EXHIBIT 99
[AMERICAN MEDICAL SECURITY GROUP, INC. LOGO]
P.O. Box 19032
Green Bay, WI 54307-9032
FOR MORE INFORMATION CONTACT:
Cliff Bowers
Vice President
Corporate Communications
(920)661-2766
- ---------------------------
NEWS RELEASE
for Immediate Release
- ---------------------------
AMERICAN MEDICAL SECURITY GROUP REPORTS
RECORD NET INCOME FOR THE SECOND QUARTER 2003
o RECORD NET INCOME OF $6.8 MILLION IN SECOND QUARTER
o EARNINGS PER DILUTED SHARE OF $0.48 IN QUARTER
o UPDATED GUIDANCE OF $0.49 FOR Q3; $1.95 FOR FULL-YEAR `03
GREEN BAY, Wis. - August 5, 2003 - American Medical Security Group, Inc.
(NYSE:AMZ) (AMS), today reported net income of $6.8 million or $0.48 per diluted
share for the second quarter of 2003. That is a 29% increase from net income of
$5.2 million or $0.38 per diluted share reported for the second quarter of 2002.
"Our quarterly net income is the highest we've achieved since AMZ
shares were first publicly traded in 1998," said Samuel V. Miller, AMS Chairman,
President & Chief Executive Officer. "The foundation for our positive results
over the past several quarters has been a focus on core markets, a disciplined
approach to pricing and tight expense control. That will remain the case as we
work to take our performance to even higher levels."
For the first six months of 2003, AMS had net income of $13.2 million
or $0.96 per diluted share. That compares to income of $10.7 million or $0.76
per diluted share for the first six months of 2002 before the cumulative effect
of a change in accounting principle associated with the adoption of SFAS No. 142
(write down of goodwill).
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REVENUES
Total revenues in the second quarter of 2003 were $187 million, down
only slightly from the $188 million reported in the first quarter of 2003. Total
revenues were $200 million in the second quarter of 2002. For the first six
months of 2003, total revenues were $374 million, compared to $403 million for
the same period of 2002.
MEMBERSHIP
Total health membership was down approximately 1% in the second quarter
from the first quarter of 2003. That represents the smallest quarter-on-quarter
decline in more than three years. At the end of the second quarter, total health
membership was 546,501, compared to 552,303 at the end of the first quarter of
2003, and 597,983 at the end of the second quarter of 2002.
"Our performance in terms of membership and revenue is still not up to
our expectations," said John R. Lombardi, Executive Vice President & Chief
Financial Officer. "However, improving trends in new member enrollment and
retention of inforce members support our belief that we will achieve quarterly
membership and revenue growth in 2003."
According to Lombardi, the strong acceptance of the company's marketing
approach in the small-group sector called "Defined Contribution at Work," the
introduction of two new products in its MedOne line, and a range of other
actions will contribute to improved membership and revenue.
HEALTH SEGMENT RATIOS
The health segment COMBINED RATIO (loss ratio plus expense ratio) was
95.5% in the second quarter of 2003. That is an improvement over the 96.6%
reported in the second quarter of 2002. The health segment combined ratio of
95.6% for the first six months was also an improvement over the 96.6% for the
first six months of 2002.
The health segment LOSS RATIO of 67.4% in the second quarter of 2003 is
an improvement of 100 basis points compared to the same period of 2002. In
addition, the company's recent experience indicates that its overall medical
cost trend has remained flat to slightly down.
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The health segment EXPENSE RATIOS for the second quarter and first six
months improved slightly compared with those reported for the comparable periods
of 2002. AMS continues to aggressively manage its operating costs.
CASH FLOW & BALANCE SHEET
Cash flow provided by operations in the second quarter of 2003 was $2.0
million, compared to $0.2 million during the second quarter of 2002. For the
first six months of 2003, net cash used in operations was $1.6 million,
reflecting the usual pay down of year-end claims inventories and other annual
expenditures made in the first quarter. AMS believes cash flow from operations
will follow historical patterns and improve significantly in subsequent quarters
of 2003.
