Net income at Pre-Paid Legal up 46%! Earnings per share up 63%!
You would think that Pre-Paid Legal distributors would be dancing in the streets, but wait until you see how Pre-Paid Legal magically found the income and earnings.
“Net income for the third quarter of 2010 increased 46% to $15.9 million from $10.8 million for the prior year’s third quarter primarily due to a $7.6 million decrease in commissions…“
Distributors taking a cut in commissions turn out to be the main reason why Pre-Paid Legal posted gains in net income.
Pre-Paid Legal admits that revenues are not growing:
“Third quarter 2010 membership fees decreased $1.5 million to $105.3 million from $106.7 million for the second quarter of 2010. Associate services revenues decreased during the 2010 third quarter by $393,000 to $6.1 million from $6.5 million for the 2010 second quarter…”
While the percentage paid back to distributors is shrinking:
Commissions to associates totaled $29.1 million in the 2010 third quarter compared to $29.2 million for the 2010 second quarter and represented 27.6% and 27.4% of membership fees for the respective periods.
According to reports, Pre-Paid Legal has received an offer to sell to a “well-known” equity firm. You might ask Arbonne how that type of transaction worked for them.
Many suggest that this type of transaction lead to Arbonne’s well publicized bankruptcy last year.
Just another reason why a publicly traded company is a red flag for many successful Network Marketers.
And this is how Pre-Paid Legal rewards there hardworking distributors? or am I reading this wrong?
I listened to a webinar with the Chairman of the Pre-Paid Legal Board, and it appears that they are not planning on selling. This firm offered them roughly $600 million to buy up all the stock.
Pre-Paid Legal is also increasing their compensation plan in November. If you look at the changes made for their associates, they are rewarding the associates quite handsomely.
Yes, never mind the company press release that shows a 27% payout and millions cut from the compensation plan….
I have one thing to say about Pre Paid Legal – they absolutely treat their distributors like corporate slaves.
I’ve heard more stories of incomes being seized, commissions being cut, distributors terminated for nonsense than in the entire combined MLM industry.
I don’t know why any leader would want to stay there, except for a fear of being sued if they leave.
-dave
This was a sad moment in the network marketing industry. So many people lied to, mistreated and duped into believing that the company has their best interest in mind.
The MidOcean merger only took care of PPL and the reps who are on the still on the payroll posing as full-time network marketers. The rest of the field better find a plan B for the plan B…
This story looks too familiar…