[Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements that reflect current views on future performance, including plans, objectives, financial performance, and business strategies - This section contains forward-looking statements that reflect current views on future performance, including plans, objectives, financial performance, and business strategies[7](index=7&type=chunk) - These statements are based on management's current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially[8](index=8&type=chunk) - Key risk factors include the COVID-19 pandemic, changes in laws/regulations, economic/competitive factors, foreign exchange volatility, cyber-attacks, agent/banking relationships, new technology, debt obligations, regulatory compliance, and political instability[10](index=10&type=chunk) [Part I - Financial Information](index=6&type=section&id=PART%201%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the reported periods [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for International Money Express, Inc., including the balance sheets, statements of operations and comprehensive income, statements of changes in stockholders' equity, and statements of cash flows, along with detailed explanatory notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity as of specific dates Balance Sheet Summary | Metric | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | Change (in thousands) | | :----- | :--------------------------- | :------------------------------- | :-------------------- | | Total Assets | $244,941 | $227,306 | +$17,635 | | Cash | $101,985 | $86,117 | +$15,868 | | Accounts Receivable, net | $60,023 | $39,754 | +$20,269 | | Total Current Assets | $170,004 | $148,227 | +$21,777 | | Total Liabilities | $173,045 | $171,339 | +$1,706 | | Total Stockholders' Equity | $71,896 | $55,967 | +$15,929 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section details the company's revenues, expenses, and net income over specific reporting periods Statements of Operations and Comprehensive Income | Metric (in thousands) | 3 Months Ended June 30, 2020 | 3 Months Ended June 30, 2019 | YoY Change | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | YoY Change | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Total Revenues | $85,062 | $82,675 | +2.9% | $162,313 | $151,024 | +7.5% | | Operating Income | $13,876 | $11,964 | +16.0% | $23,514 | $18,271 | +28.7% | | Net Income | $8,978 | $7,074 | +26.9% | $14,666 | $10,230 | +43.4% | | Basic EPS | $0.24 | $0.19 | +26.3% | $0.39 | $0.28 | +39.3% | | Diluted EPS | $0.24 | $0.19 | +26.3% | $0.39 | $0.28 | +39.3% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the company's equity components, including net income and share-based compensation Stockholders' Equity Changes | Metric (in thousands) | Balance, Dec 31, 2019 | Net Income | Share-based Compensation | Adjustment from Foreign Currency Translation, net | Balance, June 30, 2020 | | :-------------------- | :-------------------- | :--------- | :----------------------- | :--------------------------------------------- | :--------------------- | | Total Stockholders' Equity | $55,967 | $14,666 | $1,408 | $(141) | $71,896 | - Common stock shares outstanding increased slightly from **38,034,389** at December 31, 2019, to **38,035,279** at June 30, 2020, mainly due to the exercise of stock options[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities Cash Flow Activities | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | YoY Change | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by operating activities | $21,473 | $32,086 | $(10,613) | | Net cash used in investing activities | $(1,591) | $(2,663) | +$1,072 | | Net cash (used in) provided by financing activities | $(3,830) | $4,327 | $(8,157) | | Net increase in cash | $15,868 | $33,855 | $(17,987) | | Cash, end of period | $101,985 | $106,884 | $(4,899) | - Cash paid for interest decreased to **$3.133 million** in H1 2020 from **$3.783 million** in H1 2019[21](index=21&type=chunk) - Cash paid for income taxes increased to **$2.403 million** in H1 2020 from **$1.060 million** in H1 2019[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanatory notes supporting the condensed consolidated financial statements [Note 1 – Business and Accounting Policies](index=12&type=section&id=NOTE%201%20%E2%80%93%20BUSINESS%20AND%20ACCOUNTING%20POLICIES) International Money Express, Inc. operates as a money transmitter primarily from the U.S. and Canada to Latin America, Africa, and Asia through a network of agents and company-operated stores. The condensed consolidated financial statements are prepared in accordance with GAAP. The COVID-19 pandemic did not materially adversely affect the company's financial results for the reported periods, but its future impact remains uncertain - The Company operates as a money transmitter between the U.S./Canada and Mexico, Guatemala, other Latin American countries, Africa, and Asia[23](index=23&type=chunk) - Operations are conducted through authorized agents in retail establishments and **33** Company-operated stores[23](index=23&type=chunk) - The COVID-19 pandemic did not have a material adverse effect on the Company's financial condition, results of operations, and cash flows for the three and six months ended June 30, 2020[28](index=28&type=chunk) - The ultimate impact of COVID-19 remains uncertain and depends on the pandemic's duration, severity, and impact on economic conditions, particularly customer unemployment levels[29](index=29&type=chunk) [Note 2 – Revenues](index=14&type=section&id=NOTE%202%20%E2%80%93%20REVENUES) Total revenues for the three months ended June 30, 2020, were $85.062 million, and for the six months, $162.313 million, primarily driven by wire transfer and money order fees, net, and foreign exchange gains. The company recognizes revenue from a single performance obligation: collecting money and making funds available to recipients Revenue Breakdown | Revenue Type (in thousands) | 3 Months Ended June 30, 2020 | 3 Months Ended June 30, 2019 | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Wire transfer and money order fees, net | $72,793 | $70,490 | $139,888 | $128,941 | | Foreign exchange gain, net | $11,660 | $11,623 | $21,214 | $21,025 | | Other income | $609 | $562 | $1,211 | $1,058 | | **Total revenues** | **$85,062** | **$82,675** | **$162,313** | **$151,024** | - The company acts as principal in transactions, reporting revenue on a gross basis[40](index=40&type=chunk) - A loyalty program exists where points can be redeemed for discounted fees or exchange rates, with a portion of consideration recorded as deferred revenue[37](index=37&type=chunk) [Note 3 – Accounts Receivable, Net of Allowance](index=16&type=section&id=NOTE%203%20%E2%80%93%20ACCOUNTS%20RECEIVABLE%2C%20NET%20OF%20ALLOWANCE) Accounts receivable, net, increased to $60.023 million at June 30, 2020, from $39.754 million at December 31, 2019. The allowance for credit losses also increased, with a higher provision for bad debt in the six months ended June 30, 2020, due to the deterioration of creditworthiness of some sending agents Accounts Receivable Details | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :-------------------- | :------------ | :---------------- | | Accounts receivable | $60,831 | $40,513 | | Allowance for credit losses | $(808) | $(759) | | **Accounts receivable, net** | **$60,023** | **$39,754** | Allowance for Credit Losses Movement | Allowance for Credit Losses (in thousands) | 3 Months Ended June 30, 2020 | 3 Months Ended June 30, 2019 | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | | :---------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Beginning balance | $1,477 | $1,242 | $1,236 | $1,290 | | Provision | $364 | $192 | $1,101 | $552 | | Charge-offs | $(589) | $(272) | $(1,186) | $(728) | | Recoveries | $98 | $74 | $199 | $122 | | **Ending Balance** | **$1,350** | **$1,236** | **$1,350** | **$1,236** | - The increase in provision for bad debt for the six months ended June 30, 2020, was primarily due to the deterioration of creditworthiness of a small number of sending agents affected by the COVID-19 pandemic[41](index=41&type=chunk) [Note 4 – Prepaid Expenses and Other Current Assets](index=16&type=section&id=NOTE%204%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid expenses and other current assets decreased to $2.536 million at June 30, 2020, from $4.155 million at December 31, 2019, primarily due to decreases in prepaid insurance, prepaid fees, and prepaid taxes Prepaid Expenses and Other Current Assets Details | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :-------------------- | :------------ | :---------------- | | Prepaid insurance | $188 | $404 | | Prepaid fees | $786 | $1,211 | | Notes receivable, net of allowance | $675 | $648 | | Prepaid taxes | $0 | $1,025 | | Other prepaid expenses and current assets | $887 | $867 | | **Total** | **$2,536** | **$4,155** | [Note 5 – Goodwill and Intangible Assets](index=16&type=section&id=NOTE%205%20%E2%80%93%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill remained stable at $36.260 million, while intangible assets, net, decreased to $23.905 million at June 30, 2020, from $27.381 million at December 31, 2019, due to amortization expense. The company performed a qualitative assessment and found no impairment indicators for goodwill or finite-lived intangibles despite the COVID-19 pandemic Goodwill and Intangible Assets Movement | Metric (in thousands) | December 31, 2019 | Amortization Expense | June 30, 2020 | | :-------------------- | :---------------- | :------------------- | :------------ | | Goodwill | $36,260 | $0 | $36,260 | | Intangibles | $27,381 | $(3,476) | $23,905 | - Intangible assets (agent relationships, trade name, developed technology) are amortized over **15 years** using an accelerated method[43](index=43&type=chunk) - The company performed a qualitative assessment of goodwill and finite-lived intangibles and determined no impairment was necessary as of June 30, 2020, despite the COVID-19 pandemic[45](index=45&type=chunk)[46](index=46&type=chunk) [Note 6 – Wire Transfers and Money Orders Payable, Net](index=18&type=section&id=NOTE%206%20%E2%80%93%20WIRE%20TRANSFERS%20AND%20MONEY%20ORDERS%20PAYABLE%2C%20NET) Wire transfers and money orders payable, net, increased to $47.712 million at June 30, 2020, from $40.197 million at December 31, 2019, primarily due to increases in wire transfers payable and customer voided wires payable Wire Transfers and Money Orders Payable Details | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :-------------------- | :------------ | :---------------- | | Wire transfers payable, net | $19,762 | $16,058 | | Customer voided wires payable | $13,114 | $10,937 | | Money orders payable | $14,836 | $13,202 | | **Total** | **$47,712** | **$40,197** | - Customer voided wires payable represent unclaimed funds from uncompleted wire transfers, subject to state escheatment laws with abandonment periods ranging from **three to seven years**[48](index=48&type=chunk) [Note 7 – Accrued and Other Liabilities](index=19&type=section&id=NOTE%207%20%E2%80%93%20ACCRUED%20AND%20OTHER%20LIABILITIES) Accrued and other liabilities increased to $24.628 million at June 30, 2020, from $23.074 million at December 31, 2019, mainly due to increases in commissions payable to sending agents and accrued taxes. The deferred revenue loyalty program liability remained stable Accrued and Other Liabilities Details | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :-------------------- | :------------ | :---------------- | | Commissions payable to sending agents | $11,163 | $10,124 | | Accrued legal settlement | $2,925 | $3,250 | | Accrued salaries and benefits | $2,008 | $2,374 | | Accrued taxes | $3,423 | $2,345 | | Deferred revenue loyalty program | $2,494 | $2,495 | | **Total** | **$24,628** | **$23,074** | - The remaining balance of the TCPA legal settlement, approximately **$2.9 million**, is included in accrued and other liabilities[49](index=49&type=chunk)[76](index=76&type=chunk) - The deferred revenue loyalty program liability remained stable, with **$852 thousand** deferred and **$853 thousand** recognized during the period[49](index=49&type=chunk) [Note 8 – Debt](index=19&type=section&id=NOTE%208%20%E2%80%93%20DEBT) Total debt, net, decreased to $84.101 million at June 30, 2020, from $87.623 million at December 31, 2019, primarily due to scheduled repayments of the term loan. The company maintains a $35 million revolving credit facility and a $90 million term loan, with no outstanding amounts drawn on the revolving facility as of June 30, 2020 Debt Details | Metric (in thousands) | June 30, 2020 | December 31, 2019 | | :-------------------- | :------------ | :---------------- | | Term loan | $93,214 | $97,044 | | Less: Current portion of long-term debt | $(7,044) | $(7,044) | | Less: Debt origination costs | $(2,069) | $(2,377) | | **Total Debt, net** | **$84,101** | **$87,623** | - The Credit Agreement provides for a **$35 million** revolving credit facility and a **$90 million** term loan facility, maturing on November 7, 2023[51](index=51&type=chunk)[166](index=166&type=chunk) - No outstanding amounts were drawn on the revolving credit facility as of June 30, 2020[51](index=51&type=chunk) - The company returned **$3.5 million** received under the Paycheck Protection Program on April 29, 2020, after re-evaluating eligibility criteria[57](index=57&type=chunk)[172](index=172&type=chunk) [Note 9 – Fair Value Measurements](index=21&type=section&id=NOTE%209%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) The company determines fair value in accordance with FASB guidance, categorizing inputs into a three-level hierarchy. Non-financial assets like goodwill and intangibles are measured on a nonrecurring basis, while cash, accounts receivable, and payables are representative of fair value due to their short turnover. The fair value of the term loan and revolving credit facility approximates their book value - Fair value is defined as an exit price in an orderly transaction between market participants, categorized into a three-level hierarchy (Level 1: quoted prices, Level 2: observable inputs, Level 3: unobservable inputs)[58](index=58&type=chunk) - Goodwill and intangible assets are non-financial assets measured at fair value on a nonrecurring basis[59](index=59&type=chunk) - Cash, accounts receivable, prepaid wires, accounts payable, and wire transfers/money orders payable are representative of their fair values due to short turnover[59](index=59&type=chunk) - The fair value of the term loan and revolving credit facility approximates their book value[60](index=60&type=chunk) [Note 10 – Share-Based Compensation](index=21&type=section&id=NOTE%2010%20%E2%80%93%20SHARE-BASED%20COMPENSATION) The company's 2020 Omnibus Equity Compensation Plan, approved in June 2020, reserves 3.7 million shares for stock options and RSUs. Share-based compensation expense for stock options was $0.6 million for both Q2 2020 and Q2 2019, and $1.2 million for both H1 2020 and H1 2019. As of June 30, 2020, 3.1 million stock options were outstanding with $6.8 million in unrecognized compensation expense - The 2020 Omnibus Equity Compensation Plan, approved June 26, 2020, reserves **3.7 million** shares for stock options and RSUs[61](index=61&type=chunk) - Share-based compensation expense for stock options was **$0.6 million** for the three months ended June 30, 2020 and 2019, and **$1.2 million** for the six months ended June 30, 2020 and 2019[63](index=63&type=chunk) - As of June 30, 2020, **3.1 million** stock options were outstanding with **$6.8 million** of unrecognized compensation expense, expected to be recognized over a weighted-average period of **2.4 years**[63](index=63&type=chunk) - For RSUs, compensation expense was **$0.1 million** for both Q2 2020 and Q2 2019, and **$0.2 million** and **$0.1 million** for H1 2020 and H1 2019, respectively, with **$0.3 million** of unrecognized compensation expense as of June 30, 2020[64](index=64&type=chunk) [Note 11 – Earnings Per Share](index=23&type=section&id=NOTE%2011%20%E2%80%93%20EARNINGS%20PER%20SHARE) Basic and diluted earnings per share for the three months ended June 30, 2020, were $0.24, up from $0.19 in the prior year. For the six months, EPS was $0.39, up from $0.28. The calculation includes adjustments for dilutive securities like RSUs and stock options Earnings Per Share Calculation | Metric | 3 Months Ended June 30, 2020 | 3 Months Ended June 30, 2019 | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income