Life Partners Holdings to Post Record Earnings

Life Partners Holdings, Inc. (NASDAQ GM: LPHI), parent company of Life Partners, Inc., today announced another quarter of record earnings as it issued guidance for its second fiscal quarter and first half ended August 31, 2008. For the quarter, Life Partners expects to report a 56% increase in net earnings which were $6.6 million or $0.56 per share compared with earnings of $4.3 million or $0.36 per share for the same period of last year. For the six months ended August 31, 2008, the company expects to report earnings of $12.9 million or $1.08 per share compared with $9.1 million or $0.76 per share for the same period last year.

For the quarter ended August 31, 2008, Life Partners expects to report $25.9 million in revenues, a 47% increase over the $17.6 million it reported for the same period last year. For the first half of the year ended August 31, 2008, the company expects to report revenues of $50.4 million, which is a 43% increase compared to $35.2 million for the same period last year.

Additionally, the company intends to report a five-fold increase in its investment in policies purchased for its own account from just over $1 million at February 29, 2008, to $6.3 million at August 31, 2008. The company also expects to increase its next quarterly dividend by one cent, which is an annualized increase of 11%.

Among other key financial results that LPHI expects to report are:

SECOND QUARTER
	ÂÂ	Ended 8-31-2008	ÂÂ	Ended 8-31-2007	ÂÂ	% of Change
Revenues		$25.9 million		$17.6 million		47% increase
Income from Operations		$10.0 million		$ 6.3 million		59% increase
Pre-tax Income		$10.0 million		$ 6.6 million		52% increase
Net Income		$ 6.6 million		$ 4.3 million		53% increase
Earnings Per Share		$ 0.56		$ 0.36		56% increase

SIX MONTHS
	ÂÂ	Ended 8-31-2008	ÂÂ	Ended 8-31-2007	ÂÂ	% of Change
Revenues		$50.4 million		$35.2 million		43% increase
Income from Operations		$19.7 million		$13.2 million		49% increase
Pre-tax Income		$19.8 million		$13.6 million		46% increase
Net Income		$12.9 million		$ 9.1 million		42% increase
Earnings Per Share		$ 1.08		$ 0.76		42% increase

BALANCE SHEET COMPARISON
SECOND QUARTER
	ÂÂ	As of 8-31-2008	ÂÂ	As of 8-31-2007	ÂÂ	% of Change
Current Assets		$34.0 million		$18.6 million		83% increase
Current Liabilities		$12.6 million		$ 8.4 million		50% increase
Current Ratio		2.7 : 1		2.2 : 1
Working Capital		$21.4 million		$10.2 million		109% increase
Total Assets		$46.2 million		$24.7 million		87% increase
Total Liabilities		$13.4 million		$ 9.4 million		43% increase
Shareholder Equity		$32.8 million		$15.3 million		114% increase
Return on Assets		74.5%		78.5%
Return on Equity		109.9%		126.7%
Operating Return On Capital		166.9%		185.1%

Life Partners also released its preliminary consolidated balance sheet and income statement for the quarter ended August 31, 2008:

LIFE PARTNERS HOLDINGS, INC.
PRELIMINARY CONSOLIDATED BALANCE SHEET COMPARISON
AS OF AUGUST 31, 2008 AND 2007
(unaudited)
ÂÂ
ASSETS
	August 31,
CURRENT ASSETS:	2008		ÂÂ	2007
Cash	$ 3,224,899			$ 6,094,995
Investment in securities	4,265,487			5,082,852
Accounts receivable - trade	25,350,335			7,090,957
Accounts receivable - employees	55,760			84,190
Accounts receivable - other	99,034			100,000
Notes receivable	541,973			-
Prepaid expenses	444,611	ÂÂ		153,603	ÂÂ
Total current assets	33,982,099			18,606,597
PROPERTY AND EQUIPMENT:
Land and building	2,131,285			1,959,065
Proprietary software	493,513			421,187
Furniture, fixtures and equipment	1,167,339			721,275
Transportation equipment	145,300			1,039,500
	3,937,437			4,141,027
Accumulated depreciation	(1,301,461	)		(1,035,905	)
Total property and equipment	2,635,976			3,105,122
OTHER ASSETS:
Investments in policies	6,283,799			762,352
Deferred income taxes	831,700			831,700
Artifacts and other	2,461,877			1,405,316
Total other assets	9,577,376	ÂÂ		2,999,368	ÂÂ
Total Assets	46,195,451	ÂÂ		24,711,087	ÂÂ
				ÂÂ
				ÂÂ
LIABILITIES AND SHAREHOLDERS' EQUITY
ÂÂ
CURRENT LIABILITIES:
Accounts payable	9,268,283			3,863,280
Accrued liabilities - contingencies and other	903,686			1,070,361
Current portion of long-term debt	41,608			275,178
Short-term notes payable	-			1,839,295
Deferred Revenue	276,350			262,950
Income taxes payable	2,155,213	ÂÂ		1,067,224	ÂÂ
Total current liabilities	12,645,140			8,378,288
LONG-TERM DEBT, net of current portion shown above	754,051	ÂÂ		1,048,540	ÂÂ
SHAREHOLDERS' EQUITY
Common Stock, $0.01 par value 18,750,000 shares authorized,
12,019,483 shares and outstanding	120,194			120,194
Additional paid-in capital	11,490,360			11,490,360
Retained earnings	24,037,680			4,691,768
Accumulated other comprehensive loss, net of taxes	(1,216,910	)		(645,922	)
Less: Notes receivable issued for common stock	-			(372,141	)
Less: Treasury stock - 132,270 shares	(1,635,064	)		-	ÂÂ
Total shareholders' equity	32,796,260	ÂÂ		15,284,259	ÂÂ
Total liabilities & shareholders' equity	46,195,451	ÂÂ		24,711,087	ÂÂ

