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: January 5, 2004
(Date of earliest event reported)
Pre-Paid Legal Services, Inc.
(Exact name of registrant as specified in its charter)
(Commission File No. 1-9293)
Oklahoma 73-1016728
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation)
One Pre-Paid Way
Ada, Oklahoma 74820
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (580) 436-1234
Item 7. Financial Statements and Exhibits
The following exhibits are included with this report:
Exhibit No. Description
99.1 Company Press Release dated January 5, 2004
Item 12. Results of Operation and Financial Condition
On January 5, 2004, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its membership production and recruiting information
for the three months ended December 31, 2003. A copy of the release is included
as an exhibit to this report.
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 thereunto duly authorized.
PRE-PAID LEGAL SERVICES, INC.
By: /s/ Randy Harp
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Date: January 5, 2004 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Company Press Release dated January 5, 2004
For Immediate Release Company Steve Williamson
Monday, January 5, 2004 Contact: (580) 436-1234
PRE-PAID ANNOUNCES 2003 RECRUITING AND MEMBERSHIP PRODUCTION RESULTS
ADA, OK, January 5, 2004 - Pre-Paid Legal Services, Inc. (NYSE: PPD), today
reported new memberships produced and new sales associates enrolled for the
fourth quarter and for the year ended December 31, 2003. During the 4th quarter
of 2003, new sales associates enrolled increased 12% to 33,068 from the 29,555
enrolled in the 4th quarter of 2002 and new memberships produced decreased 9% to
153,501 from 169,350. For the year 2003, new sales associates enrolled decreased
30% to 108,557 from the 155,663 enrolled in 2002 while new memberships produced
decreased 13% to 671,857 from 773,767. The Company's active memberships
increased 3% during 2003 from 1,382,306 to 1,418,997. From the 3rd quarter of
2003 to the 4th quarter of 2003, the Company's active memberships decreased
approximately one-tenth of 1%. Pre-Paid anticipates announcing its 2003 fourth
quarter and yearly earnings on February 23, 2004 after the market closes and
hosting a conference call to discuss such earnings on February 25, 2004.
Three Months Ended For the Year Ended
12/31/03 12/31/02 12/31/03 12/31/02
New memberships produced...................... 153,501 169,350 671,857 773,767
New sales associates enrolled................. 33,068 29,555 108,557 155,663
Sales associates selling one or more memberships.............................. 84,207 103,112
Active memberships at end of period........................................... 1,418,997 1,382,306
Included in the numbers above for the fourth quarter memberships produced
are 4,377 "stand alone" Identity Theft plans that typically sell for $12.95 per
month of which 4,251 were included in the number of active memberships at the
end of the year above. Identity Theft plans sold in conjunction with new legal
plan memberships or "added-on" to existing legal plan memberships sell for $9.95
per month and are not counted as "new" memberships but do increase the average
premium of the Company's membership base. The Company reported sales of these
"add-on" Identity Theft plans of 89,928 during the fourth quarter with 86,602
active at the end of the year.
The Company also announced that it repurchased 2.1 million shares of its
common stock during 2003 for total consideration of $48.3 million, or an average
price of $22.70 per share. Fourth quarter purchases were 538,400 shares for a
total of $14.2 million, or an average price of $26.30. Since April 1999, the
Company has repurchased 7.6 million shares for total consideration of $173.4
million, or an average price of $22.74 per share, and reduced the number of
shares outstanding at the end of 2003 to approximately 16.8 million shares. The
Company has fully funded its $25 million line of credit as of year-end and
utilized approximately $14.2 million during the fourth quarter for treasury
share purchases and has the remaining $10.8 million available for further
treasury stock purchases.
About Pre-Paid Legal Services
Pre-Paid Legal Services develops and markets legal service plans across
North America. The plans provide for legal service benefits, including unlimited
attorney consultation, will preparation, traffic violation defense,
automobile-related criminal charges defense, letter writing, document
preparation and review and a general trial defense benefit. More information can
be located at the Company's homepage on the worldwide web at
http://www.prepaidlegal.com.
Forward-Looking Statements
Statements in this press release, other than purely historical information,
regarding the Company's future plans and objectives and expected operating
results, and statements of the assumptions underlying such statements,
constitute forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. The forward-looking statements contained herein
are based on certain assumptions that may not be correct. They are subject to
risks and uncertainties incident to the Company's business that could cause
actual results to differ materially from those described in the forward-looking
statements. These risks and uncertainties are described in the reports and
statements filed by the Company with the Securities and Exchange Commission,
including (among others) those listed in the Company's Form 10-K and Form 10-Q,
and include the risks that the Company's membership persistency or renewal rates
may decline, that the Company may not be able to continue to grow its
memberships and earnings, that the Company is dependent on the continued active
participation of its principal executive officer, that pending or future
litigation may have a material adverse effect on the Company if resolved
unfavorably to the Company, that the Company could be adversely affected by
regulatory developments, that competition could adversely affect the Company,
that the Company is substantially dependent on its marketing force and that the
Company's stock price may be affected by short sellers. Please refer to pages 37
and 38 of the Company's 2002 Form 10-K and pages 8 through 10 of the Company's
September 30, 2003 Form 10-Q for a more complete description of these risks. The
Company undertakes no duty to update any of the forward-looking statements in
this release.