for basic and diluted EPS (in thousands) | $8,978 | $7,074 | $14,666 | $10,230 | | Weighted-average common shares outstanding – basic | 38,035,279 | 37,505,598 | 38,035,146 | 36,847,845 | | Weighted-average common shares outstanding – diluted | 38,047,792 | 37,594,151 | 38,043,233 | 36,898,462 | | **Earnings per common share – basic and diluted** | **$0.24** | **$0.19** | **$0.39** | **$0.28** | - As of June 30, 2020, **3.1 million** options and **22.5 thousand** RSUs were excluded from diluted EPS calculation because their inclusion would be anti-dilutive[66](index=66&type=chunk) [Note 12 – Income Taxes](index=24&type=section&id=NOTE%2012%20%E2%80%93%20INCOME%20TAXES) The income tax provision for the three months ended June 30, 2020, was $3.265 million, and for the six months, $5.345 million, reflecting higher taxable income. The effective tax rate is influenced by state and foreign tax rates, and non-deductible expenses. The CARES Act did not have a material effect on the tax provision for the reported periods Income Tax Provision | Metric (in thousands) | 3 Months Ended June 30, 2020 | 3 Months Ended June 30, 2019 | 6 Months Ended June 30, 2020 | 6 Months Ended June 30, 2019 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income before income taxes | $12,243 | $9,676 | $20,011 | $13,913 | | US statutory tax rate | 21 % | 21 % | 21 % | 21 % | | Income tax expense at statutory rate | $2,571 | $2,032 | $4,202 | $2,922 | | **Total tax provision** | **$3,265** | **$2,602** | **$5,345** | **$3,683** | - The increase in income tax provision was mainly attributable to higher taxable income resulting from higher revenues[121](index=121&type=chunk)[150](index=150&type=chunk) - The CARES Act did not have a material effect on the annual effective tax rate or income tax provision for the three and six months ended June 30, 2020[70](index=70&type=chunk) - A valuation allowance of **$0.3 million** was recorded on deferred tax assets associated with Canadian net operating loss carryforwards as of June 30, 2020[109](index=109&type=chunk) [Note 13 – Commitments and Contingencies](index=24&type=section&id=NOTE%2013%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company has future minimum rental payments under operating leases totaling $5.537 million. It is also subject to legal proceedings, including a class action lawsuit under the TCPA, for which a $3.25 million settlement fund was established, with a remaining balance of $2.9 million accrued. The company's subsidiaries were in compliance with regulatory minimum tangible net worth and liquid asset requirements Operating Lease Payment Schedule | Operating Lease Payments (in thousands) | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | | :------------------------------------ | :---- | :--------------- | :----------- | :----------- | :---------------- | | Future minimum rental payments | $5,537 | $768 | $2,199 | $1,596 | $265 | - A class action complaint under the TCPA was settled for **$3.25 million**, with a remaining balance of approximately **$2.9 million** included in accrued and other liabilities as of June 30, 2020[74](index=74&type=chunk)[76](index=76&type=chunk) - The company's subsidiaries were in compliance with minimum tangible net worth and liquid asset regulatory requirements as of June 30, 2020[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, including the impact of the COVID-19 pandemic, an overview of the business, key factors affecting operations, how performance is assessed, detailed results of operations for the three and six months ended June 30, 2020, liquidity and capital resources, and critical accounting policies [Recent Developments](index=26&type=section&id=Recent%20Developments) This section outlines recent operational adjustments and financial impacts, including the company's response to the COVID-19 pandemic - The company withdrew its 2020 guidance due to heightened uncertainty from the COVID-19 pandemic[80](index=80&type=chunk) - Operational adjustments included temporary closure of **33** company-operated stores (all reopened by June 30, 2020) and mandatory work-at-home programs[81](index=81&type=chunk) - Transaction volume saw a slight year-over-year decrease at the pandemic's start but increased in May and June 2020[83](index=83&type=chunk) - Increased foreign exchange volatility due to the pandemic had a positive overall effect on results of operations to date[83](index=83&type=chunk) - The COVID-19 pandemic did not have a material adverse effect on the company's financial condition, results of operations, and cash flows for the three and six months ended June 30, 2020[84](index=84&type=chunk) [Overview](index=28&type=section&id=Overview) This section provides a general description of the company's money remittance services, market focus, and operational reach - International Money Express, Inc. is a rapidly growing money remittance services company focused primarily on the United States to Latin America and the Caribbean (LAC) corridor[87](index=87&type=chunk) - The company expanded services to Africa from the U.S. and sending services from Canada to Latin America and Africa in 2019[87](index=87&type=chunk) - Services are available through over **100,000** sending and paying agents, **33** Company-operated stores, and online/mobile platforms[87](index=87&type=chunk)[89](index=89&type=chunk) - Processed approximately **7.6 million** remittances in Q2 2020 (**8% growth YoY**) and **14.6 million** in H1 2020 (**3% growth YoY**)[89](index=89&type=chunk) - Revenue is