ExamWorks Reports Second Quarter 2012 Financial Results
(firmenpresse) - ATLANTA, GA -- (Marketwire) -- 08/02/12 -- ExamWorks Group, Inc. (NYSE: EXAM), a leading provider of independent medical examinations ("IMEs"), peer reviews, bill reviews and related services, today reported financial results for the second quarter of 2012.
Revenues for the second quarter of 2012 were $127.8 million, an increase of $21.1 million, or 19.8%, over the year-ago quarter revenues of $106.7 million.
Revenues for the first half of 2012 were $251.5 million, an increase of $78.2 million, or 45.1%, over the year-ago six month revenues of $173.3 million.
Actual revenues for the second quarter of 2012 were $127.8 million, an increase of $900,000, or 0.7%, over the year-ago quarter pro forma revenues of $126.9 million. Excluding the impact of currency, revenues would have grown by 1.7% over the prior year pro forma quarter. Pro forma revenues assume that acquisitions completed in 2011 were completed on January 1, 2010. We did not complete any acquisitions in the first half of 2012, thus pro forma revenues equal actual revenues.
Actual revenues for the first half of 2012 were $251.5 million, an increase of $3.4 million, or 1.4%, over the comparable period of 2011 pro forma revenues of $248.1 million. Excluding the impact of currency, revenues would have grown by 2.2% over the prior year pro forma six month period ended June 30, 2011.
Adjusted EBITDA for the second quarter of 2012 was $20.4 million (16.0% of revenues), an increase of $1.9 million, or 10.3%, over the year-ago quarter adjusted EBITDA of $18.5 million. The adjusted EBITDA margin of 16.0% compares favorably to the 15.2% adjusted EBITDA margin in the first quarter of 2012, demonstrating the leverage inherent in the business. Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net loss below and is not a substitute for the GAAP equivalent.
Adjusted EBITDA for the first half of 2012 was $39.3 million (15.6% of revenues), an increase of $9.9 million, or 33.7%, over the comparable period of 2011 adjusted EBITDA of $29.4 million.
We generated $11.4 million of cash flow from operations in the second quarter of 2012 and $16.2 million of cash flows in the first six months of 2012, net of $11.0 million of interest paid on the senior unsecured notes. We ended the quarter with available liquidity in excess of $85 million, including cash on hand and availability under the senior secured revolving credit facility.
For 2012, we continue to expect organic revenue growth between 4-6% based upon our 2011 pro forma revenue of approximately $483 million and we expect adjusted EBITDA margins between 15-16% of reported revenues.
Commenting on today's earnings announcement, Richard E. Perlman, Executive Chairman of ExamWorks, said: "Our second quarter results continue to show the success of our strategy, our model and our focus on execution. We are well positioned, back on track and looking forward to the second half of 2012, as well as 2013, as we expect our momentum to continue."
James K. Price, Chief Executive Officer of ExamWorks, said: "We continue to be pleased with how the industry has embraced our model and with the value that we are able to deliver to our clients. We continue to invest in differentiating infrastructure to service our clients and to focus proactively on our clients' present and future needs. Having focused on operational initiatives for the last several quarters, we are excited about the prospects for what we believe are some exciting acquisitions during the second half of 2012."
For the three months ended June 30, 2012, revenues were $127.8 million, an increase of 19.8% over the $106.7 million in revenues in the second quarter of 2011. The increase in revenues was primarily due to acquisitions completed in 2011. The company did not complete any acquisitions in the three months ended June 30, 2012.
For the six months ended June 30, 2012, revenues were $251.5 million, an increase of 45.1% over the $173.3 million in revenues in the comparable period of 2011. The increase in revenues was primarily due to acquisitions completed in 2011. The company did not complete any acquisitions in the six months ended June 30, 2012.
Consistent with the presentation in our first quarter of 2012 press release, below is a table presenting our revenues and growth rates for each of the regions that we serve. The 2011 numbers presented below are pro forma for the effect of acquisitions completed in 2011. The 2012 numbers presented below are actual results as no acquisitions have been completed in the first half of 2012.
In the second quarter of 2012, our US businesses generated revenues of $88.5 million, comparable to the $88.7 million of revenues generated in the second quarter of 2011. For the six month period ended June 30, 2012, our US businesses generated revenues of $175.7 million, a 2.2% increase over the $171.8 million of revenues generated in the six month period ended June 30, 2011. The growth was primarily due to increased volumes.
