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 2, 2009
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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 January 2, 2009, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing our membership production and recruiting information
for the three months ended December 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 January 2, 2009
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/ Steve Williamson
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Steve Williamson,
Chief Financial Officer
Date: January 5, 2009
For Immediate Release Company Steve Williamson
Friday, January 2, 2009 Contact: (580) 436-1234
PRE-PAID ANNOUNCES 2008 4th QUARTER & YEAR-END RESULTS
ADA, OK, January 2, 2009 - Pre-Paid Legal Services, Inc. (NYSE: PPD), reported
new memberships produced and new sales associates enrolled for the fourth
quarter and for the year ended December 31, 2008. During the 4th quarter of
2008, new sales associates enrolled decreased 9.7% to 32,533 from the 36,029
enrolled in the 4th quarter of 2007 and new memberships produced decreased 11.6%
to 132,641 during the 2008 quarter compared to 150,100 for the 2007 quarter.
For the year 2008, new sales associates enrolled decreased 17.8% to 122,255
compared to 148,802 enrolled during 2007 while new memberships produced were
552,327, down 9.8% from 612,096. Our active memberships decreased 1.1% during
2008 from 1,575,802 to 1,559,154. From the 3rd quarter of 2008 to the 4th
quarter of 2008, our active memberships decreased by 16,739 memberships.
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| Three Months Ended: Year Ended: |
|New Memberships: 12/31/2008 9/30/2008 12/31/2007 12/31/2008 12/31/2007 |
|---------------- ---------- --------- ---------- ---------- ---------- |
|New legal service membership sales................. 124,629 137,227 139,282 521,522 570,637 |
|New "stand-alone" IDT membership sales............. 8,012 7,814 10,818 30,805 41,459 |
| ---------- --------- ---------- ---------- -----------|
|Total new membership sales......................... 132,641 145,041 150,100 552,327 612,096 |
| ---------- --------- ---------- ---------- -----------|
|New "add-on" IDT membership sales.................. 85,221 95,762 94,945 344,869 381,419 |
|Average Annual Membership fee...................... $321.00 $326.14 $321.32 $324.52 $321.18 |
| |
|Active Memberships: |
|------------------ |
|Active legal service memberships at end of period.. 1,469,315 1,488,259 1,492,341 1,469,315 1,492,341 |
|Active "stand-alone" IDT memberships at end of |
| period (see note below)........................ 89,839 87,634 83,461 89,839 83,461 |
| ---------- --------- ---------- ---------- -----------|
|Total active memberships at end of period.......... 1,559,154 1,575,893 1,575,802 1,559,154 1,575,802 |
| ---------- --------- ---------- ---------- -----------|
|Active "add-on" IDT memberships at end of period |
| (see note below)............................... 680,862 681,118 631,910 680,862 631,910 |
| |
|New Sales Associates: |
|-------------------- |
|New sales associates recruited..................... 32,533 37,820 36,029 122,255 148,802 |
| |
|Average enrollment fee paid by new sales associates $49.02 $56.17 $48.99 $71.53 $56.75 |
| |
|Average Membership fee in force: |
|------------------------------- |
|Average Annual Membership fee...................... $300.80 $301.40 $297.62 $300.80 $297.62 |
| |
|-------------------------------------------------------------------------------------------------------------------------------|
|Note - reflects 4,941 net transfers from "add-on" status to "stand-alone" status during the 2008 4th quarter |
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Our total active membership premium in force remained unchanged at $469.0
million at December 31, 2008 and 2007. 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) was 73.3% for 2008.
Our fourth quarter 2008 corporate finance focus has again been on share
repurchases. During the 4th quarter, we returned $7.8 million to shareholders
through the repurchase of 220,766 shares of common stock, at an average per
share price of $35.21. Since April 1999, we have returned $407.1 million to
shareholders through the purchase of 13.7 million shares, average price of
$29.62 per share, and $17.1 million in dividends for a combined total of more
than $424 million representing more than 115 percent of our net earnings during
the same timeframe. We have reduced the number of shares outstanding by
approximately 52% from 23.6 million at March 31, 1999 to 11.4 million today.
We anticipate announcing our 2008 fourth quarter and yearly earnings on February
23, 2009 after the market closes and hosting a conference call to discuss such
earnings on February 25, 2009.
About Us
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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 as well as 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 because of the
combination of outside vendors and our provider law firms. More information
about us and our products can be found at our homepage at
http://www.prepaidlegal.com.
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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 and pages 7 and 8 of our September 30,
2008 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.
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