SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 28, 2003
(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)
321 East Main Street
Ada, Oklahoma 74821-0145
(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 April 28, 2003
Item 12. Results of Operation and Financial Condition
On April 28, 2003, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its earnings and operating results for the three months
ended March 31, 2003. 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
--------------------------------------------
Date: April 28, 2003 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
99.1 Company Press Release dated April 28, 2003
EXHIBIT 99.1
For Release 8:30 am Eastern Company Melanie Lawson
Monday, April 28, 2003 Contact: (580) 436-1234
Pre-Paid Legal Announces First Quarter 2003 Results
$20.3 Million Cash Flow for Quarter, Up 12%
Net Income Up 36%, EPS Up 56%, and Membership Revenue Up 13%
ADA, OK, April 28, 2003 - Pre-Paid Legal Services, Inc. (NYSE:PPD), today
announced results for the first quarter ended March 31, 2003. Reported net
income for the first quarter of 2003 increased 36 percent to $12.0 million from
$8.9 million for the prior year's first quarter. Diluted earnings per share
increased 56 percent to 67 cents per share from 43 cents per share for the prior
year's comparable quarter due to increased net income of 36 percent and an
approximate 12 percent decrease in the weighted average number of outstanding
shares. Membership revenues increased 13 percent to $81.5 million from $71.9
million for the same period last year.
Net cash provided from operating activities for the 2003 quarter increased
12 percent to $20.3 million from $18.1 million for the 2002 quarter. At March
31, 2003, the Company had cash and investment balances exceeding $37 million
after spending $19.9 million during the first quarter of 2003 to repurchase 1.0
million shares of its stock at an average share price of $19.92. The Company has
accessed $4 million of the $10 million available to it under a previously
announced stock purchase line of credit. At March 31, 2003, the Company had $1.3
million outstanding after repaying $2.7 million of these advances and may access
the remaining $6 million available for additional stock purchases through May
31, 2003. At March 31, 2003, the Company also had $11.9 million outstanding on
its $20 million line of credit for its new office construction.
The Company will conduct a conference call to present the first quarter
results on Wednesday, April 30, 2003 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 (913) 981-5520. Audio replay will be available
beginning at 11:30 a.m. Eastern Time on April 30, 2003 and will run through
midnight Tuesday, May 6, 2003 by dialing (719) 457-0820; passcode for the replay
is 574134. 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 investor@pplsi.com.
The Company expects to file its quarterly report on Form 10-Q for the three
months ended March 31, 2003 later today.
About Pre-Paid Legal Services
Pre-Paid Legal Services develops and markets legal service plans across
North America. The plans typically 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 and that the
Company's stock price may be affected by short sellers. Please refer to pages 37
and 38 of the Company's 2002 Form 10-K for a more complete description of these
risks. The Company undertakes 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 000's, except per share amounts)
Three Months Ended March
31,
--------------------------
2003 2002
------------ ------------
Revenues:
Membership fees........................................... $ 81,547 $ 71,894
Associate services........................................ 7,537 9,019
Other..................................................... 1,236 1,118
------------ ------------
90,320 82,031
------------ ------------
Costs and expenses:
Membership benefits....................................... 26,725 24,312
Commissions............................................... 28,178 27,808
Associate services and direct marketing................... 7,059 7,568
General and administrative................................ 7,993 7,802
Other, net................................................ 1,993 999
------------ ------------
71,948 68,489
------------ ------------
Income before income taxes.................................. 18,372 13,542
Provision for income taxes.................................. 6,338 4,672
------------ ------------
Net income.................................................. $ 12,034 $ 8,870
------------ ------------
Basic earnings per common share............................. $ .67 $ .44
------------ ------------
Diluted earnings per common share........................... $ .67 $ .43
------------ ------------
Weighted average number of shares, as adjusted:
Primary................................................. 18,039 20,304
------------ ------------
Diluted................................................. 18,055 20,444
------------ ------------
Net cash provided by operating activities................... $ 20,272 $ 18,063
------------ ------------
Net cash used in investing activities....................... $ (6,001) $ (3,504)
------------ ------------
Net cash used in financing activities....................... $ (18,062) $ (19,372)
------------ ------------