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 28, 2008
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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 28, 2008, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its earnings and operating results for the three months
ended March 31, 2008. 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 28, 2008
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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Randy Harp, Chief Operating Officer
Date: April 28, 2008
For Immediate Release Company Steve Williamson
Monday, April 28, 2008 Contact: (580) 436-1234
Pre-Paid Legal Announces 2008 First Quarter Results
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2008 First Quarter EPS Up 19%; Membership Revenues Up 5%
ADA, OK, April 28, 2008 - Pre-Paid Legal Services, Inc. (NYSE:PPD), announced
results for the first quarter ended March 31, 2008. Net income for the first
quarter of 2008 increased 8% to $15.9 million from $14.7 million for the prior
year's first quarter. Diluted earnings per share increased 19% to $1.29 per
share from $1.08 per share for the prior year's comparable quarter due to an
increase in net income of 8% and a 9% decrease in the weighted average
outstanding shares. Membership revenues in the first quarter of 2008 increased
5% to $109.1 million from $103.9 million for the same period last year.
Net cash provided from operating activities decreased 14% to $20.8 million for
the first quarter of 2008 from $24.1 million for 2007 primarily due to the
increase in cash taxes paid during the 2008 period. During the 2008 first
quarter, we returned $12.9 million to shareholders through the repurchase of
279,576 shares of common stock, at an average per share price of $46.08. Since
April 1999, we have returned $375.3 million to shareholders through the purchase
of 13 million shares, at an average price of $28.93 per share, and $17.1 million
in dividends for a combined total of $392.4 million representing more than 115
percent of our net earnings during the same timeframe. At March 31, 2008, we had
$69.2 million of debt outstanding and $60.4 million in cash and cash equivalents
and unpledged investments.
First quarter 2008 membership fees remained stable at $109.1 million compared to
$108.9 million for the 2007 fourth quarter while associate services revenues
remained unchanged at $6.0 million for both periods. Commissions decreased 4%
while associate services and direct marketing expenses decreased approximately
19%. Membership benefits were 34% and 35% of membership fees, respectively for
the two periods. Commissions, as a percent of membership fees, were 28% and 30%,
respectively, for the two periods while general and administrative expenses were
12% and 10%, respectively, for the two periods.
After our earnings conference call later this week, we expect to continue our
open market share purchases as we have authorization from the Board to purchase
an additional 1 million shares and funds immediately available for share
purchases of approximately $14.7 million.
We will conduct a conference call to present the first quarter results on
Wednesday, April 30, 2008, at 8:30 a.m. Eastern Time. The conference call will
be webcast on the investor relations' page of www.prepaidlegal.com or may be
accessed by dialing (719) 325-4843. Audio replay will be available beginning at
11:30 a.m. Eastern Time on April 30, 2008 and will run through midnight
Wednesday, May 7, 2008 by dialing (719) 457-0820; pass code for the replay is
1173479. The presentation will be available on the web site indefinitely by
selecting "Earnings Calls" under the "Investor Relations" section. Questions may
be submitted prior to the call via email to [email protected].
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 more than
50 independent law firms across the U.S. and Canada, and include 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. We have an identity
theft restoration product we think is also one of a kind due to the combination
of our identity theft restoration partner 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
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 2007 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.
PRE-PAID LEGAL SERVICES, INC.
Financial Highlights (Unaudited)
(Dollars and shares in 000s, except per share amounts)
Three Months Ended
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March 31 December 31
2008 2007 2007
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Revenues:
Membership fees........................................... $ 109,060 $ 103,881 $ 108,898
Associate services........................................ 6,043 7,064 6,048
Other..................................................... 1,100 1,139 1,122
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116,203 112,084 116,068
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Costs and expenses:
Membership benefits....................................... 37,262 36,751 37,639
Commissions............................................... 30,824 30,532 32,172
Associate services and direct marketing................... 5,604 6,375 6,916
General and administrative................................ 12,574 12,747 10,627
Other, net................................................ 4,166 3,744 3,220
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90,430 90,149 90,574
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Income before income taxes.................................. 25,773 21,935 25,494
Provision for income taxes.................................. 9,831 7,207 13,772
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Net income.................................................. $ 15,942 $ 14,728 $ 11,722
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Basic earnings per common share............................. $ 1.29 $ 1.09 $ .92
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Diluted earnings per common share........................... $ 1.29 $ 1.08 $ .92
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Weighted average number of shares, as adjusted:
Primary................................................. 12,361 13,541 12,727
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Diluted................................................. 12,382 13,617 12,752
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Net cash provided by operating activities................... $ 20,825 $ 24,105 $ 19,767
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Net cash used in investing activities....................... $ (10,408) $ (827) $ 3,613
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Net cash used in financing activities....................... $ (17,269) $ (17,702) $ (27,469)
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