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, ~~2020 OR~~2021


☐			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 other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

9480 South Dixie Highway Miami, Florida						33156
(Address of Principal Executive Offices)						(Zip Code)


(305) 671-8000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock ($0.0001 par value)	IMXI	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


☐	Large accelerated filer	☒	Accelerated filer
☐	Non-accelerated filer	☒☐	Smaller reporting company
		☒	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

☒

As of October ~~30, 2020,~~29, 2021, there were ~~38,072,882~~38,613,689 shares of the registrant’s common stock, $0.0001 par value per share, outstanding. The registrant has no other class of common stock outstanding.

Index

INTERNATIONAL MONEY EXPRESS, INC.

INDEX TO FINANCIAL STATEMENTS


		Page

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3

PART 1 - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	4

	Condensed Consolidated Balance Sheets as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020	4

	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020	8

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2023

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3538

Item 4.	Controls and Procedures	3740

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	3841

Item 1A.	Risk Factors	3841

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3941

Item 3.	Defaults Upon Senior Securities	3941

Item 4.	Mine Safety Disclosures	3941

Item 5.	Other Information	3941

Item 6.	Exhibits	4042

SIGNATURES		4143

Index

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to certain events that could have an effect on our future performance, including but without limitation, statements regarding our plans, objectives, financial performance, business strategies, expectations for our business and the business of the Company.

These statements relate to expectations concerning matters that are not historical fact and may include the words or phrases such as “would,” “will,” “should,” “expects,” “believes,” “anticipates,” “continues,” “could,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “forecasts,” “intends,” “assumes,” “estimates,” “approximately,” “shall,” “our planning assumptions,” “future outlook” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Except for historical information, matters discussed in this Form 10-Q are forward-looking statements. These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, as well as macroeconomic conditions, and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will, in fact, occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. Some factors that could cause ~~actual results~~or contribute to ~~differ and could materially adversely affect our business, financial condition, results of operations, cash flows and liquidity~~such differences include, but are not limited ~~to:~~

•to, the ~~ability to maintain the listing of our common stock on Nasdaq;~~following:

•changes in applicable laws or regulations;

•~~the possibility that we may be adversely affected by other economic, business and/or competitive factors;~~

•factors relating to our business, operations and financial performance, including:

◦the COVID-19 pandemic, responses thereto and the economic and market effects thereof, including unemployment levels, inflation, recovery from related adverse economic effects, and increased capital markets volatility;

◦competition in the markets in which we operate;

◦volatility in foreign exchange rates that could affect the volume of consumer remittance activity and/or affect our foreign exchange related gains and losses;

◦cyber-attacks or disruptions to our information technology environment, computer network systems and data centers;

◦our ability to maintain agent relationships on terms consistent with those currently in place;

◦~~our ability to maintain banking relationships necessary for us to conduct our business;~~

◦credit risks from our agents and the financial institutions with which we do business;

◦bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;

◦new technology or competitors that disrupt the current ecosystem by introducing digital platforms;

◦our ability to satisfy our debt obligations and remain in compliance with our credit facility requirements;

◦interest rate risk from elimination of the London Inter-bank Offered Rate (“LIBOR”) as a benchmark interest rate;

◦our success in developing and introducing new products, services and infrastructure;

◦customer confidence in our brand and in consumer money transfers generally;

◦our ability to maintain compliance with ~~the~~ regulatory requirements of the jurisdictions in which we operate or plan to operate;

◦international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States and Canada;

◦changes in U.S. tax ~~laws and unfavorable outcomes of tax positions we take;~~laws;

◦political instability, currency restrictions and volatility in countries in which we operate or plan to operate;

◦consumer fraud and other risks relating to customers’ authentication;

◦weakness in U.S. or international economic conditions;

◦~~change or disruption~~changes in ~~international migration patterns;~~immigration laws and their enforcement;

◦our ability to protect our brand and intellectual property rights;

◦our ability to retain key personnel; and

•other economic, business and/or competitive factors, risks and uncertainties, including those described in the ~~section entitled “Risk Factors”~~“Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

All forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or ~~otherwise, except as may be required under applicable securities laws.~~otherwise.

