-----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, Ex0IApN5C8KSU7lDPqYDKrQPs02nF08qc48x3W6kOnNAIZlUPRgm05VftlVwJGvz 7+hrpwEdru8/WkwBudpPWQ== 0001015402-03-003111.txt : 20030807 0001015402-03-003111.hdr.sgml : 20030807 20030806173144 ACCESSION NUMBER: 0001015402-03-003111 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030804 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030807 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: 03827152 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) August 4, 2003 ELECTRONIC CLEARING HOUSE, INC. ------------------------------- (Exact name of registrant as specified in its charter) Nevada 0-15245 93-0946274 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 28001 Dorothy Drive, Agoura Hills, CA 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 99.1 Press Release dated August 4, 2003, announcing financial results for the quarter ended June 30, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On August 4, 2003, Electronic Clearing House, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2003. A copy of the press release is being furnished as Exhibit 99.1 to this report and is incorporated herein by reference. The information in this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such a filing. 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: August 5, 2003 EX-99.1 3 doc2.txt EXHIBIT 99.1 ECHO(SM) FOR IMMEDIATE RELEASE - --------------------- ELECTRONIC CLEARING HOUSE (ECHO) ANNOUNCES RECORD THIRD QUARTER FY 2003 RESULTS - Revenue increases 25.7% to record $10.6 million AGOURA HILLS, CALIF., AUGUST 4, 2003 - Electronic Clearing House, Inc. (NASDAQ: ECHO), a leading provider of electronic payment services, today reported financial and operating results for the three and nine months ended June 30, 2003. Revenue for the third quarter of fiscal 2003 was a record $10,578,000, an increase of 25.7%, as compared to $8,415,000 in the prior year quarter. Operating income rose to $564,000, as compared to an operating loss of $143,000 in the same period last year. The year-over-year improvement can be attributed to the significant increase in bankcard and transaction processing revenue, reduction in research and development expenditures as the Visa Point-of-Sale (POS) Check Service program moved from beta testing to implementation, and elimination of $129,000 in amortization of goodwill. The Company reported net income of $308,000, or $0.05 per share on a fully diluted basis, in the quarter, as compared to a net loss of $168,000, or $0.03 per share in the third quarter of fiscal 2002. "We are pleased to announce another strong quarter of revenue growth and profitability," said Joel M. Barry, Chairman and CEO of Electronic Clearing House, Inc. "ECHO continues to make significant progress on our strategic plan by expanding our check services business and introducing our credit card agent bank program to smaller regional and community banks. During the quarter, we completed a full implementation of a major global specialty-retailer, with close to 3,000 storefronts, into the Visa program. As a result of the growing client base in check services, our ACH processing volume rose threefold, a clear indication of the substantial growth we anticipate through the Visa program." "ECHO is currently providing key processing infrastructure to eight of the ten banks participating in Visa's POS Check Service program. These banks are becoming very effective at convincing their merchants that the Visa program lowers check costs and greatly diminishes fraudulent activity. We continue to believe that the Visa POS check service program is well poised to become the industry standard for electronic check processing in the near future," Mr. Barry added. Total processing and transaction revenue for this fiscal quarter increased 26.3% to $10,526,000 from $8,337,000 in the same period last year. For the quarter, gross margin from processing and transaction revenue increased to 32.9%, from 30.5% in the third quarter of fiscal 2002. Bankcard processing and transaction revenue increased 24.1% to $8,612,000 for this fiscal quarter, from $6,940,000 in the third fiscal quarter 2002. This increase was mainly attributable to the organic growth from the Company's existing merchants and from new merchants generated from our marketing initiatives, such as the Company's