	$	4,497
Per share data:
Net income per share:
Basic	$	0.05		$	0.08
Diluted	$	0.05		$	0.08
Weighted average number of common shares outstanding:
Basic		40,418			40,805
Diluted		42,680			42,362

The accompanying notes are an integral part of these consolidated financial statements.

2

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited) 

	For the three months ended March 31,
	2015			2016
Operating activities:
Net income	$	2,024		$	3,260
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,848			16,636
Amortization of deferred rent		138			99
Share-based compensation		6,136			5,419
Excess tax benefit related to share-based compensation		(2,086	)		(4,766	)
Provision for doubtful accounts		1,918			2,116
Amortization of deferred financing costs		587			381
Deferred income taxes		(1,759	)		348
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(14,763	)		(7,562	)
Prepaid expenses and other current assets		1,010			(2,184	)
Accounts payable and accrued expenses		4,668			(2,729	)
Accrued interest expense		(5,640	)		7,169
Deferred revenue and customer deposits		(133	)		(108	)
Other liabilities		(784	)		(2,313	)
Net cash provided by operating activities		6,164			15,766
Investing activities:
Cash paid for acquisitions, net		(2,299	)		(92,348	)
Purchases of building, equipment and leasehold improvements, net		(2,229	)		(2,737	)
Working capital and other settlements for acquisitions		(91	)		(271	)
Proceeds from foreign currency net investment hedges		4,812			1,649
Other		(1,250	)		(150	)
Net cash used in investing activities		(1,057	)		(93,857	)
Financing activities:
Borrowings under senior secured revolving credit facility		25,478			75,000
Excess tax benefit related to share-based compensation		2,086			4,766
Proceeds from the exercise of options and warrants		8,855			582
Repayment of contingent earnout obligation		(1,023	)		—
Net repayments under working capital facilities		(132	)		(1,623	)
Purchases of stock for treasury		—			(8,006	)
Repayments under senior secured revolving credit facility		(29,331	)		(25,000	)
Net cash provided by financing activities		5,933			45,719
Exchange rate impact on cash and cash equivalents		(509	)		506
Net increase (decrease) in cash and cash equivalents		10,531			(31,866	)
Cash and cash equivalents, beginning of period		9,751			47,865
Cash and cash equivalents, end of period	$	20,282		$	15,999
Supplemental disclosures of cash flow information:
Cash paid for interest	$	12,979		$	825
Cash paid for income taxes	$	2,703		$	4,457

The accompanying notes are an integral part of these consolidated financial statements.

3

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1)               Nature of Operations and Basis of Presentation

ExamWorks Group, Inc. (“ExamWorks” or the “Company”) is a leading provider of independent medical examinations (“IMEs”), peer and bill reviews, Medicare compliance services, case management services and other related services, which include litigation support services, administrative support services, medical record retrieval services and document management services (“IME services” or the “IME industry”). ExamWorks, Inc. was incorporated as a Delaware corporation on April 27, 2007. Since 2008 through the date of this filing, ExamWorks completed 57 acquisitions. As of March 31, 2016, ExamWorks, Inc. operated out of 71 service centers serving all 50 United States, Canada, the United Kingdom and Australia.

The consolidated financial statements of the Company as of March 31, 2016 and for the periods ended March 31, 2015 and 2016 included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and have not been audited by its independent registered public accounting firm. In the opinion of management, all adjustments of a normal and recurring nature necessary to present fairly the financial position and results of operations and cash flows for all periods presented have been made. Pursuant to SEC rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted from these statements unless significant changes have taken place since the end of the Company's most recent fiscal year. The Company's December 31, 2015 Consolidated Balance Sheet was derived from audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, (the “Form 10-K”), but does not include all disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Form 10-K. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The consolidated financial statements include the accounts of ExamWorks and its 100% owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

(2)               Summary of Significant Accounting Policies

(a)               Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on certain assumptions which they believe are reasonable in the circumstances and actual results could differ from those estimates. The more significant estimates reflected in these consolidated financial statements include purchase price allocations, useful lives of intangible assets, potential impairment of goodwill and intangible assets, the allowance for doubtful accounts, the portion of accounts receivable deemed to be long term in nature, the valuation of deferred tax assets, the valuation of equity and share-based compensation and derivative instruments.

(b)              Foreign Currencies

Assets and liabilities recorded in foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (loss) and are reported net of the effect of income taxes on the consolidated financial statements (See Note 2 (p)).

(c)              Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015 and March 31, 2016.

(d)              Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts owed to the Company for services provided in the normal course of business and are reported net of allowance for doubtful accounts, which amounted to $12.2 million and $12.5 million as of December 31, 2015 and March 31, 2016, respectively. Generally, no collateral is received from customers and additions to the allowance are based on ongoing credit evaluations of customers with general credit experience being within the range of management’s expectations. Accounts are reviewed regularly for collectability and those deemed uncollectible are written off.  The Company assumes, that on average, all accounts receivable will be collected within one year and thus classifies these as current assets; however there are certain receivables, principally in the U.K., that have aged longer than one year as of December 31, 2015 and March 31, 2016, and the Company has recorded an estimate for those receivables that will not be collected within one year as long-term in the consolidated balance sheets.

4

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(e)              Concentrations of Credit Risk

The Company routinely assesses the financial strength of its customers and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. For the three months ended March 31, 2015 and 2016, no individual customer accounted for more than 10% of revenues. At December 31, 2015 and March 31, 2016, there was an individual customer that accounted for approximately 14% and 13%, respectively, of the accounts receivable balance.

As of March 31, 2016, the Company had cash and cash equivalents totaling approximately $16.0 million. These amounts were held for future acquisition and working capital purposes and were held in non-interest bearing accounts, of which $1.6 million was held in the U.S. The U.S. amounts were insured under standard FDIC insurance coverage for deposit accounts up to $250,000, per depositor and account ownership category, at each separately insured depository institution.

 (f)              Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets and accelerated methods for income tax purposes. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining lease term. Maintenance and repair costs are expensed as incurred.

(g)              Long-Lived Assets

In accordance with Impairment or Disposal of Long-Lived Assets, Subsections of Financial Accounting Standards Board (“FASB”) ASC Subtopic 360-10 (“ASC 360”),  Property, Plant, and Equipment — Overall, long-lived assets, such as equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models (using market participant assumptions), quoted market values and third-party independent appraisals, as considered necessary. At December 31, 2015 and March 31, 2016, no impairment was noted.

 (h)               Goodwill and Other Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually in accordance with the provisions of FASB ASC Topic 350, Intangibles — Goodwill and Other (“ASC 350”). The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting units are compared with their carrying values (including goodwill). If the fair value of a reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis (using market participant assumptions). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

The Company performed its annual impairment review of goodwill in October of 2015, and it was determined that the carrying amount of goodwill was not impaired, as the fair value of the reporting units substantially exceeded their carrying values and there have been no subsequent developments that would indicate impairment existed as of March 31, 2016. The goodwill impairment review will continue to be performed annually or more frequently if facts and circumstances warrant a review.

ASC 350 also requires that intangible assets with definite lives be amortized over their estimated useful lives. Currently, customer relationships, trade names, covenants not-to-compete and technology are amortized using the straight-line method over estimated useful lives.

(i)              Deferred Financing Costs

In November 2010, the Company entered into a senior secured revolving credit facility with Bank of America N.A. (“Senior Secured Revolving Credit Facility”) (see Note 10). The Company has incurred deferred financing costs of $8.5 million associated with the Senior Secured Revolving Credit Facility and related amendments and restatements, none of which were incurred in the three months ended March 31, 2015 and 2016. In the second quarter of 2015, the Company amended and restated the Senior Secured Revolving Credit Facility in connection with the offering of the Notes as defined in Note 10, pursuant to an amended and restated credit agreement (the “Amended and Restated Credit Facility”), which resulted in a loss on extinguishment of debt of approximately $274,000 for the write-off of unamortized deferred financing costs in accordance with ASC Topic 470, Debt (“ASC 470”).

5

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The deferred financing costs associated with the Senior Secured Revolving Credit Facility are being amortized to interest expense over the five-year term of the facility, using the straight-line method, which approximates the effective interest method.

The Company amortized $361,000 and $148,000 for the three months ended March 31, 2015 and 2016, respectively, to interest expense.

(j)                 Revenue Recognition

Revenue related to IMEs, peer reviews, bill reviews, administrative support services and Medicare compliance services is recognized at the time services have been performed and the report is shipped to the end user. The Company believes that recognizing revenue at the time the report is shipped is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25,  Revenue Recognition: Overall,  (i) persuasive evidence that arrangement exists, (ii) shipment has occurred, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured. The Company reports revenues net of any sales, use and value added taxes.

Revenue related to other IME services, including litigation support services, medical record retrieval services, document management services and case management services, where no report is generated, is recognized at the time the service is performed. The Company believes that recognizing revenue at the time the service is performed is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25, (i) persuasive evidence that arrangement exists, (ii) services have been rendered, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim.  The Company has deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and is deferring these revenues, net of estimated costs, until the case has been settled, the contingency has been resolved and the cash has been collected.   As of December 31, 2015 and March 31, 2016, the Company had $2.7 million and $2.5 million, respectively, in U.K. net deferred revenues associated with such agreements.

Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any subsequent reporting period could be adversely affected.

(k)              Costs of Revenues

Costs of revenues are comprised of fees paid to members of the Company’s medical panel; other direct costs including transcription, film and medical record obtainment and transportation; and other indirect costs including labor and overhead related to the generation of revenues.

 (l)                Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, (included in FASB ASC Subtopic 740-10, Income Taxes — Overall ), and recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(m)             Income (Loss) Per Common Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Diluted income (loss) per common share is calculated by dividing net income (loss), adjusted on an “as if converted” basis, by the weighted-average number of actual shares outstanding and, when dilutive, the share equivalents that would arise from the assumed conversion of convertible instruments. The effect of potentially dilutive stock options, warrants, shares of restricted stock with service restrictions that have not yet been satisfied and unvested restricted stock units (“RSUs”) is calculated using the treasury stock method.

6

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table sets forth basic and diluted net income per share computational data for the three months ended March 31, 2015 and 2016 (amounts in thousands):

	Three months ended March 31,
	2015		2016
Net income	$	2,024	$	3,260
Basic shares outstanding:
Common stock		40,418		40,805
Diluted shares outstanding:
Common stock		40,418		40,805
Dilutive securities (1)		2,262		1,557
Total		42,680		42,362

(1) For the three months ended March 31, 2015 and 2016, the Company's dilutive securities excluded options potentially exercisable in the future into 32,000 shares and 86,000 shares, respectively, because their inclusion would have been anti-dilutive.

(n)                Share-Based Compensation

The Company has an Amended and Restated 2008 Stock Incentive Plan, as amended, (the “Plan”) that provides for granting of stock options, restricted stock, RSUs and other equity awards. The Company accounts for share-based awards in accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”). ASC 718 requires measurement of compensation cost for all share-based awards at fair value on the grant date (or measurement date if different) and recognition of compensation expense, net of forfeitures, over the requisite service period for awards expected to vest.

Stock Options

The fair value of stock option grants is determined using the Black-Scholes valuation model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options. Additionally, option valuation models require the input of highly subjective assumptions, including the expected volatility of the stock price. Because the Company’s stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimates, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of its share-based awards.

 The Company’s expected volatility assumptions are based upon the weighted average of the Company’s implied volatility, the Company’s mean reversion volatility and the median of the Company’s peer group’s most recent historical volatilities for 2015 stock option grants. Expected life assumptions are based upon the “simplified” method as for those options issued in 2015, which were determined to be issued approximately at-the-money. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

In the three months ended March 31, 2016, the Company issued no stock option awards to employees. Share-based compensation expense related to stock option awards was $1.9 million and $1.2 million for the three months ended March 31, 2015 and 2016, respectively, of which $469,000 and $307,000, respectively, was included in costs of revenues, and $1.4 million and $921,000, respectively, was recorded in selling, general and administrative (“SGA”) expenses.

At March 31, 2016, the unrecognized compensation expense related to stock option awards was $3.4 million, with a remaining weighted average life of 1.2 years.

7

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

A summary of option activity for the three months ended March 31, 2016 is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2015		3,766,868		$	13.28
Options granted		—			—
Options forfeited		(46,346	)		33.13
Options exercised		(74,121	)		9.99
Outstanding at March 31, 2016		3,646,401		$	13.10
Exercisable at March 31, 2016		3,377,368		$	11.51		5.1	$	61,718

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The total intrinsic value of stock options exercised was approximately $860,000 during the three months ended March 31, 2016.

Restricted Stock and Restricted Stock Units

The Company has granted members of the Board of Directors, certain employees and outside consultants, time lapse restricted stock and RSUs which vest after a stipulated number of years from the grant date depending on the terms of the issue. The fair value of shares of restricted stock and RSUs is determined based upon the market price of the underlying common stock as of the date of grant. Time lapse restricted shares issued and RSUs vest over one to five-year periods. The agreements under which the restricted stock and RSUs are issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have been satisfied. The restriction on a majority of these awards could expire earlier than the stipulated time frame in the event of a change in control or merger or other acquisition. Share-based compensation expense related to shares of restricted stock and RSUs was $4.1 million and $4.2 million for the three months ended March 31, 2015 and 2016, respectively, all of which is included in SGA expenses.

The following is a summary of restricted share and RSU activity for the three months ended March 31, 2016:

	Number of awards			Weighted average grant date fair value
Non-vested awards at December 31, 2015		1,315,522		$	34.30
Awards granted		685,280			27.68
Awards vested		(238,094	)		24.28
Awards forfeited		(130,237	)		35.96
Non-vested awards at March 31, 2016		1,632,471		$	32.85

The total fair value of vested RSUs and shares of restricted stock during the three months ended March 31, 2015 and 2016 was $3.2 million and $5.8 million, respectively. At March 31, 2016, total unrecognized compensation costs related to non-vested restricted shares and RSUs was $41.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

During the three months ended March 31, 2015 the Company recorded share-based compensation expense of $130,000 related to an annual incentive compensation plan established by the Compensation Committee of the Board of Directors, all of which was recorded in SGA expenses. No such share-based compensation expense was recorded for the three months ended March 31, 2016, as all amounts paid under the incentive compensation plan for the year ended December 31, 2016 will be settled in cash.

8

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(o)              Fair Value Measurements 

The Company’s financial assets and (liabilities), which are measured at fair value on a recurring basis, are categorized using the fair value hierarchy at December 31, 2015 and March 31, 2016, and are as follows (in thousands):

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

The contingent consideration relates to earnout provisions recorded in conjunction with a 2016 acquisition (see Note 3). The fair value of the foreign currency derivative was determined using observable market inputs such as foreign currency exchange rates and considers nonperformance risk of the Company and that of its counterparties. 

(p)              Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are recorded as a component of stockholders’ equity but are excluded from net income (loss). The Company’s accumulated other comprehensive income (loss) consists of foreign currency translation adjustments, reported net of tax as appropriate, from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses, reported net of tax as appropriate, resulting from its net investment hedge of its Australian and U.K. subsidiaries.

Accumulated other comprehensive income (loss) consists of the following (in thousands): 

	Foreign Currency Translation			Net investment hedge - foreign exchange contract			Total
Balance at December 31, 2015	$	(33,716	)	$	7,713		$	(26,003	)
Change during 2016:
Before-tax amount		818			(107	)		711
Tax (expense) benefit		484			42			526
Total activity in 2016		1,302			(65	)		1,237
Balance at March 31, 2016	$	(32,414	)	$	7,648		$	(24,766	)

(q)               Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-05”), which define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Currently, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. This going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. This ASU provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and the related footnote disclosures. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early adoption permitted. The Company has adopted the provisions during the year ending December 31, 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about its ability to continue as a going concern. Adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. Additionally, in August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”) which amends ASU 2015-03, which did not address the balance sheet presentation of debt issuance costs incurred in connection with line-of-credit arrangements. Under ASU 2015-15, a Company may defer debt issuance costs associated with line-of-credit arrangements and present such costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. The amendments in these updates were effective for fiscal periods beginning on or after December 15, 2015, and interim periods within those fiscal years, were applied retrospectively and represent a change in accounting principle.

The Company adopted the provisions of these amendments in January of 2016. As a result, approximately $6.9 million and $6.6 million of debt issuance costs related to the Company’s $500.0 million 5.625% Senior Unsecured Notes Payable due April 2023 (the "Notes") were reclassified from deferred financing costs to Notes payable in the accompanying consolidated balance sheets as of December 31, 2015 and March 31, 2016, respectively. The Company elected to continue presenting the deferred financing costs associated with its Senior Secured Revolving Credit Facility as deferred financing costs, net in the accompanying consolidated balance sheets.

In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”) which requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The amendments in this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company adopted the provisions of this ASU prospectively in the first quarter of 2016, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-16 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

9

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”), which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. Earlier adoption is permitted. This amendment may be applied either prospectively or retrospectively to all periods presented. The Company adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-17 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

Accounting Pronouncements Not Yet Adopted 

In May 2014, the FASB issued ASU No. 2014-09, (Topic 606): Revenue from Contracts with Customers (“ASU 2014-09”) which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2018 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” (“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2017 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update are effective for fiscal period beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

There were various other accounting standards and interpretations issued during 2015 and 2016 the Company has not yet been required to adopt, none of which are expected to have a material impact on its financial position, results of operations and cash flows.

10

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements 

(3)              Acquisitions

ExamWorks operates in a highly fragmented industry and has completed 57 acquisitions since July 14, 2008 through the date of this filing. A key component of ExamWorks’ acquisition strategy is growth through acquisitions that expand its geographic coverage, that provide new or complementary lines of business, expand its portfolio of services and that increase its market share.

The Company has accounted for all business combinations using the purchase method to record a new cost basis for the assets acquired and liabilities assumed. The Company recorded, based on a preliminary purchase price allocation, intangible assets representing client relationships, tradenames, covenants not to compete, technology and the excess of purchase price over the estimated fair value of the tangible assets acquired and liabilities assumed as goodwill in the accompanying consolidated balance sheets. The goodwill is attributable to synergies achieved through the streamlining of operations combined with improved margins attainable through increased market presence. The results of operations are reflected in the consolidated financial statements of the Company from the date of acquisition.

(a)             2015 Acquisitions

In 2015, the Company completed the following individually insignificant acquisitions, as defined in SEC Regulation S-X Rule 3-05, with an aggregate purchase price of $75.7 million, composed of $76.8 million cash consideration less cash acquired of $1.1 million. In conjunction with the 2015 acquisitions, the Company incurred aggregate transaction costs of $882,000, of which $35,000 was incurred in the three months ended March 31, 2015. The Company did not incur any costs associated with the indicated acquisitions in the first quarter of 2016. These amounts are reported in SGA expenses in the Company’s accompanying consolidated statements of comprehensive income (loss). These acquisitions enhanced and expanded the presence and service offerings of the Company. 

Company Name	Form of acquisition	Date of acquisition
ReliableRS (United States)	Substantially all of the assets and assumed certain liabilities	January 2, 2015
Landmark Exams & Maven Exams (United States)	Substantially all of the assets and assumed certain liabilities	April 14, 2015
Karen Rucas & Associates (Canada)	Substantially all of the assets and assumed certain liabilities	July 13, 2015
First Choice (United States)	Substantially all of the assets and assumed certain liabilities	October 30, 2015
Argent (United Kingdom)	Substantially all of the assets and assumed certain liabilities	November 23, 2015

The preliminary allocation of consideration for these acquisitions is summarized as follows (in thousands): 

	Preliminary purchase price allocation December 31, 2015			Adjustments/ reclassifications			Preliminary purchase price allocation March 31, 2016
Equipment and leasehold improvements	$	1,513		$	—		$	1,513
Customer relationships		28,530			—			28,530
Tradenames		1,965			—			1,965
Covenants not to compete		182			—			182
Goodwill		24,296			489			24,785
Net deferred tax liability associated with step-up in book basis		(18	)		—			(18	)
Assets acquired and liabilities assumed, net		18,931			(218	)		18,713
Totals	$	75,399		$	271		$	75,670

In 2016, the Company recorded adjustments to working capital resulting in an increase in total consideration paid of $271,000. Goodwill of $24.6 million and other intangible assets of $30.4 million are expected to be deductible for U.S. federal income tax purposes. The Company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize those fair values. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. The Company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

11

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(b)             2016 Acquisitions

In 2016, the Company completed the following individually insignificant acquisitions, as defined in SEC Regulation S-X Rule 3-05, with an aggregate purchase price of $99.6 million, composed of $92.0 million cash consideration and $7.6 million of contingent consideration. In conjunction with the 2016 acquisitions, the Company incurred aggregate transaction costs of $446,000, of which $82,000 were incurred in the three months ended March 31, 2016. The Company did not incur any costs associated with the acquisitions in the first quarter of 2015. These amounts are reported in SGA expenses in the Company’s accompanying consolidated statements of comprehensive income (loss). These acquisitions enhanced and expanded the presence and service offerings of the Company.

Company name	Form of acquisition	Date of acquisition
ABI (United States)	100% of the outstanding common stock	January 8, 2016
Advanced Medical Reviews (United States)	100% of the outstanding common stock	January 19, 2016

The preliminary allocation of consideration for these acquisitions is summarized as follows (in thousands): 

	Preliminary purchase price allocation March 31, 2016
Equipment and leasehold improvements	$	1,044
Customer relationships		32,201
Tradename		6,900
Goodwill		70,378
Net deferred tax liability associated with step-up in book basis		(15,104	)
Assets acquired and liabilities assumed, net		4,219
Total	$	99,638

None of the goodwill or other intangibles are currently expected to be deductible for U.S. federal income tax purposes. The Company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize those fair values. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. The Company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. The 2016 acquisitions contributed $13.0 million in revenues and $231,000 in operating losses for the three months ended March 31, 2016.

(c)               Pro forma Financial Information

The following unaudited pro forma results of operations for the three months ended March 31, 2015 and 2016 assumes that the 2015 acquisitions were completed on January 1, 2014 and the 2016 acquisitions were completed on January 1, 2015.

For the three months ended March 31, 2015 and 2016, the pro forma results include adjustments to reflect interest and other expenses of $2.3 million and $128,000, respectively, associated with the funding of the acquisitions assuming that acquisition related debt was incurred as referenced above. In addition, incremental depreciation and amortization expense was recorded as if the acquisitions had occurred on the dates referenced above and amounted to $5.1 million and $315,000 for the three months ended March 31, 2015 and 2016, respectively. Finally, adjustments of $948,000 and $1.2 million were made to reduce SGA expenses for the three months ended March 31, 2015 and 2016, respectively, principally related to certain salary and other personal expenses attributable to the previous owners and employees of the acquired businesses.  These adjustments represent contractual reductions and are considered to be non-recurring and are not expected to have a continuing impact on the operations of the Company.

	Three months ended March 31,
	2015		2016
	(In thousands, except per share data)
Pro forma revenues	$	224,914	$	228,389
Pro forma net income		139		3,812
Pro forma income per share: Basic	$	0.00	$	0.09
Pro forma income per share: Diluted	$	0.00	$	0.09

The pro forma financial information presented above is not necessarily indicative of either the results of operations that would have occurred had the acquisitions been effective as of January 1 of the respective years or of future operations of the Company.

12

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(4)              Property, Equipment and Leasehold Improvements 

Property, equipment and leasehold improvements at December 31, 2015 and March 31, 2016, consist of the following (in thousands):

	Estimated useful lives			December 31,		March 31,
	(years)			2015		2016
Building		15		$	3,669	$	3,701
Computer and office equipment		3			23,162		24,982
Furniture and fixtures	3	to	5		5,051		5,461
Leasehold improvements	Lease term				6,272		7,695
					38,154		41,839
Less accumulated depreciation and amortization					18,009		19,575
Totals				$	20,145	$	22,264

Depreciation expense was $1.7 million and $1.9 million for the three months ended March 31, 2015 and 2016, respectively.

(5)              Goodwill and Intangible Assets

Goodwill by segment at December 31, 2015 and March 31, 2016 consists of the following (in thousands) (1):

	United				United
	States		Canada		Kingdom			Australia		Total
Balance at December 31, 2015	$	412,502	$	15,364	$	49,428		$	31,003	$	508,297
Goodwill acquired during the year		70,378		—		—			—		70,378
Adjustments to prior year acquisitions		738		2		(251	)		—		489
Effect of foreign currency translation		—		1,435		(1,531	)		2,311		2,215
Balance at March 31, 2016	$	483,618	$	16,801	$	47,646		$	33,314	$	581,379

(1) Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

Intangible assets at December 31, 2015 and March 31, 2016, consist of the following (in thousands):

				December 31, 2015
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	263,293	$	(199,266	)	$	64,027
Tradenames	45	to	84		68,172		(52,354	)		15,818
Covenants not to compete		36			10,254		(6,047	)		4,207
Technology	24	to	40		9,014		(8,393	)		621
Totals				$	350,733	$	(266,060	)	$	84,673

13

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

				March 31, 2016
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	296,657	$	(212,493	)	$	84,164
Tradenames	45	to	84		75,323		(54,651	)		20,672
Covenants not to compete		36			10,729		(6,605	)		4,124
Technology	24	to	40		8,973		(8,524	)		449
Totals				$	391,682	$	(282,273	)	$	109,409

The aggregate intangible amortization expense was $13.1 million and $14.7 million for the three months ended March 31, 2015 and 2016, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	37,682
Years ended December 31:
2017		40,480
2018		21,131
2019		10,062
2020		54
Total	$	109,409

(6)              Accrued Expenses

Accrued expenses at December 31, 2015 and March 31, 2016 consist of the following (in thousands):

	December 31, 2015		March 31, 2016
Accrued compensation and benefits	$	13,266	$	12,020
Accrued selling and professional fees		5,457		5,143
Accrued income, value added and other taxes		30,774		28,827
Accrued medical panel fees		7,598		6,239
Other accrued expenses		3,653		3,032
Totals	$	60,748	$	55,261

(7)              Stockholders’ Equity

During the three months ended March 31, 2016, the Company issued approximately 74,000 shares of common stock to settle options exercised during the period.

During the three months ended March 31, 2016, the Company issued approximately 67,000 shares of restricted stock with a fair value of $1.7 million to certain officers and employees for services to be provided during the next three years. The Company is recording the expenses related to these awards in SGA expenses over the requisite service period.

During the three months ended March 31, 2016, the Company issued approximately 98,000 shares of common stock to settle restricted stock units whose restrictions were lifted during the period.

Repurchased shares of the Company’s common stock are held as treasury shares until they are reissued or retired. When the Company reissues treasury stock, if the value of the transaction is greater than the average price paid to acquire the shares, an increase in additional paid-in capital is recorded. Conversely, if the value of the transaction is less than the average price paid to acquire the shares, a decrease is recorded to additional paid-in capital to the extent of increases previously recorded for similar transactions, and a decrease is recorded in retained earnings for any remaining amount. During the three months ended March 31, 2016, the Company repurchased approximately 310,000 shares of common stock under the share repurchase program. These shares were repurchased at an average cost of $25.85 per share for a total cost of $8.0 million. As of March 31, 2016, the Company has approximately 2.0 million shares of common stock held as treasury shares with an average value of $18.74 per share, and the ability to repurchase an additional $35.9 million in shares of its common stock.

14

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(8)              Related Party Transactions 

The previous and existing revolving credit facilities contain a provision requiring the Company to use a third party to perform financial due diligence for acquisitions exceeding a certain size. With the approval of the senior lender, the Company engaged RedRidge Finance Group (“RedRidge”) to assist it with financial due diligence and incurred $118,000 and $176,000 in fees, respectively, pertaining to acquisition-related work performed during the three months ended March 31, 2015 and 2016, respectively. P&P Investment, LLC (“P&P”), a company owned by Richard Perlman and James Price, the Executive Chairman and Chief Executive Officer, respectively, of the Company, is a minority owner of RedRidge. P&P, Mr. Perlman and Mr. Price had historically waived any right P&P had to any portion of the diligence fees paid by the Company to RedRidge. This waiver terminated as of August 1, 2013.

(9)              Commitments and Contingencies

(a)              Lease Commitments

The Company and its subsidiaries lease office space and office related equipment under noncancelable operating leases with various expiration dates from 2016 through 2023.

Future minimum lease payments under the operating leases for the nine months ended December 31, 2016 and each of the years subsequent to December 31, 2016 are as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	11,780
Years ended December 31:
2017		14,162
2018		11,771
2019		8,185
2020		5,134
Thereafter		3,874
Total	$	54,906

Related rent expense was $4.2 million and $5.1 million for the three months ended March 31, 2015 and 2016, respectively.

(b)              Employee Benefit Plans

The Company and certain of its subsidiaries each sponsor separate voluntary defined contribution pension plans. The plans cover employees that meet specific age and length of service requirements. The Company and certain of its subsidiaries have various matching and vesting arrangements within their individual plans. For the three months ended March 31, 2015 and 2016, the Company recorded $370,000 and $238,000, respectively, in compensation expense related to these plans.

(10)            Long-Term Debt

Long-term debt at December 31, 2015 and March 31, 2016 consists of the following (in thousands):

	December 31,			March 31,
	2015			2016
Notes Payable (a)	$	500,000		$	500,000
Deferred financing costs related to Notes Payable (a)		(6,874	)		(6,641	)
Senior Secured Revolving Credit Facility, Bank of America, N.A. (b)		—			50,000
Working capital facilities, Barclays (c)		35,243			32,578
Totals	$	528,369		$	575,937

(a)      On April 16, 2015, the Company closed a public offering of the Notes. The Notes were issued at a price of 100% of their principal amount. The Notes are senior obligations of ExamWorks and are guaranteed by certain of ExamWorks’ existing and future U.S. subsidiaries. The gross proceeds of $500.0 million were used to repay all of the Company’s outstanding borrowings under the Senior Secured Revolving Credit Facility, to redeem all of the Company’s prior $250.0 million, 9.0% senior notes due 2019 the (“Senior Unsecured Notes”), to pay related fees and expenses, and for general corporate purposes, including acquisitions. The Company incurred deferred financing costs of $7.5 million related to this offering, none of which were incurred in the three months ended March 31, 2015 or 2016. These costs are amortized on a straight-line basis over the 8-year life of the Notes which approximates the effective interest method. Additionally, the Company amortized deferred financing costs of approximately $226,000 in the three months ended March 31, 2015 related to previous Senior Unsecured Notes which were extinguished in April 2015.

15

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The Notes were issued under an indenture, dated as of April 16, 2015, as supplemented by a supplemental indenture, dated April 16, 2015 (collectively, the “Indenture”), among the Company, the Guarantors and U.S. Bank, National Association, as trustee (the “Trustee”).  The Notes are the Company’s general senior unsecured obligations, and rank equally with the Company’s existing and future senior unsecured obligations and senior to all of the Company’s further subordinated indebtedness. The Notes accrue interest at a rate of 5.625% per year, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing October 15, 2015. Interest accrues from the date of issuance of the Notes.

At any time on or after April 15, 2018, the Company may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 105.625% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, provided that at least 60% of the original aggregate principal amount of the Notes remains outstanding after redemption. In addition, the Company may redeem some or all of the Notes at any time prior to April 15, 2018 at a redemption price equal to 100% of the principal amount of the Notes plus a make whole premium described in the Indenture, plus accrued and unpaid interest.

The Indenture includes covenants which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness, make certain types of restricted payments, incur liens on assets of the Company or the restricted subsidiaries, engage in asset sales and enter into transactions with affiliates. Upon a change of control (as defined in the Indenture), the Company may be required to make an offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest. The Indenture also contains customary events of default.

(b)      On November 2, 2010, the Company entered into the Senior Secured Revolving Credit Facility with Bank of America, N.A. The facility initially consisted of a $180.0 million revolving credit facility.

On May 6, 2011, the Company increased and fully exercised the accordion features of the Senior Secured Revolving Credit Facility.  The increase and exercise of the accordion feature increased the committed capacity of the credit facility by $55.0 million, from a total of $245.0 million to a total of $300.0 million.

On July 7, 2011, the Company entered into a second amendment to its Senior Secured Revolving Credit Facility (the “Second Amendment”) which became effective simultaneously with the consummation of the Company’s private offering of the Senior Unsecured Notes.  The Second Amendment amended the Senior Secured Revolving Credit Facility to, among other things, (i) extend the maturity date of the Senior Secured Revolving Credit Facility from November 2013 to July 2016; (ii) permit the issuance and sale of the Senior Unsecured Notes; (iii) replace the consolidated senior leverage ratio with a consolidated senior secured leverage ratio while permitting the maximum consolidated senior secured leverage ratio to be 3.00 to 1; (iv) permit the Company’s maximum consolidated leverage ratio to increase from 3.5 to 1 to 4.75 to 1; (v) reduce the borrowing cost; and (vi) allow the Company to complete acquisitions with a purchase price of up to $75.0 million (previously $50.0 million) without prior lender consent. The Second Amendment also reduced the aggregate revolving commitments under the Senior Secured Revolving Credit Facility by $37.5 million for a maximum commitment of $262.5 million, subject to the Company’s right to increase the aggregate revolving commitments by $37.5 million for a maximum commitment of $300.0 million, so long as the Company is not in default and the Company satisfies certain other customary conditions.

