-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FyH1nmlrXpOiNx0RwFSHzQlmqG8SKZaRMsa74lcemFYr294b5OsYX8++TkxnnyQn ft1/YYNs4BLMsEp59n3GPw== 0000878897-01-500010.txt : 20010521 0000878897-01-500010.hdr.sgml : 20010521 ACCESSION NUMBER: 0000878897-01-500010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010518 ITEM INFORMATION: FILED AS OF DATE: 20010518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDICAL SECURITY GROUP INC CENTRAL INDEX KEY: 0000878897 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 391431799 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13154 FILM NUMBER: 1643606 BUSINESS ADDRESS: STREET 1: 3100 AMS BLVD CITY: GREEN BAY STATE: WI ZIP: 54313 BUSINESS PHONE: 9206611111 MAIL ADDRESS: STREET 1: 3100 AMS BLVD CITY: GREEN BAY STATE: WI ZIP: 54313 FORMER COMPANY: FORMER CONFORMED NAME: UNITED WISCONSIN SERVICES INC /WI DATE OF NAME CHANGE: 19930328 8-K 1 may20018kfiling.txt MAY 2001 8-K FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): MAY 18, 2001 AMERICAN MEDICAL SECURITY GROUP, INC. (Exact name of Registrant as specified in its charter) WISCONSIN 1-13154 39-1431799 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 3100 AMS BOULEVARD, GREEN BAY, WISCONSIN 54313 (Address of principal executive offices) (Zip Code) (920) 661-1111 (Registrant's telephone number, including area code) -------------- ITEM 9. REGULATION FD DISCLOSURE American Medical Security Group, Inc. (the "Company") has developed an investor financial presentation that will be available on its website - www.AMSchoices.com, and presented to a number of financial analysts. The presentation is an update to a presentation previously furnished pursuant to a Form 8-K dated February 21, 2001. The presentation (i)describes the Company's current businesses, strategies and financial highlights; (ii) describes projected changes in the mix of revenue contributions from the Company's major businesses anticipated by 2003; and (iii) provides new forward looking revenue projections through 2003. The content of the presentation will form the base of future presentations the Company expects to make at financial forums, including health care conferences sponsored by various financial institutions. The presentation is prepared in summary fashion and contains information that should be read in conjunction with the Company's reports filed with the Securities and Exchange Commission from time to time. Following is the content of the presentation. AMERICAN MEDICAL SECURITY RX for Good Health MAY 2001 AMERICAN CAUTIONARY STATEMENT MEDICAL SECURITY - ----------------- Rx for Good Health This presentation is a summary of previously disclosed historical financial data as of March 31, 2001, unless otherwise indicated, and expectations of the Company held as of May 18, 2001. The Company undertakes no obligation to update this information as a result of new information or future events. This presentation contains certain "forward-looking" statements (within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995) with respect to strategic business plans, earnings and changes in business mix. Such statements are subject to inherent risks and uncertainties that may cause actual results to differ materially from those contemplated. See the last page of this presentation for risk factors that may affect actual results. Information in this presentation related to the Company's major business products is provided in addition to previously disclosed information. In this presentation, historical and forward looking data reflecting the Company's health and life insurance segment businesses have been allocated to major business products based on the underlying customer base. 2 AMERICAN FINANCIAL HIGHLIGHTS MEDICAL SECURITY - ----------------- Rx for Good Health - -- Investment Considerations - Growing MedOne business - Leader in small group market - Profitable dental business - Strong systems and back office - High book value - Book value of $15.54 per share on 3/31/2001 - Tangible book value of $7.97 per share on 3/31/2001 - Effective action plans in place - Low debt to total capital ratio - 15.8% 3 AMERICAN AMS OVERVIEW MEDICAL SECURITY - ----------------- Rx for Good Health [Map of the United States] - Specializes in providing Current markets served: healthcare benefit plans for small-employer groups, Alabama Arizona Arkansas individuals & families Colorado Delaware Florida Georgia Illinois Indiana - PPO model Iowa Kansas Louisiana Maryland Michigan Mississippi - 2000 Revenues: Missouri Nebraska Nevada $989.9 million New Mexico North Carolina North Dakota Ohio Oklahoma Pennsylvania - 1Q 2001 Revenues: South Carolina South Dakota Tennessee $232.3 million Texas Utah Virginia West Virginia Wisconsin Washington DC - 652,683 medical members at 3/31/2001 4 AMERICAN AMS OVERVIEW MEDICAL SECURITY - ----------------- Rx for Good Health - -- Preferred Provider Organization (PPO) Model - Open access to health care providers - PPOs