Pre-Paid Legal Announces Third Quarter 2003 Financial Results; EPS Up 17%, Net Income Up 5%, and Membership Revenue Up 4%
27 Octubre 2003 - 4:05PM
PR Newswire (US)
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/
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