SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 2, 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 April 2, 2004
Item 12. Results of Operation and Financial Condition
On April 2, 2004, Pre-Paid Legal Services, Inc. (the "Company") issued
a press release announcing its membership production and recruiting information
for the three months ended March 31, 2004. 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
-------------------------------------------------
Date: April 2, 2004 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Company Press Release dated April 2, 2004
For Release 8:00 a.m. Eastern Company Steve Williamson
Friday, April 2, 2004 Contact: (580) 436-1234
Pre-Paid Legal Services Announces
First Quarter Production and Recruiting Results
- - -
First Quarter 2004 Earnings Release Date Set
ADA, OK, April 2, 2004 - Pre-Paid Legal Services, Inc. (NYSE: PPD)
announced 2004 first quarter membership production and recruiting results and
has scheduled its first quarter 2004 earnings release to be issued after the
close of trading on the New York Stock Exchange on Monday, April 26, 2004. The
Company noted that monthly total new membership sales increased throughout the
quarter.
Three Months Ended
New Memberships: 3/31/2004 12/31/2003 3/31/2003
---------------- --------- ---------- ---------
New legal service membership sales.............................................. 156,135 149,124 178,820
New "stand-alone" IDT membership sales.......................................... 6,697 4,377 -
Total new membership sales............................................. -------------- ------------- --------------
162,832 153,501 178,820
-------------- ------------- --------------
New "add-on" IDT membership sales............................................... 84,774 89,928 -
Active Memberships:
Active legal service memberships at end of period............................... 1,417,553 1,414,746 1,394,569
Active "stand-alone" IDT memberships at end of period (see note below).......... 12,071 4,251 -
Total active memberships at end of period.............................. -------------- ------------- --------------
1,429,624 1,418,997 1,394,569
-------------- ------------- --------------
Active "add-on" IDT memberships at end of period (see note below)............... 154,774 86,602 -
New Sales Associates:
New sales associates recruited.................................................. 14,774 33,068 29,755
Note - reflects 2,748 transfers from "add-on" status to "stand-alone" status during the quarter
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, while "stand alone" Identity Theft plans are not
attached to a legal plan membership and sell for $12.95 per month.
Effective January 1, 2004, and continuing throughout the quarter, the
Company, in order to provide additional tools and enhance the classroom training
to the new sales associate, increased the cost to become a Fast Start sales
associate to $249 from $99 which was in effect for December 2003 and $149 which
was in effect for October and November 2003. The cost to become a Fast Start
associate during the entire previous year's comparable quarter was $149. Despite
the higher Fast Start fee, which caused a significant decline in the number of
new sales associates recruited, the number of new legal memberships sold
actually increased sequentially. The Company attributes this to a combination of
a solid core base of active associates and more productive newly recruited sales
associates.
The Company purchased 375,500 shares of its common stock during the 2004
first quarter for $9.2 million, or an average price of $24.49 and is currently
working with its lenders for additional financing or modifications to existing
loan covenants pertaining to restrictions on the amount of treasury stock that
may be purchased. The Company expects to announce additional treasury stock
purchase ability in the near future.
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, that the
Company's stock price may be affected by short sellers and that the Company has
been unable to increase significantly its employee group membership sales.
Please refer to pages 39 and 40 of the Company's 2003 Form 10-K for a more
complete description of these risks. The Company undertakes no duty to update
any of the forward-looking statements in this release.
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