-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q+Td3ytkdcBDRyVCX/vqImuYKzFr2nQ5w3YIYmk3jSQUjET5LuXHepFHxhAoR63O 35jbCXIOX4l7GVxDhXc2mA== 0001015402-03-002037.txt : 20030516 0001015402-03-002037.hdr.sgml : 20030516 20030515191538 ACCESSION NUMBER: 0001015402-03-002037 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030507 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELECTRONIC CLEARING HOUSE INC CENTRAL INDEX KEY: 0000721773 STANDARD INDUSTRIAL CLASSIFICATION: FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC [6099] IRS NUMBER: 930946274 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15245 FILM NUMBER: 03706976 BUSINESS ADDRESS: STREET 1: 28001 DOROTHY DR CITY: AGOURA HILLS STATE: CA ZIP: 91301-2697 BUSINESS PHONE: 8187068999 MAIL ADDRESS: STREET 1: 28001 DOROTHY DRIVE CITY: AGOURA HILLS STATE: CA ZIP: 91301 FORMER COMPANY: FORMER CONFORMED NAME: BIO RECOVERY TECHNOLOGY INC DATE OF NAME CHANGE: 19860122 8-K 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 7, 2003 ELECTRONIC CLEARING HOUSE, INC. --------------------------------- (Exact name of registrant as specified in its charter) NEVADA 0-15245 93-0946274 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 28001 Dorothy Drive, Agoura Hills, California 91301 -------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (818) 706-8999 ------------------------------------------------------------------------ (Former name or former address, if changes since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit 99.1 Press Release dated May 7, 2003, announcing financial results for the quarter ended March 31, 2003 (furnished pursuant to Item 12 of Form 8-K, under Item 9 of this report). ITEM 9. REGULATION FD DISCLOSURE. Pursuant to Exchange Act Release 34-47583, we are furnishing the information required by Item 12 of Form 8-K, "Results of Operation and Financial Condition," under this Item 9. Electronic Clearing House, Inc. has issued a press release announcing its financial results for the quarter ended March 31, 2003, and a copy of the press release is being furnished as Exhibit 99.1 to this report and incorporated herein by reference. ITEM 12. RESULTS OF OPERATION AND FINANCIAL CONDITION. Pursuant to Exchange Act Release 34-47583, we are furnishing the information required by this Item under Item 9 of Form 8-K, "Regulation FD Disclosure." SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ELECTRONIC CLEARING HOUSE, INC. (Registrant) By: \s\ Alice Cheung ---------------------------------- Alice L. Cheung, Treasurer & Chief Financial Officer Dated: May 13, 2003 EX-99.1 3 doc2.txt EXHIBIT 99.1 [GRAPHIC OMITTED] FOR IMMEDIATE RELEASE - --------------------- ELECTRONIC CLEARING HOUSE (ECHO) ANNOUNCES IMPROVED SECOND QUARTER FY 2003 RESULTS - Revenue increases 16.5% to record $9.8 million AGOURA HILLS, CALIF., MAY 7, 2003 - Electronic Clearing House, Inc. (NASDAQ: ECHO), a leading provider of electronic payment services, today reported financial and operating results for the three and six months ended March 31, 2003. Revenue for the second quarter of fiscal 2003 was a record $9,767,000, an increase of 16.5%, as compared to $8,386,000 in the prior year quarter. Operating income rose to $465,000, as compared to an operating loss of $3,129,000 in the same period last year. The year-over-year improvement can be primarily attributed to the absence of $2,669,000 of legal and settlement fees incurred in the second quarter of fiscal 2002, elimination of $128,000 in amortization of goodwill, and a reduction of $300,000 in valuation allowance for real estate and inventory recorded in the prior year quarter. Excluding these expense items, operating income increased by $497,000 over the same quarter last year. The Company reported net income of $268,000, or $0.05 per share on a fully diluted basis, in the quarter, as compared to a net loss of $1.9 million, or $0.33 per share in the second quarter of fiscal 2002. "We are pleased to report another quarter of strong organic growth and improving profitability," said Joel M. Barry, Chairman and CEO of Electronic Clearing House, Inc. "ECHO's complete and flexible end-to-end solution that encompasses all popular forms of payment and our commitment to high-quality customer service has translated into nine sequential quarters of revenue growth. As our payment processing services gain traction in our core small and mid-sized markets and we grow our customer base, we are able to realize the operating leverage inherent in our business. For the quarter, gross margin from processing and transaction revenue increased to 34.6%, from 30.5% in the second quarter of fiscal 2002 and from 32.4% in the first quarter of 2003." "ECHO continues to work to maximize the success of our risk management tools and ability to underwrite our merchants in order to mitigate any potential chargeback losses. The reduction of our chargeback losses accounted for approximately 1.1% out of the 4.1% of the gross margin improvement for this quarter over the same period last year. Additionally, the 30.5% increase of the check services revenue this quarter also contributed to the higher gross margin, since check services normally generates a higher gross margin than bankcard processing revenue," Mr. Barry added. "During the second quarter, ECHO continued to make excellent progress in providing value-added services with our payment processing