At June 30, 2003, AMS had a book value per share of $15.27, compared to
$14.68 at the end of the first quarter of 2003, and $12.87 at the end of the
same quarter of 2002.
EARNINGS GUIDANCE
AMS now believes that its earnings for the third quarter of 2003 will
be approximately $0.49 per diluted share, and approximately $1.95 per diluted
share for the full-year 2003.
American Medical Security Group, through its operating subsidiaries,
markets health care benefits and insurance products to small businesses,
families and individuals. Insurance products of American Medical Security Group
are underwritten by United Wisconsin Life Insurance Company. The company serves
customers nationwide through partnerships with professional, independent agents
and quality health care providers. It provided health coverage for 546,501
members as of June 30, 2003.
# # #
AMS WILL HOST A CONFERENCE CALL TO DISCUSS ITS FINANCIAL RESULTS ON
WEDNESDAY, AUGUST 6, 2003, AT 10:00 A.M. (CENTRAL TIME). INTERESTED PARTIES MAY
LISTEN TO THE CONFERENCE CALL LIVE VIA THE INVESTOR SECTION OF THE COMPANY'S
WEBSITE AT WWW.EAMS.COM. LISTEN-ONLY ACCESS TO THE LIVE CONFERENCE CALL IS ALSO
AVAILABLE BY DIALING 913-981-5549. FOLLOWING THE LIVE CALL, A REPLAY WILL BE
AVAILABLE UNTIL MIDNIGHT, FRIDAY, AUGUST 8, 2003, BY DIALING 719-457-0820 (CODE
624664). THIS PRESS RELEASE, ACCOMPANYING FINANCIAL INFORMATION AND OTHER
STATISTICAL INFORMATION CONTAINED IN THE CONFERENCE CALL WILL APPEAR IN THE
INVESTOR SECTION OF THE COMPANY'S WEBSITE AT WWW.EAMS.COM.
CAUTIONARY STATEMENT: Some of the statements contained in this press release are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Generally, forward-looking statements express
expectations for or about the future, rather than historical fact.
Forward-looking statements are subject to inherent risks and uncertainties that
may cause actual results or events to differ materially from those contemplated
by such statements. Such risks and uncertainties include, among others,
unexpected increases in health care costs; the company's ability to predict
future health care costs and adequately price its products; the company's
ability to expand its distribution network, generate new sales, sell new
products and retain existing members; the company's ability to control expenses
during a time of declining revenue and membership; legislative and regulatory
matters, including delays in regulatory approvals, changes in government
regulation, regulatory action resulting from market conduct activity; general
business conditions, including competitive practices and demand for the
company's existing and new products; adverse outcomes of legal and
administrative proceedings; publicity about the company; development of and
changes in claims reserves; general economic conditions that impact the
performance of the company's investment portfolio or decisions of consumers to
purchase our products; and other factors that may be referred to in American
Medical Security Group, Inc.'s reports filed with the Securities and Exchange
Commission from time to time. Forward-looking statements made in this release
express expectations only as of the date they are made. The company does not
undertake any obligation to update or revise such statements as a result of new
information or future events.
