ExamWorks Reports Third Quarter 2012 Financial Results
(firmenpresse) - ATLANTA, GA -- (Marketwire) -- 11/05/12 -- 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 third quarter of 2012.
Revenues for the third quarter of 2012 were $130.1 million, an increase of $20.9 million, or 19.1%, over the year-ago quarter revenues of $109.2 million. Excluding the impact of acquisitions completed within the past twelve months, organic revenue growth was 6.4% over the prior year quarter.
Pro forma revenues for the third quarter of 2012 were $141.4 million, an increase of $8.5 million, or 6.4%, over the year-ago quarter pro forma revenues of $132.9 million. Excluding the impact of currency, revenues would have grown by 7.1% over the prior year pro forma quarter. Pro forma revenues assume that acquisitions completed in 2011 and 2012 were completed on January 1, 2010 and 2011, respectively.
Adjusted EBITDA for the third quarter of 2012 was $20.2 million (15.5% of revenues), an increase of $3.1 million, or 18.1%, over the year-ago quarter adjusted EBITDA of $17.1 million. Excluding the impact of acquisitions completed in the third quarter of 2012, adjusted EBITDA was $18.9 million (15.2% of revenues), an increase of $1.8 million, or 10.5%, over the year-ago quarter adjusted EBITDA of $17.1 million. Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net loss below and is not a substitute for the GAAP equivalent.
On August 31, 2012, we completed the acquisition of MedHealth Holdings Pty Ltd ("MedHealth"), gaining a leadership position in the Australian IME services market, continuing our global expansion into high-growth markets, and further diversifying our business. Additionally, on July 12, 2012, we completed the acquisition of Makos Health, a small Ontario based company that was immediately integrated into one of our existing business units, providing us with new customer relationships. During the twelve months ended June 30, 2012, these acquired businesses generated aggregate annual revenues and adjusted EBITDA of $56.5 million and $12.8 million, respectively. In the third quarter of 2012, these two acquisitions contributed revenues and adjusted EBITDA of $5.5 million and $1.3 million, respectively.
We ended the quarter with $6.4 million of cash on hand, approximately $381.9 million of total debt and total consolidated leverage of approximately 4.28x, pro forma for the effect of the MedHealth acquisition. As of the end of the quarter, we had available liquidity in excess of $45 million, including cash on hand and availability under our senior secured revolving credit facility.
Commenting on today's earnings announcement, Richard E. Perlman, Executive Chairman of ExamWorks, said: "We are delighted that during the third quarter all of our geographies experienced meaningful improvement. The positive trend continued as anticipated in our US business, our U.K. business continued to experience substantial growth, and our Canadian business delivered significantly improved performance. Finally, our newest geography, Australia, is experiencing significant growth that we also expect to continue, and we are pleased to have entered this exciting market. We are satisfied with both our operational and financial performance year to date, and notwithstanding the anticipated impact that our business in the northeastern United States will suffer from Hurricane Sandy during the fourth quarter, our improvements in 2012 have been significant and we are enthusiastically looking forward to 2013."
James K. Price, Chief Executive Officer of ExamWorks, said: "We have been extremely selective and disciplined in the execution of our acquisition strategy in 2012. Our MedHealth acquisition in Australia is illustrative of that as we have acquired a rapidly growing and market-leading business that diversifies our revenue base in an attractive Australian market that is estimated to be approximately $500 million in annual revenues. We are pleased to welcome into our family MedHealth's exceptionally well managed business, its talented and experienced team, and its nine service centers in six states and two territories. We look forward to continuing to raise the innovation, technology and quality bar in the IME industry in all of our markets."
For the three months ended September 30, 2012, revenues were $130.1 million, an increase of 19.1% over the $109.2 million in revenues in the third quarter of 2011. Excluding the impact of acquisitions completed within the past twelve months, organic revenue growth was 6.4% over the prior year quarter.
For the nine months ended September 30, 2012, revenues were $381.6 million, an increase of 35.1% over the $282.5 million in revenues in the comparable period of 2011. The increase in revenues was primarily due to acquisitions completed in 2011 and 2012. Excluding the impact of acquisitions completed in 2011 and 2012, organic revenue growth was 2.2% over the comparable prior year period.
Consistent with our presentation in prior quarters, below is a table presenting our pro forma revenues and growth rates for each of the regions that we serve. In the third quarter of 2012, we added Australia as a region through the acquisition of MedHealth and we added the Makos acquisition into the Canadian region. The numbers presented below are pro forma for the effect of acquisitions completed in 2011 and 2012.
In the third quarter of 2012, our US businesses generated revenues of $84.8 million, a 1.6% increase over the $83.5 million of pro forma revenues generated in the third quarter of 2011. For the nine month period ended September 30, 2012, our US businesses generated revenues of $260.4 million, a 2.0% increase over the $255.3 million of pro forma revenues generated in the nine month period ended September 30, 2011. The growth was largely due to increased volumes resulting from market share gains.
In the third quarter of 2012, our UK businesses generated revenues of $33.5 million, a 23.6% increase over the $27.1 million of revenues generated in the third quarter of 2011. For the nine month period ended September 30, 2012, our UK businesses generated revenues of $95.5 million, a 14.9% increase over the $83.1 million of pro forma revenues generated in the nine month period ended September 30, 2011. The growth was largely due to increased volumes resulting from market share gains.