LIFE PARTNERS HOLDINGS, INC.
PRELIMINARY CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED AUGUST 31, 2008 AND 2007
(2008 unaudited)
					ÂÂ			ÂÂ			ÂÂ
		ÂÂ	ÂÂ						ÂÂ
			Three Months Ended						Six Months Ended
			August 31,						August 31,
			2008			2007			2008			2007
REVENUES			$25,933,254			$17,646,109			$50,371,400			$35,225,085
BROKERAGE FEES			12,521,299	ÂÂ		9,048,770	ÂÂ		24,699,171	ÂÂ		17,726,473	ÂÂ
REVENUES, NET OF BROKERAGE FEES			13,411,955	ÂÂ		8,597,339	ÂÂ		25,672,229	ÂÂ		17,498,612	ÂÂ
OPERATING AND ADMINISTRATIVE EXPENSES:
ÂÂ	General and administrative		2,882,570			2,035,618			5,226,840			3,842,663
	Settlement costs		416,852			124,741			562,371			328,216
	Depreciation and amortization		83,647	ÂÂ		96,149	ÂÂ		160,611	ÂÂ		154,796	ÂÂ
			3,383,069	ÂÂ		2,256,508	ÂÂ		5,949,822	ÂÂ		4,325,675	ÂÂ
INCOME FROM OPERATIONS			10,028,886			6,340,831			19,722,407			13,172,937
OTHER INCOME (EXPENSES):
	Interest and other income		498,571			475,796			885,255			831,503
	Interest expense		(15,236	)		(44,701	)		(34,638	)		(76,825	)
	Premium advances, net		(507,992	)		(207,149	)		(768,364	)		(349,773	)
	Realized gain on investments		-	ÂÂ		-	ÂÂ		-	ÂÂ		10,540	ÂÂ
			(24,657	)		223,946	ÂÂ		82,253	ÂÂ		415,445	ÂÂ
INCOME BEFORE INCOME TAXES			10,004,229			6,564,777			19,804,660			13,588,382
INCOME TAXES:
	Current tax expense		3,518,893			2,302,666			7,155,213			4,609,224
	Deferred tax benefit		(118,155	)		(79,000	)		(202,618	)		(85,899	)
			3,400,738	ÂÂ		2,223,666	ÂÂ		6,952,595	ÂÂ		4,523,325	ÂÂ
NET INCOME			$ 6,603,491	ÂÂ		$ 4,341,111	ÂÂ		$ 12,852,065	ÂÂ		$ 9,065,057	ÂÂ
EARNINGS PER SHARE			$ .56	ÂÂ		$ 0.36	ÂÂ		$ 1.08	ÂÂ		$ .76	ÂÂ
AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING			11,887,213	ÂÂ		11,972,704	ÂÂ		11,898,561	ÂÂ		11,964,194	ÂÂ

Life Partners Chief Executive Officer, Brian Pardo, said, "Investors today are looking for asset-based investments which are not correlated to the financial markets or other indices. Our business model deals exclusively with assets that have inherent value and are not reliant on market performance. Because life settlements are not correlated to the markets, our revenues and earnings are not correlated either. Additionally, we do not rely on credit to grow our business, so the current tight credit market has had no adverse effect on us."

The Company plans to report its earnings in its Form 10-Q to be filed with the Securities and Exchange Commission on or about October 10, 2008.

Life Partners is the world's oldest and one of the most active companies in the United States engaged in the secondary market for life insurance, commonly called "life settlements." Since its incorporation in 1991, Life Partners has completed over 77,000 transactions for its worldwide client base of over 20,000 high net worth individuals and institutions in connection with the purchase of almost 6,000 policies totaling over $1.4 billion in face value.

Safe Harbor - This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The statements in this news release that are not historical statements, including statements regarding future financial performance, the market for our services, the growth in the life settlement market and our growth within that market, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see our most recent Form 10-K. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.