ADA, Okla.--(BUSINESS WIRE)--Oct. 19, 1998--Pre-Paid Legal Services, Inc. (ASE:PPD), today reported record results for the third quarter and for the nine months ended September 30, 1998. These results reflect the 21st consecutive quarter of increased revenues and net income dating back to the third quarter of 1993.
Net income for the third quarter of 1998 rose 49 percent to $7,424,000 from $4,983,000 for the prior year's period, while revenues rose 39 percent to $33,671,000 from $24,199,000 for the prior year's period. Earnings per share, diluted, increased 45% to 32 cents per share from 22 cents per diluted share for last year's comparable quarter.
Nine-month net income during 1998 increased 50 percent to $19,985,000, or 87 cents per diluted share, from $13,319,000, or 59 cents per diluted share, for the first nine months of 1997. Revenues for the nine months were up 42% to $94,003,000 from $66,123,000 for the initial nine months of the prior year.
While revenues increased 42%, primarily as a result of new memberships written, cash flow exceeded cost of operations and acquisition of new business and resulted in positive cash flow from operations of $12,612,000 for the nine-month period of 1998, up 131 percent from the first nine months of 1997.
''We remain very excited about our future. These results mark the 21st quarter of consecutive growth in both revenues and net income. We are generating record amounts of positive cash flow, our cash and investment balances are at an all time high of more than $41 million, we remain debt free, our operating margins are up, the production of new memberships is up, our year over year recruiting is up and our retention rates remain very stable,'' said Pre-Paid Chairman Harland Stonecipher. ''Added to all of this are our recent acquisition of TPN, Inc. and its digital satellite channel and our agreement to acquire a small life insurance company, both of which we believe will increase our recruiting results in future periods. Combining all of these positive developments with access to the TPN sales force and our recently announced joint marketing relationship with Conseco demonstrates to us that the best is yet to come.''
Pre-Paid Legal Services, develops, underwrites and markets legal service plans nationally. The plans provide for or reimburse legal service benefits, including unlimited attorney consultation, will preparation, traffic violation defense, automobile-related criminal charges, 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 (www.pplsi.com).
PRE-PAID LEGAL SERVICES, INC.
Financial Highlights (Unaudited)
(Amounts in 000's, except per share amounts)
Three Months Ended Nine Months Ended
------------------ ------------------
9/30/98 9/30/97 9/30/98 9/30/97
-------- -------- -------- --------
Revenues:
Membership premiums $ 28,105 $ 20,149 $ 78,443 $ 54,758
Associate services 4,093 3,142 11,810 8,777
Interest income 783 407 1,821 1,152
Other 690 501 1,929 1,436
-------- -------- -------- --------
33,671 24,199 94,003 66,123
-------- -------- -------- --------
Costs and expenses:
Membership benefits 9,297 6,476 25,893 18,110
Commissions 6,422 4,418 17,299 11,988
General and
administrative 2,901 2,232 8,507 6,215
Associate services
and direct
marketing expenses 3,306 3,041 10,518 8,141
Depreciation 210 183 624 508
Premium taxes 277 182 908 670
-------- -------- -------- --------
22,413 16,532 63,749 45,632
-------- -------- -------- --------
Income before
income taxes 11,258 7,667 30,254 20,491
Provision for
income taxes 3,834 2,684 10,269 7,172
-------- -------- -------- --------
Net income 7,424 4,983 19,985 13,319
Less dividends on
preferred shares 2 3 7 10
-------- -------- -------- --------
Net income applicable
to common shares $ 7,422 $ 4,980 $ 19,978 $ 13,309
======== ======== ======== ========
Basic earnings per
common share $ .33 $ .22 $ .89 $ .59
======== ======== ======== ========
Diluted earnings per
common share $ .32 $ .22 $ .87 $ .59
======== ======== ======== ========
Weighted average number
of shares, as adjusted:
Basic 22,497 22,670 22,447 22,510
======== ======== ======== ========
Diluted 22,888 22,712 22,927 22,608
======== ======== ======== ========
Net cash provided by
operating activities $ 5,603 $ 1,746 $ 12,612 $ 5,453
======== ======== ======== ========
New membership sales 95,619 74,480 273,048 208,087
======== ======== ======== ========
New sales associates
recruited 15,820 14,238 46,530 43,861
======== ======== ======== ========
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Contact:
Pre-Paid Legal Services Inc., Ada
Melanie Lawson, 580/436-7462
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