Atlanta, GA – ExamWorks Group, Inc. (NYSE: EXAM), a leading provider of independent medical examinations (“IMEs”), peer reviews, bill reviews and related services, Recently reported financial results for the first quarter of 2013.
First Quarter 2013 Highlights
- Revenues for the first quarter of 2013 were $148.7 million, an increase of $25.0 million, or 20.2%, over the year-ago quarter revenues of $123.7 million.
- On a pro forma basis, revenues of $148.7 million for the first quarter of 2013 represent an increase of $8.4 million, or 6.0%, over the year-ago quarter pro forma revenues of $140.3 million. Excluding the impact of currency, revenues would have grown by 6.5% over the prior year pro forma quarter. Pro forma revenues assume that acquisitions completed in 2012 were completed on January 1, 2011.
- Adjusted EBITDA for the first quarter of 2013 was $23.0 million (15.5% of revenues), an increase of $4.2 million, or 22.3%, over the year-ago quarter adjusted EBITDA of $18.8 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.
- Reaffirming our full year 2013 guidance, reported revenues are expected to increase organically by 5-7% from our 2012 pro forma revenues of approximately $574 million and 2013 adjusted EBITDA margins are expected to range between 15.5-16.5%.
Commentary
Commenting on the recent earnings announcement, James K. Price, Chief Executive Officer of ExamWorks, said: “We are extremely proud of our more than 2,000 dedicated and talented employees worldwide who work hard every day to redefine quality and service in the IME industry. Our results reflect their hard work and dedication. Our technology infrastructure allows us to meet the security, privacy, accessibility and process integration needs of our customers and continues to set us apart in the marketplace. We are excited and look forward to continuing our progress in 2013.”
Richard E. Perlman, Executive Chairman of ExamWorks, said: “Our solid results in the first quarter validate our vision for ExamWorks and our position in the IME industry, as well as our deliberate and patient execution of our strategy over the last several quarters. All of our geographies are performing well and we expect our steady growth to continue as ExamWorks solidifies its position as the global IME industry leader.”
Financial Review
Revenues – For the three months ended March 31, 2013, revenues were $148.7 million, an increase of 20.2% over the $123.7 million in revenues in the first quarter of 2012. The increase in revenues was primarily due to acquisitions completed in 2012 and growth in our U.K. business.
On a pro forma basis, for the three months ended March 31, 2013, revenues were $148.7 million, an increase of 6.0% over the $140.3 million in pro forma revenues in the first quarter of 2012. The increase in pro forma revenues was primarily due to increased IME service volumes in our U.K. and Australian businesses. Below is a table presenting our pro forma revenues and growth rates for each of the regions that we serve. The numbers presented below are pro forma for the effect of acquisitions completed in 2012.
Costs of revenues – For the three months ended March 31, 2013, costs of revenues were $97.4 million, an increase of 20.0% over the $81.2 million in costs of revenues in the first quarter of 2012. The change was primarily due to the acquired costs of revenues for acquisitions completed in 2012. Costs of revenues as a percentage of revenues for the first quarter of 2013 remained constant at 65.5% compared to 65.6% in the first quarter of 2012. Included in costs of revenues in the first quarter of 2012 and 2013 are $744,000 and $728,000 of share-based compensation expenses, respectively.
Selling, general and administrative expenses (“SGA”) – For the three months ended March 31, 2013, SGA expenses were $33.3 million, an increase of 16.4% over the $28.6 million in SGA expenses in the first quarter of 2012. The increase was primarily due to the acquired SGA expenses for acquisitions completed in 2012. Included in SGA expenses in the first quarter of 2013 are $3.4 million in share-based compensation expenses and $812,000 in acquisition-related transaction costs and other non-recurring costs. Included in SGA expenses in the first quarter of 2012 were $4.0 million in share-based compensation expenses and $200,000 in acquisition-related transaction costs and other non-recurring costs.
Depreciation and amortization expenses (“D&A”) – For the three months ended March 31, 2013, D&A expenses were $16.3 million, an increase of 16.4% over the $14.0 million in D&A expenses in the first quarter of 2012. The increase was primarily due to acquisitions completed in 2012. For the three months ended March 31, 2013, depreciation expense was $1.4 million and amortization expense was $14.9 million.
Interest and other expenses, net – For the three months ended March 31, 2013, interest and other expenses, net were $7.5 million, an increase of 13.6% over the $6.6 million in interest and other expenses, net in the three months ended March 31, 2012. The increase was primarily due to higher average debt balances this quarter compared to the prior year quarter resulting from the acquisition of Australia based MedHealth completed in August 2012.
Adjusted EBITDA – For the three months ended March 31, 2013, adjusted EBITDA was $23.0 million, an increase of 22.3% over the $18.8 million in adjusted EBITDA in the first quarter of 2012.
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.
Other financial data – We ended the quarter with $382.3 million of total debt and total leverage of approximately 4.1x. Our total debt consisted of $250.0 million of senior unsecured notes due July 2019, $100.1 million outstanding under the senior secured revolving credit facility, $31.6 million outstanding under the working capital facilities in the U.K., and approximately $600,000 in seller subordinated notes. As of the end of the quarter, our committed availability under our credit facilities was approximately $180 million, of which approximately $58 million is immediately available and the balance of approximately $122 million is available to fund future acquisitions.
Business Outlook
ExamWorks is providing the following business outlook for the full year and the second quarter of 2013:
- Reaffirming our previously stated guidance, full year 2013 reported revenues are expected to increase organically by 5-7% from our 2012 pro forma revenues of approximately $574 million, excluding the effects of currency.
- Reaffirming our previously stated guidance, full year 2013 adjusted EBITDA margins are expected to range between 15.5% and 16.5% of reported revenues. On a quarterly basis, adjusted EBITDA margins as a percentage of revenue may fluctuate between 15.5% and 17.0%.
- Second quarter 2013 reported revenues are expected to range between $150 million and $154 million.
- Second quarter 2013 reported adjusted EBITDA margins are expected to range between 15.5% and 16.0% of reported revenues.
The complete earnings release is available here: ExampWorks First Quarter 2013 Financial Results
Source: ExamWorks