On February 27, 2012, the Company entered into a third amendment to its Senior Secured Revolving Credit Facility (the “Third Amendment”). The Third Amendment amended the Senior Secured Revolving Credit Facility as to the definitions of consolidated fixed charges and consolidated fixed charge coverage ratio and does not permit the consolidated fixed charge coverage ratio as of the end of any fiscal quarter to be less than (i) for any fiscal quarter ending during the period from December 31, 2011 to and including September 30, 2012, 1.75 to 1.00 and (ii) for any fiscal quarter ending thereafter, 2.00 to 1.00.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

On August 27, 2012, the Company entered into a fourth amendment to its Senior Secured Revolving Credit Facility (the “Fourth Amendment”). The Fourth Amendment amended the Senior Secured Revolving Credit Facility to add the Australian dollar as an alternative currency and increased the alternative currency sublimit from USD $60.0 million to USD $100.0 million.

On June 27, 2013, the Company entered into a fifth amendment to its Senior Secured Revolving Credit Facility (the “Fifth Amendment”). Among other changes, the Fifth Amendment modified the Credit Agreement to permit an implementation of an auto-borrow agreement between the swing line lender and the Company to facilitate cash management, incorporated new provisions related to swap regulations and updated various provisions related to the LIBOR rate, Foreign Account Tax Compliance Act and the International Financial Reporting Standards.

On February 3, 2014, the Company entered into a sixth amendment to its Senior Secured Revolving Credit Facility (the “Sixth Amendment”). The Sixth Amendment (i) allowed the Company to consummate the acquisition of Gould & Lamb, and (ii) allows the Company to acquire a target (a) with negative trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) if the purchase price of such acquisition is less than $5.0 million, (b) with trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) of less than or equal to $3.0 million without delivering to the lenders a quality of earnings report regarding such target and (c) without delivering pro forma projections of the Company to the lenders if the purchase price of such acquisition is less than $75.0 million, in each case, without prior lender consent.

On April 16, 2015, the Company entered into the Amended and Restated Credit Facility. The Amended and Restated Credit Facility provides for up to $300.0 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). During the term of the Amended and Restated Credit Facility, the Company has the right, subject to compliance with the covenants specified in the Amended and Restated Credit Facility and the Notes, to increase the revolving extensions under the Amended and Restated Credit Facility to a maximum of $400.0 million. The term of the Amended and Restated Credit Facility was extended for five years from the date of the amendment to April 2020. 

Borrowings under the Amended and Restated Credit Facility, as amended, bear interest, at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5%, (b) the Bank of America prime rate and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin, as the Company elects. The applicable margin means a percentage per annum determined in accordance with the following table:

Pricing Tier	Consolidated Leverage Ratio					Commitment Fee/Unused Line Fee	Letter of Credit Fee	Eurocurrency Rate Loans	Base Rate Loans
1	≥	4.00	to 1.0			0.45%	2.75%	2.75%	1.75%
2	≥	3.50	to 1.0 but <	4.00	to 1.0	0.40%	2.50%	2.50%	1.50%
3	≥	3.00	to 1.0 but <	3.50	to 1.0	0.35%	2.25%	2.25%	1.25%
4	≥	2.50	to 1.0 but <	3.00	to 1.0	0.30%	2.00%	2.00%	1.00%
5			<	2.50	to 1.0	0.30%	1.75%	1.75%	0.75%

In the event of default, the outstanding indebtedness under the facility will bear interest at an additional 2%.

The Amended and Restated Credit Facility contains restrictive covenants, including, among other things, financial covenants requiring the Company to not exceed a maximum consolidated senior secured leverage coverage ratio, a maximum total consolidated leverage ratio and to maintain a minimum consolidated fixed charge coverage ratio. The Amended and Restated Credit Facility also restricts the Company’s ability (subject to certain exceptions) to incur indebtedness, prepay or amend other indebtedness, create liens, make certain fundamental changes including mergers or dissolutions, pay dividends and make other payments in respect of capital stock, make certain investments, sell assets, change its lines of business, enter into transactions with affiliates and other corporate actions.

On June 1, 2015 the Company entered into a first amendment to the Amended and Restated Credit Facility (“First Amendment”). The First Amendment amended the definition of “Change of Control” in the Amended and Restated Credit Facility.

As of March 31, 2016, the Company had $50.0 million outstanding under the Amended and Restated Credit Facility, resulting in $250.0 million of undrawn commitments. 

(c)       On September 29, 2010, the Company’s indirect 100% owned subsidiary UK Independent Medical Services Limited (“UKIM”) entered into a Sales Finance Agreement (the “UKIM SFA”) with Barclays Bank PLC (“Barclays”), pursuant to which Barclays provides UKIM a working capital facility of up to £5,000,000, subject to the terms and conditions of the UKIM SFA. The working capital facility bore a discount margin of 2.5% over Base Rate and served to finance UKIM’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

On June 28, 2013, UKIM entered into an amendment to extend the term of the existing UKIM SFA by 24 months from June 28, 2013, to amend the discount margin to 2.4% over Base Rate and to provide that payments by UKIM for certain non-working capital purposes are permitted under the UKIM SFA. Further, on April 16, 2015, UKIM entered into an amendment to extend the term of the existing UKIM SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% rate on March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, UKIM had $6.0 million outstanding under the working capital facility, resulting in approximately $1.2 million in availability.

On May 12, 2011, the Company’s indirect 100% owned subsidiary Premex Group Limited (“Premex”) entered into a Sales Finance Agreement (the “Premex SFA”) with Barclays, pursuant to which Barclays provides Premex a working capital facility of up to £26,500,000, subject to the terms and conditions of the Premex SFA. The working capital facility bore a discount margin of 2.4% over Base Rate and served to finance Premex’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

On June 28, 2013, Premex entered into an amendment to extend the term of the existing Premex SFA by 24 months from June 28, 2013, and to provide that payments by Premex for certain non-working capital purposes are permitted under the Premex SFA. Further, on April 16, 2015, Premex entered into an amendment to extend the term of the existing Premex SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% at March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, Premex had $26.6 million outstanding under the working capital facility, resulting in approximately $11.5 million in availability.  

As of March 31, 2016, future maturities of long-term debt were as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	—
Years ended December 31:
2017		—
2018		32,578
2019		—
2020		50,000
Thereafter		500,000
Total	$	582,578

(11)             Financial Instruments

The FASB issued ASC Topic 815, Derivatives and Hedging (“ASC 815”) which establishes accounting and reporting standards for derivative instruments. ASC 815 requires an entity to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If the derivative does qualify as a hedge under ASC 815, changes in the fair value will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments or recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of a hedge’s change in fair value will be immediately recognized in earnings.

Beginning in the second quarter of 2013, in order to protect against foreign currency exposure in its Australian operations, the Company entered into forward foreign currency contracts as a hedge of AUD $60.0 million of its net investment in Australia. Beginning in the third quarter of 2013, the Company also entered into forward foreign currency contracts as a hedge of £40.0 million of its net investment in the U.K. During the fourth quarter of 2015, the Company entered into a foreign exchange agreement to hedge an additional £35.0 million related to its investment in the U.K. concurrent with funding of the acquisition of Argent.

As of December 31, 2015, the Company had a net liability of $367,000, with $1.2 million recorded in other current liabilities and $848,000 recorded in other current assets with the offsetting net unrealized loss being recorded in accumulated other comprehensive income (loss) in its consolidated balance sheets associated with open forward foreign currency contracts which matured in January of 2016. As of March 31, 2016, the Company had a net liability of $2.1 million recorded in other current liabilities with the offsetting net unrealized loss being recorded in accumulated other comprehensive income (loss) in its consolidated balance sheets associated with open forward foreign currency contracts which matured in April 2016.

18

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The Company does not enter into derivative transactions for speculative purposes.

(12)            Income Taxes

In preparing its consolidated financial statements, the Company estimates income taxes in each of the jurisdictions in which it operates. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These differences result in deferred income tax assets and liabilities.

Additionally, the Company currently has significant deferred tax assets and other deductible temporary differences including basis differences between intangible assets. The Company does not provide a valuation allowance against its deferred tax assets as the Company believes that it is more likely than not that all of the deferred tax assets will be realized based on available evidence including scheduled reversal of deferred tax liabilities, projected future taxable income and other tax planning considerations.

The Company applies the provisions of ASC 740 as it relates to uncertain tax positions. This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 states that a tax benefit from an uncertain tax position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The following table summarizes the activity related to the unrecognized tax benefits for the three months ended March 31, 2016, (in thousands):

Balance at January 1, 2016	$	1,924
Increase to prior year tax positions		95
Increase to current year tax positions		445
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at March 31, 2016	$	2,464

The Company is no longer subject to U.S. federal income and state tax return examinations by tax authorities for tax years before 2010 and 2009, respectively. The Company operates in multiple taxing jurisdictions and experiences audits from various tax authorities. The Company remains subject to possible examination until the statute of limitations expires for the respective tax jurisdiction. The Company does not anticipate that the amount of the unrecognized benefit will significantly increase or decrease within the next 12 months.

Undistributed earnings of the Company’s controlled foreign corporation subsidiaries are considered indefinitely reinvested and, accordingly, no provision for U.S. federal income taxes has been recorded. Deferred taxes are provided for earnings outside the United States when those earnings are not considered indefinitely reinvested.

(13)            Segment and Geographical Information

The Company applies the provisions of ASC Topic 280, Segment Reporting, (“ASC 280”). ASC 280, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker (“CODM”) and for which discrete financial information is available. Based on the provisions of ASC 280, the Company has determined that it operates in four geographic segments: the United States, Canada, the United Kingdom and Australia. The CODM evaluates segment performance based on revenues and segment profit, as defined below. The Company’s corporate costs and assets are all incurred in the United States and are included in the United States segment, as this is consistent with how they are presented and reviewed by the CODM. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

19

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Information relating to the Company’s product groups (IMEs, peer review, bill review, Medicare compliance, case management, medical record retrieval, document management and other related services) is as follows (in thousands):

Revenues:	For the three months ended March 31,
	2015		2016
IME and other related services (1)	$	167,345	$	182,997
Peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services (1)		28,971		43,506
Total revenues	$	196,316	$	226,503

(1) Includes the results of certain of the Company’s service centers acquired whose revenues are generated substantially through the indicated product group. Outside of this presentation, other product groups are not tracked within the Company’s financial systems. Additionally, other related services, which include any Medicare compliance services and case management services completed at the Company’s historic service centers in the periods presented, are not separately captured within the Company’s financial systems and have been included with IME services in the above presentation as separate presentation is not practicable. With the Company’s acquisition of Gould & Lamb in February 2014 and Ability Services Network and MedAllocators in June 2014, Medicare compliance services and case management services have been added to the presentation above. Additionally, with the acquisition of ABI in January 2016, medical record retrieval and document management services have been added to the presentation above. None of the individual services within the peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services categories above represent more than 10% of consolidated revenues. 

Information relating to the Company’s geographic segments is as follows (in thousands)(1):  

	United						United
	States			Canada			Kingdom			Australia			Total
Three months ended March 31, 2015
Revenues	$	121,718		$	7,949		$	47,444		$	19,205		$	196,316
Segment profit		19,522			634			7,699			4,097			31,952
Depreciation and amortization expense		9,411			582			2,383			2,472			14,848
Capital expenditures		(1,670	)		(114	)		(189	)		(256	)		(2,229	)
Total assets (3)		598,165			22,343			236,186			83,228			939,922
Long-lived assets (2)(3)		471,040			15,613			92,703			68,227			647,583
Three months ended March 31, 2016
Revenues	$	149,440		$	9,454		$	47,933		$	19,676		$	226,503
Segment profit		22,905			968			9,779			3,832			37,484
Depreciation and amortization expense		10,752			56			3,539			2,289			16,636
Capital expenditures		(1,178	)		(27	)		(178	)		(1,354	)		(2,737	)
Total assets (3)		702,747			29,341			295,222			86,450			1,113,760
Long-lived assets (2)(3)		570,681			17,515			133,337			63,192			784,725

(1) For segment purposes, the Company defines “segment profit” as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

(2) Long-lived assets are noncurrent assets excluding deferred tax assets and deferred financing costs.

(3) Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

20

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

A reconciliation of segment profit to consolidated income from operations is as follows (in thousands):

	For the three months ended March 31,
	2015			2016
Segment Profit	$	31,952		$	37,484
Depreciation and amortization		(14,848	)		(16,636	)
Share-based compensation expense		(6,136	)		(5,419	)
Acquisition related transaction costs		(559	)		(1,058	)
Other income (expenses)		731			(969	)
Income from operations	$	11,140		$	13,402

(14)            Condensed Consolidating Financial Information of Guarantor Subsidiaries

The Company has outstanding certain indebtedness that is guaranteed by certain 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, 2015 and March 31, 2016, and for the three months ended March 31, 2015 and 2016 is presented below. The Company (issuer of the Senior Unsecured Notes, and subsequently the Notes in April of 2015) 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 March 31, 2015

(In thousands)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	121,718		$	74,598	$	—	$	—		$	196,316
Costs and expenses:
Costs of revenues		82,334			45,842		—		—			128,176
Selling, general and administrative expenses		23,014			19,138		—		—			42,152
Depreciation and amortization		9,411			5,437		—		—			14,848
Total costs and expenses		114,759			70,417		—		—			185,176
Income from operations		6,959			4,181		—		—			11,140
Interest and other expenses, net		6,409			1,595		—		—			8,004
Loss before income taxes		550			2,586		—		—			3,136
Provision (benefit) for income taxes		(594	)		1,706		—		—			1,112
Net loss before earnings of consolidated subsidiaries	$	1,144		$	880	$	—	$	—		$	2,024
Net income (loss) of consolidated subsidiaries		880			—		880		(1,760	)		—
Net income (loss)	$	2,024		$	880	$	880	$	(1,760	)	$	2,024

21

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Condensed Consolidating Statement of Operations

for the three months ended March 31, 2016

(In thousands)

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	149,439	$	77,064	$	—	$	—		$	226,503
Costs and expenses:
Costs of revenues		102,001		47,125		—		—			149,126
Selling, general and administrative expenses		27,807		19,532		—		—			47,339
Depreciation and amortization		10,753		5,883		—		—			16,636
Total costs and expenses		140,561		72,540		—		—			213,101
Income from operations		8,878		4,524		—		—			13,402
Interest and other expenses, net		7,074		1,325		—		—			8,399
Income before income taxes		1,804		3,199		—		—			5,003
Provision for income taxes		492		1,251		—		—			1,743
Net income before earnings of consolidated subsidiaries	$	1,312	$	1,948	$	—	$	—		$	3,260
Net income (loss) of consolidated subsidiaries		1,948		—		1,948		(3,896	)		—
Net income (loss)	$	3,260	$	1,948	$	1,948	$	(3,896	)	$	3,260

22

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

 Notes to Consolidated Financial Statements

Condensed Consolidating Balance Sheet as of December 31, 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	$	33,011	$	14,854	$	—	$	—		$	47,865
Accounts receivable, net		68,896		176,553		—		—			245,449
Intercompany receivable		57,394		—		6,245		(63,639	)		—
Prepaid expenses		10,398		6,411		—		—			16,809
Other current assets		848		1,110		—		—			1,958
Total current assets		170,547		198,928		6,245		(63,639	)		312,081
Property, equipment and leasehold improvements, net		12,695		7,450		—		—			20,145
Investment in subsidiaries		280,114		—		800,743		(1,080,857	)		—
Intercompany notes receivable		174,421		—		174,421		(348,842	)		—
Goodwill		398,045		110,252		—		—			508,297
Intangible assets, net		46,423		38,250		—		—			84,673
Long-term accounts receivable, less current portion		—		62,717		—		—			62,717
Deferred tax assets, noncurrent		47,363		3,042		—		—			50,405
Deferred financing costs, net		2,416		104		—		—			2,520
Other assets		725		3,244		—		—			3,969
Total assets	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	24,072	$	36,527	$	—	$	—		$	60,599
Intercompany payable		6,245		57,394		—		(63,639	)		—
Accrued expenses		13,150		47,598		—		—			60,748
Accrued interest expense		—		—		6,245		—			6,245
Deferred revenue		138		3,546		—		—			3,684
Other current liabilities		3,383		5,673		—		—			9,056
Total current liabilities		46,988		150,738		6,245		(63,639	)		140,332
Senior unsecured notes payable		—		—		493,126		—			493,126
Senior secured revolving credit facility and working capital facilities, less current portion		—		35,243		—		—			35,243
Intercompany notes payable		174,421		174,421		—		(348,842	)		—
Deferred tax liability, noncurrent		—		3,333		—		—			3,333
Other long-term liabilities		2,950		9,788		—		—			12,738
Total liabilities		224,359		373,523		499,371		(412,481	)		684,772
Commitments and contingencies
Stockholders’ equity (deficit)		908,390		50,464		482,038		(1,080,857	)		360,035
Total liabilities and stockholders' equity (deficit)	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807

23

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Condensed Consolidating Balance Sheet as of March 31, 2016

(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	$	1,554	$	14,445	$	—	$	—		$	15,999
Accounts receivable, net		77,277		171,785		—		—			249,062
Intercompany receivable		61,586		—		13,414		(75,000	)		—
Prepaid expenses		8,083		11,831		—		—			19,914
Other current assets		—		1,078		—		—			1,078
Total current assets		148,500		199,139		13,414		(75,000	)		286,053
Property, equipment and leasehold improvements, net		13,877		8,387		—		—			22,264
Investment in subsidiaries		282,062		—		895,039		(1,177,101	)		—
Intercompany notes receivable		174,413		—		174,413		(348,826	)		—
Goodwill		469,161		112,218		—		—			581,379
Intangible assets, net		76,555		32,854		—		—			109,409
Long-term accounts receivable, less current portion		—		67,495		—		—			67,495
Deferred tax assets, noncurrent		37,467		3,129		—		—			40,596
Deferred financing costs, net		2,296		90		—		—			2,386
Other assets		885		3,293		—		—			4,178
Total assets	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	29,192	$	36,756	$	—	$	—		$	65,948
Intercompany payable		13,414		61,586		—		(75,000	)		—
Accrued expenses		11,967		43,294		—		—			55,261
Accrued interest expense		—		—		13,414		—			13,414
Deferred revenue		222		3,276		—		—			3,498
Current portion of contingent earnout obligation		2,556		—		—		—			2,556
Other current liabilities		4,432		2,850		—		—			7,282
Total current liabilities		61,783		147,762		13,414		(75,000	)		147,959
Senior unsecured notes payable		—		—		493,359		—			493,359
Senior secured revolving credit facility and working capital facilities, less current portion		—		32,578		50,000		—			82,578
Intercompany notes payable		174,413		174,413		—		(348,826	)		—
Long-term contingent earnout obligation, less current portion		5,079		—		—		—			5,079
Deferred tax liability, noncurrent		—		3,250		—		—			3,250
Other long-term liabilities		3,232		10,993		—		—			14,225
Total liabilities		244,507		368,996		556,773		(423,826	)		746,450
Commitments and contingencies
Stockholders’ equity (deficit)		960,709		57,609		526,093		(1,177,101	)		367,310
Total liabilities and stockholders' equity (deficit)	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Condensed Consolidating Statement of Cash Flows for the three months ended March 31, 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	$	2,226		$	3,938		$	—		$	—	$	6,164
Investing activities:
Cash paid for acquisitions, net		(2,299	)		—			—			—		(2,299	)
Purchases of building, equipment and leasehold improvements, net		(1,670	)		(559	)		—			—		(2,229	)
Working capital and other settlements for acquisitions		(91	)		—			—			—		(91	)
Proceeds from foreign currency net investment hedges		4,812			—			—			—		4,812
Other		(1,250	)		—			—			—		(1,250	)
Net cash used in investing activities		(498	)		(559	)		—			—		(1,057	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			25,478			—		25,478
Proceeds from the exercise of options and warrants		—			—			8,855			—		8,855
Excess tax benefit related to share-based compensation		—			—			2,086			—		2,086
Net repayments under working capital facilities		—			(132	)		—			—		(132	)
Repayment of contingent earnout obligation		—			(1,023	)		—			—		(1,023	)
Repayment under senior secured revolving credit facility		—			—			(29,331	)		—		(29,331	)
Intercompany notes and investments and other		7,088			—			(7,088	)		—		—
Net cash provided by (used in) financing activities		7,088			(1,155	)		—			—		5,933
Exchange rate impact on cash and cash equivalents		—			(509	)		—			—		(509	)
Net increase in cash and cash equivalents		8,816			1,715			—			—		10,531
Cash and cash equivalents, beginning of period		388			9,363			—			—		9,751
Cash and cash equivalents, end of period	$	9,204		$	11,078		$	—		$	—	$	20,282

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Condensed Consolidating Statement of Cash Flows for the three months ended March 31, 2016

(In thousands) 

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	13,500		$	2,266		$	—		$	—	$	15,766
Investing activities:
Cash paid for acquisitions, net		(92,348	)		—			—			—		(92,348	)
Purchases of building, equipment and leasehold improvements, net		(1,179	)		(1,558	)		—			—		(2,737	)
Working capital and other settlements for acquisitions		(271	)		—			—			—		(271	)
Proceeds from foreign currency net investment hedge		1,649			—			—			—		1,649
Other		(150	)		—			—			—		(150	)
Net cash used in investing activities		(92,299	)		(1,558	)		—			—		(93,857	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			75,000			—		75,000
Excess tax benefit related to share-based compensation		—			—			4,766			—		4,766
Proceeds from the exercise of options and warrants		—			—			582			—		582
Net repayments under working capital facilities		—			(1,623	)		—			—		(1,623	)
Purchases of stock for treasury		—			—			(8,006	)		—		(8,006	)
Repayment under senior secured revolving credit facility		—			—			(25,000	)		—		(25,000	)
Intercompany notes and investments and other		47,342			—			(47,342	)		—		—
Net cash provided by (used in) financing activities		47,342			(1,623	)		—			—		45,719
Exchange rate impact on cash and cash equivalents		—			506			—			—		506
Net decrease in cash and cash equivalents		(31,457	)		(409	)		—			—		(31,866	)
Cash and cash equivalents, beginning of period		33,011			14,854			—			—		47,865
Cash and cash equivalents, end of period	$	1,554		$	14,445		$	—		$	—	$	15,999

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(15)            Subsequent Events

(a)              Acquisitions

     On April 5, 2016, the Company completed the acquisition of substantially all of the assets of Prizm LLC and certain of its affiliates, an IME provider based in Marlton, New Jersey, with annual revenues of approximately $10.0 million, strengthening the Company's market position in the IME Industry.

(b)              Merger

 On April 27, 2016, the Company announced that it had entered into a definitive merger agreement to be acquired by an affiliate of Leonard Green & Partners, L.P., for $35.05 per share in cash, representing a total transaction value of approximately $2.2 billion. The merger is subject to approval by the Company’s stockholders and other customary closing conditions. In accordance with the merger agreement’s “go shop” provision, the Company will conduct a market test for 25 business days concluding June 1, 2016. There are no guarantees that the go shop process will result in a superior proposal. The merger is currently expected to close in the third quarter of 2016.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to “ExamWorks,” “the Company,” “we,” “our,” and “us” mean ExamWorks Group, Inc. and its consolidated subsidiaries.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes and the other financial information appearing elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties. Forward-looking statements convey current expectations or forecasts of future events for ExamWorks. All statements contained in this report other than statements of historical fact, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking. You can identify forward-looking statements by terminology such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” “can,” “continue,” or “may,” or the negative of these terms or other similar expressions that convey uncertainty of future events or outcomes. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A. of this Quarterly Report on Form 10-Q and elsewhere in this report, and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this report. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this report.

Our Business

We are a leading provider of IMEs, peer and bill reviews, Medicare compliance services, case management services and other related services, which include legal support services, administrative support services, medical record retrieval services and document management services. We were incorporated as a Delaware corporation on April 27, 2007. From July 14, 2008 through the date of this filing, we have acquired 57 IME services businesses, including a leading provider of software solutions to the IME industry. We currently operate out of 71 service centers servicing all 50 U.S. states, Canada, the United Kingdom and Australia. We conduct our business through four geographic segments: the United States, Canada, the United Kingdom and Australia.

We provide our services to property and casualty insurance carriers, law firms, third-party claim administrators, government agencies, and state funds that use independent services to confirm the veracity of claims by sick or injured individuals and to facilitate the delivery and quality of cost-effective care for workers’ compensation, automotive, personal injury liability and disability insurance coverage. We help our clients manage costs and enhance their risk management processes by verifying the validity, nature, cause and extent of claims, identifying fraud and providing fast, efficient and quality IME services.

We provide our clients with the local presence, expertise and broad geographic coverage they increasingly require. Our size and geographic reach give our clients access to our medical panel of credentialed physicians and other medical providers and our proprietary information technology infrastructure that has been specifically designed to streamline the complex process of coordinating referrals, scheduling appointments, complying with regulations and client reporting. Our primary service is to provide IMEs that give our clients authoritative and accurate answers to questions regarding the nature and permanency of medical conditions or personal injury, their cause and appropriate treatment. Additionally, we provide peer and bill reviews, which consist of medical opinions by members of our medical panel without conducting physical exams, and the review of physician and hospital bills to examine medical care rendered and its conformity to accepted standards of care. Further, we provide Medicare compliance services, including Medicare set-aside and reporting services that help mitigate costs and promote compliance, and case management services, which include managing the medical and vocational cases of injured workers to facilitate timely recovery and/or return to work. We also provide record retrieval, document management and electronic summary services, which services are critical for efficient and effective handling of claims and litigation processes, including the provision of IMEs. Prior to the MES acquisition in February 2011, we marketed our services primarily under the ExamWorks brand.  Initially with the MES acquisition and subsequently with the Premex and MedHealth acquisitions, we began to market our services under several brands, including but not limited to, ExamWorks, MES, Premex and MedHealth. Further, with the acquisition of Gould & Lamb in February 2014 and Ability Services Network and MedAllocators in June 2014, we expanded our presence in Medicare compliance services, including Medicare set-aside and reporting services, that help mitigate costs and promote compliance, and case management services, which include managing the medical and vocational cases of injured workers to facilitate timely recovery and/or return to work. These services are marketed under ExamWorks Clinical Solutions. With the acquisition of ABI in January 2016, we entered the complementary record retrieval and document management services market of our industry which consists of retrieving, sorting and summarizing records and other documents used to resolve insurance claims or facilitate other IME services.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Significant Recent Developments

Merger

  On April 27, 2016, we announced our entry into a definitive merger agreement to be acquired by an affiliate of Leonard Green & Partners, L.P., for $35.05 per share in cash, representing a total transaction value of approximately $2.2 billion. The merger is subject to approval by our stockholders and other customary closing conditions. In accordance with the merger agreement’s “go shop” provision, we will conduct a market test for 25 business days concluding June 1, 2016. There are no guarantees that the go shop process will result in a superior proposal. The merger is currently expected to close in the third quarter of 2016.

Acquisitions

A key feature of our strategy is to grow our business organically by selling additional services to existing clients, cross-selling into additional insurance lines of business and expanding our geographic footprint with existing clients. Because we operate in a highly fragmented industry, and have completed numerous acquisitions, another component of our business strategy has historically been and continues to be growth through acquisitions that expand our geographic coverage, provide new or complementary lines of business, expand our portfolio of services, and increase our market share. For example, our acquisition of MedHealth in August 2012 enabled us to enter the Australian market and expand our range of clients and services, and increase our international market presence. Similarly, our acquisitions of Gould & Lamb in February 2014 and Ability Services Network and MedAllocators in June 2014 enabled us to expand our presence in the Medicare compliance services and case management services markets, and our acquisition of ABI in January 2016 enabled us to establish our presence in the record retrieval and document management markets, and to expand our range of services to new and existing clients. To date, we have completed 57 acquisitions, and below we include the acquisitions completed in 2015 and 2016: 

Acquisition Date	Name
April 5, 2016	•	Prizm
January 19, 2016	•	Advanced Medical Reviews
January 8, 2016	•	ABI
November 23, 2015	•	Argent
October 30, 2015	•	First Choice
July 13, 2015	•	Karen Rucas & Associates
April 14, 2015	•	Landmark Exams & Maven Exams
January 2, 2015	•	ReliableRS

Sources of Revenues and Expenses

Revenues

We derive revenue primarily from fees charged for independent medical examinations, peer and bill reviews, Medicare compliance services, case management services and other related services, which include litigation support services, administrative support services and medical record retrieval and document management services. Revenues are recognized at the time services have been performed and, if applicable, at the time the report is shipped to the end user. We expect revenue to continue to increase through acquisition and organic growth. Our revenue is derived from services performed in different geographic areas.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim. We have deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and are deferring these revenues, net of estimated costs, until the case has been settled and the contingency has been resolved and the cash has been collected.

 Costs of revenues

Costs of revenues are comprised of fees paid to members of our medical panel; other direct costs including transcription, film and medical record obtainment and transportation; and other indirect costs including labor and overhead related to the generation of revenue. We expect these operationally driven costs to increase to support future revenue growth and as we continue to grow through acquisitions.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Selling, general and administrative expenses

Selling, general and administrative (“SGA”) expenses consist primarily of expenses for administrative, human resource related, corporate information technology support, legal (primarily from transaction costs related to acquisitions), finance and accounting personnel, professional fees (primarily from transaction costs related to acquisitions), insurance and other corporate expenses. We expect that SGA expenses will increase as we continue to add personnel to support the growth of our business and pursue acquisition growth. As a result, we expect that our SGA expenses will continue to increase in the future but decrease as a percentage of revenue over time as our revenue increases.

Depreciation and amortization

Depreciation and amortization (“D&A”) expense consists primarily of amortization of our finite lived intangible assets obtained through acquisitions completed to date and, to a lesser extent, depreciation of property, equipment and leasehold improvements. We expect that depreciation and amortization expense will decrease as a percentage of revenues as our finite lived intangible assets become fully amortized.

Results of Operations

As stated previously, our revenues consist primarily of fees charged for IME services performed. What we are able to charge per IME service performed depends on many factors relating to the type of IME services that our clients request. Those factors include, among others, (1) the line of business (e.g., worker’s compensation, automotive or liability claim), (2) product group (e.g., IME or peer review), (3) the geographic location of the claimant and (4) the medical panel provider we are able to use and his or her specialty. These factors impact the revenue generated by each IME service request differently and are largely out of our control.  As a result, our management team focuses its efforts on increasing the volume of IME service requests received and completed and not necessarily their type. Changes in revenue that we cannot attribute to increases or decreases in volume we attribute to changes in sales mix. Our largest cost is payments made to members of our medical panel. For the majority of our revenues, these costs are variable, as most of the medical panel members are independent contractors, allowing us to maintain and manage our costs of revenues more effectively. The following table sets forth our consolidated statements of operations data for each of the periods indicated (in thousands, except per share data):   

	For the three months ended March 31,
	2015		2016
Revenues	$	196,316	$	226,503
Costs and expenses:
Costs of revenues		128,176		149,126
Selling, general and administrative expenses		42,152		47,339
Depreciation and amortization		14,848		16,636
Total costs and expenses		185,176		213,101
Income from operations		11,140		13,402
Interest and other expenses, net		8,004		8,399
Income before income taxes		3,136		5,003
Provision for income taxes		1,112		1,743
Net income	$	2,024	$	3,260
Per share data
Net income per share
Basic	$	0.05	$	0.08
Diluted	$	0.05	$	0.08
Weighted average number of common shares outstanding
Basic		40,418		40,805
Diluted		42,680		42,362
Other Financial Data:
Adjusted EBITDA(1)	$	31,952	$	37,484

(1) Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net income in the next section and is not a substitute for the GAAP equivalent.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Adjusted EBITDA

In connection with the ongoing operation of our business, our management regularly reviews Adjusted EBITDA, a non-GAAP financial measure, to assess our performance. We define Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, acquisition-related transaction costs, share-based compensation expenses, and other (income) expenses. We believe that Adjusted EBITDA is an important measure of our operating performance because it allows management, lenders, investors and analysts to evaluate and assess our core operating results from period to period after removing the impact of changes to our capitalization structure, acquisition related costs, income tax status, and other items of a non-operational nature that affect comparability.

We believe that various forms of the Adjusted EBITDA metric are often used by analysts, investors and other interested parties to evaluate companies such as ours for the reasons discussed above. Additionally, Adjusted EBITDA is used to measure certain financial covenants in our credit facility. Adjusted EBITDA is also used for planning purposes and in presentations to our Board of Directors as well as in our incentive compensation programs for our employees.

Non-GAAP information should not be construed as an alternative to GAAP information, as the items excluded from the non-GAAP measures often have a material impact on our financial results. Management uses, and investors should use, non-GAAP measures in conjunction with our GAAP results.