MerchantAmerica program and other sales programs. Check-related revenues increased 33.3% to $1,966,000 for the three months ended June 30, 2003, from $1,475,000 for the three months ended June 30, 2002, due to a 13.4% increase in check verification revenue and a 222.1% increase in other electronic check services revenue such as check conversion services. Check conversion revenue has grown significantly in recent months as a result of broader market acceptance of the product and as a result of the growth in the Visa POS Check Services program. "The Company generated $5,366,000 of cash from operating activities in the nine months ended June 30, 2003, as compared to $307,000 cash used in the same period last year. The cash generated was attributable to income of $810,000 before a non-cash charge of $4,707,000 due to a cumulative change in accounting principle, $3,202,000 from the net change in settlements payable and receivable, and other operating activities," continued Mr. Barry. "ECHO's balance sheet continues to improve over the prior quarter, with $5,563,000 in cash and cash equivalents, $3,294,000 in working capital and $9,705,000 in stockholders' equity as of June 30, 2003." "We are excited about our continued success in the growth of our bankcard processing and check processing revenue. As a result, we are projecting approximately 22% increase in revenue for fiscal 2003, as compared to fiscal 2002, and we anticipate that check-related revenue will represent nearly 20% of total revenue this year," 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 are 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 JUNE 30, SEPTEMBER 30, 2003 2002 ------------- --------------- Current assets: Cash and cash equivalents $ 5,563,000 $ 2,409,000 Restricted cash 1,112,000 906,000 Settlement receivable 707,000 148,000 Accounts receivable less allowance of $438,000 and $431,000 1,891,000 1,596,000 Prepaid expenses and other assets 459,000 403,000 Deferred tax asset 79,000 266,000 ------------- --------------- Total current assets 9,811,000 5,728,000 Noncurrent assets: Property and equipment, net 6,396,000 5,101,000 Deferred tax asset 1,634,000 2,018,000 Other assets, less accumulated amortization of $293,000 and $259,000 529,000 637,000 Goodwill, net -0- 4,707,000 ------------- --------------- Total assets $ 18,370,000 $ 18,191,000 ============= =============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings and current portion of long-term debt $ 625,000 $ 515,000 Accounts payable 111,000 201,000 Settlement payable 4,490,000 729,000 Accrued expenses 1,291,000 987,000 Deferred income -0- 62,000 ------------- --------------- Total current liabilities 6,517,000 2,494,000 Long-term debt 2,148,000 2,159,000 ------------- --------------- Total liabilities 8,665,000 4,653,000 ------------- --------------- Commitments and contingencies Stockholders' equity: Common stock, $.01 par value, 36,000,000 authorized: 5,855,674 and 5,835,331 shares issued; 5,816,405 and 5,796,062 shares outstanding 59,000 58,000 Additional paid-in capital 21,498,000 21,435,000 Accumulated deficit (11,383,000) (7,486,000) Less treasury stock at cost, 39,269 common shares (469,000) (469,000) ------------- --------------- Total stockholders' equity 9,705,000 13,538,000 ------------- --------------- Total liabilities and stockholders' equity $ 18,370,000 $ 18,191,000 ============= ===============
ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------------------------- -------------------------- 2003 2002 2003 2002 ---------------- ---------------- ------------ ------------ Revenues: Processing revenue $ 5,673,000 $ 4,180,000 $15,559,000 $12,048,000 Transaction revenue 4,853,000 4,157,000 13,837,000 12,413,000 Other revenue 52,000 78,000 250,000 261,000 ---------------- ---------------- ------------ ------------ 10,578,000 8,415,000 29,646,000 24,722,000 ---------------- ---------------- ------------ ------------ Costs and expenses: Processing and transaction expense 7,059,000 5,795,000 19,596,000 16,675,000 Other operating costs 812,000 688,000 2,329,000 2,238,000 Research and development expense 375,000 466,000 1,042,000 1,264,000 Selling, general and administrative expenses 1,768,000 1,480,000 5,123,000 5,008,000 Amortization expense - goodwill -0- 129,000 -0- 385,000 Legal settlement -0- -0- -0- 2,500,000 ---------------- ---------------- ------------ ------------ 10,014,000 8,558,000 28,090,000 28,070,000 ---------------- ---------------- ------------ ------------ Income (loss) from operations 564,000 (143,000) 1,556,000 (3,348,000) Interest income 6,000 10,000 21,000 46,000 Interest expense (51,000) (46,000) (150,000) (84,000) ---------------- ---------------- ------------ ------------ Income (loss) before provision for income taxes and cumulative effect of an accounting change 519,000 (179,000) 1,427,000 (3,386,000) (Provision) benefit for income taxes (211,000) 11,000 (617,000) 1,217,000 ---------------- ---------------- ------------ ------------ Income (loss) before cumulative effect of an accounting change 308,000 (168,000) 810,000 (2,169,000) Cumulative effect of an accounting change to adopt SFAS 142 -0- -0- (4,707,000) -0- ---------------- ---------------- ------------ ------------ Net income (loss) $ 308,000 $ (168,000) $(3,897,000) $(2,169,000) ================ ================ ============ ============ Basic net earnings (loss) per share Before cumulative effect of accounting change $ 0.05 $ (0.03) $ 0.14 $ (0.38) Cumulative effect of accounting change -0- -0- (0.81) -0- ---------------- ---------------- ------------ ------------ Basic net earnings (loss) per share $ 0.05 $ (0.03) $ (0.67) $ (0.38) ================ ================ ============ ============ Diluted net earnings (loss) per share Before cumulative effect of accounting change $ 0.05 $ (0.03) $ 0.14 $ (0.38) Cumulative effect of accounting change -0- -0- (0.81) -0- ---------------- ---------------- ------------ ------------ Diluted net earnings (loss) per share $ 0.05 $ (0.03) $ (0.67) $ (0.38) ================ ================ ============ ============ Weighted average shares outstanding Basic 5,810,787 5,796,109 5,802,802 5,785,362 ================ ================ ============ ============ Diluted 6,039,990 5,796,109 5,802,802 5,785,362 ================ ================ ============ ============
ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED JUNE 30, ------------------------------ 2003 2002 ---------------- ------------ Cash flows from operating activities: Net loss $ (3,897,000) $(2,169,000) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 498,000 476,000 Amortization of software 649,000 377,000 Amortization of goodwill -0- 385,000 Provision for losses on accounts and notes receivable 45,000 258,000 Provision for obsolete inventory -0- 201,000 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 571,000 (1,236,000) Stock option compensation 20,000 -0- Legal settlement -0- 1,300,000 Cumulative effect of an accounting change 4,707,000 -0- Changes in assets and liabilities: Restricted cash (206,000) 520,000 Accounts receivable (340,000) (110,000) Settlement receivable (559,000) (68,000) Accounts payable (90,000) (3,000) Settlement payable 3,761,000 (60,000) Accrued expenses 304,000 (315,000) Prepaid expenses (118,000) (8,000) ---------------- ------------ Net cash provided by (used in) operating activities 5,366,000 (307,000) ---------------- ------------ Cash flows from investing activities: Other assets 74,000 (62,000) Purchase of equipment and software (2,129,000) (1,439,000) ---------------- ------------ Net cash used in investing activities (2,055,000) (1,501,000) ---------------- ------------ Cash flows from financing activities: Proceeds from issuance of notes payable 292,000 -0- Repayment of notes payable (133,000) (105,000) Repayment of capitalized leases (339,000) (144,000) Proceeds from sale and leaseback of equipment -0- 390,000 Proceeds from exercise of stock options 23,000 11,000 ---------------- ------------ Net cash (used in) provided by financing activities (157,000) 152,000 ---------------- ------------ Net increase (decrease) in cash 3,154,000 (1,656,000) Cash and cash equivalents at beginning of period 2,409,000 4,147,000 ---------------- ------------ Cash and cash equivalents at end of period $ 5,563,000 $ 2,491,000 ================ ============
Media Contact: - ------------- Donna Rehman, Corporate Secretary Crocker Coulson, Partner 818-706-8999, ext. 3033 CCG Electronic Clearing House, Inc., Agoura Hills, Calif. 818-789-0100 URL:http://www.echo-inc.com E-MAIL: crocker.coulson@ccgir.com ----------------------- ------------------------- E-MAIL: corp@ECHO-inc.com -----------------
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