-----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, POFW8Wk+yxMbH90MrkUS77rmUone8+aavrlSdh44l/q5YHa6JBqgygynlVLqLPJM v7K4oGLbvPq7LeMx+R0irA== 0001170918-03-000670.txt : 20031216 0001170918-03-000670.hdr.sgml : 20031216 20031216144346 ACCESSION NUMBER: 0001170918-03-000670 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031216 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031216 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: 031057099 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 fm8k-121603.txt FORM 8-K (12-16-03) 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): December 16, 2003 ELECTRONIC CLEARING HOUSE, INC. (Exact name of registrant as specified in its charter) Nevada 0-15245 93-0946274 (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 730 Paseo Camarillo, Camarillo, California 93010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (800) 233-0406 - -------------------------------------------------------------------------------- (Former name or former address, if changes since last report) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 99.1 Press Release dated December 16, 2003, announcing financial results for the quarter and fiscal year ended September 30, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On December 16, 2003, Electronic Clearing House, Inc. issued a press release announcing its financial results for the quarter and fiscal year ended September 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. 2 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: December 16, 2003 3 EX-99 3 ex99-1_121603.txt EX-99.1 PRESS RELEASE (12-16-03) [ECHO LETTERHEAD] EXHIBIT 99.1 FOR IMMEDIATE RELEASE ELECTRONIC CLEARING HOUSE (ECHO) ANNOUNCES IMPROVED FOURTH QUARTER FY 2003 RESULTS CAMARILLO, CALIF., DECEMBER 16, 2003 - Electronic Clearing House, Inc. (NASDAQ: ECHO), a leading provider of electronic payment and transaction processing services, today reported financial and operating results for the three months and fiscal year ended September 30, 2003. FOURTH QUARTER HIGHLIGHTS: o Revenue increases 28.3% to $11 million versus Q4 FY 2002 o Gross margin from processing and transaction revenue improved from 28% to 38% o Operating income of $0.9 million up from a loss of $0.3 million o Diluted earnings per share rise to $0.08 from a loss of $0.03 Revenue for the fourth quarter of fiscal 2003 was a record $10,990,000, an increase of 28.3%, as compared to $8,569,000 in the prior year quarter. Operating income rose to $869,000 in the fourth quarter, as compared to an operating loss of $321,000 in the same period last year. The year-over-year improvement can be primarily attributed to the 28.3% revenue growth and the improvement in gross margin from processing and transaction revenue, from 28% to 38%. The Company reported net income of $518,000, or $0.08 per share on a fully diluted basis, in the fourth quarter of fiscal 2003, as compared to a net loss of $207,000, or $0.03 per share in the fourth quarter of fiscal 2002. For the fiscal year ended September 30, 2003, the Company earned $0.23 per share on revenue of $40,636,000 before the cumulative effect of an accounting change to record the impairment of goodwill. This compares to a loss of $0.41 per share on revenue of $33,291,000 for the fiscal year ended September 30, 2002. Including the cumulative effect of the accounting change, the Company lost $0.58 per share in fiscal 2003. "We are very pleased to report double digit growth in revenue and significantly improved margins in the fourth quarter," said Joel M. Barry, Chairman and CEO of Electronic Clearing House, Inc. "We are successfully executing our business plan and experiencing strong growth for both our bankcard and check services products. Our expanding gross margins reflect the positive returns to scale we are realizing in our check services business, driven by the market reception to the Visa POS Check service. In fiscal 2003, our check services business segment made a positive contribution to the overall profitability of the Company. The momentum in this business is continuing as we add to our customer base of banks and retailers which use ECHO's processing infrastructure." "During the fiscal fourth quarter, ECHO launched another value-added payment processing solution. The service, Recurring Payment Manager (RPMsm), is an innovative web-based payment management program that is an easy-to-use flexible means of processing recurring payments from customers with weekly, bi-weekly or monthly payment arrangements. We believe this service has strong growth potential as businesses are rapidly adopting recurring payments as a means to cut processing costs, improve collection ratios and boost cash flow." Bankcard processing and transaction revenue increased 20.9% to $8,517,000 for this fiscal quarter, from $7,045,000 in the fourth fiscal quarter 2002. This increase was primarily due to our merchants' strong organic growth in bankcard processing volume and the continued success in the Company's marketing strategy. Check-related revenues increased 62.3% to $2,473,000 for the three months ended September 30, 2003, from $1,524,000 from the prior year quarter. This increase was primarily due to strong growth in the ACH and check conversion services and the revenue generated from the Visa POS program. A national retail merchant fully implemented the Visa program in June 2003. Gross margins from processing and