AMERICAN MEDICAL SECURITY GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
(THOUSANDS, EXCEPT SHARE DATA) 2003 2002
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
Investments:
Fixed maturity securities available for sale, at fair value $ 286,044 $ 278,222
Fixed maturity securities held to maturity, at amortized cost 3,168 4,288
Trading securities, at fair value 1,217 926
- --------------------------------------------------------------------------------------------------------------------
Total investments 290,429 283,436
Cash and cash equivalents 22,036 30,620
Property and equipment, net 35,118 33,061
Goodwill, net 32,846 32,846
Other intangibles, net 2,383 2,860
Other assets 49,239 46,117
- --------------------------------------------------------------------------------------------------------------------
Total assets $ 432,051 $ 428,940
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Medical and other benefits payable $ 131,023 $ 134,479
Advance premiums 16,453 15,200
Payables and accrued expenses 21,039 29,141
Notes payable 33,258 33,858
Other liabilities 27,860 33,512
- --------------------------------------------------------------------------------------------------------------------
Total liabilities 229,633 246,190
Shareholders' equity:
Common stock (no par value, $1 stated value, 50,000,000 shares authorized,
16,654,315 issued and 13,253,928 outstanding at June 30, 2003,
16,654,315 issued and 12,905,898 outstanding at December 31, 2002) 16,654 16,654
Paid-in capital 192,362 189,813
Retained earnings 16,090 2,858
Accumulated other comprehensive income (net of taxes of
$5,365 at June 30, 2003 and $4,117 at December 31, 2002) 9,964 7,646
Treasury stock (3,400,387 shares at June 30, 2003
and 3,748,417 shares at December 31, 2002, at cost) (32,652) (34,221)
- --------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 202,418 182,750
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Total liabilities and shareholders' equity $ 432,051 $ 428,940
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AMERICAN MEDICAL SECURITY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------------------------
(THOUSANDS, EXCEPT PER COMMON SHARE DATA) 2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------------
REVENUES
Insurance premiums $ 178,776 $ 190,787 $ 357,831 $ 385,188
Net investment income 3,345 3,799 6,747 7,723
Net realized investment gains 91 48 466 62
Other revenue 4,562 4,938 9,348 10,343
- --------------------------------------------------------------------------------------------------------------------
Total revenues 186,774 199,572 374,392 403,316
EXPENSES
Medical and other benefits 119,066 129,191 239,400 260,991
Selling, general and administrative 56,259 61,028 112,588 123,052
Interest expense 324 463 663 957
Amortization of goodwill and intangibles 239 182 477 365
- --------------------------------------------------------------------------------------------------------------------
Total expenses 175,888 190,864 353,128 385,365
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative
effect of a change in accounting principle 10,886 8,708 21,264 17,951
Income tax expense 4,117 3,467 8,032 7,280
- --------------------------------------------------------------------------------------------------------------------
Income before cumulative effect
of a change in accounting principle 6,769 5,241 13,232 10,671
Cumulative effect of a change in accounting principle - - - (60,098)
- --------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 6,769 $ 5,241 $ 13,232 $ (49,427)
====================================================================================================================
Earnings (loss) per common share - basic:
Income before cumulative effect of a
change in accounting principle $ 0.51 $ 0.42 $ 1.01 $ 0.81
Cumulative effect of a change in accounting
principle - - - (4.55)
- --------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 0.51 $ 0.42 $ 1.01 $ (3.74)
====================================================================================================================
Earnings (loss) per common share - diluted:
Income before cumulative effect of a
change in accounting principle $ 0.48 $ 0.38 $ 0.96 $ 0.76
Cumulative effect of a change in accounting
principle - - - (4.27)
- --------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 0.48 $ 0.38 $ 0.96 $ (3.51)
====================================================================================================================