solutions. The Company announced a strategic reseller agreement with Deposit Payment Protection Services, Inc., a wholly owned subsidiary of eFunds Corporation, for its SCAN OnLineSM risk scoring services. By offering real time access to two of the largest check verification services in the country, ECHO's own National Check Network and SCAN OnLineSM, we will enable our customers to achieve significant cost savings through the reduction of check fraud and transaction losses." ECHO plans to offer this value-added service to merchants in the coming months. Total processing and transaction revenue for this fiscal quarter increased 17.3% to $9,708,000 million in the second quarter of fiscal 2003 from $8,278,000 million in the same period last year. Bankcard processing and transaction revenue increased 13.4% to $7,796,000 for this fiscal quarter, from $6,876,000 in the second fiscal quarter 2002. This increase was mainly attributable to the organic growth from the Company's existing merchants and other marketing initiatives, such as the Company's MerchantAmerica and sales programs to smaller regional and community banks. Check-related revenues increased 30.5% to $1,971,000 for the three months ended March 31, 2003, from $1,510,000 for the three months ended March 31, 2002. This increase was primarily due to strong growth in ACH and check conversion services. "We continue to receive excellent feedback from major retailers regarding the potential of the Visa POS Check Service to sharply reduce transaction costs, manage risk, and accommodate customer payment preferences," said Mr. Barry. "As the market gains acceptance of the Visa POS Check Service, it will significantly increase the Company's opportunities to market its check conversion services and verification services to its core merchant base and solidify its strategic relationships with the various financial institutions that have chosen the Company as its third-party processor under the Visa POS Check Service program." "The Company generated $1,889,000 of cash from operating activities in the six months ended March 31, 2003, as compared to $600,000 cash used in the same period last year," continued Mr. Barry. "ECHO's balance sheet continues to be strong, with $2,878,000 in cash and cash equivalents, $3,261,000 in working capital and $9,354,000 in stockholders' equity as of March 31, 2003." "Looking to the third quarter, we are gaining momentum in both the interest in and the implementation of our payment processing solutions and we are optimistic that we will continue our strong double digit revenue growth," Mr. Barry concluded. ABOUT ELECTRONIC CLEARING HOUSE, INC. (ECHO) Electronic Clearing House, Inc. provides a complete solution to the payment processing needs of merchants, banks and collection agencies. ECHO's services include debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, check collection, and inventory tracking. For more information about ECHO, please visit www.echo-inc.com. ---------------- Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts re forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, such factors as fluctuations in demand for the Company's products and services, the introduction of new products and services, the Company's ability to maintain customer and strategic business relationships, technological advancements, impact of competitive products and services and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information detailed from time to time in the Company's filings with the United States Securities and Exchange Commission. - FINANCIAL TABLES FOLLOW -
ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS MARCH 31, SEPTEMBER 30, 2003 2002 ------------- --------------- Current assets: Cash and cash equivalents $ 2,878,000 $ 2,409,000 Restricted cash 1,057,000 906,000 Accounts receivable less allowance of $445,000 and $431,000 1,889,000 1,744,000 Inventory 242,000 234,000 Prepaid expenses and other assets 216,000 169,000 Deferred tax asset 84,000 266,000 ------------- --------------- Total current assets 6,366,000 5,728,000 Noncurrent assets: Property and equipment, net 6,016,000 5,101,000 Deferred tax asset 1,793,000 2,018,000 Other assets less accumulated amortization of $282,000 and $259,000 534,000 637,000 Goodwill, net -0- 4,707,000 ------------- --------------- Total assets $ 14,709,000 $ 18,191,000 ============= =============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings and current portion of long-term debt $ 571,000 $ 515,000 Accounts payable 95,000 201,000 Settlement payable to merchants 1,201,000 729,000 Accrued expenses 1,238,000 987,000 Deferred income -0- 62,000 ------------- --------------- Total current liabilities 3,105,000 2,494,000 Long-term debt 2,250,000 2,159,000 ------------- --------------- Total liabilities 5,355,000 4,653,000 ------------- --------------- Commitments and contingencies Stockholders' equity: Common stock, $.01 par value, 36,000,000 authorized: 5,844,424 and 5,835,331 shares issued; 5,805,155 and 5,796,062 shares outstanding 58,000 58,000 Additional paid-in capital 21,456,000 21,435,000 Accumulated deficit (11,691,000) (7,486,000) Less treasury stock at cost, 39,269 common shares (469,000) (469,000) ------------- --------------- Total stockholders' equity 9,354,000 13,538,000 ------------- --------------- Total liabilities and stockholders' equity $ 14,709,000 $ 18,191,000 ============= ===============
ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS SIX MONTHS ENDED MARCH 31, ENDED MARCH 31, ------------------------------------ -------------------------- 2003 2002 2003 2002 ----------------- ----------------- ------------ ------------ Revenues: Processing revenue $ 5,139,000 $ 4,061,000 $ 9,886,000 $ 7,868,000 Transaction revenue 4,569,000 4,217,000 8,984,000 8,256,000 Terminal sales 27,000 54,000 59,000 129,000 Other revenue 32,000 54,000 139,000 54,000 ----------------- ----------------- ------------ ------------ 9,767,000 8,386,000 19,068,000 16,307,000 ----------------- ----------------- ------------ ------------ Costs and expenses: Processing and transaction expense 6,348,000 5,750,000 12,537,000 10,880,000 Cost of terminals sold 17,000 231,000 38,000 263,000 Other operating costs 758,000 678,000 1,479,000 1,287,000 Research and development expense 296,000 442,000 667,000 798,000 Selling, general and administrative expenses 1,883,000 1,786,000 3,355,000 3,528,000 Amortization expense - goodwill -0- 128,000 -0- 256,000 Legal settlement -0- 2,500,000 -0- 2,500,000 ----------------- ----------------- ------------ ------------ 9,302,000 11,515,000 18,076,000 19,512,000 ----------------- ----------------- ------------ ------------ Income (loss) from operations 465,000 (3,129,000) 992,000 (3,205,000) Interest income 7,000 14,000 15,000 36,000 Interest expense (47,000) (24,000) (99,000) (38,000) ----------------- ----------------- ------------ ------------ Income (loss) before provision for income taxes and cumulative effect of an accounting change 425,000 (3,139,000) 908,000 (3,207,000) (Provision) benefit for income taxes (157,000) 1,231,000 (406,000) 1,206,000 ----------------- ----------------- ------------ ------------ Income (loss) before cumulative effect of an accounting change 268,000 (1,908,000) 502,000 (2,001,000) Cumulative effect of an accounting change to adopt SFAS 142 -0- -0- (4,707,000) -0- ----------------- ----------------- ------------ ------------ Net earnings (loss) $ 268,000 $ (1,908,000) $(4,205,000) $(2,001,000) ================= ================= ============ ============ Basic net earnings (loss) per share Before cumulative effect of accounting change $ 0.05 $ (0.33) $ 0.09 $ (0.35) Cumulative effect of accounting change -0- -0- (0.81) -0- ----------------- ----------------- ------------ ------------ Basic net earnings (loss) per share $ 0.05 $ (0.33) $ (0.72) $ (0.35) ================= ================= ============ ============ Diluted net earnings (loss) per share Before cumulative effect of accounting change $ 0.05 $ (0.33) $ 0.09 $ (0.35) Cumulative effect of accounting change -0- -0- ( 0.81) -0- ----------------- ----------------- ------------ ------------ Diluted net earnings (loss) per share $ 0.05 $ (0.33) $ (0.72) $ (0.35) ================= ================= ============ ============ Weighted average shares outstanding Basic 5,801,619 5,790,267 5,798,810 5,779,988 ================= ================= ============ ============ Diluted 5,914,121 5,790,267 5,852,717 5,779,988 ================= ================= ============ ============
SIX MONTHS ENDED MARCH 31, ------------------------ 2003 2003 ----------- ----------- Cash flows from operating activities: Net loss (4,205,000) (2,001,000) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 330,000 307,000 Amortization of software 425,000 233,000 Amortization of goodwill -0- 251,000 Provision for losses on accounts and notes receivable 26,000 203,000 Provision for obsolete inventory -0- 200,000 Write-down of real estate -0- 100,000 Fair value of stock issued in connection with directors' compensation 21,000 45,000 Deferred income taxes 407,000 (1,211,000) Legal settlement -0- 1,300,000 Cumulative effect of an accounting change 4,707,000 -0- Changes in assets and liabilities: Restricted cash (151,000) 523,000 Accounts receivable (171,000) (250,000) Inventory (8,000) 25,000 Accounts payable (106,000) 20,000 Settlement payable to merchants 472,000 (98,000) Accrued expenses 251,000 (176,000) Prepaid expenses (109,000) (71,000) ----------- ----------- Net cash provided by (used in) operating activities 1,889,000 (600,000) ----------- ----------- Cash flows from investing activities: Other assets 80,000 (22,000) Purchase of equipment and software (1,470,000) (958,000) ----------- ----------- Net cash used in investing activities (1,390,000) (980,000) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of notes payable 292,000 -0- Repayment of notes payable (88,000) (65,000) Repayment of capitalized leases (234,000) (109,000) Proceeds from exercise of stock options -0- 11,000 ----------- ----------- Net cash used in financing activities (30,000) (163,000) ----------- Net increase (decrease) in cash 469,000 (1,743,000) Cash and cash equivalents at beginning of period 2,409,000 4,147,000 ----------- Cash and cash equivalents at end of period 2,878,000 2,404,000 =========== ===========
Media Contact: - -------------- Donna Rehman, Corporate Secretary Crocker Coulson, Partner 818-706-8999, ext. 3033 Coffin Communications Group Electronic Clearing House, Inc., Agoura Hills, Calif. 818-789-0100 URL:http://www.echo-inc.com E-MAIL:crocker.coulson@coffincg.com - --------------------------- ---------------------------- E-MAIL: corp@ECHO-inc.com ----------------- # # # -----END PRIVACY-ENHANCED MESSAGE-----