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



    ADA, Okla., July 28 /EMWNews/ -- 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 [email protected].



    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)