Pre-Paid Legal Announces 2008 Year-End Results and Additional Share Repurchase Authorization



    
    16th Consecutive Year of Increased Membership Revenues

    2008 Membership Revenues Up 2%; 2008 EPS Up 30%

    
    ADA, Okla., Feb. 23 /PRNewswire-FirstCall/ -- Pre-Paid Legal Services,
Inc. (NYSE:   PPD), announced results for the fourth quarter and year ended
December 31, 2008.  Net income for the fourth quarter of 2008 increased 26% to
$14.7 million from $11.7 million for the prior year's fourth quarter due to a
fourth quarter 2007 charge of $2.9 million relating to income taxes.  Diluted
earnings per share for the 2008 fourth quarter increased 38% to $1.27 per
share from 92 cents per share for the prior year's comparable quarter due to
an increase in net income of 26% and a decrease of 9% in the weighted average
outstanding shares.  Membership revenues in the fourth quarter of 2008
increased slightly to $109.0 million compared to $108.9 million for the same
period last year.
    

    
    Net income for the full year of 2008 increased 18% to $60.2 million from
$51.2 million for 2007.  Diluted earnings per share for 2008 increased 30% to
$5.04 per share from $3.88 per share for the prior year due to increased net
income of 18% and a 10% decrease in the weighted average number of outstanding
shares.  Membership revenues for 2008 were up 2% to $436.8 million from $427.4
million for the prior year marking the sixteenth consecutive year of increased
membership revenue.
    

    
    Net cash provided by operating activities decreased 4% to $64.3 million
for 2008 from $67.2 million for 2007.  During 2008, we purchased and formally
retired 1,053,614 shares of our common stock for $44.7 million, or an average
price of $42.44 per share.  From April 1999 to year-end 2008, we invested
$407.1 million in the repurchase of 13.7 million shares at an average price of
$29.62 per share, reducing the number of shares outstanding at year-end 2008
to 11.4 million.  At December 31, 2008, we had $59.7 million of debt
outstanding and $60.0 million in cash and cash equivalents and unpledged
investments.
    

    
    Fourth quarter 2008 membership fees decreased slightly to $109.0 million
compared to $109.3 million for the 2008 third quarter while associate services
revenues declined to $5.0 million compared to $6.2 million in the third
quarter of 2008.  Commissions decreased 8% while associate services and direct
marketing expenses increased approximately 4%.  Membership benefits were 35%
of membership fees for the 2008 fourth quarter compared to 34% for the third
quarter of 2008.  General and administrative expenses were 13% and 11%, of
membership fees, respectively, for the two periods.
    

    
    Our Board of Directors has authorized an additional repurchase of 1
million shares, as we have purchased virtually all of our previously announced
stock repurchase authorizations totaling 14 million shares.  We expect to
continue our purchases after our earnings call later this week as we have
funds available for share repurchases of approximately $11 million.  Purchases
will be made at prices that we consider attractive.  No time limit has been
set for completion of the additional share repurchases.
    

    
    We will conduct a conference call to present the year-end results on
Wednesday, February 25, 2009 at 8:30 a.m. Eastern Time.  The conference call
will be web cast on the investor relations' page of www.prepaidlegal.com or
may be accessed by dialing (719) 325-4777.  Audio replay will be available
beginning at 11:30 a.m. Eastern Time on February 25, 2009 and will run through
midnight Friday, March 6, 2009 by dialing (719) 457-0820; pass code for the
replay is 7248731.  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.
    

    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 more than 50 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 September 30, 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)

    

    
         (Dollars and shares in 000s, except per share amounts)
    

    
                                        Three Months         Year Ended
                                     Ended December 31,     December 31,
                                       2008      2007      2008      2007
    Revenues:
      Membership fees               $108,994  $108,898  $436,778  $427,428
      Associate services               4,952     6,048    23,534    25,112
      Other                              962     1,122     4,177     4,549
                                     114,908   116,068   464,489   457,089
    Costs and expenses:
      Membership benefits             37,619    37,639   150,318   148,792
      Commissions                     31,060    32,172   126,758   130,593
      Associate services and
       direct marketing                5,591     6,916    23,582    28,875
      General and administrative      14,155    10,627    53,021    50,474
      Other, net                       3,277     3,220    13,413    13,841
                                      91,702    90,574   367,092   372,575
    

    
    Income before income taxes        23,206    25,494    97,397    84,514
    Provision for income taxes         8,474    13,772    37,225    33,312
    Net income                       $14,732   $11,722   $60,172   $51,202
    

    
    Basic earnings per common
     share                             $1.28      $.92     $5.05     $3.89
    

    
    Diluted earnings per common
     share                             $1.27      $.92     $5.04     $3.88
    

    
    Weighted average number of
     shares:
      Basic                           11,547    12,727    11,916    13,151
      Diluted                         11,561    12,752    11,934    13,197
    

    
    Net cash provided by operating
     activities                                          $64,317   $67,178
    Net cash (used in) provided by
     investing activities                                $(4,411)  $30,064
    Net cash used in financing
     activities                                         $(58,319) $(84,332)






    




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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