8-K 1 september20018kfiling.txt SEPTEMBER 2001 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): SEPTEMBER 10, 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 is available on its website - www.AMSchoices.com, and presented to a number of financial analysts, investors and potential investors. The presentation filed herewith supercedes a presentation previously furnished pursuant to a Form 8-K dated May 18, 2001 and the presentation on the Company's website. 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 SEPTEMBER 2001 AMERICAN AMS OVERVIEW MEDICAL SECURITY ----------------- Rx for Good Health [Map of the United States] - Specializes in providing Markets served: healthcare benefit plans for small-employer groups, Alabama Arizona-1 Arkansas individuals & families Colorado-1 Delaware Florida-1,2 Georgia-1 Illinois-1 Indiana-1 - PPO model Iowa Kansas-1 Louisiana Maryland Michigan-2 Mississippi - 2000 Revenues: Missouri-1 Nebraska-2 Nevada $989.9 million New Mexico-2 North Carolina-2 North Dakota Ohio-1,2 Oklahoma-1,2 Pennsylvania-1,2 - YTD 6/30/2001 Revenues: South Carolina South Dakota Tennessee-1,2 $455.6 million Texas-1,2 Utah-2 Virginia-1 West Virginia Wisconsin-1,2,3 Washington DC - 626,867 health members at 6/30/2001 1-Regional Sales Office located in this state 2-District Sales Office located in this state 3-Headquarters located in Green Bay, Wisconsin 2 AMERICAN AMS OVERVIEW MEDICAL SECURITY ----------------- Rx for Good Health -- Strategies - Grow individual MedOne business - Return Small Group business to profitability - Grow stand-alone Dental business - Reduce drug costs - Promote Affordable Series products 3 AMERICAN BUSINESSES MEDICAL SECURITY ----------------- Rx for Good Health --Revenue Contribution Changes (% of all AMS revenues) [Pie Chart] [Pie Chart] 63% Small Group 44% Small Group 25% MedOne 46% MedOne 9% Specialty 9% Specialty 3% Corporate 1% Corporate 2000 2003(projected) 4 AMERICAN MEDICAL SECURITY ----------------- Rx for Good Health MedOne MedOne Medical, and Life associated with MedOne members 5 AMERICAN MEDONE COMPONENT MEDICAL SECURITY ----------------- Rx for Good Health -- Product for individuals and their families - No employer coverage - Self-employed - Tempoary coverage -- Sold through Independent Agents -- Higher profit potential than small group - More flexibility in underwriting and pricing - Better risk selection - Plans feature higher deductibles, copays, etc. 6 AMERICAN MEDONE COMPONENT MEDICAL SECURITY ----------------- Rx for Good Health -- Revenues - Up 24% in 2000 from 1999 - Up 28% in 2Q 2001 over 2Q 2000 -- Membership - 34% of total 2000 membership vs. 23% in 1999 - 41% of total 2Q 2001 membership 7 AMERICAN MEDONE COMPONENT MEDICAL SECURITY ----------------- Rx for Good Health -- Significantly increase revenues & profitability: - Expanding number of agents - Creating additional regional/national distribution relationships - Develop e-business 8 AMERICAN MEDICAL SECURITY ----------------- Rx for Good Health SMALL GROUP Small Group Medical, Dental, Life and STD associated with group members 9 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 10 AMERICAN SMALL GROUP COMPONENT MEDICAL SECURITY ----------------- Rx for Good Health -- Increase Small Group profitability by: - Focusing on core markets - Developing new products - Higher deductibles, copays, etc. - Providing agents with power of Internet - eAMS.com secured agent site 11 AMERICAN MEDICAL SECURITY ----------------- Rx for Good Health SPECIALTY BUSINESS Stand-Alone Dental, Provider Network and Self-Funded 12 AMERICAN SPECIALTY BUSINESS MEDICAL SECURITY ----------------- Rx for Good Health --Consists of: - Dental Business - 187,000 stand-alone dental members - 88,000 additional members bundled to group plans - Owned Provider Network leased to third parties - 96,000 non-AMS members - Self-Funded Business 13 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 14 AMERICAN MEDICAL SECURITY ----------------- Rx for Good Health FINANCIAL HIGHLIGHTS 15 AMERICAN TOTAL REVENUE MEDICAL SECURITY (in millions) ----------------- Rx for Good Health [line graph]
