SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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)
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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
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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
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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
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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
=========== ==========
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AMERICAN OTHER FINANCIAL DATA
MEDICAL SECURITY
-----------------
Rx for Good Health
AS OF
-------------------------------
12/31/99 12/31/00 6/30/01
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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
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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.
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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
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Gary D. Guengerich
Executive Vice President & Chief Financial Officer