AMERICAN MEDICAL SECURITY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended
June 30,
-----------------------------
(THOUSANDS) 2003 2002
- --------------------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ 13,232 $ (49,427)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Cumulative effect of a change in accounting principle - 60,098
Depreciation and amortization 4,995 4,410
Net realized investment gains (466) (62)
Increase in trading securities (291) (237)
Deferred income tax expense (benefit) 750 (8,457)
Changes in operating accounts:
Other assets (4,980) 4,751
Medical and other benefits payable (3,456) (3,554)
Advance premiums 1,253 (1,311)
Payables and accrued expenses (8,102) (3,691)
Other liabilities (4,532) 828
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (1,597) 3,348
INVESTING ACTIVITIES
Purchases of available for sale securities (62,024) (94,875)
Proceeds from sale of available for sale securities 56,532 107,747
Proceeds from maturity of available for sale securities 1,775 1,500
Purchases of held to maturity securities - (1,925)
Proceeds from maturity of held to maturity securities - 1,925
Purchases of property and equipment (5,530) (4,461)
Proceeds from sale of property and equipment 2 6
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities (9,245) 9,917
FINANCING ACTIVITIES
Issuance of common stock 3,518 1,307
Purchase of treasury stock (660) (19,540)
Repayment of notes payable (600) (5,600)
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 2,258 (23,833)
- --------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents:
Net decrease (8,584) (10,568)
Balance at beginning of year 30,620 24,975
- --------------------------------------------------------------------------------------------------------------------
Balance at end of period $ 22,036 $ 14,407
====================================================================================================================
[AMERICAN MEDICAL SECURITY GROUP, INC. LOGO]
FINANCIAL SUPPLEMENT
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
INCOME DATA
(in thousands, except earnings per share)
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2002 2003
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr
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REVENUES
Premiums $ 194,401 $ 190,787 $ 187,135 $ 182,137 $ 754,460 $ 179,055 $ 178,776
Investment income 3,924 3,799 3,591 3,691 15,005 3,402 3,345
Realized investment gain (loss) 14 48 39 (62) 39 375 91
Fees & other 5,405 4,938 4,945 4,737 20,025 4,786 4,562
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 203,744 199,572 195,710 190,503 789,529 187,618 186,774
EXPENSES
Benefits 131,800 129,191 124,699 121,515 507,205 120,334 119,066
General and administrative 33,899 32,443 32,784 31,699 130,825 30,493 30,286
Commissions and selling 26,406 26,815 26,398 25,076 104,695 24,042 24,294
Interest expense 494 463 460 431 1,848 339 324
Depreciation 1,719 1,770 1,790 1,785 7,064 1,794 1,679
Amortization 183 182 183 182 730 238 239
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Total expenses 194,501 190,864 186,314 180,688 752,367 177,240 175,888
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 9,243 8,708 9,396 9,815 37,162 10,378 10,886
Income taxes 3,813 3,467 3,658 3,738 14,676 3,915 4,117
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE 5,430 5,241 5,738 6,077 22,486 6,463 6,769
Cumulative effect of a change in
accounting principle (60,098) - - - (60,098) - -
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (54,668) $ 5,241 $ 5,738 $ 6,077 $ (37,612) $ 6,463 $ 6,769
====================================================================================================================================
PER SHARE DATA
Income before cumulative effect
of a change in accounting
principle-diluted $ 0.37 $ 0.38 $ 0.42 $ 0.45 $ 1.63 $ 0.48 $ 0.48
Net income (loss) - basic $ (3.96) $ 0.42 $ 0.45 $ 0.47 $ (2.88) $ 0.50 $ 0.51
Net income (loss) - diluted $ (3.77) $ 0.38 $ 0.42 $ 0.45 $ (2.72) $ 0.48 $ 0.48
Weighted average common shares
- basic 13,803 12,615 12,890 12,891 13,047 12,981 13,160
Weighted average common shares
- diluted 14,492 13,681 13,714 13,466 13,835 13,575 14,015
MARGIN ANALYSIS
Income before income taxes 4.5% 4.4% 4.8% 5.2% 4.7% 5.5% 5.8%
Net income (loss) (26.8%) 2.6% 2.9% 3.2% (4.8%) 3.4% 3.6%
(in thousands, except earnings per share)
- ------------------------------------------------------------------------------------------------------------------------------------
YTD
06/30/02 06/30/03