Index

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data)


		September 30, 2020		December 31, 2019			September 30, 2021		December 31, 2020
ASSETS	ASSETS	(unaudited)				ASSETS	(unaudited)
Current assets:	Current assets:					Current assets:
Cash	Cash	$	109,067	$	86,117	Cash	$	125,132	$	74,907
Accounts receivable, net of allowance of $1,243 and $759, respectively		59,962		39,754
Accounts receivable, net of allowance of $2,156 and $1,503, respectively						Accounts receivable, net of allowance of $2,156 and $1,503, respectively	97,406		55,017
Prepaid wires, net	Prepaid wires, net	8,983		18,201		Prepaid wires, net	14,355		53,281
Prepaid expenses and other current assets	Prepaid expenses and other current assets	2,685		4,155		Prepaid expenses and other current assets	6,369		3,521
Total current assets	Total current assets	180,697		148,227		Total current assets	243,262		186,726

Property and equipment, net	Property and equipment, net	12,770		13,282		Property and equipment, net	14,051		13,021
Goodwill	Goodwill	36,260		36,260		Goodwill	36,260		36,260
Intangible assets, net	Intangible assets, net	22,168		27,381		Intangible assets, net	16,560		20,430
Deferred tax asset, net		0		741
Other assets	Other assets	2,328		1,415		Other assets	7,973		3,036
Total assets	Total assets	$	254,223	$	227,306	Total assets	$	318,106	$	259,473

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY						LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	7,044	$	7,044	Current portion of long-term debt, net	$	3,882	$	7,044
Accounts payable	Accounts payable	9,890		13,401		Accounts payable	13,696		12,771
Wire transfers and money orders payable, net	Wire transfers and money orders payable, net	48,189		40,197		Wire transfers and money orders payable, net	59,520		41,746
Accrued and other liabilities	Accrued and other liabilities	24,086		23,074		Accrued and other liabilities	27,108		22,380
Total current liabilities	Total current liabilities	89,209		83,716		Total current liabilities	104,206		83,941
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:
Debt, net	Debt, net	82,340		87,623		Debt, net	80,181		80,579
Deferred tax liabilities, net		571		0
Deferred tax liability, net						Deferred tax liability, net	1,365		692
Total long-term liabilities	Total long-term liabilities	82,911		87,623		Total long-term liabilities	81,546		81,271

Commitments and contingencies, see Note 13
Commitments and contingencies, see Note 15						Commitments and contingencies, see Note 15	0		0

Stockholders' equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 38,059,737 and 38,034,389 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.		4		4
Stockholders’ equity:						Stockholders’ equity:
Common stock $0.0001 par value; 230,000,000 shares authorized, 38,739,480 and 38,217,125 shares issued and 38,669,040 and 38,217,125 shares outstanding as of September 30, 2021 and December 31, 2020, respectively.						Common stock $0.0001 par value; 230,000,000 shares authorized, 38,739,480 and 38,217,125 shares issued and 38,669,040 and 38,217,125 shares outstanding as of September 30, 2021 and December 31, 2020, respectively.	4		4
Additional paid-in capital	Additional paid-in capital	56,793		54,694		Additional paid-in capital	65,036		59,310
Retained earnings	Retained earnings	25,340		1,176		Retained earnings	68,671		34,960
Accumulated other comprehensive (loss) income		(34)		93
Total stockholders' equity		82,103		55,967
Total liabilities and stockholders' equity		$	254,223	$	227,306
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(152)		(13)
Treasury stock, at cost; 70,440 shares as of September 30, 2021 (none as of December 31, 2020)						Treasury stock, at cost; 70,440 shares as of September 30, 2021 (none as of December 31, 2020)	(1,205)		—
Total stockholders’ equity						Total stockholders’ equity	132,354		94,261
Total liabilities and stockholders’ equity						Total liabilities and stockholders’ equity	$	318,106	$	259,473

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(in thousands, except for share data, unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenues:	Revenues:									Revenues:
Wire transfer and money order fees, net	Wire transfer and money order fees, net	$	82,646	$	72,468	$	222,534	$	201,410	Wire transfer and money order fees, net	$	104,191	$	82,646	$	284,409	$	222,534
Foreign exchange gain, net	Foreign exchange gain, net	12,296		12,272		33,510		33,297		Foreign exchange gain, net	15,643		12,296		45,347		33,510
Other income	Other income	652		594		1,863		1,652		Other income	873		652		2,275		1,863
Total revenues	Total revenues	95,594		85,334		257,907		236,359		Total revenues	120,707		95,594		332,031		257,907