In the second quarter of 2012, our UK businesses generated revenues of $32.3 million, an 18.0% increase over the $27.4 million of revenues generated in the second quarter of 2011. For the six month period ended June 30, 2012, our UK businesses generated revenues of $62.0 million, a 10.6% increase over the $56.0 million of revenues generated in the six month period ended June 30, 2011. The growth was primarily due to increased volumes.
In the second quarter of 2011, our Canadian businesses generated revenues of $7.0 million, a (35.0)% decline from the $10.8 million of revenues generated in the second quarter of 2011. In the six months ended June 30, 2012, our Canadian businesses generated revenues of $13.9 million, a (31.5)% decline from the $20.3 million of revenues generated in the six months ended June 30, 2011. Our Canadian businesses continue to be negatively impacted by the previously mentioned legislative changes in the province of Ontario.
For the three months ended June 30, 2012, costs of revenues were $84.2 million, an increase of 20.1% over the $70.1 million in costs of revenues in the second quarter of 2011. The change was primarily due to the acquired costs of revenues for acquisitions completed in 2011. Costs of revenues as a percentage of revenues for the second quarter of 2012 were 65.9% compared to 65.6% in the first quarter of 2012 and 66.1% in the second quarter of 2011. Included in costs of revenues in the second quarter of 2011 and 2012 are $650,000 and $750,000 of share-based compensation expenses, respectively.
For the six months ended June 30, 2012, costs of revenues were $165.4 million, an increase of 45.0% over the $114.1 million in costs of revenues in the six months ended June 30, 2011. The change was primarily due to the acquired costs of revenues for acquisitions completed in 2011. Costs of revenues as a percentage of revenues for the six months ended June 30, 2012 and 2011 were both 65.8%. Included in costs of revenues in the six months ended June 30, 2011 and 2012 are $650,000 and $1.5 million of share-based compensation expenses, respectively.
For the three months ended June 30, 2012, SGA expenses were $27.7 million, an increase of 27.6% over the $21.7 million in SGA expenses in the second quarter of 2011. The change was primarily due to the acquired SGA expenses for acquisitions completed in 2011. Included in SGA expenses in the second quarter of 2012 are $4.1 million in share-based compensation expenses and ($228,000) in acquisition-related transaction and other non-recurring costs. Included in SGA expenses in the second quarter of 2011 are $1.4 million in share-based compensation expenses and $1.8 million in acquisition-related transaction costs and other non-recurring costs.
For the six months ended June 30, 2012, SGA expenses were $56.4 million, an increase of 56.7% over the $36.0 million in SGA expenses in the six months ended June 30, 2011. The change was primarily due to the acquired SGA expenses for acquisitions completed in 2011. Included in SGA expenses in the six months ended June 30, 2012 are $8.0 million in share-based compensation expenses and ($28,000) in acquisition-related transaction and other non-recurring costs. Included in SGA expenses in the six months ended June 30, 2011 are $2.4 million in share-based compensation expenses and $3.1 million in acquisition-related transaction costs and other non-recurring costs.
- For the three months ended June 30, 2012, D&A expenses were $13.8 million, an increase of 20.0% over the $11.5 million in D&A expenses in the second quarter of 2011. The change was primarily due to acquisitions completed in 2011. For the three months ended June 30, 2012, depreciation expense was $1.4 million and amortization expense was $12.4 million.
For the six months ended June 30, 2012, D&A expenses were $27.8 million, an increase of 38.3% over the $20.1 million in D&A expenses in the six months ended June 30, 2011. The change was primarily due to acquisitions completed in 2011. For the six months ended June 30, 2012, depreciation expense was $2.6 million and amortization expense was $25.2 million.
For the three months ended June 30, 2012, interest and other expenses, net were $6.2 million, an increase of 93.8% over the $3.2 million in interest and other expenses, net in the three months ended June 30, 2011. Included in interest and other expenses, net in the second quarter of 2012 are $6.7 million of interest expenses and deferred loan cost amortization.
For the six months ended June 30, 2012, interest and other expenses, net were $12.7 million, an increase of 202.3% over the $4.2 million in interest and other expenses, net in the six months ended June 30, 2011. Included in interest and other expenses, net in the six months ended June 30, 2012 are $13.5 million of interest expenses and deferred loan cost amortization.
For the three months ended June 30, 2012, adjusted EBITDA was $20.4 million, an increase of 10.3% over the $18.5 million in adjusted EBITDA in the second quarter of 2011. The adjusted EBITDA margin of 16.0% compares favorably to the 15.2% adjusted EBITDA margin in the first quarter of 2012, demonstrating the leverage inherent in the business.