transaction services jumped to 38% in the quarter from 28% in the year-ago quarter. The improvement in margins was primarily due to a larger proportion of higher-margin check-related revenue, which comprises 22.5% of total revenue for this fiscal quarter as compared to 17.8% for the prior year quarter; a rate adjustment implemented in August 2003; and substantially lower chargeback losses. The Company generated $1,316,000 of cash from operating activities in the three months ended September 30, 2003, as compared to $369,000 of cash generated in the same period last year. Mr. Barry commented, "ECHO's balance sheet continues to be strong, with $5,641,000 in cash and cash equivalents, $3,201,000 in working capital and $10,369,000 in stockholders' equity as of September 30, 2003. The subsequent completion of a $3 million equity funding, combined with a new $3 million line of credit facility, gives us the flexibility to continue to fund our growth initiatives in the check services business." "Looking to the first quarter of fiscal 2004, we are gaining momentum in our check services program as well as our bankcard and transaction processing services, and we are optimistic that we will continue our strong double digit revenue growth and improving gross margins," Mr. Barry concluded. 2 CONFERENCE CALL The Company will host a conference call at 1:30 p.m. PST (4:30 p.m. EST) today to discuss 2003 fourth-quarter and year-end results. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: (800) 399-7496. International callers should dial (706) 634-6508. There is no pass code required for this call. This conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Investor Relations section of ECHO's website at www.echo-inc.com. 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 - 3 ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS TWELVE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ Revenues: Processing revenue ......... $ 5,592,000 $ 4,315,000 $ 21,151,000 $ 16,363,000 Transaction revenue ........ 5,325,000 4,113,000 19,162,000 16,526,000 Other revenue .............. 73,000 141,000 323,000 402,000 ------------ ------------ ------------ ------------ 10,990,000 8,569,000 40,636,000 33,291,000 ------------ ------------ ------------ ------------ Costs and expenses: Processing and transaction expense ................. 6,764,000 6,072,000 26,360,000 22,747,000 Other operating costs ...... 1,029,000 774,000 3,358,000 3,012,000 Research and development expense ................. 363,000 455,000 1,405,000 1,719,000 Selling, general and administrative expenses . 1,965,000 1,485,000 7,088,000 6,493,000 Amortization expense - goodwill ................ -0- 104,000 -0- 489,000 Legal settlement ........... -0- -0- -0- 2,500,000 ------------ ------------ ------------ ------------ 10,121,000 8,890,000 38,211,000 36,960,000 ------------ ------------ ------------ ------------ Income (loss) from operations . 869,000 (321,000) 2,425,000 (3,669,000) Interest income ............... 7,000 9,000 28,000 55,000 Interest expense .............. (50,000) (45,000) (200,000) (129,000) ------------ ------------ ------------ ------------ Income (loss) before provision for income taxes ........... 826,000 (357,000) 2,253,000 (3,743,000) (Provision) benefit for income taxes ...................... (308,000) 150,000 (925,000) 1,367,000 ------------ ------------ ------------ ------------ Income (loss) before cumulative effect of an accounting change ..................... 518,000 (207,000) 1,328,000 (2,376,000) Cumulative effect of an accounting change to adopt SFAS 142 ................... -0- -0- (4,707,000) -0- ------------ ------------ ------------ ------------ Net income (loss) ............. $ 518,000 $ (207,000) $ (3,379,000) $ (2,376,000) ============ ============ ============ ============ Basic net earnings (loss) per share Before cumulative effect of accounting change ....... $ 0.09 $ (0.03) $ 0.23 $ (0.41) Cumulative effect of accounting change ....... -0- -0- (0.81) -0- ------------ ------------ ------------ ------------ Basic net earnings (loss) per share ...................... $ 0.09 $ (0.03) $ (0.58) $ (0.41) ============ ============ ============ ============ Diluted net earnings (loss) per share Before cumulative effect of accounting change ....... $ 0.08 $ (0.03) $ 0.23 $ (0.41) Cumulative effect of accounting change ....... -0- -0- (0.81) -0- ------------ ------------ ------------ ------------ Diluted net earnings (loss) per share ............... $ 0.08 $ (0.03) $ (0.58) $ (0.41) ============ ============ ============ ============ Weighted average shares outstanding Basic .................... 5,839,775 5,796,109 5,812,005 5,788,071 ============ ============ ============ ============ Diluted .................. 6,261,209 5,796,109 5,812,005 5,788,071 ============ ============ ============ ============