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUES
Premiums $ 385,188 $ 357,831
Investment income 7,723 6,747
Realized investment gain (loss) 62 466
Fees & other 10,343 9,348
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 403,316 374,392
EXPENSES
Benefits 260,991 239,400
General and administrative 66,342 60,779
Commissions and selling 53,221 48,336
Interest expense 957 663
Depreciation 3,489 3,473
Amortization 365 477
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 385,365 353,128
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME TAX BEFORE INCOME TAXES 17,951 21,264
Income taxes 7,280 8,032
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE 10,671 13,232
Cumulative effect of a change in
accounting principle (60,098) -
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (49,427) $ 13,232
====================================================================================================================================
PER SHARE DATA
Income before cumulative effect
of a change in accounting
principle-diluted $ 0.76 $ 0.96
Net income (loss) - basic $ (3.74) $ 1.01
Net income (loss) - diluted $ (3.51) $ 0.96
Weighted average common shares
- basic 13,206 13,071
Weighted average common shares
- diluted 14,085 13,795
MARGIN ANALYSIS
Income before income taxes 4.5% 5.7%
Net income (loss) (12.3%) 3.5%
Page 2
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
FINANCIAL DATA
(in thousands, except membership)
- ------------------------------------------------------------------------------------------------------------------------------------
2002 2003
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUE MIX
Health premiums $ 190,720 $ 187,314 $ 183,752 $ 178,891 $ 740,677 $ 175,924 $ 175,703
Life premiums 3,678 3,473 3,383 3,246 13,780 3,131 3,073
Investment income 3,938 3,847 3,630 3,629 15,044 3,777 3,436
Service fees 4,442 4,086 4,091 3,934 16,553 4,003 3,811
Other 966 852 854 803 3,475 783 751
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 203,744 $ 199,572 $ 195,710 $ 190,503 $ 789,529 $ 187,618 $ 186,774
====================================================================================================================================
MEMBERSHIP ANALYSIS
Fully insured medical 329,531 319,675 309,980 293,341 293,341 278,091 275,323
Self funded medical 43,128 43,058 43,426 43,584 43,584 42,704 42,568
Dental 240,492 235,250 235,454 234,536 234,536 231,508 228,610
- ------------------------------------------------------------------------------------------------------------------------------------
Total Health 613,151 597,983 588,860 571,461 571,461 552,303 546,501
Life 174,126 166,857 158,343 151,206 151,206 144,207 141,930
FINANCIAL STATISTICS
Book value per share $ 12.19 $ 12.87 $ 13.70 $ 14.16 $ 14.16 $ 14.68 $ 15.27
Cash flow from operations $ 3,115 $ 233 $ 16,137 $ 15,690 $ 35,175 $ (3,575) $ 1,978
Return on equity, annualized 11.3% 13.2% 13.4% 13.5% 10.9% 13.9% 13.8%
Debt to total capital 18.5% 17.2% 16.2% 15.6% 15.6% 15.0% 14.1%
Common shares outstanding,
net of treasury 12,590 12,845 12,890 12,906 12,906 12,936 13,254
(in thousands, except membership)
- ------------------------------------------------------------------------------------------------------------------------------------
YTD
06/30/02 06/30/03
- ------------------------------------------------------------------------------------------------------------------------------------
REVENUE MIX
Health premiums $ 378,034 $ 351,627
Life premiums 7,151 6,204
Investment income 7,785 7,213
Service fees 8,528 7,814
Other 1,818 1,534
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues $ 403,316 $ 374,392
====================================================================================================================================
MEMBERSHIP ANALYSIS
Fully insured medical 319,675 275,323
Self funded medical 43,058 42,568
Dental 235,250 228,610
- ------------------------------------------------------------------------------------------------------------------------------------
Total Health 597,983 546,501
Life 166,857 141,930
FINANCIAL STATISTICS
Book value per share $ 12.87 $ 15.27
Cash flow from operations $ 3,348 $ (1,597)
Return on equity, annualized 10.8% 13.7%
Debt to total capital 17.2% 14.1%
Common shares outstanding,
net of treasury 12,845 13,254
Page 3
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
BALANCE SHEETS
(in thousands)
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2002 2003
3/31 6/30 9/30 12/31 3/31 6/30
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ASSETS
