Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements tha

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(No Transcript)
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Safe Harbor Statement
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995 Any
statements that are not historical facts are
forward-looking statements. Actual results may
differ materially from 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, 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.
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Equity Snapshot
Exchange/Symbol Nasdaq ECHO Share Price as of 9
/4/03 7.30 Shares Outstanding 5.9M Float 5
.6M Market Capitalization 43.1M Revenue (ttm)
38.2M Earnings (ttm) 0.04 Price/Sales 1.13
Price/Book 4.3
Reflects earnings before cumulative effect of
accounting change
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ECHO is an electronic payment processor with two
primary lines of business
Electronic Clearing House, Inc.

• Bankcard Processing
• Retail Channel
• MERCHANTAMERICA
• (includes all ECHO products and services)

• Electronic Check Processing
• Wholesale Channels
• NCN (National Check Network)
• XPRESSCHEX
• Visa POS Check Program

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Significant Growth
Bankcard Services Five-Year CAGR 11.3 Consis
tent quarterly improvements
Check Services Grown from zero to
2M quarterly run rate in less than five years
FY 2002
FY 2003
FY 2002
FY 2003
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Total Solution Provider
American Express Discover Card VISA Credit Ca
rd MasterCard Credit Card Debit Card Network

Automated ClearingHouse (ACH) for Checks
Customer buys item with credit card, debit card
or check
Electronic data transmitted

Customer
Customer
Agent Bank Program

VISA POS Check Network

Merchant
Merchants Bank
XPRESSCHEX
Visa Banks
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MERCHANTAMERICA Comprehensive Solutions
Internet Payment Services
Debit Credit Cards
Internet Web Services
Credit Cards via Card swipe or manual e
ntry using browser- based virtual terminal
Check Services of Verification and funds
settlement via browser- based virtual termin
al FREE secure gateway FREE online store
FREE shopping cart
Check Services
Connectivity Options POS Terminals Touch Tone
Phone Personal Computer Software Fax Mac
hine Cards Include Visa MasterCard Diner
s Club STAR PULSE Maestro Discover JCB NYCE
Interlink American Express
MerchantAmerica Web site hosting and
development On-line reporting/ transacti
on history E-mail services On-line adverti
sing National Merchant Directory On-l
ine banking access Resource portal
Verification powered by NCN Electronic
Check Conversion (ECC) powered by VISA
Guarantee Collections Re-Presentment
(collection) Consolidated returns
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MERCHANTAMERICA Benefits
ECHO is the only processor with this set of
services at a fixed price Unlimited processing vo
lume Attractive fee structure Low transaction c
harges No chargeback fees No batch processing
fees Free National Directory Free online Store
Free Shopping Cart Co-branded with Community
Banks and/or Collection Agencies
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Total Solution Provider
American Express Discover Card VISA Credit Ca
rd MasterCard Credit Card Debit Card Network

Automated ClearingHouse (ACH) for Checks
Customer buys item with credit card, debit card
or check
Electronic data transmitted

Customer
Customer
Agent Bank Program

VISA POS Check Network

Merchant
Merchants Bank
XPRESSCHEX
Visa Banks
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VISA POS Check Program
VISA Bank (Acquirer) sells VISA POS Check to its
merchants

Participating Bank
Non-Participating Bank Transactions
Merchant
AcquirerProcessor(ECHO or Vital Processing)
Customer
Visa
for Approval/Settlement (ECHO or BankServ)
ECHO is VISAs preferred third-party processor
Supplying back-end infrastructure for
all but one of the financial institutions
enrolled in the program.
XPRESSCHEX
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National Check Network (NCN)
280 Collection Agencies in NCN Association
Over 100,000,000 database records
Working database for collection agencies
Includes invoicing, risk management and compliance
Major Nationwide Customers
Hastings Entertainment
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XPRESSCHEX ECHOs National Collection Service