The following table presents a reconciliation to Adjusted EBITDA from net income, the most comparable GAAP measure, for each of the periods indicated (in thousands):

	For the three months ended March 31,
	2015			2016
Net income	$	2,024		$	3,260
Share-based compensation expense (1)		6,136			5,419
Depreciation and amortization		14,848			16,636
Acquisition-related transaction costs		559			1,058
Other (income) expenses (2)		(731	)		969
Interest and other expenses, net		8,004			8,399
Provision for income taxes		1,112			1,743
Adjusted EBITDA	$	31,952		$	37,484

(1)	Share-based compensation expense of $469,000 and $307,000 is included in costs of revenues for the three months ended March 31, 2015 and 2016, respectively, and the remainder is included in SGA expenses.
(2)	Other (income) expenses consist principally of integration related expenses, such as facility termination, severance and relocation costs and gains or losses on earnout settlements associated with our acquisition strategy.

Comparison of the Three Months Ended March 31, 2016 and 2015

Revenues. Revenues were $226.5 million for the three months ended March 31, 2016 compared to $196.3 million for the three months ended March 31, 2015, an increase of $30.2 million, or 15%. Of the increase in revenues compared to 2015, $23.6 million, or 12%, was attributable to acquisitions completed in 2015 and 2016 net of the impact of a U.K. business line closed in late 2015, and $6.6 million, or 3%, was due to growth in our existing businesses.

● U.S. segment revenues were $149.4 million for the three months ended March 31, 2016 compared to $121.7 million for the three months ended March 31, 2015, an increase of $27.7 million, or 23%. Of the increase in U.S. revenues compared to 2015, $21.5 million, or 18%, was attributable to acquisitions completed in 2015 and 2016 and $6.2 million, or 5%, was due to growth in our existing businesses, of which approximately 75% related to increases in our IME and other related services product group. Of the 5% growth in our existing businesses, approximately 4% of the growth was due to increased service volumes, and the balance was due to a favorable change in sales mix.

● Canada segment revenues were $9.5 million for the three months ended March 31, 2016 compared to $8.0 million for the three months ended March 31, 2015, an increase of $1.5 million, or 19%. Of the increase in Canada revenues compared to 2015, $222,000, or 3%, was attributable to an acquisition completed in 2015 and $1.3 million, or 16%, was due to growth in our existing businesses. Excluding the impact of currency, the existing Canada businesses grew 29%. The constant currency growth in Canada revenues compared to 2015 was primarily due to increased IME service volumes, and to a lesser extent, a favorable change in sales mix.

● U.K. segment revenues were $47.9 million for the three months ended March 31, 2016 compared to $47.4 million for the three months ended March 31, 2015, an increase of $489,000, or 1%. Of the increase in U.K. revenues compared to 2015, $1.8 million, or 4%, was attributable to an acquisition completed in 2015 net of the impact of a business line closed in late 2015, offset by a decline of $1.3 million, or 3%, in our existing businesses. Excluding the impact of currency, the existing U.K. businesses grew by 3%. The constant currency increase in U.K. revenues compared to 2015 was due to increased service volumes.

● Australia segment revenues were $19.7 million for the three months ended March 31, 2016 compared to $19.2 million for the three months ended March 31, 2015, an increase of $471,000, or 3%, due to growth in our existing business. Excluding the impact of currency, the existing Australia business grew 12%. The constant currency growth in Australian revenues compared to 2015 was primarily due to a favorable change in sales mix, and to a lesser extent, increased IME service volumes.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Costs of revenues. Costs of revenues were $149.1 million for the three months ended March 31, 2016 compared to $128.2 million for the three months ended March 31, 2015, an increase of $21.0 million, or 16%. Of the increase in costs of revenues compared to 2015, $17.1 million, or 13%, was attributable to acquisitions completed in 2015 and 2016 and $3.8 million, or 3%, was related to our existing businesses and was primarily attributable to an increase in fees paid to members of our medical panel, as these fees are variable in nature, and, to a lesser extent, an increase in other direct costs. Costs of revenues as a percentage of revenues was 65.8% for the three months ended March 31, 2016, a 0.5% increase from 65.3% for the three months ended March 31, 2015.

Selling, general and administrative. SGA expenses were $47.3 million for the three months ended March 31, 2016 compared to $42.2 million for the three months ended March 31, 2015, an increase of $5.2 million, or 12%. Of the increase in SGA expenses compared to 2015, $4.1 million, or 10%, was attributable to acquisitions completed in 2015 and 2016, and $1.1 million, or 3%, related to our existing businesses primarily attributable to $423,000 in increased personnel expenses, offset by decreases in referral commissions in our U.K. business. In addition, acquisition-related transaction costs and other expenses increased $2.2 million primarily due to higher acquisition activity in the first quarter of 2016.

Depreciation and amortization. D&A expenses were $16.6 million for the three months ended March 31, 2016 compared to $14.8 million for the of D&A attributable three months ended March 31, 2015, an increase of $1.8 million, or 12%. D&A attributable to our existing businesses decreased $2.9 million as historic, finite-lived intangible and tangible assets became fully amortized, offset by an increase of $4.7 million to acquisitions completed in 2015 and 2016.

Interest and other expenses, net. Interest and other expenses, net were $8.4 million for the three months ended March 31, 2016 compared to $8.0 million for the three months ended March 31, 2015, an increase of $395,000, or 5%. Interest and other expenses, net, increased primarily due to higher average debt balances, offset by decreased rates of interest charged.

Provision for income taxes. Provision for income taxes was $1.7 million for the three months ended March 31, 2016 compared with a provision for income taxes of $1.1 million for the three months ended March 31, 2015, an increase of $631,000, or 57%. Our effective income tax rate was approximately 34.8% and 35.5% for the three months ended March 31, 2016 and 2015, respectively. The tax rates in the 2016 and 2015 periods were impacted primarily by elections made for certain foreign acquisitions, foreign rate differentials and non-deductible items.

Net income. For the foregoing reasons, net income was $3.3 million for the three months ended March 31, 2016 compared to $2.0 million for the three months ended March 31, 2015.

Adjusted EBITDA. Adjusted EBITDA was $37.5 million for the three months ended March 31, 2016 compared to $32.0 million for the three months ended March 31, 2015, an increase of $5.5 million, or 17%. The increase in Adjusted EBITDA was primarily due to the 15% increase in revenues and the positive operating leverage resulting from this increased revenue. Adjusted EBITDA is also described as Segment Profit elsewhere in this Report.

● U.S. segment Adjusted EBITDA was $22.9 million for the three months ended March 31, 2016 compared to $19.5 million for the three months ended March 31, 2015, an increase of $3.4 million, or 17%. The increase in U.S. segment Adjusted EBITDA was due to the 23% increase in U.S. segment revenues and a similar percentage increase in costs of revenues and SGA expenses primarily due to an increase in fees paid to members of our medical panel, as these fees are variable in nature, and increased personnel expense to support the growth in our business, excluding share-based compensation.

● Canada segment Adjusted EBITDA was $968,000 for the three months ended March 31, 2016 compared to $634,000 for the three months ended March 31, 2015, an increase of $334,000, or 53%. On a constant currency basis, Canada segment Adjusted EBITDA increased 74%. The constant currency increase in Canada segment Adjusted EBITDA was due to the 32% increase in Canada segment revenues, partially offset by a 28% increase in costs of revenues and SGA expenses primarily due to increased fees paid to members of our medical panel, as these fees are variable in nature, reflecting positive operating leverage.

● U.K. segment Adjusted EBITDA was $9.8 million for the three months ended March 31, 2016 compared to $7.7 million for the three months ended March 31, 2015, an increase of $2.1 million, or 27%. On a constant currency basis, U.K. segment Adjusted EBITDA increased 34%. The constant currency increase in U.K segment Adjusted EBITDA was due to the 7% increase in U.K. segment revenues, partially offset by a 5% increase in costs of revenues and SGA expenses primarily due to increased fees paid to members of our medical panel, as these fees are variable in nature, reflecting positive operating leverage.

● Australia segment Adjusted EBITDA was $3.8 million for the three months ended March 31, 2016 compared to $4.1 million for the three months ended March 31, 2015, a decrease of $265,000, or 7%. On a constant currency basis, Australia segment Adjusted EBITDA increased 2%. The constant currency increase in Australia segment Adjusted EBITDA was due to the 12% increase in Australia segment revenues, partially offset by a 14% increase in costs of revenues and SGA expenses primarily due to increased fees paid to members of our medical panel, as these fees are variable in nature, and increased personnel expenses.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Liquidity and Capital Resources

Our principal capital requirements are to fund operations and acquisitions. We fund our capital needs from cash flow generated from operations and borrowings under our Amended and Restated Credit Facility and working capital facilities. We have historically also funded our acquisition program with equity issuances to sellers. We expect that cash and cash equivalents, availability under our existing credit and working capital facilities, as amended and restated, and cash flow from operations will be sufficient to support our operations, planned capital expenditures and acquisitions for at least the next 12 months.

Although we believe that our current cash and cash equivalents, funds available under our Amended and Restated Credit Facility and working capital facilities will be sufficient to meet our working capital and acquisition plans for at least the next 12 months, we may need to raise additional funds through the issuance of equity or convertible debt securities or increase borrowings to fund acquisitions. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our existing stockholders will be reduced and these securities might have rights, preferences and privileges senior to those of our current stockholders. Additional financing may not be available or, if available, such financing may not be obtained on terms favorable to our stockholders and us.

Information related to our credit facilities, the Notes and cash flows as of March 31, 2016 follows below.

Credit Facilities

Credit Facility

On November 2, 2010, we entered into a senior secured revolving credit facility (the “Senior Secured Revolving Credit Facility”) with Bank of America, N.A. The facility initially consisted of a $180.0 million revolving credit facility. The facility was initially available to finance the Company’s acquisition program and working capital needs.

On April 16, 2015, we amended and restated the terms of our Senior Secured Revolving Credit Facility in connection with the offering of the Notes (See “Senior Unsecured Notes” below) pursuant to an amended and restated credit agreement (the “Amended and Restated Credit Facility”). The Amended and Restated Credit Facility provides for up to $300.0 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). During the term of the Amended and Restated Credit Facility, we have the right, subject to compliance with the covenants specified in the Amended and Restated Credit Facility and the Notes, to increase the revolving extensions under the Amended and Restated Credit Facility to a maximum of $400.0 million. This amendment and restatement also extended the term of the Senior Secured Revolving Credit Facility for five years from the date of the amendment to April 2020.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Borrowings under the Amended and Restated Credit Facility bear interest at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5%, (b) the Bank of America prime rate and (c) LIBOR (using a one-month period) plus 1.0%, plus the applicable margin, as we elect. The applicable margin means a percentage per annum determined in accordance with the following table:  

Pricing Tier	Consolidated Leverage Ratio	Commitment Fee/Unused Line Fee	Letter of Credit Fee	Eurocurrency Rate Loans	Base Rate Loans
1	≥ 4.00 to 1.0	0.45%	2.75%	2.75%	1.75%
2	≥ 3.50 to 1.0 but <4.00 to 1.0	0.40%	2.50%	2.50%	1.50%
3	≥ 3.00 to 1.0 but <3.50 to 1.0	0.35%	2.25%	2.25%	1.25%
4	≥ 2.50 to 1.0 but <3.00 to 1.0	0.30%	2.00%	2.00%	1.00%
5	< 2.50 to 1.0	0.30%	1.75%	1.75%	0.75%

In the event of default, the outstanding indebtedness under the Amended and Restated Credit Facility will bear interest at an additional 2%.

The Amended and Restated Credit Facility contains restrictive covenants, including among other things financial covenants requiring us to not exceed a maximum consolidated senior secured leverage coverage ratio, a maximum total consolidated leverage ratio and to maintain a minimum consolidated fixed charge coverage ratio. The Amended and Restated Credit Facility also restricts our ability (subject to certain exceptions) to incur indebtedness, prepay or amend other indebtedness, create liens, make certain fundamental changes including mergers or dissolutions, pay dividends and make other payments in respect of capital stock, make certain investments, sell assets, change its lines of business, enter into transactions with affiliates and other corporate actions. As of March 31, 2016, the Company was in compliance with the financial covenants in the Amended and Restated Credit Facility.

The Amended and Restated Credit Facility also includes events of default typical of these types of credit facilities and transactions, including, but not limited to, the nonpayment of principal, interest, fees or other amounts owing under the new Amended and Restated Credit Facility, the violation of covenants, the inaccuracy of representations and warranties, cross defaults, insolvency, certain ERISA events, material judgments and change of control. The occurrence of an event of default could result in the lenders not being required to lend any additional amounts and the acceleration of obligations under the Amended and Restated Credit Facility, causing such obligations to be due and payable immediately, which could materially and adversely affect us.

As of March 31, 2016, we had $50.0 million outstanding under the Amended and Restated Credit Facility, resulting in $250.0 million of undrawn commitments.

Working Capital Facilities

On September 29, 2010, our indirect 100% owned subsidiary UK Independent Medical Services Limited (“UKIM”) entered into a Sales Finance Agreement (the “UKIM SFA”) with Barclays Bank PLC (“Barclays”), pursuant to which Barclays provides UKIM a working capital facility of up to £5,000,000, subject to the terms and conditions of the UKIM SFA. The working capital facility bore a discount margin of 2.5% over Base Rate and served to finance UKIM’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

On June 28, 2013, UKIM entered into an amendment to extend the term of the existing UKIM SFA by 24 months from June 28, 2013, to amend the discount margin to 2.4% over Base Rate and to provide that payments by UKIM for certain non-working capital purposes are permitted under the UKIM SFA. Further, on April 16, 2015, UKIM entered into an amendment to extend the term of the existing UKIM SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% rate on March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Senior Secured Revolving Credit Facility. As of March 31, 2016, UKIM had $6.0 million outstanding under the working capital facility, resulting in approximately $1.2 million in availability.

On May 12, 2011, Premex entered into a Sales Finance Agreement (the “Premex SFA”) with Barclays, pursuant to which Barclays provides Premex a working capital facility of up to £26,500,000, subject to the terms and conditions of the Premex SFA. The working capital facility bore a discount margin of 2.4% over Base Rate and served to finance Premex’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

On June 28, 2013, Premex entered into an amendment to extend the term of the existing Premex SFA by 24 months from June 28, 2013, and to provide that payments by Premex for certain non-working capital purposes are permitted under the Premex SFA. Further, on April 16, 2015, Premex entered into an amendment to extend the term of the existing Premex SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% rate on March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Senior Secured Revolving Credit Facility. As of March 31, 2016, Premex had $26.6 million outstanding under the working capital facility, resulting in approximately $11.5 million in availability.

Senior Unsecured Notes

On July 19, 2011, we closed a private offering of $250.0 million in aggregate principal amount of 9.0% senior notes due 2019 which were subsequently registered through a public exchange offer (the “Senior Unsecured Notes”). The Senior Unsecured Notes were issued at a price of 100% of their principal amount. A portion of the gross proceeds of $250.0 million were used to repay borrowings outstanding under our Senior Secured Revolving Credit Facility and pay related fees and expenses, and the remainder was used for general corporate purposes, including acquisitions.

On April 16, 2015, we closed a public offering of $500.0 million in aggregate principal amount of 5.625% senior notes due 2023 (the “Notes”). The Notes were issued at a price of 100% of their principal amount. The Notes are our senior obligations and are guaranteed by certain of our existing and future U.S. subsidiaries. The gross proceeds of $500.0 million were used to repay all of our outstanding borrowings under the Senior Secured Revolving Credit Facility, to redeem all of the Senior Unsecured Notes, to pay related fees and expenses, and for general corporate purposes, including acquisitions.

The Notes were issued under an indenture, dated as of April 16, 2015, as supplemented by a supplemental indenture dated April 16, 2015 (collectively, the “Indenture”), among the Guarantors, U.S. Bank, National Association, as trustee (the “Trustee”), and us. The Notes are our general senior unsecured obligations, and rank equally with our existing and future senior unsecured obligations and senior to all of our further subordinated indebtedness. The Notes accrue interest at a rate of 5.625% per year, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing October 15, 2015. Interest accrues from the date of issuance of the Notes.

At any time on or after April 15, 2018, we may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2018, we may redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 105.625% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, provided that at least 60% of the original aggregate principal amount of the Notes remains outstanding after redemption. In addition, we may redeem some or all of the Notes at any time prior to April 15, 2018 at a redemption price equal to 100% of the principal amount of the Notes plus a make whole premium described in the Indenture, plus accrued and unpaid interest.

The Indenture includes covenants which, subject to certain exceptions, limit the ability of we and our restricted subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness, make certain types of restricted payments, incur liens on assets of us or the restricted subsidiaries, engage in asset sales and enter into transactions with affiliates. Upon a change of control (as defined in the Indenture), we may be required to make an offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest. The Indenture also contains customary events of default.

Cash Flow Summary

Cash and cash equivalents were $16.0 million at March 31, 2016 as compared with $20.3 million at March 31, 2015. 

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Our cash flows from operating, investing and financing activities, as reported in our consolidated financial statements included elsewhere in this report, are summarized as follows (in thousands):

	For the three months ended March 31,
	2015			2016
Net cash provided by operating activities	$	6,164		$	15,766
Net cash used in investing activities		(1,057	)		(93,857	)
Net cash provided by financing activities		5,933			45,719
Exchange rate impact on cash and cash equivalents		(509	)		506
Net increase (decrease) in cash and cash equivalents	$	10,531		$	(31,866	)

Operating Activities. Net cash provided by operating activities was $15.8 million for the three months ended March 31, 2016, compared with net cash provided by operating activities of $6.2 million for the three months ended March 31, 2015. Net cash provided by operating activities for 2016 consisted of our net income of $3.3 million and net non-cash charges of $20.2 million (principally including $16.6 million in depreciation and amortization and $5.4 million in share-based compensation, offset by the excess tax benefit related to share-based compensation of $4.8 million), offset by a net increase in working capital of approximately $7.7 million in 2016. The increase in working capital in 2016 primarily consisted of increases in accounts receivable and decreases to accounts payable and accrued expenses, offset by increased accrued interest expense.

Net cash provided by operating activities for 2015 consisted of our net income of $2.0 million and net non-cash charges of $19.8 million (principally including $14.8 million in depreciation and amortization and $6.1 million in share-based compensation, offset by the excess tax benefit related to share-based compensation of $2.1 million), offset by a net increase in working capital of approximately $15.6 million. The 2015 increase in working capital primarily consisted of increases in accounts receivable in our U.K. business and decreased accrued interest expense, offset by increased accounts payable and accrued expenses. 

Investing Activities. Net cash used in investing activities was $93.9 million for the three months ended March 31, 2016 as compared to net cash used in investing activities of $1.1 million for the three months ended March 31, 2015. The increased use was due primarily to greater acquisition activity in the first quarter of 2016.

Net cash used in investing activities for 2015 was primarily attributable to cash paid for acquisitions and working capital and other settlements for acquisitions of $4.5 million and cash paid for other investing activities of $1.3 million, offset by proceeds from foreign currency net investment hedges of $4.8 million.

Financing Activities. Net cash provided by financing activities was $45.7 million for the three months ended March 31, 2016 as compared to net cash provided by financing activities of $5.9 million for the three months ended March 31, 2015. This 2016 cash provision was primarily attributable to net borrowings under our Amended and Restated Credit Facility of $50.0 million and the excess tax benefit related to share-based compensation of $4.8 million, offset by purchases of stock for treasury of $8.0 million.

Net cash provided by financing activities for 2015 was primarily attributable to the proceeds from the exercise of options and warrants of $8.9 million and the excess tax benefit related to share-based compensation of $2.1 million, offset by net repayments under our Senior Secured Revolving Credit Facility of $3.9 million.

Contingencies

We record contingent liabilities resulting from asserted and unasserted claims against us when it is probable that a liability has been incurred and the amount of the loss is reasonably estimable. We disclose contingent liabilities when there is a reasonable possibility that the ultimate loss will exceed the recorded liability. Estimating probable losses requires analysis of multiple factors, in some cases including judgments about the potential actions of third-party claimants and courts. Therefore, actual losses in any future period are inherently uncertain. We currently are not involved in any material legal proceedings. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to any future proceedings. Contingent liabilities are described in Note 9 to the consolidated financial statements included elsewhere in this report.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Contractual Obligations and Commitments 

Our contractual cash payment obligations as of March 31, 2016 are set forth below (in thousands):

					Payments due by year ending December 31,
	Total		Period from April 1, 2016 to December 31, 2016		2017		2018		2019		2020		Thereafter
Amounts outstanding under notes payable	$	500,000	$	—	$	—	$	—	$	—	$	—	$	500,000
Amounts outstanding under senior secured revolving credit facility		50,000		—		—		—		—		50,000		—
Operating leases		54,906		11,780		14,162		11,771		8,185		5,134		3,874
Amounts outstanding under working capital facilities		32,578		—		—		32,578		—		—		—
Totals	$	637,484	$	11,780	$	14,162	$	44,349	$	8,185	$	55,134	$	503,874

As of March 31, 2016, we leased our office spaces for our corporate locations in Atlanta, Georgia and New York, New York and also for our 71 service centers in various cities under non-cancelable lease agreements. We own office facilities in Sarasota, Florida and Buffalo, New York.

We have certain contractual obligations including various debt agreements with requirements to make interest payments. Amounts outstanding under the Notes are subject to a fixed interest rate of 5.625% and interest is expected to be $28.1 million annually with semi-annual payments that began in October 2015 and end in April 2023. Additionally, certain amounts are subject to the level of borrowings in future periods and the interest rate for the applicable periods, and therefore the amounts of these payments are not determinable. Based upon amounts outstanding at March 31, 2016 and applicable interest rates currently ranging between 2.55% and 4.75%, interest amounts are expected to be approximately $1.8 million for the nine months ended December 31, 2016, approximately $2.4 million for the year ended December 31, 2017 and approximately $1.8 million for the year ended December 31, 2018.

Off-Balance Sheet Arrangements

We engage in no activities, obligations or exposures associated with off-balance sheet arrangements. 

Critical Accounting Policies and Estimates

Overview and Definitions

We have identified the policies below as critical to our business operations and understanding of our results of operations. The impact and any associated risks related to these policies on our business operations are discussed throughout this management’s discussion and analysis of financial condition and results of operations where such policies affect our reported and expected financial results. Our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, cash flow and related disclosure of contingent assets and liabilities. Our estimates include those related to accounts receivable reserves, goodwill and other intangible assets, share-based compensation other equity instruments, income and other taxes, derivative instruments and contingent obligations. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates, and the impact of changes in key assumptions may not be linear. Our management has reviewed the application of these policies with the audit committee of our Board of Directors. For a detailed discussion on the application of these and other accounting policies, see Note 2 to the consolidated financial statements included elsewhere in this report. We believe that our most critical accounting policies and estimates relate to the following:

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Revenue Recognition

Revenue related to IMEs, peer reviews, bill reviews, administrative support services and Medicare compliance services is recognized at the time services have been performed and the report is shipped to the end user. We believe that recognizing revenue at the time the report is shipped is appropriate because we meet the following four criteria in accordance with ASC 605-10-S25,  Revenue Recognition: Overall , (i) persuasive evidence that arrangement exists, (ii) shipment has occurred, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured. We report revenues net of any sales, use and value added taxes.

Revenue related to other IME services, including litigation support services, medical record retrieval services, document management services and case management, where no report is generated, is recognized at the time the service is performed. We believe that recognizing revenue at the time the service is performed is appropriate because we meet the following four criteria in accordance with ASC 605-10-S25, (i) persuasive evidence that arrangement exists, (ii) services have been rendered, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim.  We have deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and are deferring these revenues, net of estimated costs, until the case has been settled, the contingency has been resolved and the cash has been collected.

Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any reporting period could be adversely affected.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable balances consist of amounts owed to us for services provided in the normal course of business and are reported net of an allowance for doubtful accounts. Generally, no collateral is received from clients and the collectability of trade receivable balances is regularly evaluated based on a combination of factors such as client credit-worthiness, past transaction history with the customer, current economic industry trends and changes in customer payment patterns and additions to the allowance are made based on these trends. Accounts are reviewed regularly for collectability and those deemed uncollectible are written off.

We assume, that on average, all accounts receivable will be collected within one year and thus classify these as current assets; however, there are certain receivables, principally in the U.K., that have aged longer than one year as of December 31, 2015 and March 31, 2016, and we have recorded an estimate for those receivables that will not be collected within one year as long-term in the consolidated balance sheets contained elsewhere in this report.

Goodwill and Other Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Based on the provisions of ASC 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill and indefinite lived intangible assets are tested for impairment annually or more frequently if impairment indicators arise. We evaluate the carrying value of goodwill during the fourth quarter of each fiscal year and between annual valuations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting units below their carrying amount. Such circumstances include: (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, we compare the fair value of the reporting units to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill. The fair value of the reporting units is estimated using primarily the income, or discounted cash flows, approach. If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured. The impairment loss is calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount. In calculating the implied fair value of the reporting unit’s goodwill, the fair value of the reporting unit is allocated in a hypothetical analysis to all of the other assets and liabilities, including any unrecognized intangible assets, of that unit based on their fair values. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value.

Intangible assets, including client relationships, trade names, covenants not to compete and technology that have finite lives are amortized over their useful lives.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

 We performed our annual impairment review of goodwill in October 2015 and reviewed subsequent events through March 31, 2016 and determined that the fair value of our reporting units substantially exceed their carrying value, and goodwill was not impaired as of March 31, 2016. Further, we believe that there have been no facts or circumstances through the date of this filing that indicate an impairment of goodwill or other intangible assets exists. 

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of comprehensive income (loss). Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets.

Share-Based Compensation and Other Equity Instruments

Our stock incentive plan provides for the granting of stock options and other share-based awards including warrants, restricted stock units (“RSUs”) and shares of restricted stock, in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires measurement of compensation cost for all share-based awards at fair value on the grant date (or measurement date, if different) and recognition of compensation expense, net of forfeitures, over the requisite service period for awards expected to vest. We use the straight-line amortization method for recognizing share-based compensation expense.

The fair value of stock option grants is determined using the Black-Scholes valuation model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in these stock options. Additionally, option valuation models require the input of highly subjective assumptions, including the expected volatility of the stock price. Because our stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimates, in our opinion, the existing models may not provide a reliable single measure of the fair value of its share-based awards.

Our expected volatility assumptions are based upon the weighted average of our implied volatility, our mean reversion volatility and the median of our peer group’s most recent historical volatilities for 2015 stock option grants. Expected life assumptions are based upon the “simplified” method for those options issued in 2015 and prior, which were determined to be issued approximately at-the-money. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

The fair value of shares of restricted stock and RSUs is determined based upon the market price of the underlying common stock as of the date of grant. Additional information regarding our valuation of common stock and equity awards is set forth in Note 2 to our consolidated financial statements included elsewhere in this report.

Accounting for Acquisitions

Accounting for acquisitions requires us to recognize and measure identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquired entity. Our accounting for acquisitions involves significant judgments and estimates, including the fair value of certain forms of consideration such as our common stock, the fair value of acquired intangible assets, which involve projections of future revenues, cash flows and terminal value, which are then discounted at an estimated discount rate, the fair value of other acquired assets and assumed liabilities, including potential contingencies, and the useful lives of the assets. The projections are developed using internal forecasts, available industry and market data and estimates of long-term rates of growth for our business. The impact of prior or future acquisitions on our financial position or results of operations may be materially impacted by the change in or initial selection of assumptions and estimates.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Financial Instruments

Our financial assets and (liabilities), which are measured at fair value on a recurring basis, are categorized using the fair value hierarchy at December 31, 2015 and March 31, 2016, and are as follows (in thousands):

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

The contingent consideration relates to earnout provisions recorded in conjunction with a 2016 acquisition (see Note 3 to the consolidated financial statements included elsewhere in this report). The fair value of the foreign currency derivative was determined using observable market inputs such as foreign currency exchange rates and considers our nonperformance risk and that of our counterparties.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-05”), which define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Currently, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. This going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. This ASU provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and the related footnote disclosures. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early adoption permitted. We have adopted the provisions during the year ending December 31, 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about our ability to continue as a going concern. Adoption did not have a material impact on our financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. Additionally, in August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”) which amends ASU 2015-03, which did not address the balance sheet presentation of debt issuance costs incurred in connection with line-of-credit arrangements. Under ASU 2015-15, a Company may defer debt issuance costs associated with line-of-credit arrangements and present such costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. The amendments in these updates were effective for fiscal periods beginning on or after December 15, 2015, and interim periods within those fiscal years, were applied retrospectively and represent a change in accounting principle.

We adopted the provisions of these amendments in January of 2016. As a result, approximately $6.9 million and $6.6 million of debt issuance costs related to the Notes were reclassified from deferred financing costs to Notes payable in the accompanying consolidated balance sheets as of December 31, 2015 and March 31, 2016, respectively. We elected to continue presenting the deferred financing costs associated with our Senior Secured Revolving Credit Facility as deferred financing costs, net in the accompanying consolidated balance sheets.

In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments” (“ASU 2015-16”) which requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The amendments in this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. We adopted the provisions of this ASU prospectively in the first quarter of 2016, and did not retrospectively adjust prior periods. The adoption of ASU 2015-16 did not have a significant impact on our financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”), which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. Earlier adoption is permitted for all entities as of the beginning of an interim or annual reporting period. This amendment may be applied either prospectively or retrospectively to all periods presented. We adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust prior periods. The adoption of ASU 2015-17 did not have a significant impact on our financial position, results of operations or cash flows.

Accounting Pronouncements Not Yet Adopted 

In May 2014, the FASB issued ASU No. 2014-09, (Topic 606): Revenue from Contracts with Customers (“ASU 2014-09”) which supersedes the revenue recognition requirements in “Topic 605, Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. We are currently evaluating the impact of this standard on our financial position, results of operations and cash flows.

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EXAMWORKS GROUP, INC. AND SUBSIDIARIES

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We plan to adopt the provisions for the year ending December 31, 2018 and currently do not expect the adoption to have a material impact on our financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this standard on our financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” (“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. We plan to adopt the provisions for the year ending December 31, 2017 and currently do not expect the adoption to have a material impact on our financial position, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update are effective for fiscal period beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this standard on our financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this standard on our financial position, results of operations and cash flows.

There were various other accounting standards and interpretations issued during 2015 and 2016 we have not yet been required to adopt, none of which are expected to have a material impact on our financial position, results of operations and cash flows.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure results primarily from fluctuations in interest rates, foreign exchange rates and inflation. In the normal course of business, we are exposed to market risks, including changes in interest rates and foreign exchange rates which affect our debt and cash flows. We may also face additional exchange rate risk in the future as we expand our business internationally.

Interest Rate Risk. As of March 31, 2016, we had cash and cash equivalents totaling approximately $16.0 million. These amounts were held for future acquisition and working capital purposes and were held in non-interest bearing accounts, of which $1.6 million was held in the U.S. The U.S. amounts were insured under standard FDIC insurance coverage for deposit accounts up to $250,000, per depositor and account ownership category, at each separately insured depository institution.

Our outstanding debts of $32.6 million and $50.0 million at March 31, 2016 related to indebtedness under our working capital facilities and Amended and Restated Credit Facility contain floating interest rates. Thus, our interest rate is subject to market risk in the form of fluctuations in interest rates. The effect of a hypothetical one percentage point increase in our variable rate debt would result in a decrease of approximately $826,000 in our annual pre-tax income assuming no further changes in the amount of borrowings subject to variable rate interest from amounts outstanding at March 31, 2016.

41

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Foreign Exchange Risk. As of March 31, 2016, we have foreign currency risks related to our revenues and operating expenses denominated in currencies other than the U.S. dollar, namely, the Canadian dollar, the Pound Sterling and the Australian dollar. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. We do not currently hedge our exposure to foreign currency exchange rate fluctuations related to the Canadian dollar given that the net difference between foreign currency denominated revenue and expenses is immaterial. In the future, however, we may hedge such exposure to foreign currency exchange rate fluctuations in this currency.

Beginning in the second quarter of 2013, in order to protect against foreign currency exposure in our Australian operations, we entered into forward foreign currency contracts as a hedge of AUD $60.0 million of our net investment in Australia. Beginning in the third quarter of 2013, we also entered into forward foreign currency contracts as a hedge of £40.0 million of our net investment in the U.K. During the fourth quarter of 2015, we entered into a foreign exchange agreement to hedge an additional £35.0 million related to our investment in the U.K. concurrent with funding of our acquisition of Argent. 

We settled certain of our hedge positions during the three months ended March 31, 2015 and 2016 and received $4.8 million and $1.6 million, respectively, in net proceeds. This amount was classified in accumulated other comprehensive income (loss) in our consolidated balance sheet (see Note 2 to the consolidated financial statements included elsewhere in this report), offsetting the currency translation adjustment of the related net investment that is also recorded in accumulated other comprehensive income (loss), and is reported net of the effect of income taxes. As of March 31, 2016, we had a net liability of $2.1 million recorded in other current liabilities with the offsetting net unrealized loss being recorded in accumulated other comprehensive income (loss) in our consolidated balance sheets associated with open forward foreign currency contracts which matured in April 2016.

