ExamWorks Reports Third Quarter 2012 Financial Results

Marketwired

ATLANTA, GA--(Marketwire - Nov 5, 2012) - 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. 

Q3 2012 Highlights

  • 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.

Commentary

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."

Financial Review

Revenues - 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.

   
Pro Forma Revenues  
    (In thousands except %)  
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2011   2012   Change (a)     2011   2012   Change (b)  
ExamWorks U.S.   $ 83,488   $ 84,784   1.6 %   $ 255,283   $ 260,441   2.0 %
United Kingdom     27,074     33,521   23.8 %     83,114     95,475   14.9 %
Canada     8,879     6,589   (25.8) %     29,786     21,027   (29.4) %
Subtotal   $ 119,441   $ 124,894   4.6 %   $ 368,183   $ 376,943   2.4 %
                                     
Australia     13,455     16,466   22.4 %     36,541     44,538   21.9 %
                                     
Total   $ 132,896     141,360   6.4 %   $ 404,724     421,481   4.1 %
                                     
(a) For the three months ended September 30, 2012 and excluding the impact of currency, our growth in the U.K. would have been 26.3%, the decline in Canada would have been (25.0)%, our growth in Australia would have been 25.1%, and our total growth would have been 7.1%.
(b) For the nine months ended September 30, 2012 and excluding the impact of currency, our growth in the U.K. would have been 17.5%, the decline in Canada would have been (28.0)%, our growth in Australia would have been 23.1%, and our total growth would have been 4.7%.
   

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.

Costs of revenues - 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.

Selling, general and administrative expenses ("SGA") - 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. 

Depreciation and amortization expenses ("D&A") - 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.

Interest and other expenses, net - 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.

Adjusted EBITDA - 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. 

Other financial data - 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. 

Business Outlook

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. 

About ExamWorks Group

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.

Non-GAAP Financial Measures

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.

Forward Looking Statements

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 http://investorrelations.examworks.com/.

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.

                         
EXAMWORKS GROUP, INC. AND SUBSIDIARIES  
Consolidated Statements of Operations  
(In thousands, except share and per share amounts)  
(Unaudited)  
                         
                         
    For the three months ended September 30,     For the nine months ended September 30,  
    2011     2012     2011     2012  
                                 
Revenues   $ 109,218     $ 130,085     $ 282,548     $ 381,600  
Costs and expenses:                                
  Costs of revenues     72,148       86,080       186,225       251,476  
  Selling, general and administrative expenses     22,803       28,281       58,785       84,642  
  Depreciation and amortization     13,069       14,458       33,153       42,245  
    Total costs and expenses     108,020       128,819       278,163       378,363  
    Income from operations     1,198       1,266       4,385       3,237  
Interest and other expenses, net:                                
  Interest expense, net     4,722       7,136       8,922       20,154  
  Loss on early extinguishment of debt     621       -       621       -  
  Other income, net     -       (70 )     -       (226 )
  Gain on interest rate swap     (56 )     (54 )     (253 )     (169 )
  Realized foreign currency loss     -       534       223       534  
    Total interest and other expenses, net     5,287       7,546       9,513       20,293  
    Loss before income taxes     (4,089 )     (6,280 )     (5,128 )     (17,056 )
Benefit for income taxes     (1,412 )     (1,654 )     (1,820 )     (4,800 )
    Net loss   $ (2,677 )   $ (4,626 )   $ (3,308 )   $ (12,256 )
                                 
Per share data:                                
Net loss per share:                                
  Basic and diluted   $ (0.08 )   $ (0.14 )   $ (0.10 )   $ (0.36 )
                                 
Weighted average number of common shares outstanding:                                
  Basic and diluted     34,732,028       34,116,062       33,889,584       34,092,093  
                                 
Adjusted EBITDA   $ 17,128     $ 20,182     $ 46,494     $ 59,457  
                                 
                                 
                                 
             
EXAMWORKS GROUP, INC. AND SUBSIDIARIES  
Consolidated Balance Sheets  
(In thousands, except share amounts)  
(Unaudited)  
             
             
    December 31,     September 30,  
Assets   2011     2012  
Current assets:                
  Cash and cash equivalents   $ 8,416     $ 6,406  
  Accounts receivable, net     144,041       171,097  
  Other receivables     40       62  
  Prepaid expenses     4,487       5,012  
  Deferred tax assets     1,640       -  
  Other current assets     1,173       1,226  
    Total current assets     159,797       183,803  
Property, equipment and leasehold improvements, net     8,918       10,549  
Goodwill     300,260       352,026  
Intangible assets, net     146,168       160,505  
Deferred tax assets, noncurrent     -       11,607  
Deferred financing costs, net     11,458       10,771  
Other assets     438       1,102  
                       
      Total assets   $ 627,039     $ 730,363  
Liabilities and Stockholders' Equity                
Current liabilities:                
  Accounts payable   $ 42,642     $ 45,295  
  Accrued expenses     28,410       46,187  
  Accrued interest expense     10,247       5,133  
  Deferred revenue     1,332       3,369  
  Current portion of subordinated unsecured notes payable     1,932       1,251  
  Deferred tax liability     -       358  
  Current portion of contingent earnout obligation     91       83  
  Current portion of working capital facilities     -       6,292  
  Other current liabilities     5,459       6,005  
                     
