ECHO Press Releases

FOR IMMEDIATE RELEASE
May 3, 2001

ELECTRONIC CLEARING HOUSE  (ECHO) ANNOUNCES PROFITABLE SECOND QUARTER FISCAL 2001 

Q2 Revenue up 12.3% year-over-year to $7.4 million  

Net income of $167,000 or $0.01 per share in Q2 FY 01, versus loss of $219,000 or $(0.01) in FY 00

 Agoura Hills, Calif.-- Electronic Clearing House, Inc. (NASDAQ:ECHO) today announced fiscal 2001 second quarter net earnings of $167,000, compared to a net loss of $219,000 for the same period last year.  Basic and diluted earnings per share were $0.01 for the three months ended March 31, 2001, as compared to a basic and diluted loss per share of $(0.01) in the second fiscal quarter of FY 2000.

 Total revenue for the second fiscal quarter was $7,380,000, an increase of 12.3% as compared to $6,574,000 for the same period last year.  Bankcard processing and transaction revenues increased 10.3% from $6,363,000 in the second fiscal quarter 2000 to $7,019,000 for this fiscal quarter.  Check-related revenue increased 93.6% from $544,000 for the three months ended March 31, 2000 to $1,053,000 for the three months ended March 31, 2001.  This was mainly attributable to the additional check services being offered to merchants in the current fiscal year and the continued higher growth experienced in the check-related business segment. Terminal sales decreased from $161,000 in the second fiscal quarter 2000 to $108,000 for this fiscal quarter.

 Overall, gross margins from processing and transaction revenue increased from 28.8% in the second fiscal quarter 2000 to 35.9% for this fiscal quarter. 

Revenue for the first six months of fiscal 2001 was $14,359,000, compared to $12,779,000 for the same period last year, an increase of 12.4%.  Net income for this six-month period was $189,000, compared to a net loss of $238,000 for the same period last year.  Both basic and diluted net income per share was $0.01 for the six months ended March 31, 2001, versus basic and diluted net loss per share of $(0.01) for the same period last year.

 “We are pleased with the progress that we have demonstrated in the second fiscal quarter, with both steady top-line growth and improving profitability,” said Joel M. Barry, Chairman and CEO of Electronic Clearing House, Inc. “We are particularly excited about the rapid growth and margin improvement in our check-related businesses. Over the past two years, ECHO has completed a number of strategic acquisitions to provide us with the technology, business relationships and robust database required to become a top-tier competitor in the check processing field.

“To lay the groundwork, we have carefully assembled all the pieces required to deliver a complete solution to the merchant’s needs, including check conversion to electronic payment, check verification, check guarantee and collection. The Company’s system utilizes its own comprehensive and highly accurate database of bad and good check writers that employs an open architecture and is updated daily by motivated collection agency members, making it one of the best in the nation. While the system is currently ranked sixth in market share, we are currently third in connectivity. We look forward to sharing additional details of our growth strategy and milestones as we continue to develop our check related business later in the year.”

“Our financial condition remains strong, with over $4 million in cash, $14.8 million in stockholders’ equity and working capital of $6.2 million. For the six months ended March 31, 2001, operations resulted in positive cash flow of $1.1 million. We believe that we have adequate liquidity to execute on our growth strategy with internally financed growth. In conclusion, despite recent issues regarding the maintenance of our Nasdaq Small Cap listing, we remain optimistic that the investments we have made will begin to contribute to accelerating revenue traction and gradually increasing earnings visibility in the coming quarters of FY 2001,” Barry concluded.

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Electronic Clearing House, Inc. provides debit and credit card processing, check guarantee, check verification, check conversion, and inventory tracking to over 58,000 retail merchants and U-Haul dealers across the nation. 

To take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, you are hereby cautioned that this release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties.  Actual operations and results may differ materially from those expressed in the forward-looking statements made by the Company.

Media Contact:
Donna Rehman, Corporate Secretary
(818) 706-8999, ext. 3033 or corp@echo-inc.com

Press Releases are also available by calling (800) 233-0406 ext. 3033, or by email to corp@echo-inc.com

2001
2000

Electronic Clearing House, Inc. (ECHO)
28001 Dorothy Drive
Agoura Hills, CA 91301

Phone: (800) 233-0406
Fax: (818) 991-5973
E-Mail: echo@echo-inc.com
URL: http://www.echo-inc.com