Pre-Paid Legal Announces 2010 4th Quarter & Year-End Results
January 04 2011 - 8:31AM
PR Newswire (Canada)
ADA, Okla., Jan. 4, 2011 /CNW/ -- 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, 2010. During the 4th quarter of 2010, new sales
associates enrolled decreased 54.3% to 28,160 from the 61,623
enrolled in the 4th quarter of 2009 and new memberships produced
decreased 20.8% to 117,472 during the 2010 quarter compared to
148,248 for the 2009 quarter. For the year 2010, new sales
associates enrolled decreased 25.6% to 138,442 compared to 186,064
enrolled during 2009 while new memberships produced were 502,982, a
decrease of 11.5% from 568,095. Our active memberships decreased
4.8% during 2010 from 1,547,585 to 1,473,237. From the 3rd quarter
of 2010 to the 4th quarter of 2010, our active memberships
decreased by 19,896 memberships. Three Months Ended: Year Ended:
New Memberships: 12/31/2010 9/30/2010 12/31/2009 12/31/2010
12/31/2009 ---------------- ------- ------- ------- -------
-------- New legal service membership sales 110,105 121,277 139,076
480,814 541,138 New "stand-alone" IDT membership sales 7,367 4,635
9,172 22,168 26,957 ----- ----- Total new membership sales 117,472
125,912 148,248 502,982 568,095 ======= ======= ======= =======
======= New "add-on" IDT membership sales 60,416 75,027 85,095
287,345 348,607 Average Annual Membership fee $312.15 $328.17
$316.87 $324.90 $322.77 Active Memberships: -------------------
Active legal service memberships at end of period 1,381,428
1,403,848 1,454,661 1,381,428 1,454,661 Active "stand- alone" IDT
memberships at end of period (see note below) 91,809 89,285 92,924
91,809 92,924 Total active ------ memberships at end of period
1,473,237 1,493,133 1,547,585 1,473,237 1,547,585 =========
========= ========= ========= ========= Active "add-on" IDT
memberships at end of period (see note below) 668,646 689,409
711,131 668,646 711,131 New Sales Associates: ------------ New
sales associates recruited 28,160 36,329 61,623 138,442 186,064
Average enrollment fee paid by new sales associates $97.33 $65.34
$71.31 $74.57 $87.41 Average Membership fee in force: Average
Annual Membership fee $302.10 $303.70 $302.51 $302.10 $302.51
--------------- ------- ------- ------- ------- ------- Note -
reflects 4,031 net transfers from "add-on" status to "stand-alone"
status during the 2010 4th quarter Our total active membership
premium in force decreased 4.9% to $445.1 million at December 31,
2010 from $468.2 million at December 31, 2009. 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 71.8% for 2010. During the
2010 4th quarter, we retired all outstanding bank debt and accrued
interest, leaving us completely debt free. Additionally, we
returned $189,000 to shareholders through the repurchase of 3,220
shares of common stock, at an average per share price of $58.62.
Since April 1999, we have returned $472.0 million to shareholders
through the purchase of 15.4 million shares, average price of
$30.67 per share, and $17.1 million in dividends for a combined
total of more than $489 million representing more than 100 percent
of our net earnings during the same timeframe. We have reduced the
number of shares outstanding by approximately 59% from 23.6 million
at March 31, 1999 to 9.8 million today. We anticipate announcing
our 2010 fourth quarter and annual earnings on February 21, 2011
after the market closes and hosting a conference call to discuss
such earnings on February 23, 2011. 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 founder and Chairman, 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 during an economic downturn in the
economy consumer purchases of discretionary items may be affected
which could materially harm our sales, retention rates,
profitability and financial condition, 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 our outstanding shares over
the past years. Please refer to pages 16 - 19 of our 2009 Form 10-K
and pages 7 and 8 of our September 30, 2010 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. Steve
Williamson of Pre-Paid Legal Services, Inc., +1-580-436-1234 Web
Site: http://www.prepaidlegal.com
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