generated from transaction fees paid by customers and foreign exchange gains from currency exchange spreads[88](index=88&type=chunk) [Key Factors and Trends Affecting our Business](index=28&type=section&id=Key%20Factors%20and%20Trends%20Affecting%20our%20Business) This section identifies significant internal and external factors, including competition, regulatory compliance, and economic conditions, influencing the company's business performance - Key factors include the COVID-19 pandemic, competition, foreign exchange rate volatility, cyber-attacks, agent/banking relationships, new technology, debt obligations, interest rate risk, regulatory compliance, international political factors, tax law changes, consumer fraud, and U.S./international economic conditions[91](index=91&type=chunk)[96](index=96&type=chunk) - Latin American political and economic conditions remained unstable in 2019 and H1 2020, but money remittances have generally been resilient[93](index=93&type=chunk) - The company maintains a regulatory compliance department and periodically reviews policies to ensure efficacy of anti-money laundering and regulatory compliance programs[95](index=95&type=chunk) - The market for money remittance services is highly competitive, with competition from large providers (Western Union, MoneyGram, Euronet) and smaller niche players[96](index=96&type=chunk) - The company expects increasing competition from new electronic platforms but does not anticipate significant adoption rates in the near term for its customer segment[98](index=98&type=chunk) [How We Assess the Performance of Our Business](index=32&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) This section explains the key financial and non-GAAP metrics used by management to evaluate the company's operational and financial performance - Key performance indicators include revenues, service charges from agents and banks, salaries and benefits, selling, general and administrative expenses, and net income[100](index=100&type=chunk) - Non-GAAP financial measures used are Adjusted Net Income, Adjusted Earnings per Share, and Adjusted EBITDA, which exclude certain non-cash or non-core operating items[100](index=100&type=chunk)[129](index=129&type=chunk) - Adjusted EBITDA is a primary metric for management, excluding interest expense, income tax, depreciation and amortization, non-cash share-based compensation, and non-recurring charges[127](index=127&type=chunk)[138](index=138&type=chunk) - Revenue is primarily generated from transaction fees paid by customers and foreign exchange gains, with variations based on send/receive locations and amounts[101](index=101&type=chunk) - Operating expenses include agent commissions, bank fees, cash and share-based compensation, fixed overhead, IT, rent, advertising, bad debt, and depreciation/amortization[102](index=102&type=chunk)[103](index=103&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, comparing revenues and expenses across reporting periods [Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019](index=35&type=section&id=Three%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202019) For Q2 2020, total revenues grew by 2.9% to $85.1 million, primarily from a 3% increase in wire transfer transaction volume. Operating expenses increased slightly, but net income rose by 26.9% to $9.0 million, driven by revenue growth, reduced salaries and benefits, and lower interest expense Q2 2020 vs Q2 2019 Financial Performance | Metric (in thousands) | Q2 2020 | Q2 2019 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Total Revenues | $85,062 | $82,675 | +$2,387 (+2.9%) | | Wire transfer and money order fees, net | $72,793 | $70,490 | +$2,303 (+3.3%) | | Foreign exchange gain, net | $11,660 | $11,623 | +$37 (+0.3%) | | Total Operating Expenses | $71,186 | $70,711 | +$475 (+0.7%) | | Service charges from agents and banks | $56,271 | $54,622 | +$1,649 (+3.0%) | | Salaries and benefits | $7,069 | $7,597 | $(528) (-6.9%) | | Other selling, general and administrative expenses | $5,155 | $5,337 | $(182) (-3.4%) | | Depreciation and amortization | $2,691 | $3,155 | $(464) (-14.7%) | | Interest expense | $1,633 | $2,288 | $(655) (-28.6%) | | Income tax provision | $3,265 | $2,602 | +$663 (+25.5%) | | Net Income | $8,978 | $7,074 | +$1,904 (+26.9%) | - Wire transfer and money order fees increased due to a **3%** increase in transaction volume and **6%** growth in the agent network[114](index=114&type=chunk) - Salaries and benefits decreased primarily due to a **$0.4 million** decrease in commission expense for representatives[117](index=117&type=chunk) - Other selling, general and administrative expenses decreased due to a **$0.6 million** reduction in advertising and promotion, partially offset by increased IT-related expenses and bad debt provision[118](index=118&type=chunk) [Non-GAAP Financial Measures (Three Months Ended June 30)](index=36&type=section&id=Non-GAAP%20Financial%20Measures) For Q2 2020, Adjusted Net Income increased by 13% to $10.8 million, and Adjusted EPS increased by 8% to $0.28. Adjusted EBITDA rose by 7% to $17.4 million. These non-GAAP measures exclude non-cash amortization, share-based compensation, and other non-recurring items to provide a clearer view of core operating performance Non-GAAP Metrics (Q2) | Metric (in thousands) | Q2 2020 | Q2 2019 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Net Income (GAAP) | $8,978 | $7,074 | +$1,904 (+26.9%) | | Adjusted Net Income | $10,823 | $9,601 | +$1,222 (+12.7%) | | Adjusted EPS (Basic and