For the six months ended June 30, 2012, adjusted EBITDA was $39.3 million, an increase of 33.7% over the $29.4 million in adjusted EBITDA in the six months ended June 30, 2011.
Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net loss below and is not a substitute for the GAAP equivalent.
We generated $11.4 million of cash flow from operations in the second quarter of 2012 and $16.2 million of cash flow from operations in the first six months of 2012, after the $11.0 million bond interest payment made in January 2012. We ended the quarter with $12.4 million of cash on hand and approximately $287.2 million of total debt, consisting of $250.0 million of senior unsecured notes due July 2019, $35.2 million outstanding under the working capital facilities in the U.K., and $2.0 million in seller subordinated notes. As of the end of the quarter, we had available liquidity in excess of $85 million, including cash on hand and availability under our senior secured revolving credit facility.
ExamWorks is providing the following business outlook for the third quarter of 2012 and full year 2012:
Third quarter 2012 reported revenue is expected to range between $122 million to $126 million, excluding the impact of any acquisitions that may be completed in the third quarter of 2012.
Third quarter 2012 adjusted EBITDA margin is expected to range between 15-16% of reported revenue. Adjusted EBITDA is a non-GAAP measure, the use of which by ExamWorks is described below. The reconciliation to GAAP measures of reported 2012 Adjusted EBITDA is expected to be calculated and presented in a manner consistent with the reconciliation set forth below with respect to the three and six months ended June 30, 2012.
For 2012, we continue to expect organic revenue growth between 4-6% based upon our 2011 pro forma revenue of approximately $483 million. Additionally, we expect to complete acquisitions in the second half of 2012 with annual revenues of approximately $75 million.
For 2012, we expect adjusted EBITDA margins between 15-16% of reported revenues.
ExamWorks Group, Inc. is a leading provider of independent medical examinations ("IMEs"), peer and bill reviews and related services. 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. ExamWorks is focused on providing clients a national presence while maintaining the local service and capabilities they need and expect.
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 non-recurring costs. 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, excluding our senior management.
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.
Below is a table presenting a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP measure, for each of the periods indicated.
Statements made in this press release that express ExamWorks' or management's intentions, plans, beliefs, expectations or predictions of future events are forward-looking statements, which ExamWorks intends to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," or the negative of these terms or other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements may include information concerning ExamWorks' possible or assumed future results of operations, including descriptions of ExamWorks' revenues, profitability, outlook and overall business strategy. You should not place undue reliance on these statements because they are subject to numerous uncertainties and factors relating to ExamWorks' operations and business environment, all of which are difficult to predict and many of which are beyond ExamWorks' control. Although ExamWorks believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many uncertainties and factors could affect ExamWorks' actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements, including but not limited to: our limited operating history; our ability to implement our growth strategy and acquisition program; our ability to integrate completed acquisitions; our expansion into international markets; our ability to secure additional financing; regulation of our industry; our information technology systems; our ability to protect our intellectual property rights and other information; our ability to compete successfully with our competitors; our ability to retain qualified physicians and other medical providers for our medical panel; our ability to retain our clients; our ability to provide accurate health-related risk assessment analyses of data; our ability to retain key management personnel; and restrictions in our credit facility, senior notes indenture and future indebtedness. In addition, the risks discussed in our periodic reports, registration statements and other filings with the Securities and Exchange Commission could cause actual results to differ materially from the results anticipated by forward-looking statements.
You should keep in mind that any forward-looking statement made by ExamWorks herein, or elsewhere, speaks only as of the date on which made. ExamWorks expressly disclaims any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in ExamWorks' expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
ExamWorks will host a conference call to discuss the results and other matters at 5:00 p.m. Eastern Time. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (866) 788-0545 in the U.S. or (857) 350-1683 internationally with access code 70049129. A live webcast of the call is also accessible through the Investor Relations section of the company's web site at .
Following the conclusion of the call, a replay of the webcast will be available at the company's web site within two hours. Alternatively, a telephonic replay of the call will be available at 7:00 p.m. Eastern Time (4:00 p.m. Pacific Time), and can be accessed until August 9, 2012 at midnight Eastern Time, by calling (888) 286-8010 in the U.S. or (617) 801-6888 internationally, with access code 48728834.
CONTACT:
ExamWorks Group, Inc.
J. Miguel Fernandez de Castro
404-952-2400
Senior Executive Vice President and Chief Financial Officer
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Datum: 02.08.2012 - 20:01 Uhr
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