have gained market share over HMOs - Less litigation risk - Less potential impact from legislation 5 AMERICAN AMS OVERVIEW MEDICAL SECURITY - ----------------- Rx for Good Health - -- Average group size is 6 employees - -- Dedicated to Independent Agent - -- 24-hour, world-class customer service - -- Efficient back office, low-cost G & A 6 AMERICAN AMS OVERVIEW MEDICAL SECURITY - ----------------- Rx for Good Health - -- Ongoing Action Plans - Ensure premium yields exceed claim cost trends - Rapidly expand MedOne product sales - Individuals & Families - Focus small group sales in core markets - Continue efforts to reduce drug claim costs 7 AMERICAN AMS OVERVIEW MEDICAL SECURITY - ----------------- Rx for Good Health - -- Ongoing Action Plans (continued) - Enhance claims cost management programs - Promote Affordable Series products - Greater member participation in medical care costs - Strengthen Specialty Business - Dental - Leverage Internet in all businesses 8 AMERICAN MEDICAL SECURITY - ----------------- Rx for Good Health BUSINESSES 9 AMERICAN BUSINESSES MEDICAL SECURITY - ----------------- Rx for Good Health - -- Health Business - MedOne Component - MedOne Medical, and Life and STD associated with MedOne members - Small Group Component - Small Group Medical, and Dental, Life and STD associated with group members -- Specialty Business - Self-Funded and Network Revenue and Dental, Life and STD not associated with group or MedOne members -- Corporate - Revenue and Expenses not associated with the other segments 10 AMERICAN BUSINESSES MEDICAL SECURITY - ----------------- Rx for Good Health - --Revenue Contributions in 2000 (% of all AMS revenues) [Pie Chart] 63% Small Group 25% MedOne 9% Specialty 3% Corporate 11 AMERICAN MEDICAL SECURITY - ----------------- Rx for Good Health MedOne MedOne Medical, and Life and STD associated with MedOne members 12 AMERICAN MedOne Component MEDICAL SECURITY - ----------------- Rx for Good Health - -- Product for individuals and their families - No employer coverage - Self-employed - -- Sold through Independent Agents - -- Higher profit potential than small group - Plan features higher deductibles, copays, etc. - More flexibility in underwriting and pricing - Better risk selection 13 AMERICAN MedOne Component MEDICAL SECURITY - ----------------- Rx for Good Health - -- Revenues - Up 24% in 2000 from 1999 - Up 31% in 1Q 2001 over 1Q 2000 - -- Membership - 34% of total 2000 membership vs. 23% in 1999 - 38% of total 1Q 2001 membership 14 AMERICAN MedOne Component MEDICAL SECURITY - ----------------- Rx for Good Health - -- Significantly increase revenues & profitability by: - Expanding number of local agents - Creating additional regional/national distribution relationships - Developing e-business efficiencies - Increasing number of e-agency relationships 15 AMERICAN MedOne Component MEDICAL SECURITY - ----------------- Rx for Good Health - -- Revenue Contribution Growth (% of all AMS revenues) MedOne [Pie Chart] [Pie Chart] 2000 (actual) 2003 (projected) 25% MedOne 50% MedOne 16 AMERICAN MEDICAL SECURITY - ----------------- Rx for Good Health SMALL GROUP Small Group Medical, and Dental, Life and STD associated with group members 17 AMERICAN SMALL GROUP COMPONENT MEDICAL SECURITY - ----------------- Rx for Good Health - -- Small-employer groups, ranging in size from 2 to 50 employees - -- Average group size is 6 employees - -- Distribution through 17,500 Independent Agents 18 AMERICAN SMALL GROUP COMPONENT MEDICAL SECURITY - ----------------- Rx for Good Health - -- Increase Small Group profitability by: - Focusing on core markets - Enhancing underwriting - Developing new products - Higher deductibles, copays, etc. - Strengthening claims cost management - Providing agents with power of Internet -e AMS.com secured agent site 19 AMERICAN SMALL GROUP COMPONENT MEDICAL SECURITY - ----------------- Rx for Good Health - --Revenue Contribution Change (% of all AMS revenues) Small Group [Pie Chart] [Pie Chart] 2000 (actual) 2003 (projected) 63% Small Group 41% Small Group 20 AMERICAN MEDICAL SECURITY - ----------------- Rx for Good Health SPECIALTY BUSINESS Self-Funded and Network Revenue, and Dental, Life and STD not associated with group or MedOne members 21 AMERICAN SPECIALTY BUSINESS MEDICAL SECURITY - ----------------- Rx for Good Health - --Consists of: - Dental Business - 171,000 stand-alone dental members - 126,000 additional members bundles to group plans - Owned Provider Networks leased to third parties - 96,000 non-AMS members - Self-Funded Business 22 AMERICAN SPECIALTY BUSINESS MEDICAL SECURITY - ----------------- Rx for Good Health - -- Increase Profitability by: - Expanding dental business - Increase sales & marketing activity - Grow non-AMS provider network members - -- Selectively develop self-funded business 23 AMERICAN BUSINESSES MEDICAL SECURITY - ----------------- Rx for Good Health - -- Revenue Contribution Changes (% of all AMS revenues) [Pie Chart] [Pie Chart] 2000 (actual) 2003 (projected) 63% Small Group 41% Small Group 25% MedOne 50% MedOne 9% Specialty 8% Specialty 3% Corporate 1% Corporate 24 AMERICAN MEDICAL SECURITY - ----------------- Rx for Good Health FINANCIAL HIGHLIGHTS 25 AMERICAN REVENUE CHANGES MEDICAL SECURITY - ----------------- Rx for Good Health - -- Near-term revenue reductions - Disciplined pricing - Changing small group market focus - -- Significant MedOne revenue growth 26 AMERICAN REVENUE CHANGES MEDICAL SECURITY - ----------------- Rx for Good Health [line graph]
