SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 2, 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
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99.1 Company Press Release dated April 2, 2003
Item 12. Results of Operation and Financial Condition
On April 2, 2003, Pre-Paid Legal Services, Inc. (the "Company") issued a
press release announcing its membership production and recruiting information
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
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Date: April 3, 2003 Randy Harp, Chief Operating Officer
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Company Press Release dated April 2, 2003
EXHIBIT 99.1
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For Immediate Release Company Melanie Lawson
Wednesday, April 2, 2003 Contact: (580) 436-1234
PRE-PAID LEGAL ANNOUNCES FIRST QUARTER PRODUCTION
ADA, OK, April 2, 2003 - Pre-Paid Legal Services, Inc. (NYSE:PPD), today
reported production highlights for the quarter ended March 31, 2003.
Highlights of the quarter included:
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o Membership base up 8.3% year over year, .9% from December 31, 2002
o New memberships increased 5.6% from the 4th quarter of 2002
o Purchase of 1 million treasury shares
o Modification of bank loan financial covenant to allow more treasury share
purchases
Production results: Three Months Ended
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3/31/2003 3/31/2002
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New membership sales............................... 178,820 -10.9% 200,780
New sales associates recruited..................... 29,755 -11.2% 33,493
Active memberships at end of period................ 1,394,569 +8.3% 1,287,199
The Company's two line of credit agreements totaling $30 million contain,
among others, a financial covenant that the Company shall not permit the ratio
of its total liabilities to its tangible net worth to exceed 2.50 to 1.00,
measured at the end of each calendar quarter. This financial covenant has been
relaxed to 3.75 to 1.00, and a new financial covenant was added prohibiting the
Company's tangible net worth to fall below $15 million effective March 31, 2003
and each quarter thereafter. These modifications will allow the Company to
continue and possibly increase its borrowings for treasury stock purchases.
Harland Stonecipher, Chairman commented, "Given some of the marketing
changes we made in the fourth quarter of 2002 to improve the quality of
business, particularly relating to restrictions we put in place regarding
business stemming from the Internet, we are encouraged by the number of new
memberships written in the first quarter of 2003."
About Pre-Paid Legal Services
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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. More information can
be located at the Company's homepage on the worldwide web at
http://www.prepaidlegal.com.
Safe Harbor Language
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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.