Item 4. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2016. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2016, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the period ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is currently a party to various legal proceedings arising from the normal course of business activities. While the Company does not presently believe that the ultimate outcome of such proceedings will have a material impact on its business, operating results or financial condition, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, it is possible that such ruling could have a material adverse impact on our business, operating results or financial condition in the period in which the ruling occurs. Our current estimates of the potential impact from such legal proceedings could change in the future.

Item 1A. Risk Factors

There have been no material changes in the risks facing the Company as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Dividend Policy

Since the Company’s incorporation in 2007, the Company has not declared or paid any dividends on its common stock. The Company currently intends to retain all of the Company’s future earnings, if any, to finance the growth and development of the Company’s business and does not anticipate paying cash dividends for the foreseeable future. The Amended and Restated Credit Facility and the Indenture restrict the Company’s ability to pay cash dividends, and any future financing agreements may restrict the Company from paying any type of dividends.

Item 3. Defaults Upon Senior Securities

None. 

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

42

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

Item 6. Exhibits

Exhibit  Number	Title
2.1	Agreement and Plan of Merger, dated September 23, 2010, by and among ExamWorks Group, Inc., ExamWorks, Inc. and ExamWorks Merger Sub, Inc. (filed as Exhibit 2.1 to ExamWorks’ Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 13, 2010 and incorporated by reference herein).
2.2*	Agreement for the sale and purchase of the entire issued share capital of Premex Group Limited dated May 10, 2011, among ExamWorks Group, Inc., ExamWorks UK Ltd. and the shareholders of Premex Group Limited set forth therein (filed as Exhibit 2.1 to Form 8-K filed with the Securities and Exchange Commission on May 13, 2011 and incorporated by reference herein).
2.3*	Tax Deed dated May 10, 2011, relating to the sale and purchase of the entire issued share capital of Premex Group between ExamWorks UK Ltd. And Covenantors set forth therein (filed as Exhibit 2.2 to Form 8-K filed with the Securities and Exchange Commission on May 13, 2011 and incorporated by reference herein).
2.4	Agreement and Plan of Merger, dated January 8, 2016, by and among ExamWorks, Inc., Orange 12, Inc., ABI Document Support Services Inc., certain Stockholders of ABI Document Support Services Inc., and Bill Glassman, as stockholder representative (filed as Exhibit 2.1 to Form 8-K filed with the Securities and Exchange Commission on January 12, 2016 and incorporated by reference herein).
2.5	Share Purchase Agreement, dated January 19, 2016, by and among ExamWorks Group, Inc., Advanced Medical Reviews, Inc., Eytan Alpern, MD, and Barak Mevorak, MD (filed as Exhibit 2.1 to Form 8-K filed with the Securities and Exchange Commission on January 20, 2016 and incorporated by reference herein).
3.1.1	Amended and Restated Certificate of Incorporation of ExamWorks (incorporated by reference to Exhibit 3.1 to Form 10-K filed with the Securities and Exchange Commission on March 11, 2011).
3.1.2	Second Amended and Restated Bylaws of ExamWorks (incorporated by reference to Exhibit 3.1 to Form 8-K filed with the Securities and Exchange Commission on October 30, 2013).
4.1	Form of Common Stock Certificate of ExamWorks (filed as Exhibit 4.1 to Amendment No. 3 to ExamWorks’ Registration Statement on Form S-1 filed with the Securities and Exchange Commission on October 21, 2010 and incorporated by reference herein).
4.2	Indenture dated July 19, 2011, by and among ExamWorks Group, Inc., the Guarantors party thereto, and U.S. Bank, National Association, as Trustee (including Form of 9% Note Due 2019) (filed as Exhibit 4.1 to Form 8-K filed with the Securities and Exchange Commission on July 22, 2011 and incorporated by reference herein).
4.3	Form of 9% Senior Unsecured Exchange Note Due 2019 and Form of Exchange Guarantee (filed as Exhibit 4.4 to Form S-4 filed with the Securities and Exchange Commission on April 4, 2012 and incorporated by reference herein).
4.4	Indenture, dated April 16, 2015, among ExamWorks Group, Inc., the Guarantors party thereto, and U.S. Bank National Association, as Trustee (filed as Exhibit 4.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 17, 2015 and incorporated by reference herein).

 43

4.5	Supplemental Indenture, dated April 16, 2015, among ExamWorks Group, Inc., the Guarantors party thereto, and U.S. Bank National Association, as Trustee (including the Form of 5.625% Note Due 2023) (filed as Exhibit 4.2 to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 17, 2015 and incorporated by reference herein).
4.6	Form of 5.625% Senior Unsecured Note Due 2023 and Form of Guarantee (filed as Exhibit 4.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 17, 2015 and incorporated by reference herein).
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a)
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K.  The Company agrees to furnish supplementary copies of any omitted schedules to the Securities and Exchange Commission upon request. 

44

EXAMWORKS GROUP, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EXAMWORKS GROUP, INC.
Date: May 10, 2016	By:	/s/ J. Miguel Fernandez de Castro
		J. Miguel Fernandez de Castro
		Senior Executive Vice President and Chief

45

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James K. Price, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ExamWorks Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-(f) and 15d-15(f)) and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016	By:	/s/    James K. Price
		James K. Price
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Miguel Fernandez de Castro, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ExamWorks Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-(f) and 15d-15(f)) and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016	By:	/s/    J. Miguel Fernandez de Castro
		J. Miguel Fernandez de Castro
		Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of ExamWorks Group, Inc. (the “Company”) for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2016	By:	/s/    James K. Price
		James K. Price
		Chief Executive Officer
Date: May 10, 2016	By:	/s/    J. Miguel Fernandez de Castro
		J. Miguel Fernandez de Castro
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 06, 2016
Entity Registrant Name	ExamWorks Group, Inc.
Entity Central Index Key	0001498021
Trading Symbol	exam
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		41,654,000
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands		Mar. 31, 2016		Dec. 31, 2015
Current assets:
Cash and cash equivalents		$ 15,999		$ 47,865
Accounts receivable, net		249,062		245,449
Prepaid expenses		19,914		16,809
Other current assets		1,078		1,958
Total current assets		286,053		312,081
Property, equipment and leasehold improvements, net		22,264		20,145
Goodwill	[1]	581,379		508,297
Intangible assets, net		109,409		84,673
Long-term accounts receivable, less current portion		67,495		62,717
Deferred tax assets		40,596		50,405
Deferred financing costs, net		2,386		2,520
Other assets		4,178		3,969
Total assets		1,113,760	[2],[3]	1,044,807
Current liabilities:
Accounts payable		65,948		60,599
Accrued expenses		55,261		60,748
Accrued interest expense		13,414		6,245
Deferred revenue		3,498		$ 3,684
Current portion of contingent earnout obligation		2,556
Other current liabilities		7,282		$ 9,056
Total current liabilities		147,959		140,332
Notes payable		493,359		493,126
Senior secured revolving credit facility and working capital facilities		82,578		$ 35,243
Long-term contingent earnout obligation, less current portion		5,079
Deferred tax liabilities		3,250		$ 3,333
Other long-term liabilities		14,225		12,738
Total liabilities		$ 746,450		$ 684,772
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; Authorized 50,000 shares; no shares issued and outstanding at December 31, 2015 and March 31, 2016
Common stock, $0.0001 par value; Authorized 250,000 shares; issued 42,983 and 43,222 shares at December 31, 2015 and March 31, 2016, respectively		$ 4		$ 4
Additional paid-in capital		457,193		446,409
Accumulated other comprehensive loss		(24,766)		(26,003)
Accumulated deficit		(27,359)		(30,619)
Treasury stock, at cost; Outstanding 1,705 and 2,015 shares at December 31, 2015 and March 31, 2016, respectively		(37,762)		(29,756)
Total stockholders’ equity		367,310		360,035
Total liabilities and stockholders' equity		$ 1,113,760		$ 1,044,807

[1] Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

[2] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

[3] Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company's U.S. income tax returns has been reflected in the United States segment.

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	43,222,000	42,983,000
Treasury stock, shares outstanding (in shares)	2,015,000	1,705,000

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Revenues		$ 226,503	$ 196,316
Costs and expenses:
Costs of revenues		149,126	128,176
Selling, general and administrative expenses		47,339	42,152
Depreciation and amortization	[1]	16,636	14,848
Total costs and expenses		213,101	185,176
Income from operations		13,402	11,140
Interest and other expenses, net:
Interest expense, net		8,399	8,004
Total interest and other expenses, net		8,399	8,004
Income before income taxes		5,003	3,136
Provision for income taxes		1,743	1,112
Net income		3,260	2,024
Comprehensive Income (Loss):
Net income		3,260	2,024
Foreign currency translation adjustments, net of tax		1,237	(5,877)
Total comprehensive income (loss)		$ 4,497	$ (3,853)
Net income per share:
Basic (in dollars per share)		$ 0.08	$ 0.05
Diluted (in dollars per share)		$ 0.08	$ 0.05
Weighted average number of common shares outstanding:
Basic (in shares)		40,805	40,418
Diluted (in shares)		42,362	42,680

[1] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities:
Net income	$ 3,260	$ 2,024
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	16,636	14,848
Amortization of deferred rent	99	138
Share-based compensation	5,419	6,136
Excess tax benefit related to share-based compensation	(4,766)	(2,086)
Provision for doubtful accounts	2,116	1,918
Amortization of deferred financing costs	381	587
Deferred income taxes	348	(1,759)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(7,562)	(14,763)
Prepaid expenses and other current assets	(2,184)	1,010
Accounts payable and accrued expenses	(2,729)	4,668
Accrued interest expense	7,169	(5,640)
Deferred revenue and customer deposits	(108)	(133)
Other liabilities	(2,313)	(784)
Net cash provided by operating activities	15,766	6,164
Investing activities:
Cash paid for acquisitions, net	(92,348)	(2,299)
Purchases of building, equipment and leasehold improvements, net	(2,737)	(2,229)
Working capital and other settlements for acquisitions	(271)	(91)
Proceeds from foreign currency net investment hedges	1,649	4,812
Other	(150)	(1,250)
Net cash used in investing activities	(93,857)	(1,057)
Financing activities:
Borrowings under senior secured revolving credit facility	75,000	25,478
Excess tax benefit related to share-based compensation	4,766	2,086
Proceeds from the exercise of options and warrants	$ 582	8,855
Repayment of contingent earnout obligation		(1,023)
Net repayments under working capital facilities	$ (1,623)	$ (132)
Purchases of stock for treasury	(8,006)
Repayments under senior secured revolving credit facility	(25,000)	$ (29,331)
Net cash provided by financing activities	45,719	5,933
Exchange rate impact on cash and cash equivalents	506	(509)
Net increase (decrease) in cash and cash equivalents	(31,866)	10,531
Cash and cash equivalents, beginning of period	47,865	9,751
Cash and cash equivalents, end of period	15,999	20,282
Supplemental disclosures of cash flow information:
Cash paid for interest	825	12,979
Cash paid for income taxes	$ 4,457	$ 2,703

XML

Note 1 - Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

(1)

              

Nature of Operations and Basis of Presentation

ExamWorks Group, Inc. (“ExamWorks” or the “Company”) is a leading provider of independent medical examinations (“IMEs”), peer and bill reviews, Medicare compliance services, case management services and other related services,

which include litigation support services, administrative support services

, medical record retrieval services and document management services (“IME services” or the “IME industry”). ExamWorks, Inc. was incorporated as a Delaware corporation on April 27, 2007. Since 2008 through the date of this filing, ExamWorks completed 57 acquisitions. As of March 31, 2016, ExamWorks, Inc. operated out of 71 service centers serving all 50 United States, Canada, the United Kingdom and Australia.

The consolidated financial statements of the Company as of March 31, 2016 and for the periods ended March 31, 2015 and 2016 included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and have not been audited by its independent registered public accounting firm. In the opinion of management, all adjustments of a normal and recurring nature necessary to present fairly the financial position and results of operations and cash flows for all periods presented have been made. Pursuant to SEC rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted from these statements unless significant changes have taken place since the end of the Company's most recent fiscal year. The Company's December 31, 2015 Consolidated Balance Sheet was derived from audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, (the “Form 10-K”), but does not include all disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Form 10-K. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The consolidated financial statements include the accounts of ExamWorks and its 100% owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

XML

Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(2)

               

Summary of Significant Accounting Policies

(a)

              

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on certain assumptions which they believe are reasonable in the circumstances and actual results could differ from those estimates. The more significant estimates reflected in these consolidated financial statements include purchase price allocations, useful lives of intangible assets, potential impairment of goodwill and intangible assets, the allowance for doubtful accounts, the portion of accounts receivable deemed to be long term in nature, the valuation of deferred tax assets, the valuation of equity and share-based compensation and derivative instruments.

(b)

              

Foreign Currencies

Assets and liabilities recorded in foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (loss) and are reported net of the effect of income taxes on the consolidated financial statements (See Note 2 (p)).

(c)

              

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015 and March 31, 2016.

(d)

              

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts owed to the Company for services provided in the normal course of business and are reported net of allowance for doubtful accounts, which amounted to $12.2 million and $12.5 million as of December 31, 2015 and March 31, 2016, respectively. Generally, no collateral is received from customers and additions to the allowance are based on ongoing credit evaluations of customers with general credit experience being within the range of management’s expectations. Accounts are reviewed regularly for collectability and those deemed uncollectible are written off.  The Company assumes, that on average, all accounts receivable will be collected within one year and thus classifies these as current assets; however there are certain receivables, principally in the U.K., that have aged longer than one year as of December 31, 2015 and March 31, 2016, and the Company has recorded an estimate for those receivables that will not be collected within one year as long-term in the consolidated balance sheets.

(e)

              

Concentrations of Credit Risk

The Company routinely assesses the financial strength of its customers and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. For the three months ended March 31, 2015 and 2016, no individual customer accounted for more than 10% of revenues. At December 31, 2015 and March 31, 2016, there was an individual customer that accounted for approximately 14% and 13%, respectively, of the accounts receivable balance.

As of March 31, 2016, the Company had cash and cash equivalents totaling approximately $16.0 million. These amounts were held for future acquisition and working capital purposes and were held in non-interest bearing accounts, of which $1.6 million was held in the U.S. The U.S. amounts were insured under standard FDIC insurance coverage for deposit accounts up to $250,000, per depositor and account ownership category, at each separately insured depository institution.

 

(f)

              

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets and accelerated methods for income tax purposes. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining lease term. Maintenance and repair costs are expensed as incurred.

(g)

              

Long-Lived Assets

In accordance with Impairment or Disposal of Long-Lived Assets, Subsections of Financial Accounting Standards Board (“FASB”) ASC Subtopic 360-10 (“ASC 360”),

  Property, Plant, and Equipment — Overall

, long-lived assets, such as equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models (using market participant assumptions), quoted market values and third-party independent appraisals, as considered necessary. At December 31, 2015 and March 31, 2016, no impairment was noted.

 

(h)

               

Goodwill and Other Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually in accordance with the provisions of FASB ASC Topic 350,

 Intangibles — Goodwill and Other

 (“ASC 350”). The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting units are compared with their carrying values (including goodwill). If the fair value of a reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis (using market participant assumptions). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

The Company performed its annual impairment review of goodwill in October of 2015, and it was determined that the carrying amount of goodwill was not impaired, as the fair value of the reporting units substantially exceeded their carrying values and there have been no subsequent developments that would indicate impairment existed as of March 31, 2016. The goodwill impairment review will continue to be performed annually or more frequently if facts and circumstances warrant a review.

ASC 350 also requires that intangible assets with definite lives be amortized over their estimated useful lives. Currently, customer relationships, trade names, covenants not-to-compete and technology are amortized using the straight-line method over estimated useful lives.

(i)

              

Deferred Financing Costs

In November 2010, the Company entered into a senior secured revolving credit facility with Bank of America N.A. (“Senior Secured Revolving Credit Facility”) (see Note 10). The Company has incurred deferred financing costs of $8.5 million associated with the Senior Secured Revolving Credit Facility and related amendments and restatements, none of which were incurred in the three months ended March 31, 2015 and 2016. In the second quarter of 2015, the Company amended and restated the Senior Secured Revolving Credit Facility in connection with the offering of the Notes as defined in Note 10, pursuant to an amended and restated credit agreement (the “Amended and Restated Credit Facility”), which resulted in a loss on extinguishment of debt of approximately $274,000 for the write-off of unamortized deferred financing costs in accordance with ASC Topic 470,

 Debt

 (“ASC 470”).

The deferred financing costs associated with the Senior Secured Revolving Credit Facility are being amortized to interest expense over the five-year term of the facility, using the straight-line method, which approximates the effective interest method.

The Company amortized $361,000 and $148,000 for the three months ended March 31, 2015 and 2016, respectively, to interest expense.

(j)

                

Revenue Recognition

Revenue related to IMEs, peer reviews, bill reviews, administrative support services and Medicare compliance services is recognized at the time services have been performed and the report is shipped to the end user. The Company believes that recognizing revenue at the time the report is shipped is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25,

  Revenue Recognition: Overall,

  (i) persuasive evidence that arrangement exists, (ii) shipment has occurred, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured. The Company reports revenues net of any sales, use and value added taxes.

Revenue related to other IME services, including litigation support services, medical record retrieval services, document management services and case management services, where no report is generated, is recognized at the time the service is performed. The Company believes that recognizing revenue at the time the service is performed is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25, (i) persuasive evidence that arrangement exists, (ii) services have been rendered, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim.  The Company has deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and is deferring these revenues, net of estimated costs, until the case has been settled, the contingency has been resolved and the cash has been collected.   As of December 31, 2015 and March 31, 2016, the Company had $2.7 million and $2.5 million, respectively, in U.K. net deferred revenues associated with such agreements.

Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any subsequent reporting period could be adversely affected.

(k)

              

Costs of Revenues

Costs of revenues are comprised of fees paid to members of the Company’s medical panel; other direct costs including transcription, film and medical record obtainment and transportation; and other indirect costs including labor and overhead related to the generation of revenues.

 

(l)

                

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies the provisions of FASB Interpretation No. 48, 

Accounting for Uncertainty in Income Taxes

, (included in FASB ASC Subtopic 740-10, 

Income Taxes — Overall

 ), and recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

(m)

Income (Loss) Per Common Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Diluted income (loss) per common share is calculated by dividing net income (loss), adjusted on an “as if converted” basis, by the weighted-average number of actual shares outstanding and, when dilutive, the share equivalents that would arise from the assumed conversion of convertible instruments. The effect of potentially dilutive stock options, warrants, shares of restricted stock with service restrictions that have not yet been satisfied and unvested restricted stock units (“RSUs”) is calculated using the treasury stock method.

The following table sets forth basic and diluted net income per share computational data for the three months ended March 31, 2015 and 2016 (amounts in thousands):

	Three months ended March 31,
	2015		2016
Net income	$	2,024	$	3,260
Basic shares outstanding:
Common stock		40,418		40,805
Diluted shares outstanding:
Common stock		40,418		40,805
Dilutive securities (1)		2,262		1,557
Total		42,680		42,362

(1) For the three months ended March 31, 2015 and 2016, the Company's dilutive securities excluded options potentially exercisable in the future into 32,000 shares and 86,000 shares, respectively, because their inclusion would have been anti-dilutive.

(n

)

               

Share-Based Compensation

The Company has an Amended and Restated 2008 Stock Incentive Plan, as amended, (the “Plan”) that provides for granting of stock options, restricted stock, RSUs and other equity awards. The Company accounts for share-based awards in accordance with ASC Topic 718,

 Compensation — Stock Compensation

 (“ASC 718”). ASC 718 requires measurement of compensation cost for all share-based awards at fair value on the grant date (or measurement date if different) and recognition of compensation expense, net of forfeitures, over the requisite service period for awards expected to vest.

Stock Options

The fair value of stock option grants is determined using the Black-Scholes valuation model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options. Additionally, option valuation models require the input of highly subjective assumptions, including the expected volatility of the stock price. Because the Company’s stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimates, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of its share-based awards.

 The Company’s expected volatility assumptions are based upon the weighted average of the Company’s implied volatility, the Company’s mean reversion volatility and the median of the Company’s peer group’s most recent historical volatilities for 2015 stock option grants. Expected life assumptions are based upon the “simplified” method as for those options issued in 2015, which were determined to be issued approximately at-the-money. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

In the three months ended March 31, 2016, the Company issued no stock option awards to employees. Share-based compensation expense related to stock option awards was $1.9 million and $1.2 million for the three months ended March 31, 2015 and 2016, respectively, of which $469,000 and $307,000, respectively, was included in costs of revenues, and $1.4 million and $921,000, respectively, was recorded in selling, general and administrative (“SGA”) expenses.

At March 31, 2016, the unrecognized compensation expense related to stock option awards was $3.4 million, with a remaining weighted average life of 1.2 years.

A summary of option activity for the three months ended March 31, 2016 is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life ( years )		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2015		3,766,868		$	13.28
Options granted		—			—
Options forfeited		(46,346	)		33.13
Options exercised		(74,121	)		9.99
Outstanding at March 31, 2016		3,646,401		$	13.10
Exercisable at March 31, 2016		3,377,368		$	11.51		5.1	$	61,718

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The total intrinsic value of stock options exercised was approximately $860,000 during the three months ended March 31, 2016.

Restricted Stock and Restricted Stock Units

The Company has granted members of the Board of Directors, certain employees and outside consultants, time lapse restricted stock and RSUs which vest after a stipulated number of years from the grant date depending on the terms of the issue. The fair value of shares of restricted stock and RSUs is determined based upon the market price of the underlying common stock as of the date of grant. Time lapse restricted shares issued and RSUs vest over one to five-year periods. The agreements under which the restricted stock and RSUs are issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have been satisfied. The restriction on a majority of these awards could expire earlier than the stipulated time frame in the event of a change in control or merger or other acquisition. Share-based compensation expense related to shares of restricted stock and RSUs was $4.1 million and $4.2 million for the three months ended March 31, 2015 and 2016, respectively, all of which is included in SGA expenses.

The following is a summary of restricted share and RSU activity for the three months ended March 31, 2016:

	Number of awards			Weighted average grant date fair value
Non-vested awards at December 31, 2015		1,315,522		$	34.30
Awards granted		685,280			27.68
Awards vested		(238,094	)		24.28
Awards forfeited		(130,237	)		35.96
Non-vested awards at March 31, 2016		1,632,471		$	32.85

The total fair value of vested RSUs and shares of restricted stock during the three months ended March 31, 2015 and 2016 was $3.2 million and $5.8 million, respectively. At March 31, 2016, total unrecognized compensation costs related to non-vested restricted shares and RSUs was $41.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

During the three months ended March 31, 2015 the Company recorded share-based compensation expense of $130,000 related to an annual incentive compensation plan established by the Compensation Committee of the Board of Directors, all of which was recorded in SGA expenses. No such share-based compensation expense was recorded for the three months ended March 31, 2016, as all amounts paid under the incentive compensation plan for the year ended December 31, 2016 will be settled in cash.

(o)

             

Fair Value Measurements

 

The Company’s financial assets and (liabilities), which are measured at fair value on a recurring basis, are categorized using the fair value hierarchy at December 31, 2015 and March 31, 2016, and are as follows (in thousands):

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

The contingent consideration relates to earnout provisions recorded in conjunction with a 2016 acquisition (see Note 3). The fair value of the foreign currency derivative was determined using observable market inputs such as foreign currency exchange rates and considers nonperformance risk of the Company and that of its counterparties. 

(p)

              

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are recorded as a component of stockholders’ equity but are excluded from net income (loss). The Company’s accumulated other comprehensive income (loss) consists of foreign currency translation adjustments, reported net of tax as appropriate, from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses, reported net of tax as appropriate, resulting from its net investment hedge of its Australian and U.K. subsidiaries.

Accumulated other comprehensive income (loss) consists of the following (in thousands):

 

	Foreign Currency Translation			Net investment hedge - foreign exchange contract			Total
Balance at December 31, 2015	$	(33,716	)	$	7,713		$	(26,003	)
Change during 2016:
Before-tax amount		818			(107	)		711
Tax (expense) benefit		484			42			526
Total activity in 2016		1,302			(65	)		1,237
Balance at March 31, 2016	$	(32,414	)	$	7,648		$	(24,766	)

(q)

               

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 In August 2014, the FASB issued ASU No. 2014-15, “

Presentation of Financial Statements – Going Concern

 

(Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

” (“ASU 2014-05”), which define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Currently, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. This going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. This ASU provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and the related footnote disclosures. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early adoption permitted. The Company has adopted the provisions during the year ending December 31, 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about its ability to continue as a going concern. Adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, “

Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs

” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. Additionally, in August 2015, the FASB issued ASU No. 2015-15,

“Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”

(“ASU 2015-15”) which amends ASU 2015-03, which did not address the balance sheet presentation of debt issuance costs incurred in connection with line-of-credit arrangements. Under ASU 2015-15, a Company may defer debt issuance costs associated with line-of-credit arrangements and present such costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. The amendments in these updates were effective for fiscal periods beginning on or after December 15, 2015, and interim periods within those fiscal years, were applied retrospectively and represent a change in accounting principle.

The Company adopted the provisions of these amendments in January of 2016. As a result, approximately $6.9 million and $6.6 million of debt issuance costs related to the Company’s $500.0 million 5.625% Senior Unsecured Notes Payable due April 2023 (the "Notes") were reclassified from deferred financing costs to Notes payable in the accompanying consolidated balance sheets as of December 31, 2015 and March 31, 2016, respectively. The Company elected to continue presenting the deferred financing costs associated with its Senior Secured Revolving Credit Facility as deferred financing costs, net in the accompanying consolidated balance sheets.

In September 2015, the FASB issued ASU No. 2015-16, “

Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments

” (“ASU 2015-16”) which requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The amendments in this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company adopted the provisions of this ASU prospectively in the first quarter of 2016, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-16 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU No. 2015-17, “

Balance Sheet Classification of Deferred Taxes

” (“ASU 2015-17”), which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. Earlier adoption is permitted. This amendment may be applied either prospectively or retrospectively to all periods presented. The Company adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-17 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

Accounting Pronouncements Not Yet Adopted

 

In May 2014, the FASB issued ASU No. 2014-09, (Topic 606): 

Revenue from Contracts with Customers

 (“ASU 2014-09”) which supersedes the revenue recognition requirements in “

Topic 605, Revenue Recognition

” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In January 2016, the FASB issued ASU 2016-01,

“Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

” (“ASU 2016-01”), which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2018 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02,

“Leases (Topic 842)”

(“ASU 2016-02”), which requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-06,

“

Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments”

(“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2017 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-08,

“Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

”

(“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update are effective for fiscal period beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-09,

“Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”

(“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

There were various other accounting standards and interpretations issued during 2015 and 2016 the Company has not yet been required to adopt, none of which are expected to have a material impact on its financial position, results of operations and cash flows.

XML

Note 3 - Acquisitions

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

(3)

              

Acquisitions

ExamWorks operates in a highly fragmented industry and has completed 57 acquisitions since July 14, 2008 through the date of this filing. A key component of ExamWorks’ acquisition strategy is growth through acquisitions that expand its geographic coverage, that provide new or complementary lines of business, expand its portfolio of services and that increase its market share.

The Company has accounted for all business combinations using the purchase method to record a new cost basis for the assets acquired and liabilities assumed. The Company recorded, based on a preliminary purchase price allocation, intangible assets representing client relationships, tradenames, covenants not to compete, technology and the excess of purchase price over the estimated fair value of the tangible assets acquired and liabilities assumed as goodwill in the accompanying consolidated balance sheets. The goodwill is attributable to synergies achieved through the streamlining of operations combined with improved margins attainable through increased market presence. The results of operations are reflected in the consolidated financial statements of the Company from the date of acquisition.

(

a

)

2015 Acquisitions

In 2015, the Company completed the following individually insignificant acquisitions, as defined in SEC Regulation S-X Rule 3-05, with an aggregate purchase price of $75.7 million, composed of $76.8 million cash consideration less cash acquired of $1.1 million. In conjunction with the 2015 acquisitions, the Company incurred aggregate transaction costs of $882,000, of which $35,000 was incurred in the three months ended March 31, 2015. The Company did not incur any costs associated with the indicated acquisitions in the first quarter of 2016. These amounts are reported in SGA expenses in the Company’s accompanying consolidated statements of comprehensive income (loss). These acquisitions enhanced and expanded the presence and service offerings of the Company. 

Company Name	Form of acquisition	Date of acquisition
ReliableRS (United States)	Substantially all of the assets and assumed certain liabilities	January 2, 2015
Landmark Exams & Maven Exams (United States)	Substantially all of the assets and assumed certain liabilities	April 14, 2015
Karen Rucas & Associates (Canada)	Substantially all of the assets and assumed certain liabilities	July 13, 2015
First Choice (United States)	Substantially all of the assets and assumed certain liabilities	October 30, 2015
Argent (United Kingdom)	Substantially all of the assets and assumed certain liabilities	November 23, 2015

The preliminary allocation of consideration for these acquisitions is summarized as follows (in thousands): 

	Preliminary purchase price allocation December 31, 2015			Adjustments/ reclassifications			Preliminary purchase price allocation March 31 , 2016
Equipment and leasehold improvements	$	1,513		$	—		$	1,513
Customer relationships		28,530			—			28,530
Tradenames		1,965			—			1,965
Covenants not to compete		182			—			182
Goodwill		24,296			489			24,785
Net deferred tax liability associated with step-up in book basis		(18	)		—			(18	)
Assets acquired and liabilities assumed, net		18,931			(218	)		18,713
Totals	$	75,399		$	271		$	75,670

In 2016, the Company recorded adjustments to working capital resulting in an increase in total consideration paid of $271,000. Goodwill of $24.6 million and other intangible assets of $30.4 million are expected to be deductible for U.S. federal income tax purposes. The Company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize those fair values. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. The Company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date.

(b)

2016

Acquisitions

In 2016, the Company completed the following individually insignificant acquisitions, as defined in SEC Regulation S-X Rule 3-05, with an aggregate purchase price of $99.6 million, composed of $92.0 million cash consideration and $7.6 million of contingent consideration. In conjunction with the 2016 acquisitions, the Company incurred aggregate transaction costs of $446,000, of which $82,000 were incurred in the three months ended March 31, 2016. The Company did not incur any costs associated with the acquisitions in the first quarter of 2015. These amounts are reported in SGA expenses in the Company’s accompanying consolidated statements of comprehensive income (loss). These acquisitions enhanced and expanded the presence and service offerings of the Company.

Company name	Form of acquisition	Date of acquisition
ABI (United States)	100% of the outstanding common stock	January 8, 2016
Advanced Medical Reviews (United States)	100% of the outstanding common stock	January 19, 2016

The preliminary allocation of consideration for these acquisitions is summarized as follows (in thousands): 

	Preliminary purchase price allocation March 31 , 201 6
Equipment and leasehold improvements	$	1,044
Customer relationships		32,201
Tradename		6,900
Goodwill		70,378
Net deferred tax liability associated with step-up in book basis		(15,104	)
Assets acquired and liabilities assumed, net		4,219
Total	$	99,638

None of the goodwill or other intangibles are currently expected to be deductible for U.S. federal income tax purposes. The Company believes that information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed but the Company is waiting for additional information necessary to finalize those fair values. Thus, the provisional measurements of fair value set forth above are subject to change. Such changes are not expected to be significant. The Company expects to complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. The 2016 acquisitions contributed $13.0 million in revenues and $231,000 in operating losses for the three months ended March 31, 2016.

(c)

Pro forma Financial Information

The following unaudited pro forma results of operations for the three months ended March 31, 2015 and 2016 assumes that the 2015 acquisitions were completed on January 1, 2014 and the 2016 acquisitions were completed on January 1, 2015.

For the three months ended March 31, 2015 and 2016, the pro forma results include adjustments to reflect interest and other expenses of $2.3 million and $128,000, respectively, associated with the funding of the acquisitions assuming that acquisition related debt was incurred as referenced above. In addition, incremental depreciation and amortization expense was recorded as if the acquisitions had occurred on the dates referenced above and amounted to $5.1 million and $315,000 for the three months ended March 31, 2015 and 2016, respectively. Finally, adjustments of $948,000 and $1.2 million were made to reduce SGA expenses for the three months ended March 31, 2015 and 2016, respectively, principally related to certain salary and other personal expenses attributable to the previous owners and employees of the acquired businesses.  These adjustments represent contractual reductions and are considered to be non-recurring and are not expected to have a continuing impact on the operations of the Company.