Diluted) | $0.28 | $0.26 | +$0.02 (+7.7%) | | Adjusted EBITDA | $17,373 | $16,264 | +$1,109 (+6.8%) | - Adjusted Net Income increased primarily due to a **$2.4 million** increase in revenues, offset by a **$1.7 million** increase in service charges from agents and banks[131](index=131&type=chunk) - Adjusted EBITDA increased primarily due to a **$2.4 million** increase in revenues, offset by a **$1.7 million** increase in service charges from agents and banks[139](index=139&type=chunk) - Non-GAAP adjustments include share-based compensation, offering costs, TCPA settlement, employee severance, other charges/expenses, and amortization of intangibles[132](index=132&type=chunk)[140](index=140&type=chunk) [Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019](index=40&type=section&id=Six%20Months%20Ended%20June%2030%2C%202020%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202019) For H1 2020, total revenues increased by 7.5% to $162.3 million, driven by an 11% increase in transaction volume. Operating expenses rose, but net income surged by 43.4% to $14.7 million, benefiting from revenue growth, reduced salaries and benefits, and lower interest expense H1 2020 vs H1 2019 Financial Performance | Metric (in thousands) | H1 2020 | H1 2019 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Total Revenues | $162,313 | $151,024 | +$11,289 (+7.5%) | | Wire transfer and money order fees, net | $139,888 | $128,941 | +$10,947 (+8.5%) | | Foreign exchange gain, net | $21,214 | $21,025 | +$189 (+0.9%) | | Total Operating Expenses | $138,799 | $132,753 | +$6,046 (+4.6%) | | Service charges from agents and banks | $108,498 | $100,191 | +$8,307 (+8.3%) | | Salaries and benefits | $14,428 | $15,194 | $(766) (-5.0%) | | Other selling, general and administrative expenses | $10,492 | $11,061 | $(569) (-5.1%) | | Depreciation and amortization | $5,381 | $6,307 | $(926) (-14.7%) | | Interest expense | $3,503 | $4,358 | $(855) (-19.6%) | | Income tax provision | $5,345 | $3,683 | +$1,662 (+45.1%) | | Net Income | $14,666 | $10,230 | +$4,436 (+43.4%) | - Wire transfer and money order fees increased due to an **11%** increase in transaction volume and **6%** growth in the agent network[142](index=142&type=chunk)[144](index=144&type=chunk) - Salaries and benefits decreased primarily due to a **$0.8 million** decrease in commission expense for representatives[146](index=146&type=chunk) - Other selling, general and administrative expenses decreased due to non-recurring legal/professional fees in 2019, reduced advertising/promotion, and lower travel expenses, partially offset by increased IT-related expenses and bad debt provision[147](index=147&type=chunk) [Non-GAAP Financial Measures (Six Months Ended June 30)](index=43&type=section&id=Non-GAAP%20Financial%20Measures) For H1 2020, Adjusted Net Income increased by 19% to $18.4 million, and Adjusted EPS increased by 14% to $0.48. Adjusted EBITDA rose by 13% to $30.6 million. These non-GAAP measures reflect strong core operating performance, excluding specific non-cash and non-recurring items Non-GAAP Metrics (H1) | Metric (in thousands) | H1 2020 | H1 2019 | YoY Change | | :-------------------- | :------ | :------ | :--------- | | Net Income (GAAP) | $14,666 | $10,230 | +$4,436 (+43.4%) | | Adjusted Net Income | $18,419 | $15,432 | +$2,987 (+19.4%) | | Adjusted EPS (Basic and Diluted) | $0.48 | $0.42 | +$0.06 (+14.3%) | | Adjusted EBITDA | $30,593 | $27,028 | +$3,565 (+13.2%) | - Adjusted Net Income increased primarily due to an **$11.3 million** increase in revenues, offset by an **$8.3 million** increase in service charges from agents and banks[152](index=152&type=chunk) - Adjusted EBITDA increased primarily due to an **$11.3 million** increase in revenues, offset by an **$8.3 million** increase in service charges from agents and banks[159](index=159&type=chunk) - Non-GAAP adjustments include share-based compensation, offering costs, TCPA settlement, employee severance, other charges/expenses, and amortization of intangibles[153](index=153&type=chunk)[160](index=160&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's ability to generate and manage cash, including sources of funds and debt obligations - The company's principal sources of liquidity are cash generated by operating activities and borrowings under its revolving credit facility[164](index=164&type=chunk) - The company expects to fund its liquidity requirements through internally generated funds and available credit for at least the next twelve months[165](index=165&type=chunk) - Total indebtedness was **$93.2 million** as of June 30, 2020, consisting of borrowings under the term loan facility[171](index=171&type=chunk) - **$53.0 million** of additional borrowings were available under credit facilities as of June 30, 2020[171](index=171&type=chunk) - The company was in compliance with all covenants of the Credit Agreement as of June 30, 2020, including a minimum fixed charge coverage ratio of **1.25:1.00** and a maximum consolidated leverage ratio of **3.25:1.00**[170](index=170&type=chunk)[171](index=171&type=chunk) - The company returned **$3.5 million** received under the Paycheck Protection Program on April 29, 2020, after re-evaluating eligibility criteria[172](index=172&type=chunk) [Contractual Obligations](index=47&type=section&id=Contractual%20Obligations) This section outlines the company's future payment commitments under debt, interest, and non-cancelable operating leases Contractual Obligations Overview | Obligation (in thousands) | Total | Less than 1 year | 1 to 3 years | 3 to 5 years | More than 5 years | | :------------------------ | :---- | :--------------- | :----------- | :----------- | :---------------- | | Debt, principal payments | $93,214 | $7,661 | $19,153 | $66,400 | $0 | | Interest payments | $13,145 | $4,392 | $7,584 | $1,169 | $0 | | Non-cancelable operating leases | $5,537 | $1,477 | $2,199 | $1,596 | $265 | | **Total** | **$111,896** | **$13,530** | **$28,936** | **$69,165** | **$265** | - The debt principal payment obligations are gross of unamortized debt origination costs[181](index=181&type=chunk) - Interest payments are calculated using rates in effect on June 30, 2020, assuming no voluntary prepayments[181](index=181&type=chunk) [Off-Balance Sheet Arrangements](index=49&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements that could impact the company's financial position - The company is not a party to any material off-balance sheet arrangements, such as guarantee contracts, retained or contingent interests, certain derivative instruments, and variable interest entities[184](index=184&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the accounting policies and estimates that require significant judgment and can materially affect financial reporting - Critical accounting policies include Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts, Goodwill and Intangible Assets, and Income Taxes[186](index=186&type=chunk)[188](index=188&type=chunk) - No material changes to these critical accounting policies and estimates were reported from the Annual Report on Form 10-K for the year ended December 31, 2019[186](index=186&type=chunk) [Recent Accounting Pronouncements](index=49&type=section&id=Recent%20Accounting%20Pronouncements) This section provides information on newly adopted or pending accounting standards and their potential impact on the financial statements - Refer to Note 1 of the unaudited condensed consolidated financial statements for further information on recent accounting pronouncements[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to foreign currency risk, primarily from Mexican peso and Guatemalan quetzal fluctuations, and interest rate risk on its variable-rate debt. It also faces credit risk from bank balances and sending agents. The COVID-19 pandemic has increased volatility in foreign exchange rates and favorably affected interest expense due to declining market rates [Foreign Currency Risk](index=50&type=section&id=Foreign%20Currency%20Risk) This section details the company's exposure to fluctuations in foreign exchange rates, particularly for the Mexican peso and Guatemalan quetzal - The company manages foreign currency risk through spot transactions, with exposure limited as transactions settle within **two business days**[189](index=189&type=chunk) - Revenues from foreign subsidiaries represent less than **3%** of consolidated revenues, minimizing the impact of a **10%** change in currency rates on overall operating results[191](index=191&type=chunk) - The Mexican peso/dollar rate experienced increased volatility starting March 2020 due to the COVID-19 pandemic, with further volatility and depreciation against the U.S. dollar expected in 2020[193](index=193&type=chunk) - Wire transfers and money orders payable included **$3.5 million** (June 30, 2020) and **$9.9 million** (December 31, 2019) denominated primarily in Mexican pesos and Guatemalan quetzales[190](index=190&type=chunk) [Interest Rate Risk](index=50&type=section&id=Interest%20Rate%20Risk) This section describes the company's exposure to changes in interest rates, primarily affecting its variable-rate debt obligations - Interest on the term loan and revolving credit facility is variable, based on LIBOR or a 'base rate' plus an applicable margin[194](index=194&type=chunk) - Market interest rates declined significantly due to COVID-19, favorably affecting interest expense in Q2 2020 (e.g., **30-day LIBOR at 0.16%** as of June 30, 2020)[194](index=194&type=chunk) - A hypothetical **1%** increase in interest rates on the **$93.2 million** outstanding term loan would increase annual cash interest expense by approximately **$0.9 million**[195](index=195&type=chunk) [Credit Risk](index=50&type=section&id=Credit%20Risk) This section addresses the company's exposure to potential losses from the failure of counterparties to meet their obligations, including banks and sending agents - The company is exposed to credit risk from cash balances in U.S. and international banks (Mexico, Guatemala, Canada), with no losses incurred[196](index=196&type=chunk) - Credit risk also arises from receivable balances and **$1.5 million** in notes receivable from sending agents[197](index=197&type=chunk) - Provision for bad debt increased to **$1.1 million** (**0.7% of total revenues**) for H1 2020 from **$0.6 million** (**0.4% of total revenues**) for H1 2019[200](index=200&type=chunk) - Higher write-offs in H1 2020 resulted primarily from the deterioration of creditworthiness of a small number of sending agents during Q1, impacted by events other than the COVID-19 pandemic[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of June 30, 2020, providing reasonable assurance that material information is recorded, processed, summarized, and reported timely. No material changes in internal control over financial reporting occurred during the fiscal quarter, despite operational changes due to the COVID-19 pandemic [Evaluation of Disclosure Controls and Procedures](index=53&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details