ADA, Okla., June 1 /PRNewswire-FirstCall/ -- Pre-Paid Legal Services, Inc. today announced that it has received from Bank of Oklahoma a commitment for $10 million in additional financing, which will be available as soon as a definitive agreement is finalized which is expected in the next few days.
We expect to use proceeds from the financing to fund additional treasury stock purchases. We currently have Board authorization to purchase approximately 726,000 additional treasury shares.
The commitment provides for funding of $10 million to finance stock repurchases with a single principal payment maturity date of December 1, 2006 and interest payable monthly at the 30 day LIBOR Rate plus three percent, adjusted monthly. The definitive agreement will contain normal financial and reporting covenants, similar to those in our previous lines of credit. The loan is primarily secured by our rights to receive membership fees on a portion of our memberships.
Since April 1999, we have purchased 10.3 million shares, totaling $252.8 million, or an average cost per share of $24.61 per share. As a result of this aggressive treasury stock purchase program, we have reduced shares outstanding by 38% during this time.
About Pre-Paid Legal Services, Inc.
We develop, underwrite and market legal service plans across North America. The plans provide for legal service benefits, including unlimited attorney consultation, letter writing, document preparation and review, will preparation, traffic violation defense, automobile-related criminal charges defense and a general trial defense. We also market an identity theft protection plan. More information can be located at our homepage on the worldwide web at http://www.prepaidlegal.com/ .
Forward-Looking Statements
Statements in this press release, other than purely historical information, regarding our future plans and objectives and expected operating results, dividends and share repurchases 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 our 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 us with the Securities and Exchange Commission, including (among others) those listed in our Form 10- K, Form 10-Q and Form 8-K, and include the risks that our membership persistency or renewal rates may decline, that we may not be able to continue to grow our memberships and earnings, that we are dependent on the continued active participation of our principal executive officer, that pending or future litigation may have a material adverse effect on us if resolved unfavorably to us, that we could be adversely affected by regulatory developments, that competition could adversely affect us, that we are substantially dependent on our marketing force, that our stock price may be affected by short sellers, that we have been unable to increase our employee group membership sales and that our active premium in force is not indicative of future revenue as a result of changes in active memberships from cancellations and additional membership sales. Please refer to pages 14 and 15 of our 2005 Form 10-K and pages 7 through 9 of our March 31, 2006 Form 10-Q for a more complete description of these risks. We undertake no duty to update any of the forward-looking statements in this release.
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