• Registered in 48 states
• Distribution center to 260 NCN collection
  agencies
  
• Shared Collection Fees
• Completes Electronic Check Process

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Visa Point-of-Sale Program Highlights
Conversion of paper check to an electronic
transaction at the Point-of-Sale
Check verified and/or guaranteed by Bank or ECHO
in real time Funds settlement done by authorizin
g party Generates collection activity and revenue
s Standardized and customizable platform for bank
s Projected annual volume by Visa in 2000 was 265
MM transactions within five years
Launched December 2002
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Market Potential - Checks
Approx. four million merchants in U.S.
Checks used for 85 of non-cashspending
Electronic check growth expected to increase 50
annually by 2005 (already 300 YTD)
Check verification services expected to increase
15 annually by 2005 VISA promotes ECHO to banks

Merchants in the U.S.
Accept only credit cards
38
Accept credit cards and paper checks
48
Accept credit cards, paper checks and electronic
checks
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Source The Nilson report and Company estimates
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Competitive Landscape

• Bankcard Processing
• ECHO is 46th in the nation
• Over 1B processed annually
• Check Services
• ECHO is the 5th in nation in check verification
• Over 5B annually in check verification
• Over 1.6B annually in ACH volume
• Visa POS Check program creates a lower cost
  alternative to check guarantee services
  (TeleCheck/Certegy/Global Payments)

Source The Nilson Report
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Competitors By Product
Verification eFunds (SCAN) TeleCheck Certeg
y Global Payments (accesses and contributes to
NCN)
ECHO (NCN)
Conversion TeleCheck Certegy ECHO EZCheck Gl
obalPayments (using ECHO)
Visa POS ECHO (AP, TP) Vital Processing (AP) B
ankServ (TP) Sold s/w to Insta-Check Gl
obal Payments (using ECHO as AP TP)AP Acqui
rer ProcessorTP Third Party Processor
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Experienced Management
ORCC
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Growth Strategy
Grow check services business (better margins)
Focus on small to mid-sized retail accounts
(cash flow) Leverage VISA relationship (less mar
keting costs) Expand agent bank program to small
er banks (less risks) Invest in new technology a
nd infrastructure (handle growth)
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Financial Overview
Consistent positive cash flow from merchant
business Growth of higher margin check business
Improving operating margins Significant in
vestment in developing VISA relationship
Solid financial position
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Consistent Revenue Growth
12.2 CAGR
9 mo. rev. 24.7M
9 months of FY03
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Improving Gross Margins
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Solid Balance Sheet
June 30, 2003 September 30, 2002
Cash and cash equivalents
5.6MM 2.4MM 1.8MM Current ratio 1.5x
2.3x 3.0x Long-term debt 2.1MM 2.2MM
Shareholders equity 9.7MM 13.5MM
Working capital 3.3MM
3.2MM
Change due largely to float on merchant funds
related to check activity Comparison without me
rchant funds component Reflects Goodwill
w/o in 1st Qrt 03
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Attractive Valuation
Sales (ttm)
Price/
Company Name
Ticker
Price
in M
Sales
Electronic Clearing House, Inc.
ECHO
7.30
38.2


1.13
CheckFree Corporation
CKFR
23.50
554.1

3.70
Equifax, Incorporated
EFX
22.94
1200.0


2.62
First Data Corporation
FDC
41.00
8130.0


3.73
Global Payments, Inc.
GPN
37.75
516.1


2.77
InterCept Group
ICPT
12.79
270.6


.98
Ipayment
IPMT
26.90
178.8


2.38
National Processing, Inc.
NAP
20.68
452.3


2.40
Total System Services, Inc.
TSS
25.24
994.7


5.01
Priced as of September 4, 2003
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Investment Highlights
Only processor providing end-to-end payment
solution for merchants and/or banks on national
basis Profitable and growing merchant pr
ocessing business with MERCHANTAMERICA
program High growth in Check services business
due to Visa promotion of new VISA POS program to
banks Trading at discount to price/sales

ACH