Despite lower memberships, Pre-Paid Legal Services (NYSE:PPD) revealed a 43% increase in fourth-quarter profit, helped primarily by slimmer expenses.
The Ada, Okla-based company posted net income of $16.3 million, or $1.66 a share, compared with $11.4 million, or $1.08 a share, in the same quarter last year.
Revenue for the underwriter of legal expense plans in the U.S. and Canada, allowing members to access legal services through a network of independent law firms, was $111.5 million, down from $119 million a year ago.
Sales, which took a hit from 3.4% lower membership revenues, missed average analyst estimates polled by Thomson Reuters of $113.8 million. New memberships sold slipped 30% during the fourth-quarter to $26.4 million.
Cushioning the results was a 16% drop in expenses to $84 million, helped by much lower commissions, marketing and membership benefits fees, partially offset by higher general and administrative expenses due to costs incurred as part of its evaluation of strategic alternatives.
During the quarter, Pre-Paid Legal agreed to be acquired by MidOcean Partners, a New York-based private-equity firm, for $650 million.