	Three months ended March 31 ,
	2015		2016
	(In thousands, except per share data)
Pro forma revenues	$	224,914	$	228,389
Pro forma net income		139		3,812
Pro forma income per share: Basic	$	0.00	$	0.09
Pro forma income per share: Diluted	$	0.00	$	0.09

The pro forma financial information presented above is not necessarily indicative of either the results of operations that would have occurred had the acquisitions been effective as of January 1 of the respective years or of future operations of the Company.

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Note 4 - Property, Equipment and Leasehold Improvements

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(4)              Property, Equipment and Leasehold Improvements

 

Property, equipment and leasehold improvements at December 31, 2015 and March 31, 2016, consist of the following (in thousands):

	Estimated useful lives			December 31,		March 31 ,
	(years)			2015		2016
Building		15		$	3,669	$	3,701
Computer and office equipment		3			23,162		24,982
Furniture and fixtures	3	to	5		5,051		5,461
Leasehold improvements	Lease term				6,272		7,695
					38,154		41,839
Less accumulated depreciation and amortization					18,009		19,575
Totals				$	20,145	$	22,264

Depreciation expense was $1.7 million and $1.9 million for the three months ended March 31, 2015 and 2016, respectively.

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Note 5 - Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

(5)              Goodwill and Intangible Assets

Goodwill by segment at December 31, 2015 and March 31, 2016 consists of the following (in thousands) (1):

	United				United
	States		Canada		Kingdom			Australia		Total
Balance at December 31, 2015	$	412,502	$	15,364	$	49,428		$	31,003	$	508,297
Goodwill acquired during the year		70,378		—		—			—		70,378
Adjustments to prior year acquisitions		738		2		(251	)		—		489
Effect of foreign currency translation		—		1,435		(1,531	)		2,311		2,215
Balance at March 31, 2016	$	483,618	$	16,801	$	47,646		$	33,314	$	581,379

(1) Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

Intangible assets at December 31, 2015 and March 31, 2016, consist of the following (in thousands):

				December 31, 2015
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	263,293	$	(199,266	)	$	64,027
Tradenames	45	to	84		68,172		(52,354	)		15,818
Covenants not to compete		36			10,254		(6,047	)		4,207
Technology	24	to	40		9,014		(8,393	)		621
Totals				$	350,733	$	(266,060	)	$	84,673

				March 31, 2016
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	296,657	$	(212,493	)	$	84,164
Tradenames	45	to	84		75,323		(54,651	)		20,672
Covenants not to compete		36			10,729		(6,605	)		4,124
Technology	24	to	40		8,973		(8,524	)		449
Totals				$	391,682	$	(282,273	)	$	109,409

The aggregate intangible amortization expense was $13.1 million and $14.7 million for the three months ended March 31, 2015 and 2016, respectively. The estimated future amortization expense of intangible assets is as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	37,682
Years ended December 31:
2017		40,480
2018		21,131
2019		10,062
2020		54
Total	$	109,409

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Note 6 - Accrued Expenses

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(6)              Accrued Expenses

Accrued expenses at December 31, 2015 and March 31, 2016 consist of the following (in thousands):

	December 31, 2015		March 31 , 2016
Accrued compensation and benefits	$	13,266	$	12,020
Accrued selling and professional fees		5,457		5,143
Accrued income, value added and other taxes		30,774		28,827
Accrued medical panel fees		7,598		6,239
Other accrued expenses		3,653		3,032
Totals	$	60,748	$	55,261

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Note 7 - Stockholders' Equity

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

(7)              Stockholders’ Equity

During the three months ended March 31, 2016, the Company issued approximately 74,000 shares of common stock to settle options exercised during the period.

During the three months ended March 31, 2016, the Company issued approximately 67,000 shares of restricted stock with a fair value of $1.7 million to certain officers and employees for services to be provided during the next three years. The Company is recording the expenses related to these awards in SGA expenses over the requisite service period.

During the three months ended March 31, 2016, the Company issued approximately 98,000 shares of common stock to settle restricted stock units whose restrictions were lifted during the period.

Repurchased shares of the Company’s common stock are held as treasury shares until they are reissued or retired. When the Company reissues treasury stock, if the value of the transaction is greater than the average price paid to acquire the shares, an increase in additional paid-in capital is recorded. Conversely, if the value of the transaction is less than the average price paid to acquire the shares, a decrease is recorded to additional paid-in capital to the extent of increases previously recorded for similar transactions, and a decrease is recorded in retained earnings for any remaining amount. During the three months ended March 31, 2016, the Company repurchased approximately 310,000 shares of common stock under the share repurchase program. These shares were repurchased at an average cost of $25.85 per share for a total cost of $8.0 million. As of March 31, 2016, the Company has approximately 2.0 million shares of common stock held as treasury shares with an average value of $18.74 per share, and the ability to repurchase an additional $35.9 million in shares of its common stock.

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Note 8 - Related Party Transactions

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

(8)              Related Party Transactions

 

The previous and existing revolving credit facilities contain a provision requiring the Company to use a third party to perform financial due diligence for acquisitions exceeding a certain size. With the approval of the senior lender, the Company engaged RedRidge Finance Group (“RedRidge”) to assist it with financial due diligence and incurred $118,000 and $176,000 in fees, respectively, pertaining to acquisition-related work performed during the three months ended March 31, 2015 and 2016, respectively. P&P Investment, LLC (“P&P”), a company owned by Richard Perlman and James Price, the Executive Chairman and Chief Executive Officer, respectively, of the Company, is a minority owner of RedRidge. P&P, Mr. Perlman and Mr. Price had historically waived any right P&P had to any portion of the diligence fees paid by the Company to RedRidge. This waiver terminated as of August 1, 2013.

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Note 9 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(9)              Commitments and Contingencies

(a)

Lease Commitments

The Company and its subsidiaries lease office space and office related equipment under noncancelable operating leases with various expiration dates from 2016 through 2023.

Future minimum lease payments under the operating leases for the nine months ended December 31, 2016 and each of the years subsequent to December 31, 2016 are as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	11,780
Years ended December 31:
2017		14,162
2018		11,771
2019		8,185
2020		5,134
Thereafter		3,874
Total	$	54,906

Related rent expense was $4.2 million and $5.1 million for the three months ended March 31, 2015 and 2016, respectively.

(b)

Employee Benefit Plans

The Company and certain of its subsidiaries each sponsor separate voluntary defined contribution pension plans. The plans cover employees that meet specific age and length of service requirements. The Company and certain of its subsidiaries have various matching and vesting arrangements within their individual plans. For the three months ended March 31, 2015 and 2016, the Company recorded $370,000 and $238,000, respectively, in compensation expense related to these plans.

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Note 10 - Long-term Debt

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

(10)            Long-Term Debt

Long-term debt at December 31, 2015 and March 31, 2016 consists of the following (in thousands):

	December 31,			March 31 ,
	2015			2016
Notes Payable (a)	$	500,000		$	500,000
Deferred financing costs related to Notes Payable (a)		(6,874	)		(6,641	)
Senior Secured Revolving Credit Facility, Bank of America, N.A. (b)		—			50,000
Working capital facilities, Barclays (c)		35,243			32,578
Totals	$	528,369		$	575,937

(a)      On April 16, 2015, the Company closed a public offering of the Notes. The Notes were issued at a price of 100% of their principal amount. The Notes are senior obligations of ExamWorks and are guaranteed by certain of ExamWorks’ existing and future U.S. subsidiaries. The gross proceeds of $500.0 million were used to repay all of the Company’s outstanding borrowings under the Senior Secured Revolving Credit Facility, to redeem all of the Company’s prior $250.0 million, 9.0% senior notes due 2019 the (“Senior Unsecured Notes”), to pay related fees and expenses, and for general corporate purposes, including acquisitions. The Company incurred deferred financing costs of $7.5 million related to this offering, none of which were incurred in the three months ended March 31, 2015 or 2016. These costs are amortized on a straight-line basis over the 8-year life of the Notes which approximates the effective interest method. Additionally, the Company amortized deferred financing costs of approximately $226,000 in the three months ended March 31, 2015 related to previous Senior Unsecured Notes which were extinguished in April 2015.

The Notes were issued under an indenture, dated as of April 16, 2015, as supplemented by a supplemental indenture, dated April 16, 2015 (collectively, the “Indenture”), among the Company, the Guarantors and U.S. Bank, National Association, as trustee (the “Trustee”).  The Notes are the Company’s general senior unsecured obligations, and rank equally with the Company’s existing and future senior unsecured obligations and senior to all of the Company’s further subordinated indebtedness. The Notes accrue interest at a rate of 5.625% per year, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing October 15, 2015. Interest accrues from the date of issuance of the Notes.

At any time on or after April 15, 2018, the Company may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 105.625% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, provided that at least 60% of the original aggregate principal amount of the Notes remains outstanding after redemption. In addition, the Company may redeem some or all of the Notes at any time prior to April 15, 2018 at a redemption price equal to 100% of the principal amount of the Notes plus a make whole premium described in the Indenture, plus accrued and unpaid interest.

The Indenture includes covenants which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness, make certain types of restricted payments, incur liens on assets of the Company or the restricted subsidiaries, engage in asset sales and enter into transactions with affiliates. Upon a change of control (as defined in the Indenture), the Company may be required to make an offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest. The Indenture also contains customary events of default.

(b)      On November 2, 2010, the Company entered into the Senior Secured Revolving Credit Facility with Bank of America, N.A. The facility initially consisted of a $180.0 million revolving credit facility.

On May 6, 2011, the Company increased and fully exercised the accordion features of the Senior Secured Revolving Credit Facility.  The increase and exercise of the accordion feature increased the committed capacity of the credit facility by $55.0 million, from a total of $245.0 million to a total of $300.0 million.

On July 7, 2011, the Company entered into a second amendment to its Senior Secured Revolving Credit Facility (the “Second Amendment”) which became effective simultaneously with the consummation of the Company’s private offering of the Senior Unsecured Notes.  The Second Amendment amended the Senior Secured Revolving Credit Facility to, among other things, (i) extend the maturity date of the Senior Secured Revolving Credit Facility from November 2013 to July 2016; (ii) permit the issuance and sale of the Senior Unsecured Notes; (iii) replace the consolidated senior leverage ratio with a consolidated senior secured leverage ratio while permitting the maximum consolidated senior secured leverage ratio to be 3.00 to 1; (iv) permit the Company’s maximum consolidated leverage ratio to increase from 3.5 to 1 to 4.75 to 1; (v) reduce the borrowing cost; and (vi) allow the Company to complete acquisitions with a purchase price of up to $75.0 million (previously $50.0 million) without prior lender consent. The Second Amendment also reduced the aggregate revolving commitments under the Senior Secured Revolving Credit Facility by $37.5 million for a maximum commitment of $262.5 million, subject to the Company’s right to increase the aggregate revolving commitments by $37.5 million for a maximum commitment of $300.0 million, so long as the Company is not in default and the Company satisfies certain other customary conditions.

On February 27, 2012, the Company entered into a third amendment to its Senior Secured Revolving Credit Facility (the “Third Amendment”). The Third Amendment amended the Senior Secured Revolving Credit Facility as to the definitions of consolidated fixed charges and consolidated fixed charge coverage ratio and does not permit the consolidated fixed charge coverage ratio as of the end of any fiscal quarter to be less than (i) for any fiscal quarter ending during the period from December 31, 2011 to and including September 30, 2012, 1.75 to 1.00 and (ii) for any fiscal quarter ending thereafter, 2.00 to 1.00.

On August 27, 2012, the Company entered into a fourth amendment to its Senior Secured Revolving Credit Facility (the “Fourth Amendment”). The Fourth Amendment amended the Senior Secured Revolving Credit Facility to add the Australian dollar as an alternative currency and increased the alternative currency sublimit from USD $60.0 million to USD $100.0 million.

On June 27, 2013, the Company entered into a fifth amendment to its Senior Secured Revolving Credit Facility (the “Fifth Amendment”). Among other changes, the Fifth Amendment modified the Credit Agreement to permit an implementation of an auto-borrow agreement between the swing line lender and the Company to facilitate cash management, incorporated new provisions related to swap regulations and updated various provisions related to the LIBOR rate, Foreign Account Tax Compliance Act and the International Financial Reporting Standards.

On February 3, 2014, the Company entered into a sixth amendment to its Senior Secured Revolving Credit Facility (the “Sixth Amendment”). The Sixth Amendment (i) allowed the Company to consummate the acquisition of Gould & Lamb, and (ii) allows the Company to acquire a target (a) with negative trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) if the purchase price of such acquisition is less than $5.0 million, (b) with trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) of less than or equal to $3.0 million without delivering to the lenders a quality of earnings report regarding such target and (c) without delivering pro forma projections of the Company to the lenders if the purchase price of such acquisition is less than $75.0 million, in each case, without prior lender consent.

On April 16, 2015, the Company entered into the Amended and Restated Credit Facility. The Amended and Restated Credit Facility provides for up to $300.0 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). During the term of the Amended and Restated Credit Facility, the Company has the right, subject to compliance with the covenants specified in the Amended and Restated Credit Facility and the Notes, to increase the revolving extensions under the Amended and Restated Credit Facility to a maximum of $400.0 million. The term of the Amended and Restated Credit Facility was extended for five years from the date of the amendment to April 2020. 

Borrowings under the Amended and Restated Credit Facility, as amended, bear interest, at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5%, (b) the Bank of America prime rate and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin, as the Company elects. The applicable margin means a percentage per annum determined in accordance with the following table:

Pricing Tier	Consolidated Leverage Ratio					Commitment Fee/Unused Line Fee	Letter of Credit Fee	Eurocurrency Rate Loans	Base Rate Loans
1	≥	4.00	to 1.0			0.45%	2.75%	2.75%	1.75%
2	≥	3.50	to 1.0 but <	4.00	to 1.0	0.40%	2.50%	2.50%	1.50%
3	≥	3.00	to 1.0 but <	3.50	to 1.0	0.35%	2.25%	2.25%	1.25%
4	≥	2.50	to 1.0 but <	3.00	to 1.0	0.30%	2.00%	2.00%	1.00%
5			<	2.50	to 1.0	0.30%	1.75%	1.75%	0.75%

In the event of default, the outstanding indebtedness under the facility will bear interest at an additional 2%.

The Amended and Restated Credit Facility contains restrictive covenants, including, among other things, financial covenants requiring the Company to not exceed a maximum consolidated senior secured leverage coverage ratio, a maximum total consolidated leverage ratio and to maintain a minimum consolidated fixed charge coverage ratio. The Amended and Restated Credit Facility also restricts the Company’s ability (subject to certain exceptions) to incur indebtedness, prepay or amend other indebtedness, create liens, make certain fundamental changes including mergers or dissolutions, pay dividends and make other payments in respect of capital stock, make certain investments, sell assets, change its lines of business, enter into transactions with affiliates and other corporate actions.

On June 1, 2015 the Company entered into a first amendment to the Amended and Restated Credit Facility (“First Amendment”). The First Amendment amended the definition of “Change of Control” in the Amended and Restated Credit Facility.

As of March 31, 2016, the Company had $50.0 million outstanding under the Amended and Restated Credit Facility, resulting in $250.0 million of undrawn commitments. 

(c)       On September 29, 2010, the Company’s indirect 100% owned subsidiary UK Independent Medical Services Limited (“UKIM”) entered into a Sales Finance Agreement (the “UKIM SFA”) with Barclays Bank PLC (“Barclays”), pursuant to which Barclays provides UKIM a working capital facility of up to £5,000,000, subject to the terms and conditions of the UKIM SFA. The working capital facility bore a discount margin of 2.5% over Base Rate and served to finance UKIM’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

On June 28, 2013, UKIM entered into an amendment to extend the term of the existing UKIM SFA by 24 months from June 28, 2013, to amend the discount margin to 2.4% over Base Rate and to provide that payments by UKIM for certain non-working capital purposes are permitted under the UKIM SFA. Further, on April 16, 2015, UKIM entered into an amendment to extend the term of the existing UKIM SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% rate on March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, UKIM had $6.0 million outstanding under the working capital facility, resulting in approximately $1.2 million in availability.

On May 12, 2011, the Company’s indirect 100% owned subsidiary Premex Group Limited (“Premex”) entered into a Sales Finance Agreement (the “Premex SFA”) with Barclays, pursuant to which Barclays provides Premex a working capital facility of up to £26,500,000, subject to the terms and conditions of the Premex SFA. The working capital facility bore a discount margin of 2.4% over Base Rate and served to finance Premex’s unpaid account receivables.  The working capital facility had a minimum term of 36 months.

On June 28, 2013, Premex entered into an amendment to extend the term of the existing Premex SFA by 24 months from June 28, 2013, and to provide that payments by Premex for certain non-working capital purposes are permitted under the Premex SFA. Further, on April 16, 2015, Premex entered into an amendment to extend the term of the existing Premex SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% at March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, Premex had $26.6 million outstanding under the working capital facility, resulting in approximately $11.5 million in availability.  

As of March 31, 2016, future maturities of long-term debt were as follows (in thousands):

	Amount
Nine months ended December 31, 2016	$	—
Years ended December 31:
2017		—
2018		32,578
2019		—
2020		50,000
Thereafter		500,000
Total	$	582,578

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Note 11 - Financial Instruments

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(11)             Financial Instruments

The FASB issued ASC Topic 815,

 Derivatives and Hedging

 (“ASC 815”) which establishes accounting and reporting standards for derivative instruments. ASC 815 requires an entity to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If the derivative does qualify as a hedge under ASC 815, changes in the fair value will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments or recognized in accumulated other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of a hedge’s change in fair value will be immediately recognized in earnings.

Beginning in the second quarter of 2013, in order to protect against foreign currency exposure in its Australian operations, the Company entered into forward foreign currency contracts as a hedge of AUD $60.0 million of its net investment in Australia. Beginning in the third quarter of 2013, the Company also entered into forward foreign currency contracts as a hedge of £40.0 million of its net investment in the U.K. During the fourth quarter of 2015, the Company entered into a foreign exchange agreement to hedge an additional £35.0 million related to its investment in the U.K. concurrent with funding of the acquisition of Argent.

As of December 31, 2015, the Company had a net liability of $367,000, with $1.2 million recorded in other current liabilities and $848,000 recorded in other current assets with the offsetting net unrealized loss being recorded in accumulated other comprehensive income (loss) in its consolidated balance sheets associated with open forward foreign currency contracts which matured in January of 2016. As of March 31, 2016, the Company had a net liability of $2.1 million recorded in other current liabilities with the offsetting net unrealized loss being recorded in accumulated other comprehensive income (loss) in its consolidated balance sheets associated with open forward foreign currency contracts which matured in April 2016.

The Company does not enter into derivative transactions for speculative purposes.

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Note 12 - Income Taxes

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(12)            Income Taxes

In preparing its consolidated financial statements, the Company estimates income taxes in each of the jurisdictions in which it operates. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These differences result in deferred income tax assets and liabilities.

Additionally, the Company currently has significant deferred tax assets and other deductible temporary differences including basis differences between intangible assets. The Company does not provide a valuation allowance against its deferred tax assets as the Company believes that it is more likely than not that all of the deferred tax assets will be realized based on available evidence including scheduled reversal of deferred tax liabilities, projected future taxable income and other tax planning considerations.

The Company applies the provisions of ASC 740 as it relates to uncertain tax positions. This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 states that a tax benefit from an uncertain tax position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense.

The following table summarizes the activity related to the unrecognized tax benefits for the three months ended March 31, 2016, (in thousands):

Balance at January 1, 2016	$	1,924
Increase to prior year tax positions		95
Increase to current year tax positions		445
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at March 31, 2016	$	2,464

The Company is no longer subject to U.S. federal income and state tax return examinations by tax authorities for tax years before 2010 and 2009, respectively. The Company operates in multiple taxing jurisdictions and experiences audits from various tax authorities. The Company remains subject to possible examination until the statute of limitations expires for the respective tax jurisdiction. The Company does not anticipate that the amount of the unrecognized benefit will significantly increase or decrease within the next 12 months.

Undistributed earnings of the Company’s controlled foreign corporation subsidiaries are considered indefinitely reinvested and, accordingly, no provision for U.S. federal income taxes has been recorded. Deferred taxes are provided for earnings outside the United States when those earnings are not considered indefinitely reinvested.

XML

Note 13 - Segment and Geographical Information

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(13)            Segment and Geographical Information

The Company applies the provisions of ASC Topic 280, 

Segment Reporting

, (“ASC 280”). ASC 280, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker (“CODM”) and for which discrete financial information is available. Based on the provisions of ASC 280, the Company has determined that it operates in four geographic segments: the United States, Canada, the United Kingdom and Australia. The CODM evaluates segment performance based on revenues and segment profit, as defined below. The Company’s corporate costs and assets are all incurred in the United States and are included in the United States segment, as this is consistent with how they are presented and reviewed by the CODM. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

Information relating to the Company’s product groups (IMEs, peer review, bill review, Medicare compliance, case management, medical record retrieval, document management and other related services) is as follows (in thousands):

Revenues :	For the three months ended March 31 ,
	2015		2016
IME and other related services (1)	$	167,345	$	182,997
Peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services (1)		28,971		43,506
Total revenues	$	196,316	$	226,503

(1) Includes the results of certain of the Company’s service centers acquired whose revenues are generated substantially through the indicated product group. Outside of this presentation, other product groups are not tracked within the Company’s financial systems. Additionally, other related services, which include any Medicare compliance services and case management services completed at the Company’s historic service centers in the periods presented, are not separately captured within the Company’s financial systems and have been included with IME services in the above presentation as separate presentation is not practicable. With the Company’s acquisition of Gould & Lamb in February 2014 and Ability Services Network and MedAllocators in June 2014, Medicare compliance services and case management services have been added to the presentation above. Additionally, with the acquisition of ABI in January 2016, medical record retrieval and document management services have been added to the presentation above. None of the individual services within the peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services categories above represent more than 10% of consolidated revenues. 

Information relating to the Company’s geographic segments is as follows (in thousands)(1):  

	United						United
	States			Canada			Kingdom			Australia			Total
Three months ended March 31, 2015
Revenues	$	121,718		$	7,949		$	47,444		$	19,205		$	196,316
Segment profit		19,522			634			7,699			4,097			31,952
Depreciation and amortization expense		9,411			582			2,383			2,472			14,848
Capital expenditures		(1,670	)		(114	)		(189	)		(256	)		(2,229	)
Total assets (3)		598,165			22,343			236,186			83,228			939,922
Long-lived assets (2)(3)		471,040			15,613			92,703			68,227			647,583
Three months ended March 31, 2016
Revenues	$	149,440		$	9,454		$	47,933		$	19,676		$	226,503
Segment profit		22,905			968			9,779			3,832			37,484
Depreciation and amortization expense		10,752			56			3,539			2,289			16,636
Capital expenditures		(1,178	)		(27	)		(178	)		(1,354	)		(2,737	)
Total assets (3)		702,747			29,341			295,222			86,450			1,113,760
Long-lived assets (2)(3)		570,681			17,515			133,337			63,192			784,725

(1) For segment purposes, the Company defines “segment profit” as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

(2) Long-lived assets are noncurrent assets excluding deferred tax assets and deferred financing costs.

(3) Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

A reconciliation of segment profit to consolidated income from operations is as follows (in thousands):

	For the three months ended March 3 1 ,
	2015			2016
Segment Profit	$	31,952		$	37,484
Depreciation and amortization		(14,848	)		(16,636	)
Share-based compensation expense		(6,136	)		(5,419	)
Acquisition related transaction costs		(559	)		(1,058	)
Other income (expenses)		731			(969	)
Income from operations	$	11,140		$	13,402

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Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

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 certain 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, 2015 and March 31, 2016, and for the three months ended March 31, 2015 and 2016 is presented below. The Company (issuer of the Senior Unsecured Notes, and subsequently the Notes in April of 2015) 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

March 31

, 201

5

(In thousands)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	121,718		$	74,598	$	—	$	—		$	196,316
Costs and expenses:
Costs of revenues		82,334			45,842		—		—			128,176
Selling, general and administrative expenses		23,014			19,138		—		—			42,152
Depreciation and amortization		9,411			5,437		—		—			14,848
Total costs and expenses		114,759			70,417		—		—			185,176
Income from operations		6,959			4,181		—		—			11,140
Interest and other expenses, net		6,409			1,595		—		—			8,004
Loss before income taxes		550			2,586		—		—			3,136
Provision (benefit) for income taxes		(594	)		1,706		—		—			1,112
Net loss before earnings of consolidated subsidiaries	$	1,144		$	880	$	—	$	—		$	2,024
Net income (loss) of consolidated subsidiaries		880			—		880		(1,760	)		—
Net income (loss)	$	2,024		$	880	$	880	$	(1,760	)	$	2,024

Condensed Consolidating Statement of Operations

for the three months ended March 31, 2016

(In thousands)

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	149,439	$	77,064	$	—	$	—		$	226,503
Costs and expenses:
Costs of revenues		102,001		47,125		—		—			149,126
Selling, general and administrative expenses		27,807		19,532		—		—			47,339
Depreciation and amortization		10,753		5,883		—		—			16,636
Total costs and expenses		140,561		72,540		—		—			213,101
Income from operations		8,878		4,524		—		—			13,402
Interest and other expenses, net		7,074		1,325		—		—			8,399
Income before income taxes		1,804		3,199		—		—			5,003
Provision for income taxes		492		1,251		—		—			1,743
Net income before earnings of consolidated subsidiaries	$	1,312	$	1,948	$	—	$	—		$	3,260
Net income (loss) of consolidated subsidiaries		1,948		—		1,948		(3,896	)		—
Net income (loss)	$	3,260	$	1,948	$	1,948	$	(3,896	)	$	3,260

Condensed Consolidating Balance Sheet as of December 31, 201

5

(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	$	33,011	$	14,854	$	—	$	—		$	47,865
Accounts receivable, net		68,896		176,553		—		—			245,449
Intercompany receivable		57,394		—		6,245		(63,639	)		—
Prepaid expenses		10,398		6,411		—		—			16,809
Other current assets		848		1,110		—		—			1,958
Total current assets		170,547		198,928		6,245		(63,639	)		312,081
Property, equipment and leasehold improvements, net		12,695		7,450		—		—			20,145
Investment in subsidiaries		280,114		—		800,743		(1,080,857	)		—
Intercompany notes receivable		174,421		—		174,421		(348,842	)		—
Goodwill		398,045		110,252		—		—			508,297
Intangible assets, net		46,423		38,250		—		—			84,673
Long-term accounts receivable, less current portion		—		62,717		—		—			62,717
Deferred tax assets, noncurrent		47,363		3,042		—		—			50,405
Deferred financing costs, net		2,416		104		—		—			2,520
Other assets		725		3,244		—		—			3,969
Total assets	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	24,072	$	36,527	$	—	$	—		$	60,599
Intercompany payable		6,245		57,394		—		(63,639	)		—
Accrued expenses		13,150		47,598		—		—			60,748
Accrued interest expense		—		—		6,245		—			6,245
Deferred revenue		138		3,546		—		—			3,684
Other current liabilities		3,383		5,673		—		—			9,056
Total current liabilities		46,988		150,738		6,245		(63,639	)		140,332
Senior unsecured notes payable		—		—		493,126		—			493,126
Senior secured revolving credit facility and working capital facilities, less current portion		—		35,243		—		—			35,243
Intercompany notes payable		174,421		174,421		—		(348,842	)		—
Deferred tax liability, noncurrent		—		3,333		—		—			3,333
Other long-term liabilities		2,950		9,788		—		—			12,738
Total liabilities		224,359		373,523		499,371		(412,481	)		684,772
Commitments and contingencies
Stockholders’ equity (deficit)		908,390		50,464		482,038		(1,080,857	)		360,035
Total liabilities and stockholders' equity (deficit)	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807

Condensed Consolidating Balance Sheet as of

March 31, 2016

(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	$	1,554	$	14,445	$	—	$	—		$	15,999
Accounts receivable, net		77,277		171,785		—		—			249,062
Intercompany receivable		61,586		—		13,414		(75,000	)		—
Prepaid expenses		8,083		11,831		—		—			19,914
Other current assets		—		1,078		—		—			1,078
Total current assets		148,500		199,139		13,414		(75,000	)		286,053
Property, equipment and leasehold improvements, net		13,877		8,387		—		—			22,264
Investment in subsidiaries		282,062		—		895,039		(1,177,101	)		—
Intercompany notes receivable		174,413		—		174,413		(348,826	)		—
Goodwill		469,161		112,218		—		—			581,379
Intangible assets, net		76,555		32,854		—		—			109,409
Long-term accounts receivable, less current portion		—		67,495		—		—			67,495
Deferred tax assets, noncurrent		37,467		3,129		—		—			40,596
Deferred financing costs, net		2,296		90		—		—			2,386
Other assets		885		3,293		—		—			4,178
Total assets	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	29,192	$	36,756	$	—	$	—		$	65,948
Intercompany payable		13,414		61,586		—		(75,000	)		—
Accrued expenses		11,967		43,294		—		—			55,261
Accrued interest expense		—		—		13,414		—			13,414
Deferred revenue		222		3,276		—		—			3,498
Current portion of contingent earnout obligation		2,556		—		—		—			2,556
Other current liabilities		4,432		2,850		—		—			7,282
Total current liabilities		61,783		147,762		13,414		(75,000	)		147,959
Senior unsecured notes payable		—		—		493,359		—			493,359
Senior secured revolving credit facility and working capital facilities, less current portion		—		32,578		50,000		—			82,578
Intercompany notes payable		174,413		174,413		—		(348,826	)		—
Long-term contingent earnout obligation, less current portion		5,079		—		—		—			5,079
Deferred tax liability, noncurrent		—		3,250		—		—			3,250
Other long-term liabilities		3,232		10,993		—		—			14,225
Total liabilities		244,507		368,996		556,773		(423,826	)		746,450
Commitments and contingencies
Stockholders’ equity (deficit)		960,709		57,609		526,093		(1,177,101	)		367,310
Total liabilities and stockholders' equity (deficit)	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760

Condensed Consolidating Statement of Cash Flows for the

three

months ended

March 31

, 201

5

(In thousands)

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	2,226		$	3,938		$	—		$	—	$	6,164
Investing activities:
Cash paid for acquisitions, net		(2,299	)		—			—			—		(2,299	)
Purchases of building, equipment and leasehold improvements, net		(1,670	)		(559	)		—			—		(2,229	)
Working capital and other settlements for acquisitions		(91	)		—			—			—		(91	)
Proceeds from foreign currency net investment hedges		4,812			—			—			—		4,812
Other		(1,250	)		—			—			—		(1,250	)
Net cash used in investing activities		(498	)		(559	)		—			—		(1,057	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			25,478			—		25,478
Proceeds from the exercise of options and warrants		—			—			8,855			—		8,855
Excess tax benefit related to share-based compensation		—			—			2,086			—		2,086
Net repayments under working capital facilities		—			(132	)		—			—		(132	)
Repayment of contingent earnout obligation		—			(1,023	)		—			—		(1,023	)
Repayment under senior secured revolving credit facility		—			—			(29,331	)		—		(29,331	)
Intercompany notes and investments and other		7,088			—			(7,088	)		—		—
Net cash provided by (used in) financing activities		7,088			(1,155	)		—			—		5,933
Exchange rate impact on cash and cash equivalents		—			(509	)		—			—		(509	)
Net increase in cash and cash equivalents		8,816			1,715			—			—		10,531
Cash and cash equivalents, beginning of period		388			9,363			—			—		9,751
Cash and cash equivalents, end of period	$	9,204		$	11,078		$	—		$	—	$	20,282

Condensed Consolidating Statement of Cash Flows for the

three

months ended

March 31

, 201

6

(In thousands)

 

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	13,500		$	2,266		$	—		$	—	$	15,766
Investing activities:
Cash paid for acquisitions, net		(92,348	)		—			—			—		(92,348	)
Purchases of building, equipment and leasehold improvements, net		(1,179	)		(1,558	)		—			—		(2,737	)
Working capital and other settlements for acquisitions		(271	)		—			—			—		(271	)
Proceeds from foreign currency net investment hedge		1,649			—			—			—		1,649
Other		(150	)		—			—			—		(150	)
Net cash used in investing activities		(92,299	)		(1,558	)		—			—		(93,857	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			75,000			—		75,000
Excess tax benefit related to share-based compensation		—			—			4,766			—		4,766
Proceeds from the exercise of options and warrants		—			—			582			—		582
Net repayments under working capital facilities		—			(1,623	)		—			—		(1,623	)
Purchases of stock for treasury		—			—			(8,006	)		—		(8,006	)
Repayment under senior secured revolving credit facility		—			—			(25,000	)		—		(25,000	)
Intercompany notes and investments and other		47,342			—			(47,342	)		—		—
Net cash provided by (used in) financing activities		47,342			(1,623	)		—			—		45,719
Exchange rate impact on cash and cash equivalents		—			506			—			—		506
Net decrease in cash and cash equivalents		(31,457	)		(409	)		—			—		(31,866	)
Cash and cash equivalents, beginning of period		33,011			14,854			—			—		47,865
Cash and cash equivalents, end of period	$	1,554		$	14,445		$	—		$	—	$	15,999

XML

Note 15 - Subsequent Events

3 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

(15)            Subsequent Events

(

a

)

Acquisitions

     On April 5, 2016, the Company completed the acquisition of substantially all of the assets of Prizm LLC and certain of its affiliates, an IME provider based in Marlton, New Jersey, with annual revenues of approximately $10.0 million, strengthening the Company's market position in the IME Industry.