Operating expenses:	Operating expenses:									Operating expenses:
Service charges from agents and banks	Service charges from agents and banks	63,904		56,319		172,403		156,510		Service charges from agents and banks	81,416		63,904		222,654		172,403
Salaries and benefits	Salaries and benefits	8,084		7,612		22,512		22,806		Salaries and benefits	10,859		8,084		30,909		22,512
Other selling, general and administrative expenses	Other selling, general and administrative expenses	6,336		9,788		16,827		20,850		Other selling, general and administrative expenses	9,966		6,336		22,549		16,827
Depreciation and amortization	Depreciation and amortization	2,698		3,179		8,079		9,486		Depreciation and amortization	2,362		2,698		7,041		8,079
Total operating expenses	Total operating expenses	81,022		76,898		219,821		209,652		Total operating expenses	104,603		81,022		283,153		219,821

Operating income	Operating income	14,572		8,436		38,086		26,707		Operating income	16,104		14,572		48,878		38,086

Interest expense	Interest expense	1,530		2,145		5,033		6,503		Interest expense	968		1,530		3,562		5,033

Income before income taxes	Income before income taxes	13,042		6,291		33,053		20,204		Income before income taxes	15,136		13,042		45,316		33,053

Income tax provision	Income tax provision	3,544		2,253		8,889		5,936		Income tax provision	3,629		3,544		11,605		8,889

Net income	Net income	9,498		4,038		24,164		14,268		Net income	11,507		9,498		33,711		24,164

Other comprehensive income (loss)		14		(9)		(127)		34
Other comprehensive (loss) income										Other comprehensive (loss) income	(151)		14		(139)		(127)

Comprehensive income	Comprehensive income	$	9,512	$	4,029	$	24,037	$	14,302	Comprehensive income	$	11,356	$	9,512	$	33,572	$	24,037

Earnings per common share:	Earnings per common share:									Earnings per common share:
Basic	Basic	$	0.25	$	0.11	$	0.64	$	0.38	Basic	$	0.30	$	0.25	$	0.88	$	0.64
Diluted	Diluted	$	0.25	$	0.11	$	0.63	$	0.38	Diluted	$	0.29	$	0.25	$	0.86	$	0.63

Weighted-average common shares outstanding:	Weighted-average common shares outstanding:									Weighted-average common shares outstanding:
Basic	Basic	38,050,610		37,984,316		38,040,339		37,230,831		Basic	38,647,931		38,050,610		38,441,767		38,040,339
Diluted	Diluted	38,652,707		38,286,702		38,246,429		37,365,371		Diluted	39,336,051		38,652,707		39,071,622		38,246,429

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except for share data, unaudited)


		Three Months Ended																		Three Months Ended September 30, 2021
		Common Stock			Additional Paid-in Capital				Retained Earnings			Accumulated Other Comprehensive Loss				Total Stockholders' Equity				Common Stock						Treasury Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
		Shares	Amount								Shares								Amount			Shares			Amount
Balance, June 30, 2020		38,035,279	$	4			$	56,098						$	15,842			$	(48)		$	71,896
Balance, June 30, 2021																			Balance, June 30, 2021	38,585,724			$	4		—	$	—		$	64,009		$	57,164		$	(1)		$	121,176
Net income	Net income	—	—		—				9,498			—				9,498			Net income	—			—			—	—		—			11,507			—			11,507
Issuance of common stock:	Issuance of common stock:																		Issuance of common stock:
Exercise of stock options		10,607	—		(106)				—			—				(106)
Restricted stock units		13,851	—		—				—			—				0
Exercise of stock options, net of shares withheld for taxes																			Exercise of stock options, net of shares withheld for taxes	152,678			—			—	—		(85)			—			—			(85)
Fully vested shares																			Fully vested shares	1,078			—			—	—		—			—			—			—
Share-based compensation	Share-based compensation	—	—		801				—			—				801			Share-based compensation	—			—			—	—		1,112			—			—			1,112
Adjustment from foreign currency translation, net	Adjustment from foreign currency translation, net	—	—		—				—			14				14			Adjustment from foreign currency translation, net	—			—			—	—		—			—			(151)			(151)
Balance, September 30, 2020		38,059,737	$	4	$	56,793			$	25,340		$	(34)			$	82,103
Acquisition of treasury stock, at cost																			Acquisition of treasury stock, at cost	—			—			(70,440)	(1,205)		—			—			—			(1,205)
Balance, September 30, 2021																			Balance, September 30, 2021	38,739,480			$	4		(70,440)	$	(1,205)	$	65,036		$	68,671		$	(152)		$	132,354


