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Pre-Paid Legal Services announced that they have received $10 million dollars in financing from the Bank of Oklahoma. The $10 million will go towards the funding of additional treasury stock purchases.

The board of Pre-Paid has authorized the company to purchase 798,000 additional treasury shares. In the last 10 years, Pre-Paid has purchased 13.2million shares, totaling over $380 million dollars. On average, the shares have cost around $29 dollars a share. Over the last decade, Pre-Paid has been very aggressive about the purchase of their treasury stock, and through the purchase program has reduced outstanding shares by around 50% during the last ten years.

The loan from the Bank of Oklahoma is an unsecured loan which must be repaid in 12 equal monthly payments, with the first one beginning June 30, 2008. The $10 million was made available to the company immediately and adds another $10 mil to the existing debt which is approximately $65 million dollars.

Now I understand buy-back programs pretty well and it seems awfully unusual for a company to borrow money to buy its own stock back with such a small amount of money. It is a bit curious that PPL needs to borrow $10m (which they will be paying interest on) to buy back shares unless the company is gearing up to go private - why else the immediate need for such a small amount of capital. We will stay on top of this one.

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StockDiagnostics.com announced that Pre-Paid Legal, Inc has just received its number “1” ranking again for this past quarter based on their operational cash flow per share (NYSE: PPD). This is Pre-Paid’s 34th consecutive quarter at the number one spot.

Stock Diagnostics, founded in 2002, uses proprietary data to analyze the logical relationships between financial statement data and stock price performance. StockDiagnostics ranks company’s Operational cash Flow per share (OPS) a number they say is not as easily manipulated as the earning per share number, and can give a better idea of stock performance, their ability to maintain business operations for the long tern, and whether or not the stock is a good buy.

While the OPS for the first quarter for Pre Paid was slightly lower this quarter compared to first quarter last year, a 9 Cent difference, $1.68 in 2008 compared to $1.77 last year, the OPS for the last 12 months remained promising. In the last year, OPS was $4.96 per share compared to $4.22 in the previous year. Sales of Pre-Paid Legal are trading at $44.02, 12% higher than their one year low from 2007, $39.05.

StockDiagnostics monitors OPS for over 7,000 companies and ranks them mathematically into one of 8 different risk categories. The rankings are based on operational cash flow from the previous quarter as well as from the past year. Each time a company files a quarterly report, the numbers are re-calculated.

While this seems a bit confusing to me, StockDiagnostics claims that the numbers are based on carefully calculated mathematical numbers that analyze almost 2,000 data points of the publicly traded companies. Yet if you look at the companies stock chart, you sort of wonder what the real catalyst is here. The company also claims that the numbers cannot be manipulated as easily as other numbers, like the earnings per share. If nothing else, this is another great tool if you play the market to help make a more educated decision. For those of you more mathematically and stock market inclined, the site provides all the tools and information you will need. Many MLM companies are in and out of business so quickly that this might be a good tool to help examine the long term potential and sustainability of a company based on actual numbers.

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Pre-Paid Legal Services, Inc. (NYSE:PPD) has announced results for the first quarter, which ended March 31st 2008. Overall the news is good; net income, membership revenue and earning per share all saw increases in numbers. The numbers are a reflection of a jump in membership revenue and lower expenses.

Net income for the first quarter of 2008 increased 8% to $15.9 million from $14.7 million for the prior year’s first quarter.. Membership revenues in the first quarter of 2008 increased 5% to $109.1 million from $103.9 million for the same period last year.

The only number that went down was net cash provided from operating activities. Those numbers fell 14% fro $24.1 million to $20.9 million. The company blamed an increase in cash taxes paid during the first quarter of 2008.

Complete details of the call are available on the company’s website: www.prepaidlegal.com. The webcast of the all is available on the sites investor relations page.

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Pre Paid Legal Services, Inc. (Ada, Oklahoma) an at home legal services company that also offers identity theft restoration, reported this week that they had an 11 percent drop in their net income during the fourth quarter due to a charge stemming from unpaid income taxes.

The company revealed that a clerical error has shown that for several years, the company failed to pay some state income taxes. During the fourth quarter, Pre-Paid said, it found and corrected a clerical error in the net operating loss that was reported in a 2003 state income tax return. This error resulted in unpaid income taxes in a certain state for several years. Pre-Paid took a $2.9 million charge in the fourth quarter to pay the unpaid income taxes. This charge was made up of $2 million for 2006 and prior years and $900,000 for the first three quarters of last year.In total, the mistake cost the company $2.9 million dollars.

Despite the loss, the price of Pre-Paid stock continues to have some support but is till pretty volatile. Over the last nine years, Pre-Paid has spent over $360 Million dollars retiring more than half of its outstanding shares. Although shares dropped a little over 9 percent on word of the error, the stock closed at $46.67 on Friday. Membership revenue is also on the rise. In 2007 membership revenue rose 4 percent to $427.4 million, marking the 15th consecutive year of increased membership revenue.

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