(

b

)

Merger

 On April 27, 2016, the Company announced that it had entered into a definitive merger agreement to be acquired by an affiliate of Leonard Green & Partners, L.P., for $35.05 per share in cash, representing a total transaction value of approximately $2.2 billion. The merger is subject to approval by the Company’s stockholders and other customary closing conditions. In accordance with the merger agreement’s “go shop” provision, the Company will conduct a market test for 25 business days concluding June 1, 2016. There are no guarantees that the go shop process will result in a superior proposal. The merger is currently expected to close in the third quarter of 2016.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

(a)

              

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on certain assumptions which they believe are reasonable in the circumstances and actual results could differ from those estimates. The more significant estimates reflected in these consolidated financial statements include purchase price allocations, useful lives of intangible assets, potential impairment of goodwill and intangible assets, the allowance for doubtful accounts, the portion of accounts receivable deemed to be long term in nature, the valuation of deferred tax assets, the valuation of equity and share-based compensation and derivative instruments.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

(b)

              

Foreign Currencies

Assets and liabilities recorded in foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income (loss) and are reported net of the effect of income taxes on the consolidated financial statements (See Note 2 (p)).

Cash and Cash Equivalents, Policy [Policy Text Block]

(c)

              

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2015 and March 31, 2016.

Receivables, Policy [Policy Text Block]

(d)

              

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consist of amounts owed to the Company for services provided in the normal course of business and are reported net of allowance for doubtful accounts, which amounted to $12.2 million and $12.5 million as of December 31, 2015 and March 31, 2016, respectively. Generally, no collateral is received from customers and additions to the allowance are based on ongoing credit evaluations of customers with general credit experience being within the range of management’s expectations. Accounts are reviewed regularly for collectability and those deemed uncollectible are written off.  The Company assumes, that on average, all accounts receivable will be collected within one year and thus classifies these as current assets; however there are certain receivables, principally in the U.K., that have aged longer than one year as of December 31, 2015 and March 31, 2016, and the Company has recorded an estimate for those receivables that will not be collected within one year as long-term in the consolidated balance sheets.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

(e)

              

Concentrations of Credit Risk

The Company routinely assesses the financial strength of its customers and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. For the three months ended March 31, 2015 and 2016, no individual customer accounted for more than 10% of revenues. At December 31, 2015 and March 31, 2016, there was an individual customer that accounted for approximately 14% and 13%, respectively, of the accounts receivable balance.

As of March 31, 2016, the Company had cash and cash equivalents totaling approximately $16.0 million. These amounts were held for future acquisition and working capital purposes and were held in non-interest bearing accounts, of which $1.6 million was held in the U.S. The U.S. amounts were insured under standard FDIC insurance coverage for deposit accounts up to $250,000, per depositor and account ownership category, at each separately insured depository institution.

Property, Plant and Equipment, Policy [Policy Text Block]

 

(f)

              

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets and accelerated methods for income tax purposes. Leasehold improvements are amortized over the lesser of their expected useful life or the remaining lease term. Maintenance and repair costs are expensed as incurred.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

(g)

              

Long-Lived Assets

In accordance with Impairment or Disposal of Long-Lived Assets, Subsections of Financial Accounting Standards Board (“FASB”) ASC Subtopic 360-10 (“ASC 360”),

  Property, Plant, and Equipment — Overall

, long-lived assets, such as equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models (using market participant assumptions), quoted market values and third-party independent appraisals, as considered necessary. At December 31, 2015 and March 31, 2016, no impairment was noted.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

 

(h)

               

Goodwill and Other Intangible Assets

Goodwill is an asset representing the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually in accordance with the provisions of FASB ASC Topic 350,

 Intangibles — Goodwill and Other

 (“ASC 350”). The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting units are compared with their carrying values (including goodwill). If the fair value of a reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting units' goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis (using market participant assumptions). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed.

The Company performed its annual impairment review of goodwill in October of 2015, and it was determined that the carrying amount of goodwill was not impaired, as the fair value of the reporting units substantially exceeded their carrying values and there have been no subsequent developments that would indicate impairment existed as of March 31, 2016. The goodwill impairment review will continue to be performed annually or more frequently if facts and circumstances warrant a review.

ASC 350 also requires that intangible assets with definite lives be amortized over their estimated useful lives. Currently, customer relationships, trade names, covenants not-to-compete and technology are amortized using the straight-line method over estimated useful lives.

Deferred Charges, Policy [Policy Text Block]

(i)

              

Deferred Financing Costs

In November 2010, the Company entered into a senior secured revolving credit facility with Bank of America N.A. (“Senior Secured Revolving Credit Facility”) (see Note 10). The Company has incurred deferred financing costs of $8.5 million associated with the Senior Secured Revolving Credit Facility and related amendments and restatements, none of which were incurred in the three months ended March 31, 2015 and 2016. In the second quarter of 2015, the Company amended and restated the Senior Secured Revolving Credit Facility in connection with the offering of the Notes as defined in Note 10, pursuant to an amended and restated credit agreement (the “Amended and Restated Credit Facility”), which resulted in a loss on extinguishment of debt of approximately $274,000 for the write-off of unamortized deferred financing costs in accordance with ASC Topic 470,

 Debt

 (“ASC 470”).

The deferred financing costs associated with the Senior Secured Revolving Credit Facility are being amortized to interest expense over the five-year term of the facility, using the straight-line method, which approximates the effective interest method.

The Company amortized $361,000 and $148,000 for the three months ended March 31, 2015 and 2016, respectively, to interest expense.

Revenue Recognition, Policy [Policy Text Block]

(j)

                

Revenue Recognition

Revenue related to IMEs, peer reviews, bill reviews, administrative support services and Medicare compliance services is recognized at the time services have been performed and the report is shipped to the end user. The Company believes that recognizing revenue at the time the report is shipped is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25,

  Revenue Recognition: Overall,

  (i) persuasive evidence that arrangement exists, (ii) shipment has occurred, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured. The Company reports revenues net of any sales, use and value added taxes.

Revenue related to other IME services, including litigation support services, medical record retrieval services, document management services and case management services, where no report is generated, is recognized at the time the service is performed. The Company believes that recognizing revenue at the time the service is performed is appropriate because the Company’s revenue policies meet the following four criteria in accordance with ASC 605-10-S25, (i) persuasive evidence that arrangement exists, (ii) services have been rendered, (iii) the price is fixed and determinable and (iv) collectability is reasonably assured.

Certain agreements with customers in the U.K. include provisions whereby collection of the amounts billed are contingent on the favorable outcome of the claim.  The Company has deemed these provisions to preclude revenue recognition at the time of performance, as collectability is not reasonably assured and the cash payments are contingent, and is deferring these revenues, net of estimated costs, until the case has been settled, the contingency has been resolved and the cash has been collected.   As of December 31, 2015 and March 31, 2016, the Company had $2.7 million and $2.5 million, respectively, in U.K. net deferred revenues associated with such agreements.

Should changes in conditions cause management to determine these criteria are not met for certain future transactions, revenue recognized for any subsequent reporting period could be adversely affected.

Cost of Sales, Policy [Policy Text Block]

(k)

              

Costs of Revenues

Costs of revenues are comprised of fees paid to members of the Company’s medical panel; other direct costs including transcription, film and medical record obtainment and transportation; and other indirect costs including labor and overhead related to the generation of revenues.

Income Tax, Policy [Policy Text Block]

 

(l)

                

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company applies the provisions of FASB Interpretation No. 48, 

Accounting for Uncertainty in Income Taxes

, (included in FASB ASC Subtopic 740-10, 

Income Taxes — Overall

 ), and recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense.

Earnings Per Share, Policy [Policy Text Block]

(m)

Income (Loss) Per Common Share

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Diluted income (loss) per common share is calculated by dividing net income (loss), adjusted on an “as if converted” basis, by the weighted-average number of actual shares outstanding and, when dilutive, the share equivalents that would arise from the assumed conversion of convertible instruments. The effect of potentially dilutive stock options, warrants, shares of restricted stock with service restrictions that have not yet been satisfied and unvested restricted stock units (“RSUs”) is calculated using the treasury stock method.

The following table sets forth basic and diluted net income per share computational data for the three months ended March 31, 2015 and 2016 (amounts in thousands):

	Three months ended March 31,
	2015		2016
Net income	$	2,024	$	3,260
Basic shares outstanding:
Common stock		40,418		40,805
Diluted shares outstanding:
Common stock		40,418		40,805
Dilutive securities (1)		2,262		1,557
Total		42,680		42,362

(1) For the three months ended March 31, 2015 and 2016, the Company's dilutive securities excluded options potentially exercisable in the future into 32,000 shares and 86,000 shares, respectively, because their inclusion would have been anti-dilutive.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

(n

)

               

Share-Based Compensation

The Company has an Amended and Restated 2008 Stock Incentive Plan, as amended, (the “Plan”) that provides for granting of stock options, restricted stock, RSUs and other equity awards. The Company accounts for share-based awards in accordance with ASC Topic 718,

 Compensation — Stock Compensation

 (“ASC 718”). ASC 718 requires measurement of compensation cost for all share-based awards at fair value on the grant date (or measurement date if different) and recognition of compensation expense, net of forfeitures, over the requisite service period for awards expected to vest.

Stock Options

The fair value of stock option grants is determined using the Black-Scholes valuation model. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options. Additionally, option valuation models require the input of highly subjective assumptions, including the expected volatility of the stock price. Because the Company’s stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimates, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of its share-based awards.

 The Company’s expected volatility assumptions are based upon the weighted average of the Company’s implied volatility, the Company’s mean reversion volatility and the median of the Company’s peer group’s most recent historical volatilities for 2015 stock option grants. Expected life assumptions are based upon the “simplified” method as for those options issued in 2015, which were determined to be issued approximately at-the-money. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

In the three months ended March 31, 2016, the Company issued no stock option awards to employees. Share-based compensation expense related to stock option awards was $1.9 million and $1.2 million for the three months ended March 31, 2015 and 2016, respectively, of which $469,000 and $307,000, respectively, was included in costs of revenues, and $1.4 million and $921,000, respectively, was recorded in selling, general and administrative (“SGA”) expenses.

At March 31, 2016, the unrecognized compensation expense related to stock option awards was $3.4 million, with a remaining weighted average life of 1.2 years.

A summary of option activity for the three months ended March 31, 2016 is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life ( years )		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2015		3,766,868		$	13.28
Options granted		—			—
Options forfeited		(46,346	)		33.13
Options exercised		(74,121	)		9.99
Outstanding at March 31, 2016		3,646,401		$	13.10
Exercisable at March 31, 2016		3,377,368		$	11.51		5.1	$	61,718

Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the fiscal period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The total intrinsic value of stock options exercised was approximately $860,000 during the three months ended March 31, 2016.

Restricted Stock and Restricted Stock Units

The Company has granted members of the Board of Directors, certain employees and outside consultants, time lapse restricted stock and RSUs which vest after a stipulated number of years from the grant date depending on the terms of the issue. The fair value of shares of restricted stock and RSUs is determined based upon the market price of the underlying common stock as of the date of grant. Time lapse restricted shares issued and RSUs vest over one to five-year periods. The agreements under which the restricted stock and RSUs are issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the stock plans have been satisfied. The restriction on a majority of these awards could expire earlier than the stipulated time frame in the event of a change in control or merger or other acquisition. Share-based compensation expense related to shares of restricted stock and RSUs was $4.1 million and $4.2 million for the three months ended March 31, 2015 and 2016, respectively, all of which is included in SGA expenses.

The following is a summary of restricted share and RSU activity for the three months ended March 31, 2016:

	Number of awards			Weighted average grant date fair value
Non-vested awards at December 31, 2015		1,315,522		$	34.30
Awards granted		685,280			27.68
Awards vested		(238,094	)		24.28
Awards forfeited		(130,237	)		35.96
Non-vested awards at March 31, 2016		1,632,471		$	32.85

The total fair value of vested RSUs and shares of restricted stock during the three months ended March 31, 2015 and 2016 was $3.2 million and $5.8 million, respectively. At March 31, 2016, total unrecognized compensation costs related to non-vested restricted shares and RSUs was $41.4 million, which is expected to be recognized over a weighted average period of 2.2 years.

During the three months ended March 31, 2015 the Company recorded share-based compensation expense of $130,000 related to an annual incentive compensation plan established by the Compensation Committee of the Board of Directors, all of which was recorded in SGA expenses. No such share-based compensation expense was recorded for the three months ended March 31, 2016, as all amounts paid under the incentive compensation plan for the year ended December 31, 2016 will be settled in cash.

Fair Value of Financial Instruments, Policy [Policy Text Block]

(o)

             

Fair Value Measurements

 

The Company’s financial assets and (liabilities), which are measured at fair value on a recurring basis, are categorized using the fair value hierarchy at December 31, 2015 and March 31, 2016, and are as follows (in thousands):

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

The contingent consideration relates to earnout provisions recorded in conjunction with a 2016 acquisition (see Note 3). The fair value of the foreign currency derivative was determined using observable market inputs such as foreign currency exchange rates and considers nonperformance risk of the Company and that of its counterparties. 

Comprehensive Income, Policy [Policy Text Block]

(p)

              

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) refers to revenues, expenses, gains and losses that under U.S. GAAP are recorded as a component of stockholders’ equity but are excluded from net income (loss). The Company’s accumulated other comprehensive income (loss) consists of foreign currency translation adjustments, reported net of tax as appropriate, from those subsidiaries not using the U.S. dollar as their functional currency and unrealized gains and losses, reported net of tax as appropriate, resulting from its net investment hedge of its Australian and U.K. subsidiaries.

Accumulated other comprehensive income (loss) consists of the following (in thousands):

 

	Foreign Currency Translation			Net investment hedge - foreign exchange contract			Total
Balance at December 31, 2015	$	(33,716	)	$	7,713		$	(26,003	)
Change during 2016:
Before-tax amount		818			(107	)		711
Tax (expense) benefit		484			42			526
Total activity in 2016		1,302			(65	)		1,237
Balance at March 31, 2016	$	(32,414	)	$	7,648		$	(24,766	)

New Accounting Pronouncements, Policy [Policy Text Block]

(q)

               

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 In August 2014, the FASB issued ASU No. 2014-15, “

Presentation of Financial Statements – Going Concern

 

(Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern

” (“ASU 2014-05”), which define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. Currently, financial statements are prepared under the presumption that the reporting organization will continue to operate as a going concern, except in limited circumstances. This going concern basis of accounting is critical to financial reporting because it establishes the fundamental basis for measuring and classifying assets and liabilities. This ASU provides guidance regarding management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern and the related footnote disclosures. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early adoption permitted. The Company has adopted the provisions during the year ending December 31, 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about its ability to continue as a going concern. Adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

In April 2015, the FASB issued ASU No. 2015-03, “

Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs

” (“ASU 2015-03”) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. Additionally, in August 2015, the FASB issued ASU No. 2015-15,

“Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”

(“ASU 2015-15”) which amends ASU 2015-03, which did not address the balance sheet presentation of debt issuance costs incurred in connection with line-of-credit arrangements. Under ASU 2015-15, a Company may defer debt issuance costs associated with line-of-credit arrangements and present such costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. The amendments in these updates were effective for fiscal periods beginning on or after December 15, 2015, and interim periods within those fiscal years, were applied retrospectively and represent a change in accounting principle.

The Company adopted the provisions of these amendments in January of 2016. As a result, approximately $6.9 million and $6.6 million of debt issuance costs related to the Company’s $500.0 million 5.625% Senior Unsecured Notes Payable due April 2023 (the "Notes") were reclassified from deferred financing costs to Notes payable in the accompanying consolidated balance sheets as of December 31, 2015 and March 31, 2016, respectively. The Company elected to continue presenting the deferred financing costs associated with its Senior Secured Revolving Credit Facility as deferred financing costs, net in the accompanying consolidated balance sheets.

In September 2015, the FASB issued ASU No. 2015-16, “

Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments

” (“ASU 2015-16”) which requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments also require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. The amendments in this update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The Company adopted the provisions of this ASU prospectively in the first quarter of 2016, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-16 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

In November 2015, the FASB issued ASU No. 2015-17, “

Balance Sheet Classification of Deferred Taxes

” (“ASU 2015-17”), which requires deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The guidance is effective for financial statements issued for interim and annual periods beginning after December 15, 2016. Earlier adoption is permitted. This amendment may be applied either prospectively or retrospectively to all periods presented. The Company adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-17 did not have a significant impact on the Company’s financial position, results of operations or cash flows.

Accounting Pronouncements Not Yet Adopted

 

In May 2014, the FASB issued ASU No. 2014-09, (Topic 606): 

Revenue from Contracts with Customers

 (“ASU 2014-09”) which supersedes the revenue recognition requirements in “

Topic 605, Revenue Recognition

” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective retrospectively for annual or interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual and interim reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In January 2016, the FASB issued ASU 2016-01,

“Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities

” (“ASU 2016-01”), which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2018 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In February 2016, the FASB issued ASU 2016-02,

“Leases (Topic 842)”

(“ASU 2016-02”), which requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with terms greater than twelve months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. The standard requires the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. The amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-06,

“

Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments”

(“ASU 2016-06”), which will reduce diversity of practice in identifying embedded derivatives in debt instruments. ASU 2016-06 clarifies that the nature of an exercise contingency is not subject to the “clearly and closely” criteria for purposes of assessing whether the call or put option must be separated from the debt instrument and accounted for separately as a derivative. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company plans to adopt the provisions for the year ending December 31, 2017 and currently does not expect the adoption to have a material impact on its financial position, results of operations or cash flows.

In March 2016, the FASB issued ASU 2016-08,

“Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

”

(“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations. The amendments in this update are effective for fiscal period beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

In March 2016, the FASB issued ASU 2016-09,

“Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”

(“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The amendments in this update are effective for fiscal period beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial position, results of operations and cash flows.

There were various other accounting standards and interpretations issued during 2015 and 2016 the Company has not yet been required to adopt, none of which are expected to have a material impact on its financial position, results of operations and cash flows.

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Note 2 - Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three months ended March 31,
	2015		2016
Net income	$	2,024	$	3,260
Basic shares outstanding:
Common stock		40,418		40,805
Diluted shares outstanding:
Common stock		40,418		40,805
Dilutive securities (1)		2,262		1,557
Total		42,680		42,362

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of options			Weighted average exercise price		Weighted average remaining contractual life ( years )		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2015		3,766,868		$	13.28
Options granted		—			—
Options forfeited		(46,346	)		33.13
Options exercised		(74,121	)		9.99
Outstanding at March 31, 2016		3,646,401		$	13.10
Exercisable at March 31, 2016		3,377,368		$	11.51		5.1	$	61,718

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	Number of awards			Weighted average grant date fair value
Non-vested awards at December 31, 2015		1,315,522		$	34.30
Awards granted		685,280			27.68
Awards vested		(238,094	)		24.28
Awards forfeited		(130,237	)		35.96
Non-vested awards at March 31, 2016		1,632,471		$	32.85

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2			Level 3			Total
As of December 31, 2015
Financial instruments:
Foreign currency derivative asset	$	—	$	848		$	—		$	848
Foreign currency derivative liability		—		(1,215	)		—			(1,215	)
As of March 31, 2016
Financial instruments:
Contingent consideration	$	—	$	—		$	(7,635	)	$	(7,635	)
Foreign currency derivative liability		—		(2,122	)		—			(2,122	)

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Foreign Currency Translation			Net investment hedge - foreign exchange contract			Total
Balance at December 31, 2015	$	(33,716	)	$	7,713		$	(26,003	)
Change during 2016:
Before-tax amount		818			(107	)		711
Tax (expense) benefit		484			42			526
Total activity in 2016		1,302			(65	)		1,237
Balance at March 31, 2016	$	(32,414	)	$	7,648		$	(24,766	)

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Note 3 - Acquisitions (Tables)

3 Months Ended

Mar. 31, 2016

2016 Acquisitions [Member]

Notes Tables

Schedule of Preliminary Purchase Price Allocation [Table Text Block]

	Preliminary purchase price allocation March 31 , 201 6
Equipment and leasehold improvements	$	1,044
Customer relationships		32,201
Tradename		6,900
Goodwill		70,378
Net deferred tax liability associated with step-up in book basis		(15,104	)
Assets acquired and liabilities assumed, net		4,219
Total	$	99,638

2015 Acquisitions [Member]

Notes Tables

Schedule of Preliminary Purchase Price Allocation [Table Text Block]

	Preliminary purchase price allocation December 31, 2015			Adjustments/ reclassifications			Preliminary purchase price allocation March 31 , 2016
Equipment and leasehold improvements	$	1,513		$	—		$	1,513
Customer relationships		28,530			—			28,530
Tradenames		1,965			—			1,965
Covenants not to compete		182			—			182
Goodwill		24,296			489			24,785
Net deferred tax liability associated with step-up in book basis		(18	)		—			(18	)
Assets acquired and liabilities assumed, net		18,931			(218	)		18,713
Totals	$	75,399		$	271		$	75,670

Business Acquisition, Pro Forma Information [Table Text Block]

	Three months ended March 31 ,
	2015		2016
	(In thousands, except per share data)
Pro forma revenues	$	224,914	$	228,389
Pro forma net income		139		3,812
Pro forma income per share: Basic	$	0.00	$	0.09
Pro forma income per share: Diluted	$	0.00	$	0.09

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Note 4 - Property, Equipment and Leasehold Improvements (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Estimated useful lives			December 31,		March 31 ,
	(years)			2015		2016
Building		15		$	3,669	$	3,701
Computer and office equipment		3			23,162		24,982
Furniture and fixtures	3	to	5		5,051		5,461
Leasehold improvements	Lease term				6,272		7,695
					38,154		41,839
Less accumulated depreciation and amortization					18,009		19,575
Totals				$	20,145	$	22,264

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Note 5 - Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

	United				United
	States		Canada		Kingdom			Australia		Total
Balance at December 31, 2015	$	412,502	$	15,364	$	49,428		$	31,003	$	508,297
Goodwill acquired during the year		70,378		—		—			—		70,378
Adjustments to prior year acquisitions		738		2		(251	)		—		489
Effect of foreign currency translation		—		1,435		(1,531	)		2,311		2,215
Balance at March 31, 2016	$	483,618	$	16,801	$	47,646		$	33,314	$	581,379

Schedule of Finite-Lived Intangible Assets [Table Text Block]

				December 31, 2015
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	263,293	$	(199,266	)	$	64,027
Tradenames	45	to	84		68,172		(52,354	)		15,818
Covenants not to compete		36			10,254		(6,047	)		4,207
Technology	24	to	40		9,014		(8,393	)		621
Totals				$	350,733	$	(266,060	)	$	84,673

				March 31, 2016
	Estimated useful lives (months)			Gross carrying amount		Accumulated amortization			Net carrying value
Amortizable intangible assets:
Customer relationships	40	to	60	$	296,657	$	(212,493	)	$	84,164
Tradenames	45	to	84		75,323		(54,651	)		20,672
Covenants not to compete		36			10,729		(6,605	)		4,124
Technology	24	to	40		8,973		(8,524	)		449
Totals				$	391,682	$	(282,273	)	$	109,409

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Amount
Nine months ended December 31, 2016	$	37,682
Years ended December 31:
2017		40,480
2018		21,131
2019		10,062
2020		54
Total	$	109,409

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Note 6 - Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	December 31, 2015		March 31 , 2016
Accrued compensation and benefits	$	13,266	$	12,020
Accrued selling and professional fees		5,457		5,143
Accrued income, value added and other taxes		30,774		28,827
Accrued medical panel fees		7,598		6,239
Other accrued expenses		3,653		3,032
Totals	$	60,748	$	55,261

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Note 9 - Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Operating Leases of Lessee Disclosure [Table Text Block]

	Amount
Nine months ended December 31, 2016	$	11,780
Years ended December 31:
2017		14,162
2018		11,771
2019		8,185
2020		5,134
Thereafter		3,874
Total	$	54,906

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Note 10 - Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Schedule of Debt [Table Text Block]

	December 31,			March 31 ,
	2015			2016
Notes Payable (a)	$	500,000		$	500,000
Deferred financing costs related to Notes Payable (a)		(6,874	)		(6,641	)
Senior Secured Revolving Credit Facility, Bank of America, N.A. (b)		—			50,000
Working capital facilities, Barclays (c)		35,243			32,578
Totals	$	528,369		$	575,937

Schedule of Guarantor Obligations [Table Text Block]

Pricing Tier	Consolidated Leverage Ratio					Commitment Fee/Unused Line Fee	Letter of Credit Fee	Eurocurrency Rate Loans	Base Rate Loans
1	≥	4.00	to 1.0			0.45%	2.75%	2.75%	1.75%
2	≥	3.50	to 1.0 but <	4.00	to 1.0	0.40%	2.50%	2.50%	1.50%
3	≥	3.00	to 1.0 but <	3.50	to 1.0	0.35%	2.25%	2.25%	1.25%
4	≥	2.50	to 1.0 but <	3.00	to 1.0	0.30%	2.00%	2.00%	1.00%
5			<	2.50	to 1.0	0.30%	1.75%	1.75%	0.75%

Schedule of Maturities of Long-term Debt [Table Text Block]

	Amount
Nine months ended December 31, 2016	$	—
Years ended December 31:
2017		—
2018		32,578
2019		—
2020		50,000
Thereafter		500,000
Total	$	582,578

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Note 12 - Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Summary of Income Tax Contingencies [Table Text Block]

Balance at January 1, 2016	$	1,924
Increase to prior year tax positions		95
Increase to current year tax positions		445
Expiration of the statute of limitations for the assessment of taxes		—
Decrease related to settlements		—
Balance at March 31, 2016	$	2,464

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Note 13 - Segment and Geographical Information (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Revenue from External Customers by Products and Services [Table Text Block]

Revenues :	For the three months ended March 31 ,
	2015		2016
IME and other related services (1)	$	167,345	$	182,997
Peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services (1)		28,971		43,506
Total revenues	$	196,316	$	226,503

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	United						United
	States			Canada			Kingdom			Australia			Total
Three months ended March 31, 2015
Revenues	$	121,718		$	7,949		$	47,444		$	19,205		$	196,316
Segment profit		19,522			634			7,699			4,097			31,952
Depreciation and amortization expense		9,411			582			2,383			2,472			14,848
Capital expenditures		(1,670	)		(114	)		(189	)		(256	)		(2,229	)
Total assets (3)		598,165			22,343			236,186			83,228			939,922
Long-lived assets (2)(3)		471,040			15,613			92,703			68,227			647,583
Three months ended March 31, 2016
Revenues	$	149,440		$	9,454		$	47,933		$	19,676		$	226,503
Segment profit		22,905			968			9,779			3,832			37,484
Depreciation and amortization expense		10,752			56			3,539			2,289			16,636
Capital expenditures		(1,178	)		(27	)		(178	)		(1,354	)		(2,737	)
Total assets (3)		702,747			29,341			295,222			86,450			1,113,760
Long-lived assets (2)(3)		570,681			17,515			133,337			63,192			784,725

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

	For the three months ended March 3 1 ,
	2015			2016
Segment Profit	$	31,952		$	37,484
Depreciation and amortization		(14,848	)		(16,636	)
Share-based compensation expense		(6,136	)		(5,419	)
Acquisition related transaction costs		(559	)		(1,058	)
Other income (expenses)		731			(969	)
Income from operations	$	11,140		$	13,402

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Note 14 - Condensed Consolidating Financial Information of Guarantor Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2016

Notes Tables

Condensed Income Statement [Table Text Block]

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	121,718		$	74,598	$	—	$	—		$	196,316
Costs and expenses:
Costs of revenues		82,334			45,842		—		—			128,176
Selling, general and administrative expenses		23,014			19,138		—		—			42,152
Depreciation and amortization		9,411			5,437		—		—			14,848
Total costs and expenses		114,759			70,417		—		—			185,176
Income from operations		6,959			4,181		—		—			11,140
Interest and other expenses, net		6,409			1,595		—		—			8,004
Loss before income taxes		550			2,586		—		—			3,136
Provision (benefit) for income taxes		(594	)		1,706		—		—			1,112
Net loss before earnings of consolidated subsidiaries	$	1,144		$	880	$	—	$	—		$	2,024
Net income (loss) of consolidated subsidiaries		880			—		880		(1,760	)		—
Net income (loss)	$	2,024		$	880	$	880	$	(1,760	)	$	2,024

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Revenues	$	149,439	$	77,064	$	—	$	—		$	226,503
Costs and expenses:
Costs of revenues		102,001		47,125		—		—			149,126
Selling, general and administrative expenses		27,807		19,532		—		—			47,339
Depreciation and amortization		10,753		5,883		—		—			16,636
Total costs and expenses		140,561		72,540		—		—			213,101
Income from operations		8,878		4,524		—		—			13,402
Interest and other expenses, net		7,074		1,325		—		—			8,399
Income before income taxes		1,804		3,199		—		—			5,003
Provision for income taxes		492		1,251		—		—			1,743
Net income before earnings of consolidated subsidiaries	$	1,312	$	1,948	$	—	$	—		$	3,260
Net income (loss) of consolidated subsidiaries		1,948		—		1,948		(3,896	)		—
Net income (loss)	$	3,260	$	1,948	$	1,948	$	(3,896	)	$	3,260

Condensed Balance Sheet [Table Text Block]

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	33,011	$	14,854	$	—	$	—		$	47,865
Accounts receivable, net		68,896		176,553		—		—			245,449
Intercompany receivable		57,394		—		6,245		(63,639	)		—
Prepaid expenses		10,398		6,411		—		—			16,809
Other current assets		848		1,110		—		—			1,958
Total current assets		170,547		198,928		6,245		(63,639	)		312,081
Property, equipment and leasehold improvements, net		12,695		7,450		—		—			20,145
Investment in subsidiaries		280,114		—		800,743		(1,080,857	)		—
Intercompany notes receivable		174,421		—		174,421		(348,842	)		—
Goodwill		398,045		110,252		—		—			508,297
Intangible assets, net		46,423		38,250		—		—			84,673
Long-term accounts receivable, less current portion		—		62,717		—		—			62,717
Deferred tax assets, noncurrent		47,363		3,042		—		—			50,405
Deferred financing costs, net		2,416		104		—		—			2,520
Other assets		725		3,244		—		—			3,969
Total assets	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	24,072	$	36,527	$	—	$	—		$	60,599
Intercompany payable		6,245		57,394		—		(63,639	)		—
Accrued expenses		13,150		47,598		—		—			60,748
Accrued interest expense		—		—		6,245		—			6,245
Deferred revenue		138		3,546		—		—			3,684
Other current liabilities		3,383		5,673		—		—			9,056
Total current liabilities		46,988		150,738		6,245		(63,639	)		140,332
Senior unsecured notes payable		—		—		493,126		—			493,126
Senior secured revolving credit facility and working capital facilities, less current portion		—		35,243		—		—			35,243
Intercompany notes payable		174,421		174,421		—		(348,842	)		—
Deferred tax liability, noncurrent		—		3,333		—		—			3,333
Other long-term liabilities		2,950		9,788		—		—			12,738
Total liabilities		224,359		373,523		499,371		(412,481	)		684,772
Commitments and contingencies
Stockholders’ equity (deficit)		908,390		50,464		482,038		(1,080,857	)		360,035
Total liabilities and stockholders' equity (deficit)	$	1,132,749	$	423,987	$	981,409	$	(1,493,338	)	$	1,044,807

