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: July 6, 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 July 6, 2004
Item 12. Results of Operation and Financial Condition
On July 6, 2004, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its membership production and recruiting information
for the three months ended June 30, 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
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Date: July 6, 2004 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Company Press Release dated July 6, 2004
For Immediate Release Company Steve Williamson
Tuesday, July 6, 2004 Contact: (580) 436-1234
Pre-Paid Legal Services Announces
Second Quarter Production and Recruiting Results
- - -
Second Quarter 2004 Earnings Release Date Set
ADA, OK, July 6, 2004 - Pre-Paid Legal Services, Inc. (NYSE: PPD) announced
2004 second quarter membership production and recruiting results and has
scheduled its second quarter 2004 earnings release to be issued after the close
of trading on the New York Stock Exchange on Monday, July 26, 2004.
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Three Months Ended
New Memberships: 6/30/2004 3/31/2004 6/30/2003
---------------- --------- --------- ---------
New legal service membership sales.............................................. 137,390 156,135 171,180
New "stand-alone" IDT membership sales.......................................... 5,443 6,697 -
Total new membership sales............................................. -------------- ------------- --------------
142,833 162,832 171,180
New "add-on" IDT membership sales............................................... 77,802 84,774 -
Active Memberships:
Active legal service memberships at end of period............................... 1,413,666 1,417,553 1,405,121
Active "stand-alone" IDT memberships at end of period (see note below).......... 17,575 12,071 -
Total active memberships at end of period.............................. -------------- 1,429,624 --------------
1,431,241 1,405,121
Active "add-on" IDT memberships at end of period (see note below)............... 201,713 154,774 -
New Sales Associates:
New sales associates recruited.................................................. 13,733 14,774 22,747
Note - reflects 2,943 net transfers from "add-on" status to "stand-alone" status
during the quarter
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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.
In order to provide additional tools and enhance the classroom training to
the new sales associates, the Company increased the cost to become a Fast Start
sales associate to $249 throughout the 2004 second quarter compared to $149
which was in effect for the comparable quarter of the previous year. Beginning
June 28, 2004, the Company began a special promotion for single parents allowing
single parents to become a Fast Start associate for $49. This promotion is
scheduled to end on July 12, 2004.
Due to restrictions contained in the Company's lending agreements, the
Company did not purchase any shares of its common stock during the 2004 second
quarter but is currently working with its lenders on modifications to existing
loan covenants pertaining to restrictions on the amount of treasury stock that
may be purchased.
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 and pages 8
through 10 of the Company's March 31, 2004 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. # # #