Investments:
Securities available for sale,
at fair value:
Fixed maturities $ 250,217 $ 257,361 $ 276,601 $ 278,222 $ 283,595 $ 286,044
Fixed maturity securities held to
maturity, at amortized cost 4,303 4,305 4,297 4,288 3,175 3,168
Trading securities, at fair value 666 754 786 926 1,142 1,217
- ------------------------------------------------------------------------------------------------------------------------------------
Total investments 255,186 262,420 281,684 283,436 287,912 290,429
Cash and cash equivalents 17,604 14,407 17,629 30,620 20,396 22,036
Other assets:
Property and equipment, net 34,460 34,344 34,347 33,061 34,112 35,118
Goodwill and other intangibles, net 36,254 36,071 35,889 35,706 35,468 35,229
Other assets 44,744 47,006 44,141 46,117 50,737 49,239
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Total other assets 115,458 117,421 114,377 114,884 120,317 119,586
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 388,248 $ 394,248 $ 413,690 $ 428,940 $ 428,625 $ 432,051
====================================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Medical and other benefits payable $ 132,569 $ 131,950 $ 134,178 $ 134,479 $ 131,650 $ 131,023
Advance premiums 16,634 15,426 16,743 15,200 17,300 16,453
Payables and accrued expenses 26,656 24,341 27,850 29,141 23,466 21,039
Notes payable 34,758 34,458 34,158 33,858 33,558 33,258
Other liabilities 24,154 22,715 24,221 33,512 32,736 27,860
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 234,771 228,890 237,150 246,190 238,710 229,633
Shareholders' equity:
Common stock 16,654 16,654 16,654 16,654 16,654 16,654
Paid-in capital 187,892 189,232 189,738 189,813 190,367 192,362
Retained earnings (14,198) (8,957) (3,219) 2,858 9,321 16,090
Unrealized gain (loss) on investments (74) 3,051 7,655 7,646 8,090 9,964
Treasury stock (36,797) (34,622) (34,288) (34,221) (34,517) (32,652)
- ------------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 153,477 165,358 176,540 182,750 189,915 202,418
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 388,248 $ 394,248 $ 413,690 $ 428,940 $ 428,625 $ 432,051
====================================================================================================================================
Page 4
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
SEGMENT DATA - HEALTH
(in thousands, except financial statistics)
- ------------------------------------------------------------------------------------------------------------------------------------
2002 2003
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS
Revenues:
Premiums $ 190,720 $ 187,314 $ 183,752 $ 178,891 $ 740,677 $ 175,924 $ 175,703
Investment income 1,934 1,809 1,484 1,444 6,671 1,715 1,683
Other revenue 4,460 4,063 4,115 3,971 16,609 3,963 3,762
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 197,114 193,186 189,351 184,306 763,957 181,602 181,148
Expenses:
Benefits 130,564 128,185 123,792 120,639 503,180 119,519 118,388
General and administrative 32,456 30,708 31,306 30,347 124,817 29,559 29,382
Commissions and selling 25,752 26,183 25,765 24,483 102,183 23,472 23,724
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 188,772 185,076 180,863 175,469 730,180 172,550 171,494
- ------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes $ 8,342 $ 8,110 $ 8,488 $ 8,837 $ 33,777 $ 9,052 $ 9,654
====================================================================================================================================
FINANCIAL STATISTICS
Loss ratio 68.5% 68.4% 67.4% 67.4% 67.9% 67.9% 67.4%
Expense ratio:
General and administrative 14.7% 14.2% 14.8% 14.7% 14.6% 14.5% 14.6%
Commissions and selling 13.5% 14.0% 14.0% 13.7% 13.8% 13.3% 13.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense ratio 28.2% 28.2% 28.8% 28.4% 28.4% 27.9% 28.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Combined ratio 96.7% 96.6% 96.2% 95.9% 96.3% 95.8% 95.5%
====================================================================================================================================
Premiums per member per month:
Fully insured medical $ 168 $ 170 $ 172 $ 174 $ 171 $ 181 $ 184
Self funded 53 51 52 52 52 53 53
Dental 22 22 22 23 22 23 23
Short-term disability 20 21 21 21 21 22 22
Benefits cost per member per month:
Fully insured medical $ 116 $ 118 $ 117 $ 120 $ 118 $ 125 $ 124
Self funded 28 26 29 22 26 27 36
Dental 15 15 14 14 15 15 16
Short-term disability 14 11 9 12 12 12 8
(in thousands, except financial statistics)
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YTD