		Three Months Ended																		Three Months Ended September 30, 2020
		Common Stock			Additional Paid-in Capital				Accumulated Deficit			Accumulated Other Comprehensive Income				Total Stockholders' Equity				Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
		Shares	Amount								Shares								Amount
Balance, June 30, 2019		37,982,848	$	4			$	53,118						$	(8,203)			$	41		$	44,960
Balance, June 30, 2020																			Balance, June 30, 2020	38,035,279			$	4		$	56,098		$	15,842		$	(48)		$	71,896
Net income	Net income	—	—		—				4,038			—				4,038			Net income	—			—		—			9,498			—			9,498
Issuance of common stock:	Issuance of common stock:																		Issuance of common stock:
Exercise of stock options	Exercise of stock options	1,583	—		(4)				—			—				(4)			Exercise of stock options	10,607			—		(106)			—			—			(106)
Restricted stock units	Restricted stock units	21,192	—		—				—			—				0			Restricted stock units	13,851			—		—			—			—			—
Share-based compensation	Share-based compensation	—	—		634				—			—				634			Share-based compensation	—			—		801			—			—			801
Adjustment from foreign currency translation, net	Adjustment from foreign currency translation, net	—	—		—				—			(9)				(9)			Adjustment from foreign currency translation, net	—			—		—			—			14			14
Balance, September 30, 2019		38,005,623	$	4	$	53,748			$	(4,165)		$	32			$	49,619
Balance, September 30, 2020																			Balance, September 30, 2020	38,059,737			$	4	$	56,793		$	25,340		$	(34)		$	82,103

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(CONTINUED)

(in thousands, except for share data, unaudited)


		Nine Months Ended																		Nine Months Ended September 30, 2021
		Common Stock			Additional Paid-in Capital				Retained Earnings			Accumulated Other Comprehensive (Loss) Income				Total Stockholders' Equity				Common Stock						Treasury Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
		Shares	Amount								Shares								Amount			Shares			Amount
Balance, December 31, 2019		38,034,389	$	4			$	54,694						$	1,176			$	93		$	55,967
Balance, December 31, 2020																			Balance, December 31, 2020	38,217,125			$	4		—	$	—		$	59,310		$	34,960		$	(13)		$	94,261
Net income	Net income	—	—		—				24,164			—				24,164			Net income	—			—			—	—		—			33,711			—			33,711
Issuance of common stock:	Issuance of common stock:																		Issuance of common stock:
Exercise of stock options		11,497	—		(110)				—			—				(110)
Exercise of stock options, net of shares withheld for taxes																			Exercise of stock options, net of shares withheld for taxes	397,585			—			—	—		2,344			—			—			2,344
Restricted stock units	Restricted stock units	13,851	—		—				—			—				0			Restricted stock units	33,381			—			—	—		—			—			—			—
Restricted stock awards																			Restricted stock awards	88,215			—			—	—		—			—			—			—
Fully vested shares																			Fully vested shares	3,174			—			—	—		—			—			—			—
Share-based compensation	Share-based compensation	—	—		2,209				—			—				2,209			Share-based compensation	—			—			—	—		3,382			—			—			3,382
Adjustment from foreign currency translation, net	Adjustment from foreign currency translation, net	—	—		—				—			(127)				(127)			Adjustment from foreign currency translation, net	—			—			—	—		—			—			(139)			(139)
Balance, September 30, 2020		38,059,737	$	4	$	56,793			$	25,340		$	(34)			$	82,103
Acquisition of treasury stock, at cost																			Acquisition of treasury stock, at cost	—			—			(70,440)	(1,205)		—			—			—			(1,205)
Balance, September 30, 2021																			Balance, September 30, 2021	38,739,480			$	4		(70,440)	$	(1,205)	$	65,036		$	68,671		$	(152)		$	132,354

