January 18, 2018

ExamWorks Announces Fourth Quarter 2010 Financial Results

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 fourth quarter of 2010.

Fourth Quarter 2010 Highlights
– Revenues for the fourth quarter of 2010 were $54.3 million, an increase of $38.5 million, or 244%, over the year-ago quarter revenue of $15.8 million. Revenue related to acquisitions completed in 2009 and 2010 accounted for $36.8 million of this revenue growth.

– Adjusted EBITDA for the fourth quarter of 2010 was $10.1 million, an increase of $8.3 million, or 461%, over the year-ago quarter adjusted EBITDA of $1.8 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.

– In the fourth quarter of 2010, we completed the acquisitions of BME Gateway and Royal Medical Consultants. BME Gateway and Royal Medical Consultants contributed $3.1 million and $113,000 in revenues and $433,000 and $13,000 in adjusted EBITDA in the fourth quarter of 2010, respectively.

Financial Review
Revenues – For the three months ended December 31, 2010, revenues were $54.3 million, an increase of 244% over the $15.8 million in revenues in the fourth quarter of 2009. Excluding the impact of acquisitions completed in the fourth quarter of 2009 and in 2010, revenues increased $1.7 million, or 11%, during the fourth quarter of 2010.

Costs of revenues — For the three months ended December 31, 2010, costs of revenues were $34.9 million, an increase of 236% over the $10.4 million in costs of revenues in the fourth quarter of 2009. Excluding the impact of acquisitions completed in the fourth quarter of 2009 and in 2010, costs of revenues increased $808,000, or 8%, during the fourth quarter of 2010. Costs of revenues as a percentage of revenues for the fourth quarter of 2010 was 64% compared to 66% in the fourth quarter of 2009.

Selling, general and administrative expenses – For the three months ended December 31, 2010, SGA expenses were $13.7 million, an increase of 132% over the $5.9 million in SGA expenses in the fourth quarter of 2009. Excluding the impact of acquisitions completed in the fourth quarter of 2009 and in 2010, SGA expenses decreased $191,000, or 3%, during the fourth quarter of 2010. Included in SGA expenses in the fourth quarter of 2010 are $1.3 million in share based compensation expenses, $3.0 million in acquisition-related transaction costs, and $188,000 in other non-recurring costs.

Depreciation and amortization expenses – For the three months ended December 31, 2010, D&A expenses were $7.1 million, an increase of 209% over the $2.3 million in D&A expenses in the fourth quarter of 2009. Excluding the impact of acquisitions completed in the fourth quarter of 2009 and in 2010, D&A expenses decreased $225,000, or 10%, during the fourth quarter of 2010.

Interest and other expenses, net – For the three months ended December 31, 2010, interest and other expenses, net were $5.9 million, an increase of 436% over the $1.1 million in interest and other expenses, net in the fourth quarter of 2009. Included in interest and other expenses, net in the fourth quarter of 2010 are $3.2 million in charges related to the early extinguishment of debt and $1.5 million in charges related to the mark to market provision of an earnout obligation.

Adjusted EBITDA – For the three months ended December 31, 2010, adjusted EBITDA was $10.1 million, an increase of 461% over the $1.8 million in adjusted EBITDA in the fourth quarter of 2009. 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.

Subsequent Event – On February 28, 2011, we completed the acquisition of MES Group (MES) for $215 million, consisting of $175 million in cash, 1,424,501 shares of ExamWorks common stock with a value of $30.0 million (using $21.07 per share, the closing stock price on February 28th), and the payoff of $10 million of indebtedness under MES’ credit facilities.

“ExamWorks had a fantastic quarter and year,” said Richard Perlman, Chairman of ExamWorks. “We had strong top line growth, increased profitability and strong cash flow. Our entire organization performed well during 2010 to execute and achieve our strategic and operating objectives and we are extremely pleased with the performance culture that we have built across the company.

Jim Price, CEO of ExamWorks, said: “We are excited to start the year with our latest major achievement, the acquisition of MES. With this acquisition, we have increased the depth of our senior management team and added substantially to our ability to service the industry. We are now a company of 1,600 dedicated employees, 41 offices in the U.S., Canada and the UK with a large and highly credentialed panel of physicians and other medical providers. We look forward to continuing our growth both from our existing business and our strong pipeline of attractive potential acquisitions.”

Business Outlook
ExamWorks is providing the following business outlook for fiscal year 2011:

– Fiscal year 2011 revenue is expected to be $350.0 million to $360.0 million, including the expected results for acquisitions completed through March 1, 2011, but excluding the effect of expected future acquisitions during 2011.

– Fiscal year 2011 Adjusted EBITDA is expected to be $66.0 million to $72.0 million, including the expected results for acquisitions completed through March 1, 2011, but excluding the effect of expected future acquisitions during 2011. Adjusted EBITDA is a non-GAAP measure, the use of which by ExamWorks is described below. The reconciliation to GAAP measures of actual 2011 Adjusted EBITDA is expected to be calculated and presented in a manner consistent with the reconciliation set forth below with respect to the three months ended December 31, 2010.

– The Company expects to acquire a minimum of $40.0 million of annual revenue during the balance of 2011. This will result in acquired revenues of at least $175.0 million since the IPO, reaching the Company’s goal of $175.0 million of acquired revenues in 2011 and 2012 well ahead of the original timeline. Including the $40.0 million of additional acquired revenue, we expect to end 2011 with pro forma revenues in excess of $410 million.

The full earnings release is available here.

Source: ExamWorks

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