Pre-Paid Legal Announces 2008 Second Quarter Financial Results



    
    Membership Revenues Up 2%; Net Income Up 14% and EPS Up 26%

    
    ADA, Okla., July 28 /CNW/ -- Pre-Paid Legal Services, Inc. (NYSE:   PPD),
announced financial results for the second quarter ended June 30, 2008. 
Membership revenues increased 2% to $109.5 million from $106.9 million for the
same period last year.  Net income increased 14% to $15.1 million from $13.2
million for the previous year.  Diluted earnings per share for the quarter
increased 26% to $1.25 per share from 99 cents per share for the prior year's
comparable quarter, higher than the net income increase, due to a 10% decrease
in the weighted average number of outstanding shares.
    First half 2008 membership revenues increased 4% to a record $218.5
million vs. $210.8 million for the first half of 2007.  Net income for the
first six months of 2008 increased 11% to $31.0 million vs. $27.9 million for
the first six months of 2007.  Diluted earnings per share increased 23% to
$2.54 vs. $2.07.  Diluted earnings per share increased more than net income
due to a 9% decrease in the weighted average number of outstanding shares.
    Net cash provided by operating activities for the six months ended June
30, 2008 decreased 21% to $27.7 million compared to $34.9 million for the
comparable period of 2007 primarily due to the $14.6 million increase in cash
taxes paid during the 2008 period.  During the first six months of 2008, we
returned $27.8 million to shareholders through the repurchase of 622,985
shares of common stock at an average per share price of $44.56.  Since April
1999, we have returned $390.2 million to shareholders through the purchase of
13.3 million shares, average price of $29.30 per share, and $17.1 million in
dividends for a combined total of $407.3 million representing more than 115
percent of our net earnings during the same timeframe.  We have reduced the
number of shares outstanding by approximately 50% from 23.6 million at March
31, 1999 to 11.8 million at June 30, 2008.  At June 30, 2008, our total
indebtedness was $73.8 million and we had unpledged cash and investment
balances exceeding $55 million.
    Second quarter 2008 membership fees remained consistent at $109.5 million
compared to $109.1 million for the first quarter.  Associate services revenues
increased during the 2008 second quarter by approximately $260,000 to $6.3
million from $6.0 million for the 2008 first quarter and associate services
and direct marketing expenses increased by $1.4 million during the same
period.  Membership benefits totaled $37.9 million in the second quarter of
2008 compared to $37.3 million for the 2008 first quarter and represented 35%
and 34%, respectively, of membership fees for the two periods.  Commissions to
associates totaled $31.2 million in the 2008 second quarter compared to $30.8
million for the 2008 first quarter and represented 29% and 28%, respectively,
of membership fees for the two periods.  General and administrative expenses
increased during the 2008 second quarter to $13.8 million compared to $12.6
million for the 2008 first quarter and represented 13% and 12%, respectively,
of membership fees for the two periods.
    The Company will conduct a conference call to present the first quarter
results on Wednesday, July 30, 2008, at 8:30 a.m. Eastern Time.  The
conference call will be webcast on the investor relations' page of
http://www.prepaidlegal.com or may be accessed by dialing (719) 325-4879.
Audio replay will be available beginning at 11:30 a.m. Eastern Time on July
30, 2008 and will run through midnight Wednesday, August 6, 2008 by dialing
(719) 457-0820; passcode for the replay is 4449163.  The presentation will be
available on the web site indefinitely by selecting "Earnings Calls" under the
"Investor Relations" section.  Questions may be submitted prior to the call
via email to investor@pplsi.com.
    The Company expects to file its quarterly report on Form 10-Q for the
three months ended June 30, 2008 later this week.
    About Us -- We believe our products are one of a kind, life events legal
service plans.  Our plans provide for legal service benefits provided through
a network of independent law firms across the U.S. and Canada, and include
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.  We have an
identity theft restoration product we think is also one of a kind due to the
combination of our identity theft restoration partner and our provider law
firms.  More information about us and our products can be found at our
homepage 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 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 significantly 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 2007
Form 10-K and pages 7 and 8 of our March 31, 2008 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.



    
    PRE-PAID LEGAL SERVICES, INC.
    Financial Highlights (Unaudited)
    


    
                                     Three Months Ended     Six Months Ended
                                           June 30,            June 30,
                                        2008     2007       2008      2007
    Revenues:
      Membership fees                $109,456  $106,936   $218,516  $210,817
      Associate services                6,303     5,968     12,346    13,032
      Other                             1,096     1,156      2,196     2,295
                                      116,855   114,060    233,058   226,144
    Costs and expenses:
      Membership benefits              37,850    36,927     75,112    73,678
      Commissions                      31,196    34,243     62,020    64,775
      Associate services and
       direct marketing                 7,029     6,682     12,633    13,057
      General and administrative       13,761    13,383     26,335    26,130
      Other, net                        2,927     3,293      7,093     7,037
                                       92,763    94,528    183,193   184,677
    

    
    Income before income taxes         24,092    19,532     49,865    41,467
    Provision for income taxes          9,036     6,353     18,867    13,560
    Net income                        $15,056   $13,179    $30,998   $27,907
    

    
    Basic earnings per common share     $1.25      $.99      $2.54     $2.08
    

    
    Diluted earnings per common share   $1.25      $.99      $2.54     $2.07
    

    
    Weighted average number of shares:
      Basic                            12,016    13,278     12,189    13,408
      Diluted                          12,035    13,322     12,209    13,474
    

    
    Net cash provided by operating
     activities                        $6,833   $10,819    $27,658   $34,924
    Net cash provided by (used in)
     investing activities              $8,526    $5,945    $(1,882)   $5,118
    Net cash (used in) provided by
     financing activities            $(10,277) $(16,176)  $(27,546) $(33,878)

    




For further information:

For further information: Steve Williamson of Pre-Paid Legal Services,
Inc., +1-580-436-1234 Web Site: http://www.prepaidlegal.com

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PRE-PAID LEGAL SERVICES, INC.

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