In the third quarter of 2012, our Canadian businesses generated pro forma revenues of $6.6 million, a (25.8)% decline from the $8.9 million of pro forma revenues generated in the third quarter of 2011. In the nine months ended September 30, 2012, our Canadian businesses generated pro forma revenues of $21.0 million, a (29.5)% decline from the $29.8 million of pro forma revenues generated in the nine months ended September 30, 2011. Our Canadian businesses, which generate less than 5% of our total revenues, continue to be negatively impacted by the legislative changes in the province of Ontario.
In the third quarter of 2012, our Australian business generated pro forma revenues of $16.5 million, a 22.2% increase over the $13.5 million of pro forma revenues generated in the third quarter of 2011. In the nine months ended September 30, 2012, our Australian business generated pro forma revenues of $44.5 million, a 21.9% increase over the $36.5 million of pro forma revenues generated in the nine months ended September 30, 2011. The growth was primarily due to increased volumes resulting from market share gains and a change in sales mix.
For the three months ended September 30, 2012, costs of revenues were $86.1 million, an increase of 19.4% over the $72.1 million in costs of revenues in the third quarter of 2011. The change was primarily due to the acquired costs of revenues for acquisitions completed in 2011 and 2012. Costs of revenues as a percentage of revenues for the third quarter of 2012 were 66.2% compared to 66.0% in the third quarter of 2011. Included in costs of revenues in the third quarter of 2011 and 2012 are $650,000 and $750,000 of share-based compensation expenses, respectively.
For the three months ended September 30, 2012, SGA expenses were $28.3 million, an increase of 24.1% over the $22.8 million in SGA expenses in the third quarter of 2011. The change was primarily due to the acquired SGA expenses for acquisitions completed in 2011 and 2012. Included in SGA expenses in the third quarter of 2012 are $2.3 million in share-based compensation expenses and $1.4 million in acquisition-related transaction and other non-recurring costs. Included in SGA expenses in the third quarter of 2011 are $1.7 million in share-based compensation expenses and $498,000 in acquisition-related transaction costs and other non-recurring costs.
- For the three months ended September 30, 2012, D&A expenses were $14.5 million, an increase of 10.7% over the $13.1 million in D&A expenses in the third quarter of 2011. The change was primarily due to acquisitions completed in 2011 and 2012. For the three months ended September 30, 2012, depreciation expense was $1.4 million and amortization expense was $13.1 million.
For the three months ended September 30, 2012, interest and other expenses, net were $7.5 million, an increase of 41.5% over the $5.3 million in interest and other expenses, net in the three months ended September 30, 2011. Included in interest and other expenses, net in the third quarter of 2012 are $7.1 million of interest expenses and deferred loan cost amortization.
For the three months ended September 30, 2012, adjusted EBITDA was $20.2 million, an increase of 18.1% over the $17.1 million in adjusted EBITDA in the third quarter of 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 $15.1 million of cash flow from operations in the first nine months of 2012, after the $22.5 million of bond interest payments made in 2012. We ended the quarter with $6.4 million of cash on hand and approximately $381.9 million of total debt, consisting of $250.0 million of senior unsecured notes due July 2019, $94.9 million outstanding under the senior secured revolving credit facility, $35.2 million outstanding under the working capital facilities in the U.K., and $1.8 million in seller subordinated notes. As of the end of the quarter, we had available liquidity in excess of $45 million, including cash on hand and availability under our senior secured revolving credit facility.
ExamWorks is providing the following business outlook:
Full year reported revenue is expected to range between $520 million and $524 million, excluding the impact of any acquisitions that may be completed in the fourth quarter of 2012. Additionally, this outlook does not include the estimated $5 million to $10 million negative impact that Hurricane Sandy could have on our US operations.
Full year pro forma revenue is expected to range between $575 million and $579 million, assuming the closing of approximately $15 million of revenue from acquisitions currently in process. Additionally, this outlook does not include the estimated $5 million to $10 million negative impact that Hurricane Sandy could have on our US operations.
For 2012, we expect adjusted EBITDA margins between 15-16% of reported revenues. The adjusted EBITDA margin range does not include the estimated negative impact that Hurricane Sandy could have on our US operations.
Fourth quarter 2012 reported revenue is expected to range between $138 million and $142 million, excluding the impact of any acquisitions that may be completed in the fourth quarter of 2012. Additionally, this outlook does not include the estimated $5 million to $10 million negative impact that Hurricane Sandy could have on our US operations.
Fourth quarter 2012 adjusted EBITDA margin is expected to range between 15-16% of reported revenue. The adjusted EBITDA margin range does not include the estimated negative impact that Hurricane Sandy could have on our US operations. 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 nine months ended September 30, 2012.
For 2013, we expect organic revenue growth to increase to between 5-7% based upon our expected 2012 pro forma revenue and we expect adjusted EBITDA margins between 16-17% of reported revenues.
For 2013, we will no longer provide acquisition guidance. Acquisitions remain an important part of our strategy and the opportunities are plentiful. Starting in 2013, we intend to announce acquisitions as they close rather than guiding to an annual number. We believe that this will allow analysts and shareholders to more accurately and consistently model our expected results going forward.
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 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 (888) 713-4213 in the U.S. or (617) 213-4865 internationally with access code 93663989. 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 (5:00 p.m. Pacific Time), and can be accessed until November12th, 2012 at midnight Eastern Time, by calling (888) 286-8010 in the U.S. or (617) 801-6888 internationally, with access code 65994700.
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: 05.11.2012 - 21:01 Uhr
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