-----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, S9mowFUu+/2TogCETWDWMjqB+Xtpjy8nERIVYA+EoxVdvncX5gPmnsDn125a8sZm SH8mD+Vthj9MFF+0BlHqqw== 0000878897-04-000031.txt : 20040625 0000878897-04-000031.hdr.sgml : 20040625 20040625124305 ACCESSION NUMBER: 0000878897-04-000031 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040625 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13154 FILM NUMBER: 04881392 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 11-K 1 form11k_2003.txt AMERICAN MEDICAL SECURITY GROUP, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------ FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------ ------------------ Commission File Number 1-13154 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: AMERICAN MEDICAL SECURITY RETIREMENT SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: AMERICAN MEDICAL SECURITY GROUP, INC. 3100 AMS Boulevard Green Bay, WI 54313 American Medical Security Retirement Savings Plan Annual Report on Form 11-K For the Fiscal Year Ended December 31, 2003 TABLE OF CONTENTS PAGE Financial Statements and Supplemental Schedule Years ended December 31, 2003 and 2002 Report of Independent Registered Public Accounting Firm...............3 Financial Statements Statements of Net Assets Available for Benefits.......................4 Statements of Changes in Net Assets Available for Benefits............5 Notes to Financial Statements.........................................6 Supplemental Schedule Schedule H, Line 4i--Schedule of Assets (Held at End of Year)........10 Signatures....................................................................11 Exhibit Index...............................................................EX-1 2 Report of Independent Registered Public Accounting Firm The Administrative Committee American Medical Security Retirement Savings Plan We have audited the accompanying statements of net assets available for benefits of American Medical Security Retirement Savings Plan as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2003 and 2002, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2003, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP April 2, 2004 Milwaukee, Wisconsin 3 AMERICAN MEDICAL SECURITY RETIREMENT SAVINGS PLAN Statements of Net Assets Available for Benefits
DECEMBER 31 2003 2002 ------------------------------------- ASSETS Investments, at fair value (NOTE 3): Mutual funds $54,428,654 $40,565,278 Common stock of American Medical Security Group, Inc. 731,061 612,651 Participant loans receivable 1,086,347 1,050,515 Profit sharing receivable from American Medical Security, Inc. - 1,269,383 ===================================== Net assets available for benefits $56,246,062 $43,497,827 =====================================
4 AMERICAN MEDICAL SECURITY RETIREMENT SAVINGS PLAN Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 2003 2002 -------------------------------------- Investment gain (loss): Net realized and unrealized appreciation (depreciation) in fair value of investments (NOTE 3) $10,282,420 $ (6,847,272) Interest and dividends 621,365 318,617 -------------------------------------- 10,903,785 (6,528,655) Less administrative expense 5,500 79,623 -------------------------------------- 10,898,285 (6,608,278) Contributions: Employers' 2,237,034 3,740,059 Employees' 4,409,024 4,783,013 -------------------------------------- 6,646,058 8,523,072 Other 67,478 10,855 -------------------------------------- Total additions 17,611,821 1,925,649 Benefits paid 4,863,586 3,613,923 -------------------------------------- Net increase (decrease) 12,748,235 (1,688,274) Net assets available for benefits at beginning of year 43,497,827 45,186,101 -------------------------------------- Net assets available for benefits at end of year $56,246,062 $43,497,827 ======================================
5 American Medical Security Retirement Savings Plan Notes to Financial Statements December 31, 2003 1. DESCRIPTION OF THE PLAN The following description of the American Medical Security Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a complete description of the Plan's provisions. GENERAL The Plan is a contributory defined contribution plan covering all full-time and part-time employees of American Medical Security Group, Inc. (AMSG) and its subsidiaries, American Medical Security, Inc. and Nurse Healthline, Inc. (collectively the Company or Employer). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). PARTICIPATION AND VESTING Employees are eligible to become contributing participants in the Plan and receive matching contributions on the first day of the following month after reaching the age of 18 and after 30 days of eligible service. Employees with 30 days of service that are employed on the last day of the Plan year are entitled to receive profit-sharing contributions for the Plan year. Participants are immediately vested in their contributions plus actual earnings thereon. Participants do not vest in Company contributions until three years of service, at which time they become fully vested. The nonvested portion of the Company's profit sharing and matching contributions are forfeited when a participant terminates employment. Profit sharing forfeitures are allocated to the remaining Plan participants, while matching contribution forfeitures are used to reduce future matching contributions. During 2003 and 2002, the Company utilized forfeited amounts of $179,000 and $65,000, respectively, to offset the required matching contribution. 6 American Medical Security Retirement Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) CONTRIBUTIONS, WITHDRAWALS AND LOANS Plan participants are permitted to make contributions on a before-tax basis each payroll period of 2% to 18% of base compensation, subject to the maximum amount allowed by the Internal Revenue Code (IRC). Participants can change their before-tax contribution percentage any time during the Plan year. Participants direct current contributions and accumulated contributions and earnings between funds offered through the Plan. In 2003 and 2002, the Company matched 70% of the first 6% of compensation contributed to the Plan by a participant. Additional amounts may be contributed at the option of the Company. In 2002, the Company made a discretionary profit sharing contribution of $1,269,000, or 2% of eligible wages. No discretionary profit sharing contribution was made in 2003. Distributions due to retirement, death, permanent disability and termination of employment are provided for as defined within the Plan. Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of the lesser of one-half of their vested account balance or $50,000. The loan is secured by the balance in the participant's account and bears interest at a rate commensurate with prevailing rates as determined by the Plan administrator. Principal and interest are repaid through payroll deductions. TERMINATION OF THE PLAN The Company has established the Plan with the intention and expectation that the Employer will be able to make contributions indefinitely, but the Employer neither is, nor shall, be under any obligation or liability whatsoever to maintain the Plan for any given length of time. The Company retains the right to modify or terminate the Plan at any time, but may not retroactively reduce the share of any participant or cause the Plan's assets to revert to the Company unless required by law. In the event of termination, the balance of each participant's account would become fully vested, and all assets would be distributed to the participants and beneficiaries. 7 American Medical Security Retirement Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) EXPENSES Administrative expenses of the Plan are paid from Plan assets to the extent not paid by the Company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION AND ACCOUNTING METHOD The Plan's financial statements are prepared on the accrual basis of accounting. The Plan's investments are stated at fair value. The fair value of mutual fund shares and AMSG common stock are based on the quoted market values on the last business day of the Plan year. The fair value of the participation units in the common trust fund is based on quoted redemption values. Participant loans are stated at their unpaid principal balance, which approximates fair value. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates that affect the amounts reported in the Plan's financial statements and accompanying notes. Actual results could differ from these estimates. 3. INVESTMENTS The following individual investments represent 5% or more of the Plan's net assets available for benefits: DECEMBER 31 2003 2002 ----------------------------- Investments at fair value as determined by quoted market price or redemption value: Alleghany Montague & Caldwell Growth Fund $11,612,658 $8,968,682 MCM Stable Asset Fund 6,774,529 6,335,953 Scudder Growth & Income Fund 5,508,156 4,217,761 CS Warburg Pincus Emerging Growth Fund 4,762,419 3,274,196 Merrill Lynch International Value Fund 4,458,953 2,894,452 Neuberger Berman Genesis Trust Fund 5,411,797 4,020,858 SSgA Emerging Markets Fund 3,121,175 1,756,953 Gabelli Equity Income Fund 3,617,008 3,373,587 8 American Medical Security Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Plan's investments, including gains and losses on investments bought, sold and held during the year, appreciated (depreciated) in fair value as follows: YEAR ENDED DECEMBER 31 2003 2002 ------------------------------ Mutual funds $ 9,907,242 $(6,903,851) Common stock of American Medical Security Group, Inc. 375,178 56,579 ------------------------------ $ 10,282,420 $(6,847,272) ============================== 4. INCOME TAX STATUS The underlying non-standardized prototype plan has received an opinion letter from the Internal revenue Service (IRS) stating that the form of the plan is qualified under Section 401 of the Internal Revenue code, and therefore, the related trust is tax exempt. In accordance with the Revenue Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. 5. TRANSACTIONS WITH PARTIES IN INTEREST Certain administrative expenses are provided by the Company at no cost to the Plan. 9 American Medical Security Retirement Savings Plan Employer Identification Number 39-1431799 Plan number 001 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2003
Identity of Issuer, Borrower/ UNITS/ CURRENT DESCRIPTION OF INVESTMENT SHARES VALUE - ----------------------------------------------------------------------------------------------------------- American Century / International Growth Investors Fund 34,127 $ 270,967 American Funds Washington Mutual Fund 60,821 1,744,352 Dreyfus GNMA Fund 90,317 1,342,110 Dreyfus S&P 500 Fund 38,842 1,259,651 Gabelli Equity Income Fund 220,549 3,617,008 Merrill Lynch International Value Fund 199,238 4,458,953 Alleghany Montague & Caldwell Growth Fund 532,935 11,612,658 MCM Stable Asset Fund 493,782 6,774,529 INVESCO Small Company Growth Fund 130,466 1,450,781 Janus Twenty Fund 17,629 637,624 Neuberger Berman Genesis Trust Fund 146,146 5,411,797 Strong Corporate Bond Fund 121,583 1,287,561 Scudder Growth & Income Fund 273,493 5,508,156 CS Warburg Pincus Emerging Growth Fund 173,811 4,762,419 CS Warburg Pincus Global Fixed Income Fund 115,734 1,168,913 SSgA Emerging Markets Fund 185,674 3,121,175 American Medical Security Group, Inc. common stock* 59,388 731,061 Participant loans receivable (interest rates range from 5.00% to 9.75%) 1,086,347 ------------------- $56,246,062 ===================
*Represents a party in interest to the Plan. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee of the American Medical Security Retirement Savings Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. DATE: June 25, 2004 AMERICAN MEDICAL SECURITY RETIREMENT SAVINGS PLAN /S/ JOHN R. LOMBARDI ------------------------------------ John R. Lombardi American Medical Security Retirement Savings Plan Administrative Committee Member 11 EXHIBIT INDEX TO FORM 11-K ANNUAL REPORT for fiscal year ended December 31, 2003 EXHIBIT DESCRIPTION INCORPORATED HEREIN FILED NUMBER BY REFERENCE TO HEREWITH 23 Consent of Independent Registered Public Accounting Firm X EX-1 EX-23 2 exhibit_23.txt AUDITOR CONSENT EXHIBIT 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-75477) pertaining to the American Medical Security Retirement Savings Plan of American Medical Security Group, Inc. of our report dated April 2, 2004, with respect to the financial statements and schedules of the American Medical Security Retirement Savings Plan included in the Annual Report (Form 11-K) for the year ended December 31, 2003. /s/ Ernst and Young LLP Milwaukee, Wisconsin June 23, 2004 -----END PRIVACY-ENHANCED MESSAGE-----