Earnings Call Excerpt
Pre-Paid Legal Services, Inc. (PPD)
Q3 2008 Earnings Call
October 29, 2008 8:30 am ET
Executives
Randy Harp – Chief Operating Officer
Steve Williamson – Chief Financial Officer
Presentation
Operator
Welcome to the Pre-Paid Legal third quarter 2008 earnings results conference call. (Operator Instructions) At this time I'd like to turn the call over to the Chief Operating Officer, Mr. Randy Harp.
Randy Harp
Good morning. This is Randy Harp, Chief Operating for the company. I want to welcome you to the 2008 third quarter earnings conference call for Pre-Paid Legal Services. Joining me here at our home office is Steve Williamson, our Chief Financial Officer.
Before we begin I want to remind everybody that the conference call will contain forward-looking statements including our expectations of future results and our future plans. Actual results might differ materially from those projected in any forward-looking statement. Additional information concerning risk factors that could cause results to differ materially from those forward-looking statements are contained in our press release announcing our earnings, as well as from disclosures in our public reports on Forms 10-K, 10-Q, 8-K, etc., filed with the SEC and are available on the SEC Edgar web site as well as our own website.
At this time, I would ask our Chief Financial Officer, Steve Williamson to step through the more significant financial highlights of the 2008 third quarter.
Steve Williamson
First I'll just paint the big picture and walk through some of the details of the income statement that we had for the third quarter. On the big picture, the third quarter of '08 we had $1.6 million more revenue with $1.2 million less expenses and taxes which was $2.8 million difference or increased net income of 10% pure shares that results in the 40% increase in EPS.
Kind of stepping through the details that make all that up, the third quarter 2008 membership fees increased 1% over the third quarter of '07 to $109.3 million. Associate services revenue came in at $6.2 million, about $200,000 up. Other revenue was down about $100,000 to $1 million and again, that's a very consistent number. It's the amortization of that $10 enrollment fee from the new memberships that pay that over the estimated life of three years. That brings us to total revenue of $116.5 million for the quarter, a 1% increase.
On the membership benefits line, they were 34.4% of membership fees for '08 which is a reduction from the 34.8% level. Again, you will remember we talked about the $0.25 per member per month savings on the IDT memberships. That has reduced our benefit ratio in '08 compared to the '07 levels. I would expect it to be close to this 34.4% for the fourth quarter, maybe a little less than that.
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