1998 1999 2000 2001* 2002* 2003* Revenues: Small Group 633,948 750,057 620,409 518,042 503,536 512,096 MedOne 187,369 206,223 252,767 319,497 446,657 617,281 Other 139,552 141,100 116,689 85,066 95,700 117,710 ==================================================================================== Total Health 960,869 1,097,380 989,865 922,605 1,045,893 1,247,087
27 AMERICAN CONDENSED CONSOLIDATED STATEMENTS OF INCOME MEDICAL SECURITY (IN MILLIONS) - ----------------- Rx for Good Health
2000 2001 Qtr1 Qtr2 Qtr3* Qtr4 Qtr1* REVENUES: Insurance premiums $ 247.9 $ 240.5 $ 232.0 $ 230.7 $ 222.5 Investment and other income 9.8 9.8 9.7 9.4 9.8 ---------------------------------------------------------------------------- Total revenues 257.7 250.3 241.7 240.1 232.3 EXPENSES: Medical and other benefits 188.1 182.0 180.1 174.4 166.6 SG&A and other expenses 66.8 64.5 61.7 64.9 64.2 ---------------------------------------------------------------------------- Total expenses 254.9 246.5 241.8 239.3 230.8 ---------------------------------------------------------------------------- Pre-tax income (loss) 2.8 3.8 (0.1) 0.8 1.5 After-tax income (loss) $ 1.7 $ 2.3 $ (0.6) $ 0.1 $ 0.7 ============================================================================ EPS $ 0.11 $ 0.15 $ (0.04) $ 0.01 $ 0.05 ============================================================================
* EXCLUDES NONRECURRING CHARGE 28 AMERICAN CONDENSED CONSOLIDATED BALANCE SHEETS MEDICAL SECURITY (IN MILLIONS) Rx for Good Health
March 31, 2001 2000 ------------------- ASSETS: Cash and invested assets $ 278.4 $ 284.6 Goodwill and intangibles 106.7 110.4 Other assets 79.4 88.8 -------------------- Total assets $ 464.5 $ 483.8 ==================== LIABILITIES AND SHAREHOLDERS' EQUITY: Medical and other benefits payable $ 133.3 $ 150.5 Notes payable 40.9 42.1 Other liabilities 72.0 69.6 -------------------- Total liabilities 246.2 262.2 Shareholders' equity 218.3 221.6 -------------------- Total liabilities and shareholders' equity $ 464.5 $ 483.8 ====================
29 AMERICAN OTHER FINANCIAL DATA MEDICAL SECURITY - ----------------- Rx for Good Health AS OF ------------------------------- 12/31/99 12/31/00 3/31/01 ------------------------------- Book Value per Share $14.86 $15.77 $15.54 Tangible Book Value $7.69 $8.24 $7.97 per Share Debt to Total Capital Ratio 16.2% 15.7% 15.8% Risk-Based Capital 339% 389% 385% est. 30 AMERICAN FINANCIAL HIGHLIGHTS MEDICAL SECURITY - ----------------- Rx for Good Health - -- Earnings per Share - 1Q 2001 $0.05* - Projections - 2Q 2001 $0.06 - $0.08 - Full year 2001 $0.35 - $0.45* * Excluding 1Q 2001 $0.41 non-recurring charge 31 AMERICAN FINANCIAL HIGHLIGHTS MEDICAL SECURITY - ----------------- Rx for Good Health - -- Investment Considerations - Growing MedOne business - Leader in small group market - Profitable dental business - Strong systems and back office - High book value - Book value of $15.54 per share on 3/31/2001 - Tangible book value of $7.97 per share on 3/31/2001 - Effective action plans in place - Low debt to total capital ratio - 15.8% 32 AMERICAN CAUTIONARY FACTORS MEDICAL SECURITY - ----------------- Rx for Good Health - -- Risks and uncertainties that may affect future results - Inability to successfully implement the Company's business plan, attain new business sales goals (particularly for MedOne and dental products) and maintain acceptable profit margins - Rising medical costs and increased utilization of medical services and prescription drugs - Competitive practice and demand for the Company's products - Changes in the Company's relationship with key sales agents and the ability of the Company to expand its distribution network for MedOne products - Developments in health care reform and changes in insurance and health care regulations and other regulatory issues - General economic conditions affecting consumer spending and the Company's investment performance - Outcome of commercial and other litigation - Other factors referred to in the Company's reports filed with the Securities and Exchange Commission from time to time 33 AMERICAN MEDICAL SECURITY RX for Good Health SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: MAY 18, 2001 AMERICAN MEDICAL SECURITY GROUP, INC. /S/ GARY D. GUENGERICH -------------------------------------------------- Gary D. Guengerich Executive Vice President & Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----