      Total current liabilities     90,113       113,973  
                     
Senior unsecured notes payable     250,000       250,000  
Senior secured revolving credit facility and working capital facilities, less current portion     44,063       123,825  
Long-term subordinated unsecured notes payable, less current portion     717       528  
Long-term contingent earnout obligation, less current portion     86       -  
Deferred tax liability, noncurrent     2,159       -  
Other long-term liabilities     1,977       1,810  
                 
      Total liabilities     389,115       490,136  
                 
Commitments and contingencies                
                 
Stockholders' equity:                
  Preferred stock, $0.0001 par value; Authorized 50,000,000 shares; no shares issued and outstanding at December 31, 2011 and September 30, 2012     -       -  
  Common stock, $0.0001 par value; Authorized 250,000,000 shares; issued and outstanding 34,090,618 and 34,193,304 shares at                
  December 31, 2011 and September 30, 2012, respectively     3       3  
  Additional paid-in capital     268,162       278,819  
  Accumulated other comprehensive income (loss)     (1,429 )     3,698  
  Accumulated deficit     (21,549 )     (33,805 )
  Treasury stock, at cost; 805,613 and 905,349 shares at December 31, 2011 and September 30, 2012, respectively     (7,263 )     (8,488 )
                 
      Total stockholders' equity     237,924       240,227  
                 
      Total liabilities and stockholders' equity   $ 627,039     $ 730,363  
                 
                 
                 
             
EXAMWORKS GROUP, INC. AND SUBSIDIARIES  
Consolidated Statements of Cash Flows  
(In thousands)  
(Unaudited)  
             
             
    For the nine months ended September 30,  
    2011     2012  
                 
Operating activities:                
  Net loss   $ (3,308 )   $ (12,256 )
  Adjustments to reconcile net loss to net cash provided by operating activities:                
    Gain on interest rate swap     (253 )     (169 )
    Depreciation and amortization     33,153       42,245  
    Amortization of deferred rent     (386 )     (99 )
    Share-based compensation     5,385       12,562  
    Excess tax benefit related to share-based compensation     (3,112 )     -  
    Provision for doubtful accounts     1,381       2,555  
    Amortization of deferred financing costs     1,433       1,612  
    Deferred income taxes     (6,299 )     (15,346 )
    Loss on early extinguishment of debt     621       -  
    Other     223       (31 )
    Changes in operating assets and liabilities, net of effects of acquisitions:                
      Accounts receivable     (3,469 )     (20,850 )
      Prepaid expenses and other current assets     (786 )     103  
      Accounts payable and accrued expenses     1,337       8,339  
      Accrued interest expense     4,562       (5,114 )
      Deferred revenue and customer deposits     (458 )     1,938  
      Other liabilities     (3,218 )     (402 )
        Net cash provided by operating activities     26,806       15,087  
Investing activities:                
  Cash paid for acquisitions, net     (300,233 )     (95,801 )
  Purchases of equipment and leasehold improvements, net     (4,121 )     (4,857 )
  Working capital and other settlements for acquisitions     (1,884 )     547  
        Net cash used in investing activities     (306,238 )     (100,111 )
Financing activities:                
  Borrowings under senior secured revolving credit facility     268,000       160,640  
  Borrowings under senior unsecured notes payable     250,000       -  
  Proceeds from the exercise of options and warrants     2,215       1,254  
  Excess tax benefit related to share-based compensation     3,112       -  
  Purchases of stock for treasury     (3,548 )     (387 )
  Payment of deferred financing costs     (9,746 )     (1,034 )
  Repayments of subordinated unsecured notes payable     (2,101 )     (975 )
  Net borrowings (repayments) under working capital facilities     36,098       (5,517 )
  Repayments under senior secured revolving credit facility     (268,000 )     (71,000 )
  Other     (358 )     (95 )
        Net cash provided by financing activities     275,672       82,886  
Exchange rate impact on cash and cash equivalents     5       128  
        Net decrease in cash and cash equivalents     (3,755 )     (2,010 )
Cash and cash equivalents, beginning of period     33,624       8,416  
Cash and cash equivalents, end of period   $ 29,869     $ 6,406  
                 
                 
                 
EXAMWORKS GROUP, INC. AND SUBSIDIARIES  
Reconciliation to Adjusted EBITDA  
(In thousands)  
(Unaudited)  
                   
                   
    For the three months ended
September 30,
    For the nine months ended
September 30,
 
    2011     2012     2011     2012  
                                 
Net loss   $ (2,677 )   $ (4,626 )   $ (3,308 )   $ (12,256 )
  Share-based compensation expense (1)     2,363       3,018       5,385       12,563  
  Depreciation and amortization     13,069       14,458       33,153       42,245  
  Acquisition related transaction costs     477       1,378       2,704       1,269  
  Other non-recurring costs     21       62       867       143  
  Interest and other expenses, net     5,287       7,546       9,513       20,293  
  Benefit for income taxes     (1,412 )     (1,654 )     (1,820 )     (4,800 )
Adjusted EBITDA   $ 17,128     $ 20,182     $ 46,494     $ 59,457  
                                 
                                 
(1)

Share-based compensation expense of $748,000 and $2.2 million is included in costs of revenues for the three and nine months ended September 30, 2012, respectively, and the remainder is included in SGA expenses. Share-based compensation expense of $650,000 and $1.3 million is included in costs of revenues for the three and nine months ended September 30, 2011, respectively, and the remainder is included in SGA expenses.
   
Contact:
CONTACT:
ExamWorks Group, Inc.
J. Miguel Fernandez de Castro
404-952-2400
Senior Executive Vice President and Chief Financial Officer
investorrelations@examworks.com
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