PPD Pre-Paid Legal Services

Pre-Paid Legal Announces Third Quarter 2003 Financial Results; EPS Up 17%, Net Income Up 5%, and Membership Revenue Up 4% ADA, Okla., Oct. 27 /PRNewswire-FirstCall/ -- Pre-Paid Legal Services, Inc. , today announced financial results for the third quarter and for the nine months ended September 30, 2003. The Company released production results earlier this month. Net income for the third quarter of 2003 increased 5 percent to $9.4 million from $9.0 million for the prior year's third quarter. Membership revenues increased 4 percent to a record $82.7 million from $79.6 million for the same period last year. Diluted earnings per share increased 17 percent to 54 cents per share from 46 cents per share for the prior year's comparable quarter due to increased net income of 5% and an approximate 10% decrease in the weighted average number of outstanding shares. Net income for the first nine months of 2003 increased 20 percent to $31.5 million from $26.4 million for the first nine months of 2002. Diluted earnings per share for the 2003 nine-month period increased 35 percent to $1.78 per share from $1.32 per share for the prior year's comparable period. Membership revenues for the first nine months of 2003 were up 7 percent to $246.1 million from $229.1 million for the prior year period. Net cash provided from operating activities for the nine months ended September 30, 2003 increased 1 percent to $39.6 million from $39.0 million for the comparable period of 2002. Net cash provided from operating activities for the three months ended September 30, 2003, decreased 27 percent to $11.3 million from $15.5 million for the comparable period of 2002. At September 30, 2003, the Company had cash and investment balances exceeding $34 million after spending $34.1 million during the first nine months of 2003 to repurchase 1.6 million shares of its stock at an average share price of $21.48, including $1.9 million during the third quarter of 2003 to repurchase 86,100 shares at an average share cost of $22.63. Since April 1999, the Company has purchased 7.1 million shares at a cost of $159.3 million, or an average share cost of $22.47. The stock buyback initiative has reduced the number of outstanding shares by approximately 30 percent to approximately 17.3 million shares outstanding. During the third quarter the Company repaid all previous advances outstanding pursuant to a stock purchase line of credit. At September 30, 2003, the Company had $17.6 million outstanding on its $20 million line of credit for its new office construction and had immediate availability of $25 million for further treasury stock purchases pursuant to additional financing announced last month. Third quarter 2003 membership fees increased slightly to $82.7 million from $81.9 million for the second quarter of 2003. Associate services revenues declined during the 2003 third quarter by approximately $405,000 to $5.9 million from $6.3 million for the 2003 second quarter while associate services and direct marketing expenses increased by $61,000 during the same period. Membership benefits totaled $28.0 million in the third quarter of 2003 compared to $27.6 million for the second quarter and represented 34% of membership fees for both periods. Total commissions to associates per new membership sold during the respective quarters were $169 per membership for the three months ended September 30, 2003 compared to $166 for the second quarter of 2003. Primarily due to increased legal fees associated with ongoing litigation and bad debt expense, general and administrative expenses during the 2003 third quarter increased to $9.9 million compared to $8.9 million for the second quarter of 2003 and represented 12% and 11% of membership fees, respectively, for each period. The Company will conduct a conference call to present the third quarter results on Wednesday, October 29, 2003, at 8:30 a.m. Eastern Time. The conference call will be webcast on the investor relations' page of http://www.prepaidlegal.com/ or may be accessed by dialing (913) 981-5533. Audio replay will be available beginning at 11:30 a.m. Eastern Time on October 29, 2003 and will run through midnight Thursday, November 6, 2003 by dialing (719) 457-0820; passcode for the replay is 788959. The presentation will be available on the web site indefinitely by selecting "Earnings Calls" under the "Investor Relations" section. The Company expects to file its quarterly report on Form 10-Q for the three months ended September 30, 2003 later this week. About Pre-Paid Legal Services Pre-Paid Legal Services develops and markets legal service plans across North America. The plans typically 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/ . Forward-Looking Statements Statements in this press release, other than purely historical information, including those statements above regarding future stock repurchases and additional funding arrangements, 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 and pages 8 through 10 of the Company's June 30, 2003 Form 10-Q for a more complete description of these risks. The Company undertakes no duty to update any of the forward-looking statements in this release. PRE-PAID LEGAL SERVICES, INC. Financial Highlights (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 Revenues: Membership fees $ 82,695 $ 79,583 $246,123 $229,062 Associate services 6,033 9,363 19,900 27,499 Other 1,296 1,213 3,963 3,573 90,024 90,159 269,986 260,134 Costs and expenses: Membership benefits 27,956 26,620 82,271 76,936 Commissions 28,443 31,064 84,974 91,671 Associate services and direct marketing 7,411 7,732 21,820 22,455 General and administrative 9,896 8,529 26,817 23,869 Other, net 2,175 2,539 6,256 4,968 75,881 76,484 222,138 219,899 Income before income taxes 14,143 13,675 47,848 40,235 Provision for income taxes 4,705 4,718 16,333 13,881 Net income $ 9,438 $ 8,957 $ 31,515 $ 26,354 Basic earnings per common share $ .54 $ .46 $ 1.79 $ 1.32 Diluted earnings per common share $ .54 $ .46 $ 1.78 $ 1.32 Weighted average number of shares: Basic 17,335 19,312 17,654 19,909 Diluted 17,405 19,349 17,705 20,028 Net cash provided by operating activities $ 11,294 $ 15,511 $ 39,575 $ 39,045 Net cash used in investing activities $(10,010) $ (3,827) $(21,822) $ (9,363) Net cash used in financing activities $ (3,020) $ (8,797) $(26,122) $(30,895) DATASOURCE: Pre-Paid Legal Services, Inc. CONTACT: Steve Williamson of Pre-Paid Legal Services, Inc., +1-580-436-1234 Web site: http://www.prepaidlegal.com/

Copyright