Electronic Clearing House Announces Third Quarter Fiscal 2006 Results

Electronic Clearing House, Inc. (NASDAQ: ECHO), a provider of electronic payment and transaction processing services, Wednesday reported financial and operating results for the three months ended June 30, 2006.

Financial highlights included:

• Total revenue increased 39.1% to $19.9 million.
• Bankcard and transaction processing revenue grew 42.9% to $15.1 million.
• Check-related revenue advanced 28.3% to $4.8 million.
• Gross margins from processing and transaction revenue were 33.1%, compared to 36.6% for the same period last year.
• Bankcard processing volume increased 57.5% to $472.1 million.
• ACH transactions processed increased 18.5% to 9.3 million transactions.
• Cash flow from operations increased 133% to $6.5 million from $2.8 million.
• Stock compensation expense increased to $269,000 from $0 in the same period last year as a result of the Company’s adoption of SFAS 123R this fiscal year.
• Diluted EPS was $0.14, compared to diluted EPS of $0.06 for the same period last year.

“The third quarter numbers primarily reflect the impact of three things: solid organic growth from our existing merchants, continued performance from our historic sales channels and careful control over our operating costs,” said Joel M. Barry, Chairman and Chief Executive Officer of Electronic Clearing House, Inc. “In addition to these positive factors, we now see a solid pipeline developing from our new go-to-market strategy that emphasizes several new multi-channel sales avenues. The significant cash flow improvement is also a good sign that we are beginning to outrun the inherent marketing and sales costs associated with growth and we are starting to reap the financial benefits that come with higher processing volume and operating leverage.”