06/30/02 06/30/03
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS
Revenues:
Premiums $ 378,034 $ 351,627
Investment income 3,743 3,398
Other revenue 8,523 7,725
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 390,300 362,750
Expenses:
Benefits 258,749 237,907
General and administrative 63,164 58,941
Commissions and selling 51,935 47,196
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 373,848 344,044
- ------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes $ 16,452 $ 18,706
====================================================================================================================================
FINANCIAL STATISTICS
Loss ratio 68.4% 67.7%
Expense ratio:
General and administrative 14.5% 14.6%
Commissions and selling 13.7% 13.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Total expense ratio 28.2% 28.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Combined ratio 96.6% 95.6%
====================================================================================================================================
Premiums per member per month:
Fully insured medical $ 169 $ 182
Self funded 52 53
Dental 22 23
Short-term disability 21 22
Benefits cost per member per month:
Fully insured medical $ 117 $ 124
Self funded 27 31
Dental 15 15
Short-term disability 12 10
Page 5
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
SEGMENT DATA - LIFE
(in thousands, except financial statistics)
- ------------------------------------------------------------------------------------------------------------------------------------
2002 2003 YTD
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 06/30/02 06/30/03
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS
Revenues:
Premiums $ 3,678 $ 3,473 $ 3,383 $ 3,246 $ 13,780 $ 3,131 $ 3,073 $ 7,151 $ 6,204
Investment income 150 153 141 115 559 133 129 303 262
Other revenue 32 29 27 25 113 75 73 61 148
- ------------------------------------------------------------------------------------------------------------------------------------
Total revenues 3,860 3,655 3,551 3,386 14,452 3,339 3,275 7,515 6,614
Expenses:
Benefits 1,218 1,017 907 864 4,006 837 679 2,235 1,516
General and administrative 540 482 480 489 1,991 510 487 1,022 997
Commissions and selling 679 644 643 602 2,568 589 585 1,323 1,174
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Total expenses 2,437 2,143 2,030 1,955 8,565 1,936 1,751 4,580 3,687
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Income before income taxes $ 1,423 $ 1,512 $ 1,521 $ 1,431 $ 5,887 $ 1,403 $ 1,524 $ 2,935 $ 2,927
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FINANCIAL STATISTICS
Loss ratio 33.1% 29.3% 26.8% 26.6% 29.1% 26.7% 22.1% 31.3% 24.4%
Expense ratio:
General and administrative 13.8% 13.0% 13.4% 14.3% 13.6% 13.9% 13.5% 13.4% 13.7%
Commissions and selling 18.5% 18.5% 19.0% 18.5% 18.6% 18.8% 19.0% 18.5% 18.9%
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Total expense ratio 32.3% 31.6% 32.4% 32.8% 32.3% 32.7% 32.5% 31.9% 32.6%
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Combined ratio 65.4% 60.9% 59.2% 59.5% 61.3% 59.4% 54.6% 63.2% 57.0%
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Page 6
AMERICAN MEDICAL SECURITY GROUP, INC. AND SUBSIDIARIES
CORPORATE AND OTHER
(in thousands)
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2002 2003 YTD
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 06/30/02 06/30/03
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OPERATING RESULTS
Revenues:
Premiums $ 3 $ - $ - $ - $ 3 $ - $ - $ 3 $ -
Investment income 1,840 1,837 1,966 2,132 7,775 1,554 1,533 3,677 3,087
Realized investment gain (loss) 14 48 39 (62) 39 375 91 62 466
Other revenue 913 846 803 741 3,303 748 727 1,759 1,475
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Total revenues 2,770 2,731 2,808 2,811 11,120 2,677 2,351 5,501 5,028
Expenses:
Benefits 18 (11) - 12 19 (22) (1) 7 (23)
General and administrative 2,622 3,023 2,788 2,648 11,081 2,218 2,096 5,645 4,314
Commissions and selling (25) (12) (10) (9) (56) (19) (15) (37) (34)
Interest expense 494 463 460 431 1,848 339 324 957 663
Amortization of intangibles 183 182 183 182 730 238 239 365 477
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Total expenses 3,292 3,645 3,421 3,264 13,622 2,754 2,643 6,937 5,397
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Loss before income taxes $ (522) $ (914) $ (613) $ (453) $(2,502) $ (77) $ (292) $(1,436) $ (369)
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