Pre-Paid Legal Reports Net Income Up 7 Percent

Diluted earnings per share increased 18 percent to $1.52 per share from $1.29 per share for the prior year's comparable quarter due to an increase in net income of 7 percent and a 9 percent decrease in the weighted average outstanding shares. Membership fees in the first quarter of 2009 decreased 2% to $106.9 million from $109.1 million for the same period last year.

Net cash provided from operating activities increased 42 percent to $29.7 million for the first quarter of 2009 from $20.8 million for 2008 primarily due to higher cash taxes paid during the 2008 period. During the 2009 first quarter, we returned $13.5 million to shareholders through the repurchase of 422,505 shares of common stock, at an average per share price of $32.05. Since April 1999, we have returned $420.7 million to shareholders through the purchase of 14.2 million shares, average price of $29.69 per share, and $17.1 million in dividends for a combined total of $437.8 million representing more than 110 percent of our net earnings during the same timeframe. At March 31, we had $52.6 million of debt outstanding and $68.5 million in cash and cash equivalents and unpledged investments.

First quarter 2009 membership fees decreased $2.1 million to $106.9 million from $109 million for the fourth quarter of 2008. Associate services revenues increased during the 2009 first quarter by approximately $330,000 to $5.3 million from $5 million for the 2008 fourth quarter and associate services and direct marketing expenses increased by $1.2 million during the same period. Membership benefits totaled $36.2 million in the first quarter of 2009 compared to $37.6 million for the 2008 fourth quarter and represented 34 percent of membership fees for the first quarter and 35 percent for the 2008 fourth quarter.

Commissions to associates totaled $27 million in the 2009 first quarter compared to $31.1 million for the 2008 fourth quarter and represented 25 percent and 28 percent, respectively, of membership fees for the two periods. General and administrative expenses decreased $772,000 during the 2009 first quarter to $13.4 million compared to $14.2 million for the 2008 fourth quarter and represented 13 percent of membership fees for both periods. The $772,000 decrease in general and administrative expenses included decreases in employee cost, telecommunications and bank service charges which were partially offset by increases in postage, legal expenses and accounting fees.