(Source: Canada Newswire)ADA, Okla., Oct. 26 /CNW/ -- Pre-Paid Legal Services, Inc. (NYSE: PPD) announced results for the third quarter ended September 30, 2009. As previously disclosed, due to the 21% increase in new membership fees written during the third quarter of 2009 vs. the comparable 2008 quarter, we expected and incurred an increase in commission expense of approximately $3.0 million for the 2009 third quarter and a corresponding decline in earnings. As a result, net income for the third quarter of 2009 decreased 25% to $10.8 million from $14.4 million for the prior year's third quarter. Diluted earnings per share decreased 20% to $0.99 per share from $1.23 per share for the prior year's comparable quarter due to a decrease in net income of 25% partially offset by a 7% decrease in the weighted average outstanding shares. Membership fees in the third quarter of 2009 decreased 4% to $105.4 million from $109.3 million for the same period last year.

Membership revenues for the first nine months of 2009 decreased 3% to $317.9 million vs. $327.8 million for the first nine months of 2008. Net income for the first nine months of 2009 decreased 4% to $43.7 million vs. $45.4 million for the first nine months of 2008. Diluted earnings per share for the first nine months of 2009 increased 5% to $3.95 vs. $3.77 for the comparable 2008 period. Diluted earnings per share increased 5% while net income decreased 4% due to an 8% decrease in the weighted average number of outstanding shares.

Net cash provided from operating activities increased 9% to $48.4 million for the first nine months of 2009 from $44.3 million for 2008 primarily due to higher income taxes paid during the 2008 period. During the first nine months of 2009, we returned $14.8 million to shareholders through the repurchase of 451,486 shares of common stock, at an average per share price of $32.84. Since April 1999, we have returned $422.0 million to shareholders through the purchase of 14.2 million shares, average price of $29.72 per share, and $17.1 million in dividends for a combined total of $439.1 million representing more than 100% of our net earnings during the same timeframe. At September 30, 2009 we had $41.8 million of debt outstanding and $73.5 million in cash and cash equivalents and unpledged investments.

Third quarter 2009 membership fees decreased $81,000 to $105.4 million from $105.5 million for the second quarter of 2009. Associate services revenues increased during the 2009 third quarter by approximately $1.7 million to $7.6 million from $5.9 million for the 2009 second quarter and associate services and direct marketing expenses increased by $1.3 million during the same period. Membership benefits totaled $36.0 million in both the third and second quarters of 2009 and represented 34% of membership fees for both periods. Commissions to associates totaled $36.7 million in the 2009 third quarter compared to $29.3 million for the 2009 second quarter and represented 35% and 28%, respectively, of membership fees for the two periods.