	Guarantor Subsidiaries		Non- Guarantor Subsidiaries		ExamWorks Group, Inc. (Parent Corporation)		Consolidation and Elimination Entries			Consolidated Totals
Assets
Current assets:
Cash and cash equivalents	$	1,554	$	14,445	$	—	$	—		$	15,999
Accounts receivable, net		77,277		171,785		—		—			249,062
Intercompany receivable		61,586		—		13,414		(75,000	)		—
Prepaid expenses		8,083		11,831		—		—			19,914
Other current assets		—		1,078		—		—			1,078
Total current assets		148,500		199,139		13,414		(75,000	)		286,053
Property, equipment and leasehold improvements, net		13,877		8,387		—		—			22,264
Investment in subsidiaries		282,062		—		895,039		(1,177,101	)		—
Intercompany notes receivable		174,413		—		174,413		(348,826	)		—
Goodwill		469,161		112,218		—		—			581,379
Intangible assets, net		76,555		32,854		—		—			109,409
Long-term accounts receivable, less current portion		—		67,495		—		—			67,495
Deferred tax assets, noncurrent		37,467		3,129		—		—			40,596
Deferred financing costs, net		2,296		90		—		—			2,386
Other assets		885		3,293		—		—			4,178
Total assets	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	29,192	$	36,756	$	—	$	—		$	65,948
Intercompany payable		13,414		61,586		—		(75,000	)		—
Accrued expenses		11,967		43,294		—		—			55,261
Accrued interest expense		—		—		13,414		—			13,414
Deferred revenue		222		3,276		—		—			3,498
Current portion of contingent earnout obligation		2,556		—		—		—			2,556
Other current liabilities		4,432		2,850		—		—			7,282
Total current liabilities		61,783		147,762		13,414		(75,000	)		147,959
Senior unsecured notes payable		—		—		493,359		—			493,359
Senior secured revolving credit facility and working capital facilities, less current portion		—		32,578		50,000		—			82,578
Intercompany notes payable		174,413		174,413		—		(348,826	)		—
Long-term contingent earnout obligation, less current portion		5,079		—		—		—			5,079
Deferred tax liability, noncurrent		—		3,250		—		—			3,250
Other long-term liabilities		3,232		10,993		—		—			14,225
Total liabilities		244,507		368,996		556,773		(423,826	)		746,450
Commitments and contingencies
Stockholders’ equity (deficit)		960,709		57,609		526,093		(1,177,101	)		367,310
Total liabilities and stockholders' equity (deficit)	$	1,205,216	$	426,605	$	1,082,866	$	(1,600,927	)	$	1,113,760

Condensed Cash Flow Statement [Table Text Block]

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	2,226		$	3,938		$	—		$	—	$	6,164
Investing activities:
Cash paid for acquisitions, net		(2,299	)		—			—			—		(2,299	)
Purchases of building, equipment and leasehold improvements, net		(1,670	)		(559	)		—			—		(2,229	)
Working capital and other settlements for acquisitions		(91	)		—			—			—		(91	)
Proceeds from foreign currency net investment hedges		4,812			—			—			—		4,812
Other		(1,250	)		—			—			—		(1,250	)
Net cash used in investing activities		(498	)		(559	)		—			—		(1,057	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			25,478			—		25,478
Proceeds from the exercise of options and warrants		—			—			8,855			—		8,855
Excess tax benefit related to share-based compensation		—			—			2,086			—		2,086
Net repayments under working capital facilities		—			(132	)		—			—		(132	)
Repayment of contingent earnout obligation		—			(1,023	)		—			—		(1,023	)
Repayment under senior secured revolving credit facility		—			—			(29,331	)		—		(29,331	)
Intercompany notes and investments and other		7,088			—			(7,088	)		—		—
Net cash provided by (used in) financing activities		7,088			(1,155	)		—			—		5,933
Exchange rate impact on cash and cash equivalents		—			(509	)		—			—		(509	)
Net increase in cash and cash equivalents		8,816			1,715			—			—		10,531
Cash and cash equivalents, beginning of period		388			9,363			—			—		9,751
Cash and cash equivalents, end of period	$	9,204		$	11,078		$	—		$	—	$	20,282

	Guarantor Subsidiaries			Non- Guarantor Subsidiaries			ExamWorks Group, Inc. (Parent Corporation)			Consolidation and Elimination Entries		Consolidated Totals
Net cash provided by operating activities	$	13,500		$	2,266		$	—		$	—	$	15,766
Investing activities:
Cash paid for acquisitions, net		(92,348	)		—			—			—		(92,348	)
Purchases of building, equipment and leasehold improvements, net		(1,179	)		(1,558	)		—			—		(2,737	)
Working capital and other settlements for acquisitions		(271	)		—			—			—		(271	)
Proceeds from foreign currency net investment hedge		1,649			—			—			—		1,649
Other		(150	)		—			—			—		(150	)
Net cash used in investing activities		(92,299	)		(1,558	)		—			—		(93,857	)
Financing activities:
Borrowings under senior secured revolving credit facility		—			—			75,000			—		75,000
Excess tax benefit related to share-based compensation		—			—			4,766			—		4,766
Proceeds from the exercise of options and warrants		—			—			582			—		582
Net repayments under working capital facilities		—			(1,623	)		—			—		(1,623	)
Purchases of stock for treasury		—			—			(8,006	)		—		(8,006	)
Repayment under senior secured revolving credit facility		—			—			(25,000	)		—		(25,000	)
Intercompany notes and investments and other		47,342			—			(47,342	)		—		—
Net cash provided by (used in) financing activities		47,342			(1,623	)		—			—		45,719
Exchange rate impact on cash and cash equivalents		—			506			—			—		506
Net decrease in cash and cash equivalents		(31,457	)		(409	)		—			—		(31,866	)
Cash and cash equivalents, beginning of period		33,011			14,854			—			—		47,865
Cash and cash equivalents, end of period	$	1,554		$	14,445		$	—		$	—	$	15,999

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Note 1 - Nature of Operations and Basis of Presentation (Details Textual)	93 Months Ended	99 Months Ended
	Mar. 31, 2016	Mar. 31, 2016
Number of Businesses Acquired	57	57
Number of Service Centers	71	71
Number of States in which Entity Operates	50	50

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Note 2 - Summary of Significant Accounting Policies (Details Textual)		3 Months Ended			12 Months Ended
	Apr. 16, 2015	Mar. 31, 2016 USD ($) shares	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($) shares	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Major Customers		0		0
Concentration Risk, Percentage		13.00%		14.00%
UNITED STATES
Cash and Cash Equivalents, at Carrying Value		$ 1,600,000
UNITED KINGDOM
Deferred Revenue		2,500,000			$ 2,700,000
Revolving Credit Facility [Member] | Senior Secured Revolving Credit Facility [Member]
Debt Related Commitment Fees and Debt Issuance Costs		0		$ 0
Debt Issuance Costs, Gross		$ 8,500,000
Write off of Deferred Debt Issuance Cost			$ 274,000
Debt Instrument, Term	5 years	5 years
Amortization of Debt Issuance Costs		$ 148,000		361,000
Senior Notes 2023 [Member]
Debt Instrument, Face Amount		$ 500,000,000
Debt Instrument, Interest Rate, Stated Percentage		5.625%
Employee Stock Option [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense		$ 921,000		1,400,000
Employee Stock Option [Member] | Cost of Sales [Member]
Allocated Share-based Compensation Expense		$ 307,000		469,000
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | shares		0
Allocated Share-based Compensation Expense		$ 1,200,000		1,900,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 3,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		1 year 73 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value		$ 860,000
Time Lapse Restricted Stock and RSUs [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		1 year
Time Lapse Restricted Stock and RSUs [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		5 years
Restricted Stock and RSUs [Member] | Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense		$ 4,200,000		4,100,000
Restricted Stock and RSUs [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 41,400,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		2 years 73 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value		$ 5,800,000		3,200,000
Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense		0		130,000
Reclassification of Deferred Financing Costs to Notes Payable [Member] | December 31, 2015 [Member]
Prior Period Reclassification Adjustment		6,900,000
Reclassification of Deferred Financing Costs to Notes Payable [Member]
Current Period Reclassification Adjustment		6,600,000
Cash Equivalents, at Carrying Value		0			0
Allowance for Doubtful Accounts Receivable		12,500,000			12,200,000
Impairment of Long-Lived Assets Held-for-use		0			0
Cash and Cash Equivalents, at Carrying Value		15,999,000		20,282,000	$ 47,865,000	$ 9,751,000
Cash, FDIC Insured Amount		250,000
Goodwill, Impairment Loss		0
Amortization of Debt Issuance Costs		$ 381,000		$ 587,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares		86,000		32,000

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Note 2 - Basic and Diluted Net Income per Share Computational Data (Details) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Net income		$ 3,260	$ 2,024
Basic shares outstanding:
Common stock (in shares)		40,805	40,418
Diluted shares outstanding:
Basic (in shares)		40,805	40,418
Dilutive securities (1) (in shares)	[1]	1,557	2,262
Total (in shares)		42,362	42,680

[1] For the three months ended March 31, 2015 and 2016, the Company's dilutive securities exclude options potentially exercisable in the future into 32,000 shares and 86,000 shares, respectively, because their inclusion would have been anti-dilutive.

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Note 2 - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Outstanding (in shares) | shares	3,766,868
Outstanding (in dollars per share) | $ / shares	$ 13.28
Options granted (in shares) | shares
Options granted (in dollars per share) | $ / shares
Options forfeited (in shares) | shares	(46,346)
Options forfeited (in dollars per share) | $ / shares	$ 33.13
Options exercised (in shares) | shares	(74,121)
Options exercised (in dollars per share) | $ / shares	$ 9.99
Outstanding (in shares) | shares	3,646,401
Outstanding (in dollars per share) | $ / shares	$ 13.10
Exercisable (in shares) | shares	3,377,368
Exercisable (in dollars per share) | $ / shares	$ 11.51
Exercisable	5 years 36 days
Exercisable | $	$ 61,718

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Note 2 - Non-vested Restricted Share and RSU Activity (Details)	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Non-vested awards outstanding at beginning of period (in shares) | shares	1,315,522
Non-vested awards outstanding at beginning of period, weighted average grant date fair value (in dollars per share) | $ / shares	$ 34.30
Awards granted (in shares) | shares	685,280
Awards granted, weighted average grant date fair value (in dollars per share) | $ / shares	$ 27.68
Awards vested (in shares) | shares	(238,094)
Awards vested, weighted average grant date fair value (in dollars per share) | $ / shares	$ 24.28
Awards forfeited (in shares) | shares	(130,237)
Awards forfeited, weighted average grant date fair value (in dollars per share) | $ / shares	$ 35.96
Non-vested awards outstanding at end of period (in shares) | shares	1,632,471
Non-vested awards outstanding at end of period, weighted average grant date fair value (in dollars per share) | $ / shares	$ 32.85

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Note 2 - Fair Value of Financial Assets Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 2 [Member] | Foreign Currency Derivative Asset [Member]
Financial instruments, fair value		$ 848
Fair Value, Inputs, Level 2 [Member] | Foreign Currency Derivative Liability [Member]
Financial instruments, fair value	$ (2,122)	(1,215)
Fair Value, Inputs, Level 3 [Member] | Contingent Consideration [Member]
Financial instruments, fair value	(7,635)
Foreign Currency Derivative Asset [Member]
Financial instruments, fair value		848
Foreign Currency Derivative Liability [Member]
Financial instruments, fair value	(2,122)	$ (1,215)
Contingent Consideration [Member]
Financial instruments, fair value	$ (7,635)

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Note 2 - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Balance at December 31, 2015	$ (33,716)
Balance at December 31, 2015	7,713
Balance at December 31, 2015	(26,003)
Before-tax amount	818
Before-tax amount	(107)
Before-tax amount	711
Tax (expense) benefit	484
Tax (expense) benefit	42
Tax (expense) benefit	526
Total activity in 2016	1,302
Total activity in 2016	(65)
Total activity in 2016	1,237	$ (5,877)
Balance at March 31, 2016	(32,414)
Balance at March 31, 2016	7,648
Balance at March 31, 2016	$ (24,766)

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Note 3 - Acquisitions (Details Textual)	3 Months Ended		12 Months Ended	93 Months Ended	99 Months Ended
	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Mar. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)
2015 Acquisitions [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs	$ 0	$ 35,000
2015 Acquisitions [Member] | Scenario, Adjustment [Member]
Business Combination, Consideration Transferred	271,000		$ 271,000
2015 Acquisitions [Member]
Business Combination, Consideration Transferred	75,670,000		75,700,000
Payments to Acquire Businesses, Gross			76,800,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents			1,100,000
Business Acquisition, Transaction Costs			$ 882,000
Business Acquisition, Goodwill, Expected Tax Deductible Amount	24,600,000			$ 24,600,000	$ 24,600,000
Business Acquisition, Purchase Price Allocation, Intangible Assets Expected, Tax Deductible, Amount	30,400,000			30,400,000	30,400,000
2016 Acquisitions [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs	82,000	0
2016 Acquisitions [Member]
Business Combination, Consideration Transferred	99,638,000
Payments to Acquire Businesses, Gross	92,000,000
Business Acquisition, Transaction Costs	446,000			446,000	446,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability	7,600,000			$ 7,600,000	$ 7,600,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual	13,000,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual	231,000
Business Combination, Acquisition Related Costs	1,058,000	559,000
Number of Businesses Acquired				57	57
Business Combination, Pro Forma Information, Adjustments to Interest and Other Expenses Related to Funding of Acquisition	128,000	2,300,000
Business Combination, Pro Forma Information, Incremental Depreciation and Amoritzation	315,000	5,100,000
Business Combination, Pro Forma Information, Adjustments to Selling, General and Administrative Expense	$ 1,200,000	$ 948,000

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Note 3 - Preliminary Allocation of Purchase Price, 2015 (Details) - USD ($)		3 Months Ended	12 Months Ended
		Mar. 31, 2016	Dec. 31, 2015
2015 Acquisitions [Member] | Scenario, Previously Reported [Member] | Customer Relationships [Member]
Intangible assets			$ 28,530,000
2015 Acquisitions [Member] | Scenario, Previously Reported [Member] | Trade Names [Member]
Intangible assets			1,965,000
2015 Acquisitions [Member] | Scenario, Previously Reported [Member] | Noncompete Agreements [Member]
Intangible assets			182,000
2015 Acquisitions [Member] | Scenario, Previously Reported [Member]
Equipment and leasehold improvements			1,513,000
Goodwill			24,296,000
Net deferred tax liability associated with step-up in book basis			(18,000)
Assets acquired and liabilities assumed, net			18,931,000
Business Combination, Consideration Transferred			$ 75,399,000
2015 Acquisitions [Member] | Scenario, Adjustment [Member] | Customer Relationships [Member]
Intangible assets
2015 Acquisitions [Member] | Scenario, Adjustment [Member] | Trade Names [Member]
Intangible assets
2015 Acquisitions [Member] | Scenario, Adjustment [Member] | Noncompete Agreements [Member]
Intangible assets
2015 Acquisitions [Member] | Scenario, Adjustment [Member]
Equipment and leasehold improvements
Goodwill			$ 489,000
Net deferred tax liability associated with step-up in book basis
Assets acquired and liabilities assumed, net			$ (218,000)
Business Combination, Consideration Transferred		$ 271,000	271,000
2015 Acquisitions [Member] | Customer Relationships [Member]
Intangible assets		28,530,000
2015 Acquisitions [Member] | Trade Names [Member]
Intangible assets		1,965,000
2015 Acquisitions [Member] | Noncompete Agreements [Member]
Intangible assets		182,000
2015 Acquisitions [Member]
Equipment and leasehold improvements		1,513,000
Goodwill		24,785,000
Net deferred tax liability associated with step-up in book basis		(18,000)
Assets acquired and liabilities assumed, net		18,713,000
Business Combination, Consideration Transferred		75,670,000	75,700,000
Goodwill	[1]	$ 581,379,000	$ 508,297,000

[1] Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

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Note 3 - Preliminary Allocation of Purchase Price, 2016 (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Dec. 31, 2015
2016 Acquisitions [Member] | Customer Relationships [Member]
Intangible assets		$ 32,201
2016 Acquisitions [Member] | Trade Names [Member]
Intangible assets		6,900
2016 Acquisitions [Member]
Equipment and leasehold improvements		1,044
Goodwill		70,378
Net deferred tax liability associated with step-up in book basis		(15,104)
Assets acquired and liabilities assumed, net		4,219
Business Combination, Consideration Transferred		99,638
Goodwill	[1]	$ 581,379	$ 508,297

[1] Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

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Note 3 - Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pro forma revenues	$ 228,389	$ 224,914
Pro forma net income	$ 3,812	$ 139
Pro forma income per share: Basic (in dollars per share)	$ 0.09	$ 0
Pro forma income per share: Diluted (in dollars per share)	$ 0.09	$ 0

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Note 4 - Property, Equipment and Leasehold Improvements (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Depreciation	$ 1.9	$ 1.7

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Note 4 - Property, Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Building [Member]
Estimated useful lives	15 years
Property, plant, and equipment, gross	$ 3,701	$ 3,669
Computer and Office Equipment [Member]
Estimated useful lives	3 years
Property, plant, and equipment, gross	$ 24,982	23,162
Furniture and Fixtures [Member] | Minimum [Member]
Estimated useful lives	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Estimated useful lives	5 years
Furniture and Fixtures [Member]
Property, plant, and equipment, gross	$ 5,461	5,051
Leasehold Improvements [Member]
Property, plant, and equipment, gross	7,695	6,272
Property, plant, and equipment, gross	41,839	38,154
Less accumulated depreciation and amortization	19,575	18,009
Totals	$ 22,264	$ 20,145

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Note 5 - Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Amortization of Intangible Assets	$ 14.7	$ 13.1

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Note 5 - Goodwill (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)	[1]
UNITED STATES
Balance	$ 412,502
Goodwill acquired during the year	70,378
Adjustments to prior year acquisitions	$ 738
Effect of foreign currency translation
Balance	$ 483,618
CANADA
Balance	$ 15,364
Goodwill acquired during the year
Adjustments to prior year acquisitions	$ 2
Effect of foreign currency translation	1,435
Balance	16,801
UNITED KINGDOM
Balance	$ 49,428
Goodwill acquired during the year
Adjustments to prior year acquisitions	$ (251)
Effect of foreign currency translation	(1,531)
Balance	47,646
AUSTRALIA
Balance	$ 31,003
Goodwill acquired during the year
Adjustments to prior year acquisitions
Effect of foreign currency translation	$ 2,311
Balance	33,314
Balance	508,297
Goodwill acquired during the year	70,378
Adjustments to prior year acquisitions	489
Effect of foreign currency translation	2,215
Balance	$ 581,379

[1] Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

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Note 5 - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Customer Relationships [Member] | Minimum [Member]
Estimated useful lives	3 years 120 days	3 years 120 days
Customer Relationships [Member] | Maximum [Member]
Estimated useful lives	5 years	5 years
Customer Relationships [Member]
Gross carrying amount	$ 296,657	$ 263,293
Accumulated amortization	(212,493)	(199,266)
Net carrying value	$ 84,164	$ 64,027
Trade Names [Member] | Minimum [Member]
Estimated useful lives	3 years 270 days	3 years 270 days
Trade Names [Member] | Maximum [Member]
Estimated useful lives	7 years	7 years
Trade Names [Member]
Gross carrying amount	$ 75,323	$ 68,172
Accumulated amortization	(54,651)	(52,354)
Net carrying value	$ 20,672	$ 15,818
Noncompete Agreements [Member]
Estimated useful lives	3 years	3 years
Gross carrying amount	$ 10,729	$ 10,254
Accumulated amortization	(6,605)	(6,047)
Net carrying value	$ 4,124	$ 4,207
Unpatented Technology [Member] | Minimum [Member]
Estimated useful lives	2 years	2 years
Unpatented Technology [Member] | Maximum [Member]
Estimated useful lives	3 years 120 days	3 years 120 days
Unpatented Technology [Member]
Gross carrying amount	$ 8,973	$ 9,014
Accumulated amortization	(8,524)	(8,393)
Net carrying value	449	621
Gross carrying amount	391,682	350,733
Accumulated amortization	(282,273)	(266,060)
Net carrying value	$ 109,409	$ 84,673

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Note 5 - Intangible Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Nine months ended December 31, 2016	$ 37,682
2017	40,480
2018	21,131
2019	10,062
2020	54
Total	$ 109,409	$ 84,673

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Note 6 - Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accrued compensation and benefits	$ 12,020	$ 13,266
Accrued selling and professional fees	5,143	5,457
Accrued income, value added and other taxes	28,827	30,774
Accrued medical panel fees	6,239	7,598
Other accrued expenses	3,032	3,653
Totals	$ 55,261	$ 60,748

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Note 7 - Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Employee Stock Option [Member]
Stock Issued During Period, Shares, Share-based Compensation, Gross	74,000
Restricted Stock [Member] | Certain Officers and Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 1.7
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period	3 years
Restricted Stock Units (RSUs) [Member]
Stock Issued During Period, Shares, Share-based Compensation, Gross	98,000
Certain Officers and Employees [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	67,000
Treasury Stock, Shares, Acquired	310,000
Treasury Stock Acquired, Average Cost Per Share	$ 25.85
Treasury Stock, Value, Acquired, Par Value Method	$ 8.0
Treasury Stock, Shares	2,015,000	1,705,000
Treasury Stock, Average Value per Share	$ 18.74
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 35.9

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Note 8 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Red Ridge Finance Group [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 176,000	$ 118,000

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Note 9 - Commitments and Contingencies (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Leases, Rent Expense	$ 5,100,000	$ 4,200,000
Defined Contribution Plan, Cost Recognized	$ 238,000	$ 370,000

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Note 9 - Future Minimum Lease Payments (Details) $ in Thousands	Mar. 31, 2016 USD ($)
Nine months ended December 31, 2016	$ 11,780
2017	14,162
2018	11,771
2019	8,185
2020	5,134
Thereafter	3,874
Total	$ 54,906

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Note 10 - Long-term Debt (Details Textual)										1 Months Ended	3 Months Ended		12 Months Ended
		Apr. 16, 2015 USD ($)	Feb. 03, 2014 USD ($)	Jun. 28, 2013	Jul. 19, 2011 USD ($)	Jul. 07, 2011 USD ($)	May. 12, 2011 GBP (£)	May. 06, 2011 USD ($)	Sep. 29, 2010 GBP (£)	Feb. 27, 2012	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2015 USD ($)	Aug. 27, 2012 USD ($)	Dec. 31, 2011 USD ($)	May. 05, 2011 USD ($)	Nov. 02, 2010 USD ($)
Senior Unsecured Notes [Member]
Payments of Debt Extinguishment Costs											$ 0	$ 0	$ 7,500,000
Proceeds from Issuance of Senior Long-term Debt					$ 250,000,000
Debt Instrument, Interest Rate, Stated Percentage					9.00%
Debt Instrument, Term											8 years
Amortization of Debt Issuance Costs												226,000
Senior Notes 2023 [Member]
Debt Instrument, Issuance Price Percentage		100.00%
Debt Instrument, Interest Rate, Stated Percentage											5.625%
Senior Unsecured Notes Payable [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed					40.00%
Debt Instrument, Redemption Price, Percentage					105.625%
Debt Instrument, Redemption Price, Minimum Percent of Original Principal Amount Outstanding After Redemption					60.00%
Senior Unsecured Notes Payable [Member] | Debt Instrument, Redemption, Period Two [Member]
Debt Instrument, Redemption Price, Percentage					100.00%
Senior Unsecured Notes Payable [Member]
Debt Instrument Repurchase Percentage of Face Amount					101.00%
Senior Secured Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Right to Increase Revolving Extensions [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 400,000,000
Senior Secured Revolving Credit Facility [Member] | Revolving Credit Facility [Member]
Debt Instrument, Term		5 years									5 years
Amortization of Debt Issuance Costs											$ 148,000	361,000
Line of Credit Facility, Maximum Borrowing Capacity		$ 300,000,000
Senior Secured Revolving Credit Facility [Member]
Long-term Line of Credit	[1]										$ 50,000,000
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity																	$ 180,000,000
Original Maximum Consolidated Leverage Ratio [Member]
Consolidated Leverage Ratio						3.5
New Maximum Consolidated Leverage Ratio [Member]
Consolidated Leverage Ratio						4.75
Any Fiscal Quarter After September 30, 2012 [Member]
Minimum Fixed Charge Coverage Ratio										2
With Negative Trailing Twelve Months Adjusted EBITDA [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 3
Without Delivering Pro Forma Projections to the Lenders [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 75,000,000
Default Rate [Member]
Debt Instrument, Interest Rate, Stated Percentage			2.00%
Federal Funds Rate Base [Member]
Debt Instrument, Basis Spread on Variable Rate			0.50%
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			1.00%
Base Rate [Member] | UKIM [Member]
Debt Instrument, Basis Spread on Variable Rate		2.05%		2.40%					2.50%		0.50%
Base Rate [Member] | Premex Group [Member]
Debt Instrument, Basis Spread on Variable Rate		2.05%					2.40%				0.50%
UKIM [Member] | Minimum [Member]
Debt Instrument, Term									3 years
UKIM [Member]
Line of Credit Facility, Maximum Borrowing Capacity | £									£ 5,000,000
Long-term Line of Credit											$ 6,000,000
Line of Credit Facility, Remaining Borrowing Capacity											1,200,000
Debt Instrument, Term, Increase				2 years
Premex Group [Member] | Minimum [Member]
Debt Instrument, Term							3 years
Premex Group [Member]
Line of Credit Facility, Maximum Borrowing Capacity | £							£ 26,500,000
Long-term Line of Credit											26,600,000
Line of Credit Facility, Remaining Borrowing Capacity											11,500,000
Debt Instrument, Term, Increase				2 years
Amortization of Debt Issuance Costs											381,000	$ 587,000
Line of Credit Facility, Maximum Borrowing Capacity			$ 5,000,000			$ 262,500,000		$ 300,000,000								$ 245,000,000
Line of Credit Facility, Increase (Decrease), Other, Net								55,000,000
Consolidated Senior Secured Leverage Ratio						3
Line of Credit Facility, Capacity Available for Specific Purpose Other than for Trade Purchases						$ 75,000,000		$ 50,000,000
Line of Credit Facility Increase Right						37,500,000
Line of Credit Facility Increase, Capacity						$ 300,000,000
Minimum Fixed Charge Coverage Ratio										1.75
Secured Revolving Credit Facility, Alternative Currency Sublimit														$ 100,000,000	$ 60,000,000
Long-term Line of Credit											50,000,000
Line of Credit Facility, Remaining Borrowing Capacity											$ 250,000,000

[1] On November 2, 2010, the Company entered into the Senior Secured Revolving Credit Facility with Bank of America, N.A. The facility initially consisted of a $180.0 million revolving credit facility. On May 6, 2011, the Company increased and fully exercised the accordion features of the Senior Secured Revolving Credit Facility. The increase and exercise of the accordion feature increased the committed capacity of the credit facility by $55.0 million, from a total of $245.0 million to a total of $300.0 million. On July 7, 2011, the Company entered into a second amendment to its Senior Secured Revolving Credit Facility (the "Second Amendment") which became effective simultaneously with the consummation of the Company's private offering of the Senior Unsecured Notes. The Second Amendment amended the Senior Secured Revolving Credit Facility to, among other things, (i) extend the maturity date of the Senior Secured Revolving Credit Facility from November 2013 to July 2016; (ii) permit the issuance and sale of the Senior Unsecured Notes; (iii) replace the consolidated senior leverage ratio with a consolidated senior secured leverage ratio while permitting the maximum consolidated senior secured leverage ratio to be 3.00 to 1; (iv) permit the Company's maximum consolidated leverage ratio to increase from 3.5 to 1 to 4.75 to 1; (v) reduce the borrowing cost; and (vi) allow the Company to complete acquisitions with a purchase price of up to $75.0 million (previously $50.0 million) without prior lender consent. The Second Amendment also reduced the aggregate revolving commitments under the Senior Secured Revolving Credit Facility by $37.5 million for a maximum commitment of $262.5 million, subject to the Company's right to increase the aggregate revolving commitments by $37.5 million for a maximum commitment of $300.0 million, so long as the Company is not in default and the Company satisfies certain other customary conditions. On February 27, 2012, the Company entered into a third amendment to its Senior Secured Revolving Credit Facility (the "Third Amendment"). The Third Amendment amended the Senior Secured Revolving Credit Facility as to the definitions of consolidated fixed charges and consolidated fixed charge coverage ratio and does not permit the consolidated fixed charge coverage ratio as of the end of any fiscal quarter to be less than (i) for any fiscal quarter ending during the period from December 31, 2011 to and including September 30, 2012, 1.75 to 1.00 and (ii) for any fiscal quarter ending thereafter, 2.00 to 1.00. On August 27, 2012, the Company entered into a fourth amendment to its Senior Secured Revolving Credit Facility (the “Fourth Amendment”). The Fourth Amendment amended the Senior Secured Revolving Credit Facility to add the Australian dollar as an alternative currency and increased the alternative currency sublimit from USD $60.0 million to USD $100.0 million. On June 27, 2013, the Company entered into a fifth amendment to its Senior Secured Revolving Credit Facility (the “Fifth Amendment”). Among other changes, the Fifth Amendment modifies the Credit Agreement to permit an implementation of an auto-borrow agreement between the swing line lender and the Company to facilitate cash management, incorporates new provisions related to swap regulations and updates various provisions related to the LIBOR rate, Foreign Account Tax Compliance Act and the International Financial Reporting Standards. On February 3, 2014, the Company entered into a sixth amendment to its Senior Secured Revolving Credit Facility (the “Sixth Amendment”). The Sixth Amendment (i) allowed the Company to consummate the acquisition of Gould & Lamb, and (ii) allows the Company to acquire a target (a) with negative trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) if the purchase price of such acquisition is less than $5.0 million, (b) with trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) of less than or equal to $3,000,000 without delivering to the lenders a quality of earnings report regarding such target and (c) without delivering pro forma projections of the Company to the lenders if the purchase price of such acquisition is less than $75.0 million, in each case, without prior lender consent. On April 16, 2015, the Company entered into the Amended and Restated Credit Facility. The Amended and Restated Credit Facility provides for up to $300.0 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). During the term of the Amended and Restated Credit Facility, the Company has the right, subject to compliance with the covenants specified in the Amended and Restated Credit Facility and the Notes, to increase the revolving extensions under the Amended and Restated Credit Facility to a maximum of $400.0 million. The term of the Amended and Restated Credit Facility was extended for five years from the date of the amendment to April 2020. Borrowings under the Amended and Restated Credit Facility, as amended, bear interest, at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5%, (b) the Bank of America prime rate and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin, as the Company elects. The applicable margin means a percentage per annum determined in accordance with the following table: Pricing Tier Consolidated Leverage Ratio Commitment Fee/Unused Line Fee Letter of Credit Fee Eurocurrency Rate Loans Base Rate Loans 1 = 4.00 to 1.0 0.45 % 2.75 % 2.75 % 1.75 % 2 = 3.50 to 1.0 but < 4.00 to 1.0 0.40 % 2.50 % 2.50 % 1.50 % 3 = 3.00 to 1.0 but < 3.50 to 1.0 0.35 % 2.25 % 2.25 % 1.25 % 4 = 2.50 to 1.0 but < 3.00 to 1.0 0.30 % 2.00 % 2.00 % 1.00 % 5 < 2.50 to 1.0 0.30 % 1.75 % 1.75 % 0.75 % In the event of default, the outstanding indebtedness under the facility will bear interest at an additional 2%. The Amended and Restated Credit Facility contains restrictive covenants, including among other things financial covenants requiring the Company to not exceed a maximum consolidated senior secured leverage coverage ratio, a maximum total consolidated leverage ratio and to maintain a minimum consolidated fixed charge coverage ratio. The Amended and Restated Credit Facility also restricts the Company's ability (subject to certain exceptions) to incur indebtedness, prepay or amend other indebtedness, create liens, make certain fundamental changes including mergers or dissolutions, pay dividends and make other payments in respect of capital stock, make certain investments, sell assets, change its lines of business, enter into transactions with affiliates and other corporate actions. On June 1, 2015 the Company entered into a first amendment to the Amended and Restated Credit Facility ("First Amendment"). The First Amendment amended the definition of "Change of Control" in the Amended and Restated Credit Facility. As of March 31, 2016, the Company had $50.0 million outstanding under the Amended and Restated Credit Facility, resulting in $250.0 million of undrawn commitments.

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Note 10 - Debt (Details) - USD ($)		Mar. 31, 2016	Dec. 31, 2015
Senior Unsecured Notes Payable [Member]
Notes payable	[1]	$ 500,000,000	$ 500,000,000
Deferred financing costs related to Notes Payable (a)	[1]	(6,641,000)	$ (6,874,000)
Senior Secured Revolving Credit Facility [Member]
Long-term Line of Credit	[2]	50,000,000
Working Capital Facilities [Member]
Long-term Line of Credit	[3]	32,578,000	$ 35,243,000
Deferred financing costs related to Notes Payable (a)		(2,386,000)	(2,520,000)
Long-term Line of Credit		50,000,000
Totals		$ 575,937,000	$ 528,369,000

[1] On April 16, 2015, the Company closed a public offering of $500.0 million in aggregate principal amount of 5.625% senior unsecured notes due 2023 (the "Notes"). The Notes were issued at a price of 100% of their principal amount. The Notes are senior obligations of ExamWorks and are guaranteed by certain of ExamWorks' existing and future U.S. subsidiaries. The gross proceeds of $500.0 million were used to repay all of the Company's outstanding borrowings under the Senior Secured Revolving Credit Facility, to redeem all of the Company's prior $250.0 million, 9.0% senior notes due 2019 the ("Senior Unsecured Notes"), to pay related fees and expenses, and for general corporate purposes, including acquisitions. The Company incurred deferred financing costs of $7.5 million related to this offering, none of which were incurred in the three months ended March 31, 2015 and 2016. These costs are amortized on a straight-line basis over the 8 year life of the Notes which approximates the effective interest method. Additionally, the Company amortized deferred financing costs of approximately $226,000 in the three months ended March 31, 2015 related to previous Senior Unsecured Notes which were extinguished in April 2015. The Notes were issued under an indenture, dated as of April 16, 2015, as supplemented by a supplemental indenture, dated April 16, 2015 (collectively, the "Indenture"), among the Company, the Guarantors and U.S. Bank, National Association, as trustee (the "Trustee"). The Notes are the Company's general senior unsecured obligations, and rank equally with the Company's existing and future senior unsecured obligations and senior to all of the Company's further subordinated indebtedness. The Notes accrue interest at a rate of 5.625% per year, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing October 15, 2015. Interest accrues from the date of issuance of the Notes. At any time on or after April 15, 2018, the Company may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and unpaid interest to the date of redemption. Prior to April 15, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 105.625% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, provided that at least 60% of the original aggregate principal amount of the Notes remains outstanding after redemption. In addition, the Company may redeem some or all of the Notes at any time prior to April 15, 2018 at a redemption price equal to 100% of the principal amount of the Notes plus a make whole premium described in the Indenture, plus accrued and unpaid interest. The Indenture includes covenants which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the Indenture) to, among other things, incur additional indebtedness, make certain types of restricted payments, incur liens on assets of the Company or the restricted subsidiaries, engage in asset sales and enter into transactions with affiliates. Upon a change of control (as defined in the Indenture), the Company may be required to make an offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest. The Indenture also contains customary events of default.

