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): July 2, 2007
---------------------------------
Pre-Paid Legal Services, Inc.
--------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Oklahoma
--------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
001-09293 73-1016728
--------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
One Pre-Paid Way
Ada, OK 74820
--------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(580) 436-1234
--------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
--------------------------------------------------------------------------------
(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 July 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 June 30, 2007. 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. Desription
----------- ----------
99.1 Company Press Release dated July 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/ Randy Harp
---------------------------------------
Randy Harp, Chief Operating Officer
Date: July 2, 2007
For Immediate Release Company Steve Williamson
Monday, July 2, 2007 Contact: (580) 436-1234
PRE-PAID ANNOUNCES 2007 2nd QUARTER MEMBERSHIP AND RECRUITING RESULTS
ADA, OK, July 2, 2007 - Pre-Paid Legal Services, Inc. (NYSE: PPD), reported new
memberships produced and new sales associates enrolled for the 2007 second
quarter. During the 2nd quarter of 2007, new sales associates enrolled decreased
16.1% compared to the second quarter of 2006. Memberships produced decreased
4.2% while new membership fees written decreased 4.6% and our active membership
base increased 1.2% compared to the comparable period of the previous year.
On a sequential quarterly basis, new associates enrolled increased 23.0%; new
memberships produced decreased 9.5%, new membership fees written decreased 5.5%
and our active membership base increased by 8,441 memberships.
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
------------------
New Memberships: 6/30/2007 3/31/2007 6/30/2006
---------------- ---------- ----------- -----------
New legal service membership sales.......................................... 138,083 147,742 146,043
New "stand-alone" IDT membership sales...................................... 8,082 13,788 6,461
---------- ----------- -----------
Total new membership sales......................................... 146,165 161,530 152,504
---------- ----------- -----------
New "add-on" IDT membership sales........................................... 92,382 93,204 98,156
Average Annual Membership fee............................................... $326.04 $309.86 $327.34
Active Memberships:
Active legal service memberships at end of period........................... 1,484,414 1,477,604 1,484,498
Active "stand-alone" IDT memberships at end of period (see note below)...... 75,156 73,525 57,167
---------- ----------- -----------
Total active memberships at end of period.......................... 1,559,750 1,551,129 1,541,665
---------- ----------- -----------
Active "add-on" IDT memberships at end of period (see note below)........... 587,550 562,075 507,049
New Sales Associates:
New sales associates recruited.............................................. 38,175 31,043 45,517
Average enrollment fee paid by new sales associates......................... $44.65 $103.13 $49.70
Average Membership fee in force:
Average Annual Membership fee............................................... $295.98 $294.17 $291.22
Note - reflects 5,328 net transfers from "add-on" status to "stand-alone" status during the quarter
------------------------------------------------------------------------------------------------------------------------------------
Our total active membership fees in force increased approximately 3% during the
last year and continue our trend of increasing our membership fees. 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
72.7% for the 12 month period ended June 30, 2007.
Our second quarter 2007 corporate finance focus has again been on share
repurchases. During the 2nd quarter, we returned $11.0 million to shareholders
through the repurchase of 185,815 shares of common stock, at an average per
share price of $59.44. Since April 1999, we have returned $321.0 million to
shareholders through the purchase of 11.9 million shares, average price of
$27.00 per share, and $17.1 million in dividends for a combined total of $338.1
million representing more than 110 percent of our net earnings during the same
timeframe.
We anticipate announcing our 2007 second quarter financial results on July 23,
2007 after the market closes and hosting a conference call to discuss such
results on July 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, 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
www.prepaidlegal.com.
Forward-Looking Statements
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 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 and pages 7 and 8 of our March 31, 2007 Form 10-Q for a
more complete description of these risks. We undertake no duty to update any of
the forward-looking statements in this release.
###