ECHO Press Releases

FOR IMMEDIATE RELEASE
Aug 8, 2001

Electronic Clearing House -- ECHO -- Announces Profitable Third Quarter of Fiscal Year 2001

Aug 8, 2001, Agoura Hills, Calif. Electronic Clearing House, Inc. (NASDAQ:ECHOC), a leading provider of electronic payment services, today announced net income for its fiscal 2001 third quarter of $282,000, a decrease of 12.1% compared to net income of $321,000 for the same period last year. 

Income from operations for the three months ended June 30, 2001, was $203,000, as compared to $299,000 for the same period last year, a decrease of 32.1%. Both basic and diluted earnings per share were $0.01 for the three months ended June 30, 2001, as compared to basic and diluted earnings per share of $0.01 for the three months ended June 30, 2000, for the same period last year.

Revenue for the quarter was $7.8 million, a decrease of 3.3 % as compared to $8 million for the same period last year. Total processing and transaction revenues for this fiscal quarter increased 15.5% to $7.5 million, from $6.5 million in the third fiscal quarter 2000.

This increase was attributable to a 128% increase in check-related revenue and a 4.8% increase in bank card and transaction revenue. Terminal sales decreased 87.1% to $183,000 for this fiscal quarter, down from $1.4 million in the third fiscal quarter 2000. This decrease was primarily due to the delivery of approximately 3,100 terminals to U-Haul during the third fiscal quarter 2000.

Revenue for the first nine months of fiscal 2001 increased 6.3% to $22.1 million, as compared to $20.8 million in the comparable period in fiscal 2000. Net income for this nine-month period was $471,000, compared to a net income of $83,000 for the same period last year.

Income from operations for the nine months ended June 30, 2001, was $616,000, as compared to a loss from operations of $45,000 for the same period last year. Net cash provided by operating activities was $1,300,000 for the nine-month period ended June 30, 2001, as compared to $387,000 for the same nine-month period last year.

Basic and diluted earnings per share were $0.02 for the nine months ended June 30, 2001, versus basic and diluted earnings of $0.00 for the same period last year.

``We are pleased to report another profitable quarter of operations in our fiscal third quarter, despite a substantial investment made in developing our check-related services and processing capabilities during the period,'' said Joel M. Barry, chairman and CEO of Electronic Clearing House. ``Excluding the effect of a drop in terminal sales from the U-Haul contract last year and the effect from the termination of the innoVentry joint venture, the company continued to demonstrate solid revenue growth in our bank card and transaction processing business and spectacular growth in our check-related business.''

``This quarter we expect to continue to invest in the personnel and technology required to scale our electronic check processing, verification and guarantee services to the transaction levels anticipated under our recently announced Visa POS Check Service pilot program. By the end of the calendar year, we expect to have completed pilot programs with Visa and multiple member banks and be ready to take this service to their installed merchant customer base. In addition, we are preparing to market this service to select, high-value end markets on a private label basis.''

Barry noted that the company's balance sheet remains strong with $3.4 million in cash and equivalents, over $6 million in working capital and stockholders' equity of $15 million as of June 30, 2001.

``We are pleased that Nasdaq has approved the company's application to move forward with a reverse stock split so as to maintain our listing and improve the marketability of ECHO's stock,'' Barry concluded.

About ECHO:

Electronic Clearing House Inc. provides debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, check collection and inventory tracking to more than 60,000 retail merchants and U-Haul dealers across the nation.

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 successful completion of the Visa POS check service pilot program, acceptance of the service by Visa member banks, 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 and other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission.

Investor Contacts:

Donna Rehman, Corporate Secretary 
Electronic Clearing House, Inc.
818-706-8999, ext. 3033 
Agoura Hills, Calif. 
E-MAIL: corp@ECHO-inc.com
URL: http://www.ECHO-inc.com

Crocker Coulson, Partner
Coffin Communications Group
818-789-0100
E-MAIL: crocker.coulson@coffincg.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