management's assessment of the effectiveness of the company's disclosure controls and procedures - Disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that objectives are met[203](index=203&type=chunk) - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2020[204](index=204&type=chunk) [Changes in Internal Control Over Financial Reporting](index=53&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the quarter - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[205](index=205&type=chunk) - This is despite operational changes made in response to the COVID-19 pandemic[205](index=205&type=chunk) [Part II - Other Information](index=54&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional disclosures not covered in Part I, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings and claims in the ordinary course of business. Management believes these will not have a material adverse effect on the business, financial condition, and results of operations, except for a previously disclosed TCPA class action settlement - The company is subject to various claims, charges, and litigation matters that arise in the ordinary course of business[207](index=207&type=chunk) - Management does not believe these actions, individually or in the aggregate, will have a material adverse effect on the business, financial condition, and results of operations, except for the TCPA claim[207](index=207&type=chunk) - Reference is made to Note 13 – Commitments and Contingencies for information regarding certain legal proceedings[208](index=208&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section updates the principal risk factors, emphasizing the potential negative impact of public health crises like the COVID-19 pandemic on the company's financial condition, operations, and cash flow. While the pandemic had a limited effect on reported results for Q2 and H1 2020, its ultimate impact remains uncertain and could be materially adverse if conditions worsen - No material changes to principal risks from the Annual Report on Form 10-K for the year ended December 31, 2019, except as set forth in this section[209](index=209&type=chunk) - Public health crises, such as the COVID-19 pandemic, may negatively affect the company's financial condition, results of operations, business, and cash flow[210](index=210&type=chunk) - The extent of the COVID-19 pandemic's impact depends on numerous evolving factors, including its duration, governmental responses, and economic activity[210](index=210&type=chunk) - Adjustments to operating procedures due to COVID-19 had a limited effect on the company's financial condition, results of operations, and cash flows for the three and six months ended June 30, 2020[212](index=212&type=chunk) - The ultimate impact of the COVID-19 pandemic remains uncertain and could be materially adverse if the global response escalates or governmental decisions are ineffective/reversed[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[214](index=214&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[215](index=215&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[216](index=216&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item - None[217](index=217&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including equity compensation plans, stock option and RSU agreements, certifications under the Sarbanes-Oxley Act, and Inline XBRL documents - Includes the International Money Express, Inc. 2020 Omnibus Equity Compensation Plan and 2020 Employee Stock Purchase Plan[219](index=219&type=chunk) - Includes certifications pursuant to Section 302 of the Sarbanes-Oxley Act and 18 U.S.C. § 1350 from the Chief Executive Officer and Chief Financial Officer[219](index=219&type=chunk) - Includes Inline XBRL Instance Document and Taxonomy Extension files[219](index=219&type=chunk) [Signatures](index=58&type=section&id=SIGNATURES) This section contains the official signatures of the company's Chief Executive Officer and Chief Financial Officer, certifying the report - The report is signed by Robert Lisy, Chief Executive Officer and President, and Tony Lauro II, Chief Financial Officer[222](index=222&type=chunk) - Date of signing: August 6, 2020[222](index=222&type=chunk)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37986 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) INTERNATIONAL MONEY EXPRESS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inco ...

OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to Commission File No. 001-37986 INTERNATIONAL MONEY EXPRESS, INC. (Exact name of registrant as specified in its charter) Delaware 47-4219082 (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37986 INTERNATIONAL MONEY EXPRESS, INC. (Exact name of registrant as specified in its charter) Delaware 47-4219082 (State or ot ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Registrant's telephone number, including area code) For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37986 INTERNATIONAL MONEY EXPRESS, INC. (Exact name of registrant as specified ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION INTERNATIONAL MONEY EXPRESS, INC. (Exact name of registrant as specified in its charter) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q For the transition period from to __________ Commission File No. 001-37986 Delaware 47-4219082 (Stat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-37986 INTERNATIONAL MONEY EXPRESS, INC. (305) 671-8000 (Registrant's telephone number, including area code) Securities registered pursu ...