UNITED STATES
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 (Date of earliest event reported): January 4, 2010
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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 4, 2010, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing our membership production and recruiting information
for the three months and year ended December 31, 2009. 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 4, 2010
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 5, 2010
For Immediate Release Company Steve Williamson
Monday, January 4, 2010 Contact: (580) 436-1234
PRE-PAID LEGAL ANNOUNCES 2009 4th QUARTER & YEAR-END RESULTS
Year 2009 New Memberships Produced Up 2.9%, New Sales Associates
Enrolled Up 52.2%
ADA, OK, January 4, 2010 - 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, 2009. During the 4th quarter of
2009, new sales associates enrolled increased 89.4% to 61,623 from the 32,533
enrolled in the 4th quarter of 2008 and new memberships produced increased 11.8%
to 148,248 during the 2009 quarter compared to 132,641 for the 2008 quarter.
For the year 2009, new sales associates enrolled increased 52.2% to 186,064
compared to 122,255 enrolled during 2008 while new memberships produced were
568,095, up 2.9% from 552,327. Our active memberships decreased less than 1.0%
during 2009 from 1,559,154 to 1,547,585. From the 3rd quarter of 2009 to the 4th
quarter of 2009, our active memberships increased by 2,030 memberships.
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Three Months Ended: Year Ended:
New Memberships: 12/31/2009 9/30/2009 12/31/2008 12/31/2009 12/31/2008
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New legal service membership sales................. 139,076 166,377 124,629 541,138 521,522
New "stand-alone" IDT membership sales............. 9,172 8,645 8,012 26,957 30,805
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Total new membership sales......................... 148,248 175,022 132,641 568,095 552,327
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New "add-on" IDT membership sales.................. 85,095 112,653 85,221 348,607 344,869
Average Annual Membership fee...................... $316.87 $325.60 $321.00 $322.77 $324.52
Active Memberships:
Active legal service memberships at end of period.. 1,454,661 1,455,492 1,469,315 1,454,661 1,469,315
Active "stand-alone" IDT memberships at end of
period (see note below)........................ 92,924 90,063 89,839 92,924 89,839
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Total active memberships at end of period.......... 1,547,585 1,545,555 1,559,154 1,547,585 1,559,154
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Active "add-on" IDT memberships at end of period
(see note below)............................... 711,131 710,795 680,862 711,131 680,862
New Sales Associates:
New sales associates recruited..................... 61,623 75,398 32,533 186,064 122,255
Average enrollment fee paid by new sales associates $71.31 $79.31 $49.02 $87.41 $71.53
Average Membership fee in force:
Average Annual Membership fee...................... $302.51 $302.86 $300.80 $302.51 $300.80
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Note - reflects 4,494 net transfers from "add-on" status to "stand-alone" status
during the 2009 4th quarter
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Our total active membership premium in force decreased less than 1% to $468.2
million at December 31, 2009 from $469 million at December 31, 2008. 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 72.8% for 2009.
Our fourth quarter 2009 corporate finance focus has again been on share
repurchases. During the 4th quarter, we returned $35.9 million to shareholders
through the repurchase of 902,697 shares of common stock, at an average per
share price of $39.75. Since April 1999, we have returned $457.9 million to
shareholders through the purchase of 15.1 million shares, average price of
$30.32 per share, and $17.1 million in dividends for a combined total of more
than $475 million representing more than 100 percent of our net earnings during
the same timeframe. We have reduced the number of shares outstanding by
approximately 57% from 23.6 million at March 31, 1999 to 10.1 million today.
We anticipate announcing our 2009 fourth quarter and annual earnings on February
22, 2010 after the market closes and hosting a conference call to discuss such
earnings on February 24, 2010.
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 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.
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 pending or future litigation may have a
material adverse effect on us if resolved unfavorably to us, that we may have
compromises of our information security, that consumer purchases of
discretionary items may be impacted by a downturn in the economy, 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, 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 and that we have
repurchased more than half of our outstanding shares. Please refer to pages 18
through 20 of our 2008 Form 10-K/A and pages 7 and 8 of our September 30, 2009
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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