SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 6, 2003
----------------
UICI
(Exact name of registrant as specified in its charter)
Delaware 001-14953 75-2044750
----------------------------------------------- ---------------- --------------------
(State or other jurisdiction of incorporation (Commission File (IRS Employer
or organization) Number) Identification No.)
4001 McEwen Drive, Suite 200, Dallas, Texas 75244
----------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 392-6700
--------------
Not Applicable
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS
On February 6, 2003, the Company will issue a press release disclosing
its results of operations for the three and twelve months ended December 31,
2002. A copy of that press release is included herein as Exhibit 99.1 hereto.
As disclosed in the press release, the Company has issued the following
guidance with respect to 2003 results of operations.
o The Company currently estimates that consolidated revenues in 2003
will be approximately $1.8 billion.
o The Company currently estimates that fully diluted earnings from
continuing operations for 2003 will be between $1.48 and $1.63 per
share. For purposes of this estimate, the Company has estimated that
in 2003 the aggregate amount of the Company's share of operating
losses at Healthaxis, Inc. and pre-tax variable stock-based
compensation will be approximately $8.0 million and that in 2003
approximately 49.0 million weighted average UICI shares will remain
outstanding.
o Excluding the effects of estimated operating losses at Healthaxis,
Inc. and variable stock-based compensation, the Company currently
estimates that pro forma fully diluted earnings from continuing
operations will be between $1.58 and $1.73 per share.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995:
Certain statements in this press release are "forward-looking statements" within
the meaning of the Private Securities Litigation Act of 1995. Such statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results to differ materially from those included in the forward-looking
statements. These forward-looking statements involve risks and uncertainties
including, but not limited to, the following: changes in general economic
conditions, including the performance of financial markets, and interest rates;
competitive, regulatory or tax changes that affect the cost of or demand for the
Company's products; health care reform; the ability to predict and effectively
manage claims related to health care costs; and reliance on key management and
adequacy of claim liabilities.
The Company's future results will depend in large part on accurately predicting
health care costs incurred on existing business and upon the Company's ability
to control future health care costs through product and benefit design,
underwriting criteria, utilization management and negotiation of favorable
provider contracts. Changes in mandated benefits, utilization rates, demographic
characteristics, health care practices, provider consolidation, inflation, new
pharmaceuticals/technologies, clusters of high-cost cases, the regulatory
environment and numerous other factors are beyond the control of any health plan
provider and may adversely affect the Company's ability to predict and control
health care costs and claims, as well as the Company's financial condition,
results of operations or cash flows. Periodic renegotiations of hospital and
other provider contracts coupled with continued consolidation of physician,
hospital and other provider groups may result in increased health care costs and
limit the Company's ability to negotiate favorable rates. In addition, the
Company faces competitive and regulatory pressure to contain premium prices.
Fiscal concerns regarding the continued viability of government-sponsored
programs such as Medicare and Medicaid may cause decreasing reimbursement rates
for these programs. Any limitation on the Company's ability to increase or
maintain its premium levels, design products, implement underwriting criteria or
negotiate competitive provider contracts may adversely affect the Company's
financial condition or results of operations.
The Company's insurance subsidiaries are subject to extensive regulation in
their states of domicile and the other states in which they do business under
statutes that typically delegate broad regulatory, supervisory and
administrative powers to state insurance departments and agencies. State
insurance departments have also periodically conducted and continue to conduct
financial and market conduct examinations and other inquiries of UICI's
insurance subsidiaries. State insurance regulatory agencies have authority to
levy monetary fines and penalties resulting from findings made during the course
of such examinations and inquiries. Historically, the Company's insurance
subsidiaries have from time to time been subject to such regulatory fines and
penalties. While none of such fines or penalties individually or in the
aggregate have to date had a material adverse effect on the results of
operations or financial condition of the Company, the Company could be adversely
affected by increases in regulatory fines or penalties an/or changes in the
scope, nature and/or intensity of regulatory scrutiny and review.
The health insurance products issued by the Company are primarily issued to
members of various independent membership associations that endorse the products
and act as the master policyholder for such products. The two principal
membership associations in the self-employed market for which the Company
underwrites and issues insurance are the National Association for the
Self-Employed and the Alliance for Affordable Services. The membership
associations provide their members with a number of endorsed products, including
health insurance underwritten and issued by the Company. Individuals generally
may not obtain insurance under the associations' master policies unless they are
members of the associations. Agents of the Company's insurance subsidiaries also
act as enrollers of new members for the associations. The Company has no formal
agreements with these associations requiring the associations to continue to act
as the master policyholder and to endorse the Company's insurance products to
their respective members. While the Company believes it is in good standing with
these associations, changes in the relationship between the Company and the
membership associations could have a material adverse impact on the business of
the Company.
The Company's Academic Management Services Corp. business could be adversely
affected by changes in the Higher Education Act or other relevant federal or
state laws, rules and regulations and the programs implemented thereunder may
adversely impact the education credit market. In addition, existing legislation
and future measures by the federal government may adversely affect the amount
and nature of federal financial assistance available with respect to loans made
through the U.S. Department of Education. Finally the level of competition
currently in existence in the secondary market for loans made under the Federal
Loan Programs could be reduced, resulting in fewer potential buyers of the
Federal Loans and lower prices available in the secondary market for those
loans.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Press Release distributed on February 6, 2003,
disclosing results of operations for the three and twelve
months ended December 31, 2002
SIGNATURES
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 hereunto duly authorized.
UICI
-------------------------------
(Registrant)
Date February 6, 2003 By /s/ Mark D. Hauptman
------------------ --------------------------------------
Mark D. Hauptman
Vice President and Chief
Financial Officer
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
99.1 Press Release distributed on February 6, 2003, disclosing
results of operations for the three and twelve months ended
December 31, 2002