[2] On November 2, 2010, the Company entered into the Senior Secured Revolving Credit Facility with Bank of America, N.A. The facility initially consisted of a $180.0 million revolving credit facility. On May 6, 2011, the Company increased and fully exercised the accordion features of the Senior Secured Revolving Credit Facility. The increase and exercise of the accordion feature increased the committed capacity of the credit facility by $55.0 million, from a total of $245.0 million to a total of $300.0 million. On July 7, 2011, the Company entered into a second amendment to its Senior Secured Revolving Credit Facility (the "Second Amendment") which became effective simultaneously with the consummation of the Company's private offering of the Senior Unsecured Notes. The Second Amendment amended the Senior Secured Revolving Credit Facility to, among other things, (i) extend the maturity date of the Senior Secured Revolving Credit Facility from November 2013 to July 2016; (ii) permit the issuance and sale of the Senior Unsecured Notes; (iii) replace the consolidated senior leverage ratio with a consolidated senior secured leverage ratio while permitting the maximum consolidated senior secured leverage ratio to be 3.00 to 1; (iv) permit the Company's maximum consolidated leverage ratio to increase from 3.5 to 1 to 4.75 to 1; (v) reduce the borrowing cost; and (vi) allow the Company to complete acquisitions with a purchase price of up to $75.0 million (previously $50.0 million) without prior lender consent. The Second Amendment also reduced the aggregate revolving commitments under the Senior Secured Revolving Credit Facility by $37.5 million for a maximum commitment of $262.5 million, subject to the Company's right to increase the aggregate revolving commitments by $37.5 million for a maximum commitment of $300.0 million, so long as the Company is not in default and the Company satisfies certain other customary conditions. On February 27, 2012, the Company entered into a third amendment to its Senior Secured Revolving Credit Facility (the "Third Amendment"). The Third Amendment amended the Senior Secured Revolving Credit Facility as to the definitions of consolidated fixed charges and consolidated fixed charge coverage ratio and does not permit the consolidated fixed charge coverage ratio as of the end of any fiscal quarter to be less than (i) for any fiscal quarter ending during the period from December 31, 2011 to and including September 30, 2012, 1.75 to 1.00 and (ii) for any fiscal quarter ending thereafter, 2.00 to 1.00. On August 27, 2012, the Company entered into a fourth amendment to its Senior Secured Revolving Credit Facility (the “Fourth Amendment”). The Fourth Amendment amended the Senior Secured Revolving Credit Facility to add the Australian dollar as an alternative currency and increased the alternative currency sublimit from USD $60.0 million to USD $100.0 million. On June 27, 2013, the Company entered into a fifth amendment to its Senior Secured Revolving Credit Facility (the “Fifth Amendment”). Among other changes, the Fifth Amendment modifies the Credit Agreement to permit an implementation of an auto-borrow agreement between the swing line lender and the Company to facilitate cash management, incorporates new provisions related to swap regulations and updates various provisions related to the LIBOR rate, Foreign Account Tax Compliance Act and the International Financial Reporting Standards. On February 3, 2014, the Company entered into a sixth amendment to its Senior Secured Revolving Credit Facility (the “Sixth Amendment”). The Sixth Amendment (i) allowed the Company to consummate the acquisition of Gould & Lamb, and (ii) allows the Company to acquire a target (a) with negative trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) if the purchase price of such acquisition is less than $5.0 million, (b) with trailing twelve month adjusted EBITDA (as defined in the senior secured revolving credit facility) of less than or equal to $3,000,000 without delivering to the lenders a quality of earnings report regarding such target and (c) without delivering pro forma projections of the Company to the lenders if the purchase price of such acquisition is less than $75.0 million, in each case, without prior lender consent. On April 16, 2015, the Company entered into the Amended and Restated Credit Facility. The Amended and Restated Credit Facility provides for up to $300.0 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit). During the term of the Amended and Restated Credit Facility, the Company has the right, subject to compliance with the covenants specified in the Amended and Restated Credit Facility and the Notes, to increase the revolving extensions under the Amended and Restated Credit Facility to a maximum of $400.0 million. The term of the Amended and Restated Credit Facility was extended for five years from the date of the amendment to April 2020. Borrowings under the Amended and Restated Credit Facility, as amended, bear interest, at either (i) LIBOR plus the applicable margin or (ii) a base rate (equal to the highest of (a) the federal funds rate plus 0.5%, (b) the Bank of America prime rate and (c) LIBOR (using a one-month period) plus 1.0%), plus the applicable margin, as the Company elects. The applicable margin means a percentage per annum determined in accordance with the following table: Pricing Tier Consolidated Leverage Ratio Commitment Fee/Unused Line Fee Letter of Credit Fee Eurocurrency Rate Loans Base Rate Loans 1 = 4.00 to 1.0 0.45 % 2.75 % 2.75 % 1.75 % 2 = 3.50 to 1.0 but < 4.00 to 1.0 0.40 % 2.50 % 2.50 % 1.50 % 3 = 3.00 to 1.0 but < 3.50 to 1.0 0.35 % 2.25 % 2.25 % 1.25 % 4 = 2.50 to 1.0 but < 3.00 to 1.0 0.30 % 2.00 % 2.00 % 1.00 % 5 < 2.50 to 1.0 0.30 % 1.75 % 1.75 % 0.75 % In the event of default, the outstanding indebtedness under the facility will bear interest at an additional 2%. The Amended and Restated Credit Facility contains restrictive covenants, including among other things financial covenants requiring the Company to not exceed a maximum consolidated senior secured leverage coverage ratio, a maximum total consolidated leverage ratio and to maintain a minimum consolidated fixed charge coverage ratio. The Amended and Restated Credit Facility also restricts the Company's ability (subject to certain exceptions) to incur indebtedness, prepay or amend other indebtedness, create liens, make certain fundamental changes including mergers or dissolutions, pay dividends and make other payments in respect of capital stock, make certain investments, sell assets, change its lines of business, enter into transactions with affiliates and other corporate actions. On June 1, 2015 the Company entered into a first amendment to the Amended and Restated Credit Facility ("First Amendment"). The First Amendment amended the definition of "Change of Control" in the Amended and Restated Credit Facility. As of March 31, 2016, the Company had $50.0 million outstanding under the Amended and Restated Credit Facility, resulting in $250.0 million of undrawn commitments.

[3] On September 29, 2010, the Company's indirect 100% owned subsidiary UK Independent Medical Services Limited ("UKIM") entered into a Sales Finance Agreement (the "UKIM SFA") with Barclays Bank PLC ("Barclays"), pursuant to which Barclays provides UKIM a working capital facility of up to £5,000,000, subject to the terms and conditions of the UKIM SFA. The working capital facility bore a discount margin of 2.5% over Base Rate and served to finance UKIM's unpaid account receivables. The working capital facility had a minimum term of 36 months. On June 28, 2013, UKIM entered into an amendment to extend the term of the existing UKIM SFA by 24 months from June 28, 2013, to amend the discount margin to 2.4% over Base Rate and to provide that payments by UKIM for certain non-working capital purposes are permitted under the UKIM SFA. Further, on April 16, 2015, UKIM entered into an amendment to extend the term of the existing UKIM SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% rate on March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, UKIM had $6.0 million outstanding under the working capital facility, resulting in approximately $1.2 million in availability. On May 12, 2011, the Company's indirect 100% owned subsidiary Premex Group Limited ("Premex") entered into a Sales Finance Agreement (the "Premex SFA") with Barclays, pursuant to which Barclays provides Premex a working capital facility of up to £26,500,000, subject to the terms and conditions of the Premex SFA. The working capital facility bore a discount margin of 2.4% over Base Rate and served to finance Premex's unpaid account receivables. The working capital facility had a minimum term of 36 months. On June 28, 2013, Premex entered into an amendment to extend the term of the existing Premex SFA by 24 months from June 28, 2013, and to provide that payments by Premex for certain non-working capital purposes are permitted under the Premex SFA. Further, on April 16, 2015, Premex entered into an amendment to extend the term of the existing Premex SFA for an additional 36 months from the amendment date and to amend the discount margin to 2.05% over Base Rate (0.5% at March 31, 2016). The working capital facility operates on a co-terminus and cross-default basis with other facilities provided by Barclays and with the Amended and Restated Credit Facility. As of March 31, 2016, Premex had $26.6 million outstanding under the working capital facility, resulting in approximately $11.5 million in availability.

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Note 10 - Borrowings Under the Senior Secured Revolving Credit Facility (Details)	3 Months Ended
	Mar. 31, 2016
Pricing Tier 1 [Member] | Minimum [Member]
Consolidated Leverage Ratio	4
Pricing Tier 1 [Member] | Eurodollar [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.75%
Pricing Tier 1 [Member]
Commitment Fee/Unused Line Fee	0.45%
Letter of Credit Fee	2.75%
Debt Instrument, Interest Rate, Stated Percentage	2.75%
Pricing Tier 2 [Member] | Minimum [Member]
Consolidated Leverage Ratio	3.5
Pricing Tier 2 [Member] | Maximum [Member]
Consolidated Leverage Ratio	4
Pricing Tier 2 [Member] | Eurodollar [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.50%
Pricing Tier 2 [Member]
Commitment Fee/Unused Line Fee	0.40%
Letter of Credit Fee	2.50%
Debt Instrument, Interest Rate, Stated Percentage	2.50%
Pricing Tier 3 [Member] | Minimum [Member]
Consolidated Leverage Ratio	3
Pricing Tier 3 [Member] | Maximum [Member]
Consolidated Leverage Ratio	3.5
Pricing Tier 3 [Member] | Eurodollar [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.25%
Pricing Tier 3 [Member]
Commitment Fee/Unused Line Fee	0.35%
Letter of Credit Fee	2.25%
Debt Instrument, Interest Rate, Stated Percentage	2.25%
Pricing Tier 4 [Member] | Minimum [Member]
Consolidated Leverage Ratio	2.5
Pricing Tier 4 [Member] | Maximum [Member]
Consolidated Leverage Ratio	3
Pricing Tier 4 [Member] | Eurodollar [Member]
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Pricing Tier 4 [Member]
Commitment Fee/Unused Line Fee	0.30%
Letter of Credit Fee	2.00%
Debt Instrument, Interest Rate, Stated Percentage	2.00%
Pricing Tier 5 [Member] | Maximum [Member]
Consolidated Leverage Ratio	2.5
Pricing Tier 5 [Member] | Eurodollar [Member]
Debt Instrument, Interest Rate, Stated Percentage	0.75%
Pricing Tier 5 [Member]
Commitment Fee/Unused Line Fee	0.30%
Letter of Credit Fee	1.75%
Debt Instrument, Interest Rate, Stated Percentage	1.75%

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Note 10 - Future Maturities of Long-Term Debt (Details)	Mar. 31, 2016 USD ($)
Nine months ended December 31, 2016	$ 0
2017	0
2018	32,578,000
2019	0
2020	50,000,000
Thereafter	500,000,000
Total	$ 582,578,000

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Note 11 - Financial Instruments (Details Textual) £ in Millions, AUD in Millions	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2015 GBP (£)	Sep. 30, 2013 GBP (£)	Jun. 30, 2013 AUD
Other Current Liabilities [Member]
Derivative Liability	$ 2,100,000	$ 1,200,000
Other Current Assets [Member]
Derivative Liability		848,000
Derivative, Amount of Hedged Item			£ 35	£ 40	AUD 60
Derivative Liability		$ 367,000

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Note 12 - Unrecognized Tax Benefits (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)
Unrecognized tax benefits	$ 1,924,000
Increase to prior year tax positions	95,000
Increase to current year tax positions	$ 445,000
Expiration of the statute of limitations for the assessment of taxes
Decrease related to settlements	$ 0
Unrecognized tax benefits	$ 2,464,000

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Note 13 - Segment and Geographical Information (Details Textual)	3 Months Ended
	Mar. 31, 2016
Number of Operating Segments	4

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Note 13 - Revenues by Product Group (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
IME and Other Related Services [Member]
Revenue	[1]	$ 182,997	$ 167,345
Peer and Bill Review Medicare Compliance and Case Management [Member]
Revenue	[1]	43,506	28,971
Revenue		$ 226,503	$ 196,316

[1] Includes the results of certain of the Company's service centers acquired whose revenues are generated substantially through the indicated product group. Outside of this presentation, other product groups are not tracked within the Company's financial systems. Additionally, other related services, which include any Medicare compliance services and case management services completed at the Company's historic service centers in the periods presented, are not separately captured within the Company's financial systems and have been included with IME services in the above presentation as separate presentation is not practicable. With the Company's acquisition of Gould & Lamb in February 2014 and Ability Services Network and MedAllocators in June 2014, Medicare compliance services and case management services have been added to the presentation above. Additionally with the acquisition of ABI in January 2016, medical record retrieval and document management services have been added to the presentation above. None of the individual services within the peer and bill reviews, Medicare compliance, case management, medical record retrieval and document management services categories above represent more than 10% of consolidated revenues.

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Note 13 - Segment Information (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016		Mar. 31, 2015		Dec. 31, 2015
UNITED STATES
Revenues	[1]	$ 149,440		$ 121,718
Segment profit	[1]	22,905		19,522
Depreciation and amortization expense	[1]	10,752		9,411
Capital expenditures	[1]	(1,178)		(1,670)
Total assets	[1],[2]	702,747		598,165
Long-lived assets (2)(3)	[1],[2],[3]	570,681		471,040
CANADA
Revenues	[1]	9,454		7,949
Segment profit	[1]	968		634
Depreciation and amortization expense	[1]	56		582
Capital expenditures	[1]	(27)		(114)
Total assets	[1],[2]	29,341		22,343
Long-lived assets (2)(3)	[1],[2],[3]	17,515		15,613
UNITED KINGDOM
Revenues	[1]	47,933		47,444
Segment profit	[1]	9,779		7,699
Depreciation and amortization expense	[1]	3,539		2,383
Capital expenditures	[1]	(178)		(189)
Total assets	[1],[2]	295,222		236,186
Long-lived assets (2)(3)	[1],[2],[3]	133,337		92,703
AUSTRALIA
Revenues	[1]	19,676		19,205
Segment profit	[1]	3,832		4,097
Depreciation and amortization expense	[1]	2,289		2,472
Capital expenditures	[1]	(1,354)		(256)
Total assets	[1],[2]	86,450		83,228
Long-lived assets (2)(3)	[1],[2],[3]	63,192		68,227
Revenues	[1]	226,503		196,316
Segment profit	[1]	37,484		31,952
Depreciation and amortization expense	[1]	16,636		14,848
Capital expenditures	[1]	(2,737)		(2,229)
Total assets		1,113,760	[1],[2]	939,922	[1],[2]	$ 1,044,807
Long-lived assets (2)(3)	[1],[2],[3]	$ 784,725		$ 647,583

[1] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

[2] Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company's U.S. income tax returns has been reflected in the United States segment.

[3] Long-lived assets are noncurrent assets excluding deferred tax assets and deferred financing costs.

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Note 13 - Reconciliation of Segment Profit to the Consolidated Statement of Comprehensive Loss (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Segment Profit	[1]	$ 37,484	$ 31,952
Depreciation and amortization	[1]	(16,636)	(14,848)
Share-based compensation expense		(5,419)	(6,136)
Acquisition related transaction costs		(1,058)	(559)
Other income (expenses)		(969)	731
Income from operations		$ 13,402	$ 11,140

[1] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

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Note 14 - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Guarantor Subsidiaries [Member]
Revenues		$ 149,439	$ 121,718
Costs and expenses:
Costs of revenues		102,001	82,334
Selling, general and administrative expenses		27,807	23,014
Depreciation and amortization		10,753	9,411
Total costs and expenses		140,561	114,759
Income from operations		8,878	6,959
Interest and other expenses, net		7,074	6,409
Loss before income taxes		1,804	550
Provision (benefit) for income taxes		492	(594)
Net income (loss) before earnings of consolidated subsidiaries		1,312	1,144
Net income (loss) of consolidated subsidiaries		1,948	880
Net income		3,260	2,024
Revenues		149,439	121,718
Non-Guarantor Subsidiaries [Member]
Revenues		77,064	74,598
Costs and expenses:
Costs of revenues		47,125	45,842
Selling, general and administrative expenses		19,532	19,138
Depreciation and amortization		5,883	5,437
Total costs and expenses		72,540	70,417
Income from operations		4,524	4,181
Interest and other expenses, net		1,325	1,595
Loss before income taxes		3,199	2,586
Provision (benefit) for income taxes		1,251	1,706
Net income (loss) before earnings of consolidated subsidiaries		$ 1,948	$ 880
Net income (loss) of consolidated subsidiaries
Net income		$ 1,948	$ 880
Revenues		$ 77,064	$ 74,598
Parent Company [Member]
Revenues
Costs and expenses:
Costs of revenues
Selling, general and administrative expenses
Depreciation and amortization
Total costs and expenses
Income from operations
Interest and other expenses, net
Loss before income taxes
Provision (benefit) for income taxes
Net income (loss) before earnings of consolidated subsidiaries
Net income (loss) of consolidated subsidiaries		$ 1,948	$ 880
Net income		$ 1,948	$ 880
Revenues
Consolidation, Eliminations [Member]
Revenues
Costs and expenses:
Costs of revenues
Selling, general and administrative expenses
Depreciation and amortization
Total costs and expenses
Income from operations
Interest and other expenses, net
Loss before income taxes
Provision (benefit) for income taxes
Net income (loss) before earnings of consolidated subsidiaries
Net income (loss) of consolidated subsidiaries		$ (3,896)	$ (1,760)
Net income		$ (3,896)	$ (1,760)
Revenues
Revenues		$ 226,503	$ 196,316
Costs of revenues		149,126	128,176
Selling, general and administrative expenses		47,339	42,152
Depreciation and amortization	[1]	16,636	14,848
Total costs and expenses		213,101	185,176
Income from operations		13,402	11,140
Interest and other expenses, net		8,399	8,004
Loss before income taxes		5,003	3,136
Provision (benefit) for income taxes		1,743	1,112
Net income (loss) before earnings of consolidated subsidiaries		$ 3,260	$ 2,024
Net income (loss) of consolidated subsidiaries
Net income		$ 3,260	$ 2,024
Revenues		$ 226,503	$ 196,316

[1] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

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Note 14 - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands		Mar. 31, 2016		Dec. 31, 2015	Mar. 31, 2015		Dec. 31, 2014
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents		$ 1,554		$ 33,011	$ 9,204		$ 388
Accounts receivable, net		77,277		68,896
Intercompany receivable		61,586		57,394
Prepaid expenses		$ 8,083		10,398
Other current assets				848
Total current assets		$ 148,500		170,547
Property, equipment and leasehold improvements, net		13,877		12,695
Investment in subsidiaries		282,062		280,114
Intercompany notes receivable		174,413		174,421
Goodwill		469,161		398,045
Intangible assets, net		$ 76,555		$ 46,423
Long-term accounts receivable, less current portion
Deferred tax assets, noncurrent		$ 37,467		$ 47,363
Deferred financing costs, net		2,296		2,416
Other assets		885		725
Total assets		1,205,216		1,132,749
Current liabilities:
Accounts payable		29,192		24,072
Intercompany payable		13,414		6,245
Accrued expenses		$ 11,967		$ 13,150
Accrued interest expense
Deferred revenue		$ 222		$ 138
Other current liabilities		4,432		3,383
Total current liabilities		$ 61,783		$ 46,988
Senior unsecured notes payable
Senior secured revolving credit facility and working capital facilities, less current portion
Intercompany notes payable		$ 174,413		$ 174,421
Deferred tax liability, noncurrent
Other long-term liabilities		$ 3,232		$ 2,950
Total liabilities		$ 244,507		224,359
Commitments and contingencies
Stockholders’ equity (deficit)		$ 960,709		908,390
Total liabilities and stockholders' equity (deficit)		1,205,216		1,132,749
Current portion of contingent earnout obligation		2,556
Long-term contingent earnout obligation, less current portion		5,079
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents		14,445		14,854	$ 11,078		$ 9,363
Accounts receivable, net		$ 171,785		$ 176,553
Intercompany receivable
Prepaid expenses		$ 11,831		$ 6,411
Other current assets		1,078		1,110
Total current assets		199,139		198,928
Property, equipment and leasehold improvements, net		$ 8,387		$ 7,450
Investment in subsidiaries
Intercompany notes receivable
Goodwill		$ 112,218		$ 110,252
Intangible assets, net		32,854		38,250
Long-term accounts receivable, less current portion		67,495		62,717
Deferred tax assets, noncurrent		3,129		3,042
Deferred financing costs, net		90		104
Other assets		3,293		3,244
Total assets		426,605		423,987
Current liabilities:
Accounts payable		36,756		36,527
Intercompany payable		61,586		57,394
Accrued expenses		$ 43,294		$ 47,598
Accrued interest expense
Deferred revenue		$ 3,276		$ 3,546
Other current liabilities		2,850		5,673
Total current liabilities		$ 147,762		$ 150,738
Senior unsecured notes payable
Senior secured revolving credit facility and working capital facilities, less current portion		$ 32,578		$ 35,243
Intercompany notes payable		174,413		174,421
Deferred tax liability, noncurrent		3,250		3,333
Other long-term liabilities		10,993		9,788
Total liabilities		$ 368,996		373,523
Commitments and contingencies
Stockholders’ equity (deficit)		$ 57,609		50,464
Total liabilities and stockholders' equity (deficit)		$ 426,605		$ 423,987
Current portion of contingent earnout obligation
Long-term contingent earnout obligation, less current portion
Parent Company [Member]
Current assets:
Cash and cash equivalents
Accounts receivable, net
Intercompany receivable		$ 13,414		$ 6,245
Prepaid expenses
Other current assets
Total current assets		$ 13,414		$ 6,245
Property, equipment and leasehold improvements, net
Investment in subsidiaries		$ 895,039		$ 800,743
Intercompany notes receivable		$ 174,413		$ 174,421
Goodwill
Intangible assets, net
Long-term accounts receivable, less current portion
Deferred tax assets, noncurrent
Deferred financing costs, net
Other assets
Total assets		$ 1,082,866		$ 981,409
Current liabilities:
Accounts payable
Intercompany payable
Accrued expenses
Accrued interest expense		$ 13,414		$ 6,245
Deferred revenue
Other current liabilities
Total current liabilities		$ 13,414		$ 6,245
Senior unsecured notes payable		493,359		$ 493,126
Senior secured revolving credit facility and working capital facilities, less current portion		$ 50,000
Intercompany notes payable
Deferred tax liability, noncurrent
Other long-term liabilities
Total liabilities		$ 556,773		$ 499,371
Commitments and contingencies
Stockholders’ equity (deficit)		$ 526,093		482,038
Total liabilities and stockholders' equity (deficit)		$ 1,082,866		$ 981,409
Current portion of contingent earnout obligation
Long-term contingent earnout obligation, less current portion
Consolidation, Eliminations [Member]
Current assets:
Cash and cash equivalents
Accounts receivable, net
Intercompany receivable		$ (75,000)		$ (63,639)
Prepaid expenses
Other current assets
Total current assets		$ (75,000)		$ (63,639)
Property, equipment and leasehold improvements, net
Investment in subsidiaries		$ (1,177,101)		$ (1,080,857)
Intercompany notes receivable		$ (348,826)		$ (348,842)
Goodwill
Intangible assets, net
Long-term accounts receivable, less current portion
Deferred tax assets, noncurrent
Deferred financing costs, net
Other assets
Total assets		$ (1,600,927)		$ (1,493,338)
Current liabilities:
Accounts payable
Intercompany payable		$ (75,000)		$ (63,639)
Accrued expenses
Accrued interest expense
Deferred revenue
Other current liabilities
Total current liabilities		$ (75,000)		$ (63,639)
Senior unsecured notes payable
Senior secured revolving credit facility and working capital facilities, less current portion
Intercompany notes payable		$ (348,826)		$ (348,842)
Deferred tax liability, noncurrent
Other long-term liabilities
Total liabilities		$ (423,826)		$ (412,481)
Commitments and contingencies
Stockholders’ equity (deficit)		$ (1,177,101)		(1,080,857)
Total liabilities and stockholders' equity (deficit)		$ (1,600,927)		(1,493,338)
Current portion of contingent earnout obligation
Long-term contingent earnout obligation, less current portion
Cash and cash equivalents		$ 15,999		47,865	$ 20,282		$ 9,751
Accounts receivable, net		$ 249,062		$ 245,449
Intercompany receivable
Prepaid expenses		$ 19,914		$ 16,809
Other current assets		1,078		1,958
Total current assets		286,053		312,081
Property, equipment and leasehold improvements, net		$ 22,264		$ 20,145
Investment in subsidiaries
Intercompany notes receivable
Goodwill	[1]	$ 581,379		$ 508,297
Intangible assets, net		109,409		84,673
Long-term accounts receivable, less current portion		67,495		62,717
Deferred tax assets, noncurrent		40,596		50,405
Deferred financing costs, net		2,386		2,520
Other assets		4,178		3,969
Total assets		1,113,760	[2],[3]	1,044,807	$ 939,922	[2],[3]
Accounts payable		$ 65,948		$ 60,599
Intercompany payable
Accrued expenses		$ 55,261		$ 60,748
Accrued interest expense		13,414		6,245
Deferred revenue		3,498		3,684
Other current liabilities		7,282		9,056
Total current liabilities		147,959		140,332
Senior unsecured notes payable		493,359		493,126
Senior secured revolving credit facility and working capital facilities, less current portion		$ 82,578		$ 35,243
Intercompany notes payable
Deferred tax liability, noncurrent		$ 3,250		$ 3,333
Other long-term liabilities		14,225		12,738
Total liabilities		$ 746,450		$ 684,772
Commitments and contingencies
Stockholders’ equity (deficit)		$ 367,310		$ 360,035
Total liabilities and stockholders' equity (deficit)		1,113,760		$ 1,044,807
Current portion of contingent earnout obligation		2,556
Long-term contingent earnout obligation, less current portion		$ 5,079

[1] Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

[2] For segment purposes, the Company defines "segment profit" as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

[3] Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company's U.S. income tax returns has been reflected in the United States segment.

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Note 14 - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Guarantor Subsidiaries [Member]
Net cash provided by operating activities	$ 13,500	$ 2,226
Cash paid for acquisitions, net	(92,348)	(2,299)
Purchases of building, equipment and leasehold improvements, net	(1,179)	(1,670)
Working capital and other settlements for acquisitions	(271)	(91)
Proceeds from foreign currency net investment hedges	1,649	4,812
Other	(150)	(1,250)
Net cash used in investing activities	$ (92,299)	$ (498)
Borrowings under senior secured revolving credit facility
Proceeds from the exercise of options and warrants
Excess tax benefit related to share-based compensation
Net repayments under working capital facilities
Repayment of contingent earnout obligation
Repayment under senior secured revolving credit facility
Intercompany notes and investments and other	$ 47,342	$ 7,088
Net cash provided by (used in) financing activities	$ 47,342	$ 7,088
Exchange rate impact on cash and cash equivalents
Net increase in cash and cash equivalents	$ (31,457)	$ 8,816
Cash and cash equivalents, beginning of period	33,011	388
Cash and cash equivalents, end of period	$ 1,554	9,204
Purchases of stock for treasury
Non-Guarantor Subsidiaries [Member]
Net cash provided by operating activities	$ 2,266	$ 3,938
Cash paid for acquisitions, net
Purchases of building, equipment and leasehold improvements, net	$ (1,558)	$ (559)
Working capital and other settlements for acquisitions
Proceeds from foreign currency net investment hedges
Other
Net cash used in investing activities	$ (1,558)	$ (559)
Borrowings under senior secured revolving credit facility
Proceeds from the exercise of options and warrants
Excess tax benefit related to share-based compensation
Net repayments under working capital facilities	$ (1,623)	$ (132)
Repayment of contingent earnout obligation		$ (1,023)
Repayment under senior secured revolving credit facility
Intercompany notes and investments and other
Net cash provided by (used in) financing activities	$ (1,623)	$ (1,155)
Exchange rate impact on cash and cash equivalents	506	(509)
Net increase in cash and cash equivalents	(409)	1,715
Cash and cash equivalents, beginning of period	14,854	9,363
Cash and cash equivalents, end of period	$ 14,445	$ 11,078
Purchases of stock for treasury
Parent Company [Member]
Net cash provided by operating activities
Cash paid for acquisitions, net
Purchases of building, equipment and leasehold improvements, net
Working capital and other settlements for acquisitions
Proceeds from foreign currency net investment hedges
Other
Net cash used in investing activities
Borrowings under senior secured revolving credit facility	$ 75,000	$ 25,478
Proceeds from the exercise of options and warrants	582	8,855
Excess tax benefit related to share-based compensation	$ 4,766	$ 2,086
Net repayments under working capital facilities
Repayment of contingent earnout obligation
Repayment under senior secured revolving credit facility	$ (25,000)	$ (29,331)
Intercompany notes and investments and other	$ (47,342)	$ (7,088)
Net cash provided by (used in) financing activities
Exchange rate impact on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Purchases of stock for treasury	$ (8,006)
Consolidation, Eliminations [Member]
Net cash provided by operating activities
Cash paid for acquisitions, net
Purchases of building, equipment and leasehold improvements, net
Working capital and other settlements for acquisitions
Proceeds from foreign currency net investment hedges
Other
Net cash used in investing activities
Borrowings under senior secured revolving credit facility
Proceeds from the exercise of options and warrants
Excess tax benefit related to share-based compensation
Net repayments under working capital facilities
Repayment of contingent earnout obligation
Repayment under senior secured revolving credit facility
Intercompany notes and investments and other
Net cash provided by (used in) financing activities
Exchange rate impact on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Purchases of stock for treasury
Net cash provided by operating activities	$ 15,766	$ 6,164
Cash paid for acquisitions, net	(92,348)	(2,299)
Purchases of building, equipment and leasehold improvements, net	(2,737)	(2,229)
Working capital and other settlements for acquisitions	(271)	(91)
Proceeds from foreign currency net investment hedges	1,649	4,812
Other	(150)	(1,250)
Net cash used in investing activities	(93,857)	(1,057)
Borrowings under senior secured revolving credit facility	75,000	25,478
Proceeds from the exercise of options and warrants	582	8,855
Excess tax benefit related to share-based compensation	4,766	2,086
Net repayments under working capital facilities	$ (1,623)	(132)
Repayment of contingent earnout obligation		(1,023)
Repayment under senior secured revolving credit facility	$ (25,000)	$ (29,331)
Intercompany notes and investments and other
Net cash provided by (used in) financing activities	$ 45,719	$ 5,933
Exchange rate impact on cash and cash equivalents	506	(509)
Net increase in cash and cash equivalents	(31,866)	10,531
Cash and cash equivalents, beginning of period	47,865	9,751
Cash and cash equivalents, end of period	15,999	$ 20,282
Purchases of stock for treasury	$ (8,006)

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Note 15 - Subsequent Events (Details Textual) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Apr. 27, 2016	Sep. 30, 2016	Apr. 05, 2016
Subsequent Event [Member] | Prizm LLC [Member]
Business Combination, Annual Expected Revenues of Acquiree			$ 10
Subsequent Event [Member] | ExamWorks Group, Inc. [Member] | Affiliate of Leonard Green & Partners, L.P. [Member]
Business Acquisition, Share Price	$ 35.05
Subsequent Event [Member] | ExamWorks Group, Inc. [Member]
Go Shop Period	25 days
ExamWorks Group, Inc. [Member] | Affiliate of Leonard Green & Partners, L.P. [Member] | Scenario, Forecast [Member]
Business Combination, Consideration Transferred		$ 2,200