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: October 4, 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 2.02 Results of Operations and Financial Condition
On October 4, 2004, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its membership production and recruiting information
for the three months ended September 30, 2004. A copy of the release is included
as an exhibit to this report.
Item 9.01 Financial Statements and Exhibits
The following exhibits are included with this report:
Exhibit No. Description
99.1 Company Press Release dated October 4, 2004
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: October 4, 2004 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Company Press Release dated October 4 2004
For Immediate Release Company Steve Williamson
Monday, October 4, 2004 Contact: (580) 436-1234
Pre-Paid Legal Services Announces
Third Quarter Production and Recruiting Results
- - -
Third Quarter 2004 Earnings Release Date Set
ADA, OK, October 4, 2004 - Pre-Paid Legal Services, Inc. (NYSE: PPD)
announced 2004 third quarter membership production and recruiting results and
has scheduled its third quarter 2004 earnings release to be issued after the
close of trading on the New York Stock Exchange on Monday, October 25, 2004. A
conference call is scheduled for Wednesday, October 27, 2004 at 8:30 a.m. ET to
present the quarterly results.
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Three Months Ended
New Memberships: 9/30/2004 6/30/2004 9/30/2003
---------------- ----------- ----------- -----------
New legal service membership sales................................................. 157,058 137,390 168,356
New "stand-alone" IDT membership sales............................................. 4,906 5,443 -
Total new membership sales................................................ ------------ ----------- -----------
161,964 142,833 168,356
New "add-on" IDT membership sales.................................................. 87,136 77,802 -
Active Memberships:
Active legal service memberships at end of period.................................. 1,422,444 1,413,666 1,420,860
Active "stand-alone" IDT memberships at end of period (see note below)............. 21,302 17,575 -
Total active memberships at end of period................................. ------------ ----------- ------------
1,443,746 1,431,241 1,420,860
Active "add-on" IDT memberships at end of period (see note below).................. 247,370 201,713 -
New Sales Associates:
New sales associates recruited..................................................... 37,216 13,733 22,987
Average Membership fee in force:
Average Membership fee............................................................. $271.77 $269.17 $257.57
Note - reflects 3,642 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.
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Beginning June 28, 2004, and running through July 31, 2004, the Company
began a special promotion for single parents allowing single parents that
entered into a performance agreement with the Company whereby they committed to
attend training and hold private business receptions within a specified time
frame to become a Fast Start associate for $49 rather than $249 which was in
place for all other new associates. Beginning August 1, 2004, the cost to become
a Fast Start sales associate reverted back to $249 for all new associates unless
the new sales associate executed the performance agreement. The majority of new
sales associates that enrolled during the current quarter were either single
parents (at $49) or other associates who executed the performance agreement and
were allowed to join for $149, otherwise all new Fast Start sales associates
paid $249. The fee to become a new Fast Start sales associate was $149 during
the comparable period of 2003.
Harland C. Stonecipher, Pre-Paid's Chairman, stated, "We are pleased to
report that over the 12 months ending September 30, 2004, our average membership
fees have increased by more than 5.5% while at the same time we have increased
the number of memberships by more than 1.6% for a combined increase in excess of
7% in membership fees in force at September 30, 2004."
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 June 30, 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.
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