Nine Months Ended
Common Stock Additional
Paid-in Capital Accumulated
Deficit Accumulated Other
Comprehensive
Income (Loss) Total
Stockholders'
Equity
Shares Amount
Balance, December 31, 2018 36,182,783 $ 4 $ 61,889 $ (17,418) $ (2) $ 44,473
Adoption of revenue recognition accounting pronouncement — — — (1,015) — (1,015)
Warrant exchange 1,800,065 — (10,031) — — (10,031)
Net income — — — 14,268 — 14,268
Issuance of common stock:
Exercise of stock options 1,583 — (4) — — (4)
Restricted stock units 21,192 — — — — 0
Share-based compensation — — 1,894 — — 1,894
Adjustment from foreign currency translation, net — — — — 34 34
Balance, September 30, 2019 38,005,623 $ 4 $ 53,748 $ (4,165) $ 32 $ 49,619


	Nine Months Ended September 30, 2020
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
Balance, December 31, 2019	38,034,389	$	4	$	54,694	$	1,176	$	93	$	55,967
Net income	—	—		—		24,164		—		24,164
Issuance of common stock:
Exercise of stock options	11,497	—		(110)		—		—		(110)
Restricted stock units	13,851	—		—		—		—		—
Share-based compensation	—	—		2,209		—		—		2,209
Adjustment from foreign currency translation, net	—	—		—		—		(127)		(127)
Balance, September 30, 2020	38,059,737	$	4	$	56,793	$	25,340	$	(34)	$	82,103

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	24,164	$	14,268	Net income	$	33,711	$	24,164
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	8,079		9,486		Depreciation and amortization	7,041		8,079
Share-based compensation	Share-based compensation	2,209		1,894		Share-based compensation	3,382		2,209
Provision for bad debt		1,421		1,171
Provision for credit losses						Provision for credit losses	1,009		1,421
Debt origination costs amortization	Debt origination costs amortization	564		546		Debt origination costs amortization	626		564
Deferred income tax provision, net	Deferred income tax provision, net	1,312		572		Deferred income tax provision, net	673		1,312
Loss on disposal of property and equipment	Loss on disposal of property and equipment	336		182		Loss on disposal of property and equipment	1,311		336
Total adjustments	Total adjustments	13,921		13,851		Total adjustments	14,042		13,921
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable		(21,694)		(19,224)
Accounts receivable, net						Accounts receivable, net	(43,402)		(21,694)
Prepaid wires, net	Prepaid wires, net	7,773		17,259		Prepaid wires, net	38,561		7,773
Prepaid expenses and other assets	Prepaid expenses and other assets	433		933		Prepaid expenses and other assets	(6,210)		433
Wire transfers and money orders payable, net	Wire transfers and money orders payable, net	9,465		21,047		Wire transfers and money orders payable, net	18,136		9,465
Accounts payable and accrued and other liabilities	Accounts payable and accrued and other liabilities	(2,465)		9,013		Accounts payable and accrued and other liabilities	5,867		(2,465)
Net cash provided by operating activities	Net cash provided by operating activities	31,597		57,147		Net cash provided by operating activities	60,705		31,597

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(2,770)		(3,817)		Purchases of property and equipment	(5,523)		(2,770)
Acquisition of agent locations		0		(250)
Net cash used in investing activities	Net cash used in investing activities	(2,770)		(4,067)		Net cash used in investing activities	(5,523)		(2,770)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings under term loan		0		12,000
Repayments of term loan		(5,746)		(3,679)
Repayments under revolving loan, net		0		(30,000)
Repayments of term loan facility						Repayments of term loan facility	(43,135)		(5,746)
Borrowings under term loan facility						Borrowings under term loan facility	40,158		—
Debt origination costs	Debt origination costs	0		(240)		Debt origination costs	(2,894)		—
Proceeds from exercise of options		20		0
Cash paid in warrant exchange		0		(10,031)
Proceeds from exercise of stock options						Proceeds from exercise of stock options	3,192		20
Payments for stock-based awards						Payments for stock-based awards	(849)		—
Repurchases of common stock						Repurchases of common stock	(1,205)		—
Net cash used in financing activities	Net cash used in financing activities	(5,726)		(31,950)		Net cash used in financing activities	(4,733)		(5,726)

Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(151)		30		Effect of exchange rate changes on cash	(224)		(151)

Net increase in cash	Net increase in cash	22,950		21,160		Net increase in cash	50,225		22,950

Cash, beginning of period	Cash, beginning of period	86,117		73,029		Cash, beginning of period	74,907		86,117

Cash, end of period	Cash, end of period	$	109,067	$	94,189	Cash, end of period	$	125,132	$	109,067

