UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 2, 2007
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Pre-Paid Legal Services, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Oklahoma
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(State or Other Jurisdiction of Incorporation)
001-09293 73-1016728
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(Commission File Number) (IRS Employer Identification No.)
One Pre-Paid Way
Ada, OK 74820
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(Address of Principal Executive Offices) (Zip Code)
(580) 436-1234
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
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On April 2, 2007, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing our membership production and recruiting information
for the three months ended March 31, 2007. A copy of the release is included as
an exhibit to this report.
Item 9.01 Financial Statements and Exhibits
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The following exhibits are included with this report:
Exhibit No. Description
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99.1 Company Press Release dated April 2, 2007
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/ Steve Williamson
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Steve Williamson, Chief Financial Officer
Date: April 2, 2007
For Release 8:30 a.m. Eastern Company Steve Williamson
Monday, April 2, 2007 Contact: (580) 436-1234
Pre-Paid Legal Services Announces 2007 1st Quarter
Membership and Recruiting Results
ADA, OK, April 2, 2007 - Pre-Paid Legal Services, Inc. (NYSE: PPD), reported new
memberships produced and new sales associates enrolled for the 2007 first
quarter. During the 1st quarter of 2007, new sales associates enrolled decreased
37.6% compared to the first quarter of 2006. Memberships produced decreased 2.2%
and new membership fees written decreased 7.5% and our active membership base
increased slightly by 8,368 memberships compared to the comparable period of the
previous year.
On a sequential quarterly basis, new associates enrolled decreased 12.1%, new
memberships produced increased 15.7%, new membership fees written increased
10.8% and our active membership base increased by 12,389 memberships.
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Three Months Ended
New Memberships: 3/31/2007 12/31/2006 3/31/2006
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New legal service membership sales.......................................... 147,742 131,628 158,426
New "stand-alone" IDT membership sales...................................... 13,788 8,010 6,800
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Total new membership sales......................................... 161,530 139,638 165,226
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New "add-on" IDT membership sales........................................... 93,204 88,255 100,405
Average Annual Membership fee............................................... $309.86 $323.54 $327.43
Active Memberships:
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Active legal service memberships at end of period........................... 1,477,604 1,473,710 1,488,308
Active "stand-alone" IDT memberships at end of period (see note below)...... 73,525 65,030 54,453
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Total active memberships at end of period.......................... 1,551,129 1,538,740 1,542,761
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Active "add-on" IDT memberships at end of period (see note below)........... 562,075 540,253 485,246
New Sales Associates:
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New sales associates recruited.............................................. 31,043 35,311 49,776
Average enrollment fee paid by new sales associates......................... $103.13 $49.47 $49.82
Average Membership fee in force:
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Average Annual Membership fee............................................... $294.17 $293.00 $288.92
Note - reflects 6,178 net transfers from "add-on" status to "stand-alone" status during the quarter
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Our total active membership fees in force increased approximately 2.4% during
the last twelve months and continues our annualized trend of increasing our
membership fees in force. Membership persistency rate (defined as the number of
memberships in force at the end of a 12 month period as a percentage of the
total of memberships in force at the beginning of such period, plus new
memberships sold during such period) was 72.1% for the 12 month period ended
March 31, 2007 an increase from the 71.1% for the 12 month period ended March
31, 2006.
Our 2007 first quarter corporate finance focus has again been on share
repurchases. During the 1st quarter, we returned $13.9 million to shareholders
through the repurchase of 327,902 shares of common stock, at an average per
share price of $42.53. Pursuant to the repurchase program originally announced
on April 6, 1999, we have returned $309.9 million to shareholders through the
purchase of 11.7 million shares, average price of $26.49 per share, and $17.1
million in dividends for a combined total of $326.9 million representing more
than 115 percent of our net earnings during the same timeframe. We have reduced
the number of shares outstanding by approximately 44% from 23.7 million at March
31, 1999 to approximately 13.3 million today.
We anticipate announcing our 2007 first quarter financial results on April 23,
2007 after the market closes and hosting a conference call to discuss such
results on April 25, 2007.
About Us - We believe our products are one of a kind, life events legal service
plans. Our plans provide for legal service benefits provided through a network
of independent law firms across the U.S. and Canada, and include unlimited
attorney consultation as well as will preparation, traffic violation defense,
automobile-related criminal charges defense, letter writing, document
preparation and review and a general trial defense benefit. We have an identity
theft restoration product we think is also one of a kind because of the
combination of outside vendors and our provider law firms. More information
about us and our products can be found at our homepage at
http://www.prepaidlegal.com.
Forward-Looking Statements
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Statements in this press release, other than purely historical information,
regarding our future plans and objectives and expected operating results,
dividends and share repurchases 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 our 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 us with the Securities and Exchange Commission,
including (among others) those listed in our Form 10-K, Form 10-Q and Form 8-K,
and include the risks that our membership persistency or renewal rates may
decline, that we may not be able to continue to grow our memberships and
earnings, that we are dependent on the continued active participation of our
principal executive officer, that pending or future litigation may have a
material adverse effect on us if resolved unfavorably to us, that we could be
adversely affected by regulatory developments, that competition could adversely
affect us, that we are substantially dependent on our marketing force, that our
stock price may be affected by short sellers, that we have been unable to
significantly increase our employee group membership sales and that our active
premium in force is not indicative of future revenue as a result of changes in
active memberships from cancellations and additional membership sales. Please
refer to pages 14 and 15 of our 2006 Form 10-K for a more complete description
of these risks. We undertake no duty to update any of the forward-looking
statements in this release.
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