Pre-Paid Announces Delayed Filing of Annual Report on Form 10-K

Apr 13, 2001, 01:00 ET from Pre-Paid Legal Services, Inc.

    ADA, Okla., April 13 /PRNewswire/ -- Pre-Paid Legal Services, Inc.
 (NYSE:   PPD), today reported that it does not expect to file its Annual Report
 on Form 10-K on its extended April 16, 2001 due date because of the additional
 time required to complete its evaluation of comments received from the staff
 of the Securities and Exchange Commission relating to certain aspects of its
 accounting for commission advances.  As previously reported, the staff of the
 Securities and Exchange Commission ("SEC") has inquired into Pre-Paid's
 accounting for commission advances.
     Although the Company continues to believe that the accounting treatment
 historically afforded to commission advances is acceptable under generally
 accepted accounting principles, in light of preliminary comments received from
 the staff of the SEC, the Company has determined, with the concurrence of its
 independent auditors, to adopt a new, more conservative method for evaluating
 the recoverability of its commission advances and will no longer "pool"
 commission advances for terminated or "D status" associates for purposes of
 evaluating recoverability.  This change in the Company's recoverability
 evaluation methodology results in a change in accounting principle that will
 be reflected in the Company's financial statements for the year ended
 December 31, 2000.  Based on preliminary estimates, the aggregate effect of
 the change is expected to reduce fiscal 2000 net income by approximately
 $7.2 million ($.32 per basic and diluted share).  The cumulative effect of
 this change on prior years will be reflected as a separate charge and is
 expected to result in a reduction of fiscal 2000 net income of approximately
 $4.1 million ($.18 per basic and diluted share).  The effect of the change on
 fiscal 2000 is expected to result in a further reduction of fiscal 2000 net
 income of approximately $3.1 million ($.14 per basic and diluted share).
     Due to the change described above, the Company now expects to release
 first quarter 2001 earnings on April 23, 2001.  The accounting change
 described above is expected to result in an additional after-tax charge for
 the first quarter of 2001 of approximately $600,000 ($.03 per basic and
 diluted share).
     The Company expects to file its 10-K containing audited financial
 statements incorporating these changes in the near future.  The SEC staff has
 not reviewed or approved the Company's proposed changes and is expected to
 continue its review.
 
     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.
 
     Statements in this press release, including those pertaining to the
 Company's efforts to resolve accounting questions raised by the staff of the
 SEC and the effect of those efforts on the Company's financial statements,
 other than purely historical information, including estimates, projections and
 statements relating to 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 which may not be
 correct.  They are subject to all of the risks and uncertainties incident to
 the Company's business which 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.  Please refer to page 1 of
 the Company's 1999 Form 10-K for a more complete description of the factors
 that could cause actual results to differ materially from those described in
 the forward-looking statements.  In addition, the statements regarding the
 Company's efforts to resolve accounting questions raised by the SEC staff and
 the likely effect on the Company's business are subject to the risk that the
 SEC staff may not concur in the position of the Company with respect to the
 issues under discussion, including the Company's accounting for commission
 advances.  The Company undertakes no duty to update any of the forward-looking
 statements in this press release.
 
 

SOURCE Pre-Paid Legal Services, Inc.
    ADA, Okla., April 13 /PRNewswire/ -- Pre-Paid Legal Services, Inc.
 (NYSE:   PPD), today reported that it does not expect to file its Annual Report
 on Form 10-K on its extended April 16, 2001 due date because of the additional
 time required to complete its evaluation of comments received from the staff
 of the Securities and Exchange Commission relating to certain aspects of its
 accounting for commission advances.  As previously reported, the staff of the
 Securities and Exchange Commission ("SEC") has inquired into Pre-Paid's
 accounting for commission advances.
     Although the Company continues to believe that the accounting treatment
 historically afforded to commission advances is acceptable under generally
 accepted accounting principles, in light of preliminary comments received from
 the staff of the SEC, the Company has determined, with the concurrence of its
 independent auditors, to adopt a new, more conservative method for evaluating
 the recoverability of its commission advances and will no longer "pool"
 commission advances for terminated or "D status" associates for purposes of
 evaluating recoverability.  This change in the Company's recoverability
 evaluation methodology results in a change in accounting principle that will
 be reflected in the Company's financial statements for the year ended
 December 31, 2000.  Based on preliminary estimates, the aggregate effect of
 the change is expected to reduce fiscal 2000 net income by approximately
 $7.2 million ($.32 per basic and diluted share).  The cumulative effect of
 this change on prior years will be reflected as a separate charge and is
 expected to result in a reduction of fiscal 2000 net income of approximately
 $4.1 million ($.18 per basic and diluted share).  The effect of the change on
 fiscal 2000 is expected to result in a further reduction of fiscal 2000 net
 income of approximately $3.1 million ($.14 per basic and diluted share).
     Due to the change described above, the Company now expects to release
 first quarter 2001 earnings on April 23, 2001.  The accounting change
 described above is expected to result in an additional after-tax charge for
 the first quarter of 2001 of approximately $600,000 ($.03 per basic and
 diluted share).
     The Company expects to file its 10-K containing audited financial
 statements incorporating these changes in the near future.  The SEC staff has
 not reviewed or approved the Company's proposed changes and is expected to
 continue its review.
 
     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.
 
     Statements in this press release, including those pertaining to the
 Company's efforts to resolve accounting questions raised by the staff of the
 SEC and the effect of those efforts on the Company's financial statements,
 other than purely historical information, including estimates, projections and
 statements relating to 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 which may not be
 correct.  They are subject to all of the risks and uncertainties incident to
 the Company's business which 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.  Please refer to page 1 of
 the Company's 1999 Form 10-K for a more complete description of the factors
 that could cause actual results to differ materially from those described in
 the forward-looking statements.  In addition, the statements regarding the
 Company's efforts to resolve accounting questions raised by the SEC staff and
 the likely effect on the Company's business are subject to the risk that the
 SEC staff may not concur in the position of the Company with respect to the
 issues under discussion, including the Company's accounting for commission
 advances.  The Company undertakes no duty to update any of the forward-looking
 statements in this press release.
 
 SOURCE  Pre-Paid Legal Services, Inc.