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands, unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2020		2019			2021		2020
Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for interest	Cash paid for interest	$	4,475	$	5,780	Cash paid for interest	$	2,940	$	4,475
Cash paid for income taxes	Cash paid for income taxes	$	7,323	$	2,550	Cash paid for income taxes	$	12,567	$	7,323

Supplemental disclosure of non-cash investing activity:
Agent business acquired in exchange for receivables		$	0	$	85

Supplemental disclosure of non-cash financing activity:	Supplemental disclosure of non-cash financing activity:					Supplemental disclosure of non-cash financing activity:
Issuance of common stock for cashless exercise of options		$	130	$	4
Issuance of common stock for cashless exercise of stock options						Issuance of common stock for cashless exercise of stock options	$	2,973	$	130

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Index

INTERNATIONAL MONEY EXPRESS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BUSINESS AND ACCOUNTING POLICIES

International Money Express, Inc. (the “Company” or “us” or “we”) operates as a money transmitter between the United States of America (“~~U.S.~~United States” or “U.S.”) and Canada to Mexico, Guatemala and other countries in Latin America, Africa and Asia through a network of authorized agents located in various unaffiliated retail establishments and 34 Company-operated stores throughout the United States and Canada.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). Although the worst effects of the pandemic appear to have subsided in the United States, the pandemic has had and continues to have a significant effect on economic conditions in the United States, and continues to cause significant uncertainties in the U.S. and ~~Canada.~~global economies, particularly as a result of new Delta and other variants of COVID-19, which appear to be causing an increase in COVID-19 cases in certain places around the world. Public health officials and medical professionals have warned that COVID-19 resurgences may continue to occur due to a variety of factors, including the extent of economic activity, social interaction, vaccination rates and the emergence of potent variants. It is unclear how long any resurgence will last, how severe it will be, and what safety measures governments and businesses will impose in response.

The extent to which the COVID-19 pandemic affects our business, operations and financial results depends, and will continue to depend, on numerous evolving factors that we may not be able to accurately predict. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our financial condition, results of operations and cash flows is dependent on future developments, including the duration or resurgence of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, inflation, interest rate levels and foreign exchange volatility, all of which remain uncertain and cannot be predicted at this time. If the global response to contain and remedy the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, or if an escalation in the global response to contain the COVID-19 pandemic is required or is unsuccessful, the Company could experience a material adverse effect on its financial condition, results of operations and cash flows.

The condensed consolidated financial statements of the Company include Intermex Holdings, Inc., its wholly-owned indirect subsidiary, Intermex Wire Transfer, LLC (“LLC”), Intermex Wire Transfers de Guatemala, S.A. (“Intermex Guatemala”) - ~~99.8%~~100% owned by LLC, Intermex Wire Transfer de Mexico, S.A. and Intermex Transfers de Mexico, S.A. (“Intermex Mexico”) - 98% owned by LLC, Intermex Wire Transfer Corp. - 100% owned by LLC, Intermex Wire Transfer II, LLC - 100% owned by LLC and Canada International Transfers Corp. - 100% owned by LLC. Non-controlling interest in the results of operations of consolidated subsidiaries represents the minority stockholders’ share of the profit or loss of Intermex Mexico and Intermex Guatemala. The non-controlling interest asset and non-controlling interest in the portion of the profit or loss from operations of these subsidiaries were not recorded by the Company as they are considered immaterial.

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the ~~U.S.~~United States (“GAAP”). All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements.

The Company’s interim condensed consolidated financial statements and related notes are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. Certain information and footnote disclosures required by GAAP have been condensed or omitted. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Risks and Uncertainties~~

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of the outbreak of a new strain of coronavirus (“COVID-19”) and the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and national, state and local governments in the jurisdictions where we operate and serve our customers imposed emergency restrictions to mitigate the spread of the virus.

Starting in March 2020, governmental authorities took measures that restricted the normal course of operations of businesses and consumers. Although those restrictions were in place for most of the second and third quarter and affected the Company, sending and paying agents as well as consumers and their beneficiaries, those measures did not have a material adverse effect on the Company’s financial condition, results of operations and cash flows for the three and nine month periods ended September 30, 2020.

The Company and our sending agents are considered essential businesses under current federal guidance; however, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, all of which remain uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature, counterproductive or reversed, the Company could experience a material adverse effect on its business, financial condition, results of operations and cash flows.

Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) issued amended guidance, Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment. The amended standard simplifies how an entity tests goodwill by eliminating Step 2 of the goodwill impairment test related to measuring an impairment charge. Instead, impairment will be recorded for the amount that the carrying amount of a reporting unit exceeds its fair value. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

Index

The FASB issued amended guidance, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amended standard requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement if those costs would be capitalized by the customers in a software licensing arrangement. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance was adopted by the Company on January 1, 2021. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. The guidance requires that a lessee recognizes a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. This guidance is required to be adopted by the Company on January 1, 2022 ~~and may be applied~~ using ~~either the earliest period adjustment method or~~ the modified retrospective approach. The ~~adoption of~~Company is currently evaluating the impact this guidance ~~is not expected to~~will have ~~a material impact~~ on the condensed consolidated financial statements.

~~Index~~

~~The FASB issued amended guidance,~~ ~~Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment~~. The amended standard simplifies how an entity tests goodwill by eliminating Step 2 of the goodwill impairment test related to measuring an impairment charge. Instead, impairment will be recorded for the amount that the carrying amount of a reporting unit exceeds its fair value. This new guidance is effective for the Company on January 1, 2021. The adoption of this guidance is not expected to have a material impact on the condensed consolidated financial statements.

~~The FASB issued amended guidance,~~ ~~Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~. The amended standard requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customers in a software licensing arrangement. This new guidance is effective for the Company on January 1, 2021. The adoption of this guidance is not expected to have a material impact on the condensed consolidated financial statements.

~~The FASB issued guidance,~~ ~~Simplifying the Accounting for Income Taxes (Topic 740)~~, which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This new guidance is effective for the Company on January 1, 2021. The adoption of this guidance is not expected to have a material impact on the condensed consolidated financial statements.

The FASB issued guidance, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit losses for certain financial instruments. The new standard replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is ~~currently~~ required to adopt the new ~~standard~~guidance on January 1, 2023. The Company is currently evaluating the impact this guidance will have on the condensed consolidated financial statements.

The FASB issued guidance, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption permitted. The potential adoption of this guidance is not expected to have a material impact on the condensed consolidated financial statements.

NOTE 2 – REVENUES

The Company recognized revenues from contracts with customers for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, as follows (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Wire transfer and money order fees $ 82,890 $ 72,710 $ 223,171 $ 202,202
Discounts and promotions (244) (242) (637) (792)
Wire transfer and money order fees, net 82,646 72,468 222,534 201,410
Foreign exchange gain, net 12,296 12,272 33,510 33,297
Other income 652 594 1,863 1,652
Total revenues $ 95,594 $ 85,334 $ 257,907 $ 236,359


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Wire transfer and money order fees	$	104,543	$	82,890	$	285,430	$	223,171
Discounts and promotions	(352)		(244)		(1,021)		(637)
Wire transfer and money order fees, net	104,191		82,646		284,409		222,534
Foreign exchange gain, net	15,643		12,296		45,347		33,510
Other income	873		652		2,275		1,863
Total revenues	$	120,707	$	95,594	$	332,031	$	257,907

There are no significant initial costs incurred to obtain contracts with customers, although the Company has a loyalty program under which customers earn 1 point for each wire transfer completed. Points can be redeemed for a discounted wire transaction fee or ~~higher~~a foreign exchange ~~rate.~~rate that is more favorable to the customer. The ~~discounts~~customer benefits vary by country, and the earned points expire if the customer has not initiated and completed an eligible wire transfer transaction within the immediately preceding ~~180 day~~180-day period. In addition, earned points will expire 30 days after the end of the program. ~~Therefore, because~~Because the loyalty program benefits represent a future performance obligation, a portion of the initial consideration is recorded as deferred revenue loyalty program (see Note 7)8) and a corresponding loyalty program expense is recorded as contra revenue. Revenue from this performance obligation is recognized upon customers redeeming points or upon expiration of any points outstanding.

Index

Except for the loyalty program discussed above, our revenues include only 1 performance obligation, which is to collect the customer’s money and make funds available for payment, generally on the same day, to a designated recipient in the currency requested.

~~Index~~

The Company also offers several other services, including money orders and check cashing, for which revenue is derived from a fee per transaction. For substantially all of the Company’s revenues, the Company acts as principal in the transactions and reports revenue on a gross basis, because the Company controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss and has the ability to establish transaction prices.