1998 1999 2000 2001* 2002* 2003* Revenues: Total 961 1,097 990 880 941 1,135 Small Group 634 750 620 472 451 498 MedOne 187 206 253 311 391 522 Other 140 141 117 97 99 115
* Projected 16 AMERICAN EARNINGS PER SHARE MEDICAL SECURITY (excluding non-recurring charges) ----------------- Rx for Good Health [line graph] Earnings Per Share Actual: Quarter 3 2000 $(0.04) Quarter 4 2000 $ 0.01 Quarter 1 2001 $ 0.05 Quarter 2 2001 $ 0.10 Company guidance as of 8/7/2001: Quarter 3 2001 $ 0.15 Quarter 4 2001 $ 0.17 17 AMERICAN CONDENSED CONSOLIDATED STATEMENTS OF INCOME MEDICAL SECURITY (in millions) ----------------- Rx for Good Health Year Year YTD 6/30 1999* 2000 2001* REVENUES: Insurance premiums $1,056.1 $ 951.1 $ 436.1 Investment and other income 41.3 38.8 19.5 ----------------------------------------------- Total revenues 1,097.4 989.9 455.6 EXPENSES: Medical and other benefits 841.3 724.6 322.8 SG&A and other expenses 274.0 259.2 128.7 ----------------------------------------------- Total expenses 1,115.3 983.8 451.5 ----------------------------------------------- Pre-tax income (loss) (17.9) 6.1 4.1 After-tax income (loss) $ (12.2) $ 2.7 $ 2.2 =============================================== EPS $ (.74) $ 0.18 $ 0.15 EBITDA $ (5.5) $ 18.1 $ 10.1 =============================================== * EXCLUDES NONRECURRING CHARGES 18 AMERICAN CONDENSED CONSOLIDATED BALANCE SHEETS MEDICAL SECURITY (in millions) Rx for Good Health December 31, June 30, 2000 2001 ----------- ----------- ASSETS: Cash and invested assets $ 285.0 $ 279.4 Goodwill and intangibles 107.5 105.7 Other assets 79.4 75.9 ----------- ----------- Total assets $471.9 $ 461.0 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY: Medical and other benefits payable $ 145.3 $ 131.9 Notes payable 41.2 40.7 Other liabilities 64.2 69.6 ----------- ---------- Total liabilities 250.7 242.2 Shareholders' equity 221.2 218.8 ----------- ---------- Total liabilities and shareholders' equity $ 471.9 $ 461.0 =========== ========== 19 AMERICAN OTHER FINANCIAL DATA MEDICAL SECURITY ----------------- Rx for Good Health AS OF ------------------------------- 12/31/99 12/31/00 6/30/01 ------------------------------- Book Value per Share $14.86 $15.77 $15.70 Tangible Book Value $7.69 $8.24 $8.15 per Share Debt to Total Capital Ratio 16.2% 15.7% 15.7% Capital Adequacy (RBC) 339% 389% -- 20 AMERICAN FINANCIAL HIGHLIGHTS MEDICAL SECURITY ----------------- Rx for Good Health SMALL CAP VALUE -- Investment Considerations - Growing MedOne business - Leader in small group market - Profitable dental business - Strong systems and back office - Low debt to total capital ratio - 15.7% - Book value of $15.70 per share on 6/30/2001 - Tangible book value of $8.15 per share on 6/30/2001 - Closing price of $6.65 on 9/5/2001 21 AMERICAN CAUTIONARY STATEMENT MEDICAL SECURITY ----------------- Rx for Good Health 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. Risk factors that may affect actual results include: - Inability to successfully implement the Company's business plan, attain new business sales goals (particularly for MedOne, dental and re-designed products), retain existing customers and maintain acceptable profit margins - Unexpected increases in 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 - 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 The Company undertakes no obligation to update this information as a result of new information or future events. 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. 22 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: SEPTEMBER 10, 2001 AMERICAN MEDICAL SECURITY GROUP, INC. /S/ GARY D. GUENGERICH -------------------------------------------------- Gary D. Guengerich Executive Vice President & Chief Financial Officer