4 ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended September 30, ----------------------------------------- 2003 2002 2001 ----------- ----------- ----------- Cash flows from operating activities: Net (loss) income ................. $(3,379,000) $(2,376,000) $ 434,000 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation ...................... 512,000 480,000 384,000 Amortization of software .......... 1,081,000 697,000 537,000 Amortization of goodwill .......... -0- 489,000 414,000 Provisions for losses on accounts and notes receivable ............ 67,000 302,000 326,000 Provision for obsolete inventory .. 110,000 300,000 -0- Write-down of real estate ......... 55,000 100,000 -0- Fair value of stock issued in connection with director's compensation .................... 21,000 45,000 45,000 Deferred income taxes ............. 942,000 (1,375,000) 436,000 Stock option compensation ......... 28,000 -0- -0- Legal settlement .................. -0- 1,300,000 -0- Loss (gain) on sale of asset ...... 16,000 -0- (350,000) Cumulative effect of an accounting change .......................... 4,707,000 -0- -0- Changes in assets and liabilities, net of effects of acquisitions: Restricted cash ................... (71,000) 504,000 (393,000) Accounts receivable ............... (389,000) (226,000) (307,000) Settlement receivable ............. (569,000) (42,000) -0- Accounts payable .................. 578,000 66,000 15,000 Settlement payable ................ 2,700,000 111,000 448,000 Accrued expenses .................. 349,000 (376,000) 349,000 Prepaid expenses .................. (76,000) 63,000 11,000 ----------- ----------- ----------- Net cash provided by operating activities ...................... 6,682,000 62,000 2,349,000 ----------- ----------- ----------- Cash flows from investing activities: Other assets ...................... (51,000) (81,000) (458,000) Purchase of equipment ............. (664,000) (253,000) (280,000) Purchase and capitalized software . (2,627,000) (1,501,000) (1,124,000) Proceeds from sale of asset ....... 71,000 -0- 350,000 Cash used in acquisition .......... -0- -0- (169,000) ----------- ----------- ----------- Net cash used in investing activities ...................... (3,271,000) (1,835,000) (1,681,000) ----------- ----------- ----------- Cash flows from financing activities: Proceeds from issuance of notes payable ......................... 292,000 -0- -0- Repayment of notes payable ........ (177,000) (151,000) (130,000) Repayment of capitalized leases ... (452,000) (215,000) (47,000) Proceeds from sales and leaseback of equipment .................... -0- 390,000 -0- Proceeds from exercise of stock options ......................... 158,000 11,000 47,000 Repurchase of common stock ........ -0- -0- (332,000) ----------- ----------- ----------- Net cash (used in) provided by financing activities ............ (179,000) 35,000 (462,000) ----------- ----------- ----------- Net increase (decrease) in cash ..... 3,232,000 (1,738,000) 206,000 Cash and cash equivalents at beginning of period ............... 2,409,000 4,147,000 3,941,000 ----------- ----------- ----------- Cash and cash equivalents at end of period ............................ $ 5,641,000 $ 2,409,000 $ 4,147,000 =========== =========== ===========
5 ELECTRONIC CLEARING HOUSE, INC. CONSOLIDATED BALANCE SHEETS September 30, 2003 2002 ------------ ------------ ASSETS ------ Current assets: Cash and cash equivalents ............... $ 5,641,000 $ 2,409,000 Restricted cash ......................... 977,000 906,000 Settlement receivable ................... 717,000 148,000 Accounts receivable less allowance of $91,000 and $431,000 1,918,000 1,596,000 Prepaid expenses and other assets ....... 307,000 403,000 Deferred tax asset ...................... 86,000 266,000 ------------ ------------ Total current assets ................ 9,646,000 5,728,000 Noncurrent assets: Property and equipment, net ............. 2,928,000 2,248,000 Software, net ........................... 4,445,000 2,853,000 Deferred tax asset ...................... 1,256,000 2,018,000 Other assets less accumulated amortization of $305,000 and $259,000 ......................... 500,000 637,000 Goodwill, net ........................... -0- 4,707,000 ------------ ------------ Total assets ........................ $ 18,775,000 $ 18,191,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Short-term borrowings and current portion of long- term debt ............................. $ 901,000 $ 515,000 Accounts payable ........................ 779,000 201,000 Settlement payable ...................... 3,429,000 729,000 Accrued expenses ........................ 1,336,000 987,000 Deferred income ......................... -0- 62,000 ------------ ------------ Total current liabilities ........... 6,445,000 2,494,000 Long-term debt ............................. 1,961,000 2,159,000 ------------ ------------ Total liabilities ................... 8,406,000 4,653,000 ------------ ------------ Commitments and contingencies Stockholders' equity: Common stock, $.01 par value, 36,000,000 shares authorized; 5,920,174 and 5,835,331 shares issued; 5,881,906 and 5,796,062 shares outstanding ................... 59,000 58,000 Additional paid-in capital ................. 21,641,000 21,435,000 Accumulated deficit ........................ (10,865,000) (7,486,000) Less treasury stock at cost, 38,269 and 39,269 common shares ......... (466,000) (469,000) ------------ ------------ Total stockholders' equity .......... 10,369,000 13,538,000 ------------ ------------ Total liabilities and stockholders' equity ............. $ 18,775,000 $ 18,191,000 ============ ============ 6 Media Contact: Donna Rehman, Corporate Secretary Crocker Coulson, Partner 805-419-8533 Coffin Communications Group Electronic Clearing House, Inc., 818-789-0100 Agoura Hills, Calif. E-MAIL: crocker.coulson@coffincg.com URL:http://www.echo-inc.com ---------------------------- - --------------------------- E-MAIL: corp@ECHO-inc.com ----------------- # # # 7 -----END PRIVACY-ENHANCED MESSAGE-----