PrePaid LEGAL Does It Again!
Ed Note: See paragraph four - new members vs. sales associates. Amazing! Beats my cynical estimates and most certainly those of the short sellers reported earlier. And No I don't belong to pre-paid or even own stock! Rod
From: <newsdesk@broadcast.shareholder.com>
To: Fred Farfunkle <FF@mlmconsultant.com>
Sent: Monday, October 21, 2002 3:02 PM
Subject: PPD Announces Record 3rd Quarter Results
Pre-Paid Legal Announces Record 2002 Third Quarter Results
- - -
Net Income Up 29%, EPS Up 44% and Nine-Month Cash Flow Up 51%
- - -
38th Consecutive Quarter of Increased Membership Base &
Membership Revenues
ADA, OK, October 21, 2002 - Pre-Paid Legal Services, Inc. (NYSE:PPD), today announced results for the third quarter and nine months ended September 30, 2002. Reported net income for the third quarter of 2002 increased 29 percent to $9.0 million from $7.0 million for the prior year's third quarter. Membership revenues increased 18 percent to a record $79.6 million from $67.4 million for the same period last year. Diluted earnings per share increased 44 percent to 46 cents per share from 32 cents per share for the prior year's comparable quarter due to increased net income of 29 percent and an approximate 10 percent decrease in the weighted average number of outstanding shares.
Reported net income for the first nine months of 2002 increased 36 percent to $26.4 million from $19.4 million for the first nine months of 2001. Diluted earnings per share for the 2002 nine-month period increased 47 percent to $1.32 per share from 90 cents per share for the prior year's comparable period. Membership revenues for the first nine months of 2002 were up 18 percent to $229.1 million from $193.8 million for the prior year period.
Net cash provided from operating activities for the nine months ended September 30, 2002 increased 51 percent to $39.0 million from $25.8 million for the comparable period of 2001. At September 30, 2002, the Company had cash and investment balances exceeding $35 million after spending $42.4 million during the first nine months of 2002 to repurchase 2.0 million shares of its stock at an average share price of $20.94. Between April 1999 and September 30, 2002, the Company has purchased 5.2 million shares at a cost of $117.3 million, or an average share cost of $22.50. The stock buyback initiative has reduced the number of outstanding shares by approximately 20 percent to approximately 19.0 million shares outstanding at September 30, 2002. At September 30, 2002, the Company had outstanding $8.4 million on its lines of credit for stock repurchases and new office construction, all of which was borrowed during the quarter.
For the third quarter of 2002, the Company added 197,442 new members and 46,653 new sales associates compared to 177,135 new members and 22,002 new sales associates added during the same period of 2001. Sales associate recruiting in the 2002 quarter was positively impacted by the reduced sales associate entry price of $99 during July 2002 and $149 during August and September 2002 compared to the normal sales associate entry price of $249, which was in effect during the three months ended September 30, 2001. For the nine months ended September 30, 2002, the Company added 604,417 new members and 126,108 new sales associates compared to 548,967 new members and 83,193 new sales associates added during the same period of 2001. Active memberships as of September 30, 2002, increased 14 percent to a
record 1,389,467 from 1,216,889 at September 30, 2001.
Commenting on the third quarter highlights, Harland C. Stonecipher, Chairman and Chief Executive Officer of Pre-Paid Legal Services, Inc. said, "This quarter is the 38th consecutive quarter we have increased membership revenues and active memberships. The fact that cash flow increased 51% during the first nine months of 2002, while still growing our membership base by 14%, demonstrates the economic soundness of our business
model."
The Company will conduct a conference call to present the third quarter results on Tuesday, October 22, 2002 at 8:30 a.m. Eastern Time. The conference call will be webcast on the investor relations' page of www.prepaidlegal.com or may be accessed by dialing (913) 981-5572. Audio replay will be available beginning at 11:30 a.m. Eastern Time on October 22, 2002 and will run through midnight Wednesday, October 30, 2002 by dialing (719) 457-0820; passcode for the replay is 479649. The presentation will be available on the web site indefinitely by selecting "Earnings Calls" under the "Investor Relations" section. Questions may be submitted prior to the call via email to investor@pplsi.com.
The Company expects to file its quarterly report on Form 10-Q for the three months ended September 30, 2002 later this week.
About Pre-Paid Legal Services
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.
Forward-Looking Statements
Statements in this press release, other than purely historical information, including those contained in the comments above by Harland Stonecipher and the comments regarding the Company's financial statements and statements relating to estimates, projections and 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 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 and that the Company is substantially dependent on its marketing force. Please refer to pages 33 and 34 of the Company's 2001 Form 10-K and page 7 of the Company's June 30, 2002 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.
Please Take A Moment To Sign Our Guest Book:
