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): January 4, 2005
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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)
1-9293 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
On January 4, 2005, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its membership production and recruiting information
for the three months ended December 31, 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 January 4, 2005
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: January 4, 2005
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Company Press Release dated January 4, 2005
For Immediate Release Company Steve Williamson
Tuesday, January 4, 2005 Contact: (580) 436-1234
PRE-PAID ANNOUNCES 4th QUARTER & YEAR-END
MEMBERSHIP AND RECRUITING RESULTS
4th Quarter Membership Sales Up 2%
4th Quarter Sales Associates Recruited Up 26%
2004 Active Memberships Up 2%
ADA, OK, January 4, 2005 - Pre-Paid Legal Services, Inc. (NYSE: PPD), today
reported new memberships produced and new sales associates enrolled for the
fourth quarter and for the year ended December 31, 2004. During the 4th quarter
of 2004, new sales associates enrolled increased 26% to 41,829 from the 33,068
enrolled in the 4th quarter of 2003 and new memberships produced increased 2% to
156,896 from 153,501. For the year 2004, new sales associates enrolled remained
consistent at 107,552 compared to 108,557 enrolled during 2003 while new
memberships produced decreased 7% to 624,525 from 671,857. The Company's active
memberships increased 2% during 2004 from 1,418,997 to 1,451,700. From the 3rd
quarter of 2004 to the 4th quarter of 2004, the Company's active memberships
increased by 7,954 memberships.
----------------------------------------------------------- ------------------------------------------ ---------------------------
Three Months Ended Year Ended
New Memberships: 12/31/2004 9/30/2004 12/31/2003 12/31/2004 12/31/2003
---------------- ---------- --------- ---------- ---------- ----------
New legal service membership sales........................ 149,759 157,058 149,124 599,929 667,480
New "stand-alone" IDT membership sales.................... 7,137 4,906 4,377 24,596 4,377
--------- --------- --------- --------- ---------
Total new membership sales....................... 156,896 161,964 153,501 624,525 671,857
--------- --------- --------- --------- ---------
New "add-on" IDT membership sales......................... 85,918 87,136 89,928 335,792 89,928
Active Memberships:
Active legal service memberships at end of period......... 1,424,707 1,422,444 1,414,746 1,424,707 1,414,746
Active "stand-alone" IDT memberships at end of period
(see note below)...................................... 26,993 21,302 4,251 26,993 4,251
--------- --------- --------- --------- ---------
Total active memberships at end of period........ 1,451,700 1,443,746 1,418,997 1,451,700 1,418,997
--------- --------- --------- --------- ---------
Active "add-on" IDT memberships at end of period
(see note below)...................................... 283,889 247,370 86,602 283,889 86,602
New Sales Associates:
New sales associates recruited............................ 41,829 37,216 33,068 107,552 108,557
Average Membership fee in force:
Average Annual Membership fee............................. $274.02 $271.77 $262.36 $274.02 $262.36
Note - reflects 4,568 net transfers from "add-on" status to "stand-alone" status
during the quarter
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The Company's total active membership premium in force increased
approximately 7% during 2004 and represents the 12th consecutive year of
increasing its membership base and membership fees. Additionally, the 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) has
increased for six consecutive quarters from 67.6% as of June 30, 2003 to 71.0%
for the latest 12 month period ended December 31, 2004.
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Pre-Paid anticipates announcing its 2004 fourth quarter and yearly earnings
on February 21, 2005 after the market closes and hosting a conference call to
discuss such earnings on February 23, 2005.
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. The Company also
markets an identity theft protection plan. 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, 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
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, that the
Company has been unable to increase significantly its employee group membership
sales and that the Company's 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 39 and 40 of the Company's
2003 Form 10-K and pages 8 through 10 of the Company's September 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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