NOTE 3 – ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE, NET OF ALLOWANCE

Accounts Receivable

Accounts receivable ~~represent~~represents outstanding balances from sending agents for pending wire transfers or money orders from our customers. The outstanding balance of accounts receivable, net of allowance for credit losses, consists of the following (in thousands):

September 30, 2020 December 31, 2019
Accounts receivable $ 61,205 $ 40,513
Allowance for credit losses (1,243) (759)
Accounts receivable, net $ 59,962 $ 39,754


	September 30, 2021		December 31, 2020
Accounts receivable	$	99,562	$	56,520
Allowance for credit losses	(2,156)		(1,503)
Accounts receivable, net	$	97,406	$	55,017

Notes Receivable

The Company had notes receivable, net of allowance for credit losses, from sending agents as follows (in thousands):


	September 30, 2021		December 31, 2020
Notes receivable, current	$	685	$	710
Allowance for credit losses	(17)		(244)
Net current	$	668	$	466

Notes receivable, long-term	$	982	$	816
Allowance for credit losses	(33)		(295)
Net long-term	$	949	$	521

The net current portion of notes receivable is included in prepaid expenses and other current assets (see Note 4), and the net long-term portion is included in other assets in the condensed consolidated balance sheets. The notes have interest rates ranging from 0% to 16% per annum. At September 30, 2021 and December 31, 2020, there were $1.7 million and $1.5 million, respectively, of notes collateralized by personal guarantees from the sending agents and assets from their businesses in case of a default by the agent.

The maturities of notes receivable at September 30, 2021 are as follows (in thousands):


	Unpaid Principal Balance
Under 1 year	$	685
Between 1 and 2 years	982
Total	$	1,667

Allowance for Credit Losses

Index

The changes in the allowance for credit losses related to accounts receivable and notes receivable are as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Beginning balance $ 1,350 $ 1,236 $ 1,236 $ 1,290
Provision 320 619 1,421 1,171
Charge-offs (120) (589) (1,338) (1,317)
Recoveries 154 45 385 167
Ending Balance $ 1,704 $ 1,311 $ 1,704 $ 1,311


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	2,028	$	1,350	$	2,042	$	1,236
Provision	342		320		1,009		1,421
Charge-offs	(361)		(120)		(1,249)		(1,338)
Recoveries	197		154		404		385
Ending Balance	$	2,206	$	1,704	$	2,206	$	1,704

The allowance for credit losses allocated by financial instrument category is as follows (in thousands):

September 30, 2020 December 31, 2019
Accounts receivable $ 1,243 $ 759
Notes receivable (1)
461 477
Allowance for credit losses $ 1,704 $ 1,236

(1) This allowance relates to $1.3 million in notes receivable from sending agents as of both September 30, 2020 and December 31, 2019. The current portion of these notes amounted to $1.1 million and $1.0 million as of September 30, 2020 and December 31, 2019, respectively. The net current portion is included in prepaid expenses and other current assets (see Note 4) and the net long-term portion is included in other assets in the condensed consolidated balance sheets.


	September 30, 2021		December 31, 2020
Accounts receivable	$	2,156	$	1,503
Notes receivable	50		539
Allowance for credit losses	$	2,206	$	2,042

Change in Accounting Estimate to Calculate the Allowance for Credit Losses

Accounts receivable and notes receivable are recorded at their net realizable value, which is net of an allowance for credit losses. The current accounting policy for the allowance for credit losses considers a number of factors, predominantly collection experience and historical net loss rates, but also other qualitative considerations.

In the third quarter of 2021, the Company modified its estimate of the allowance for credit losses and made refinements to the related calculation methodology of net historical loss rates for the different pools of accounts and notes receivable grouped based on similar characteristics.

The aforementioned change was treated as a change in accounting estimate for accounting purposes and applied prospectively beginning August 2021. The impact of the change in estimate and any effect in comparability to prior periods are not material. Further, the change is not expected to materially impact any financial statement line items or the Company’s results from operations in a future period.

Index

NOTE 4 – PREPAID EXPENSES AND OTHER ~~CURRENT~~ ASSETS

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30, 2020 December 31, 2019
Prepaid insurance $ 431 $ 404
Prepaid fees 682 1,211
Notes receivable, net of allowance 705 648
Prepaid taxes 130 1,025
Other prepaid expenses and current assets 737 867
$ 2,685 $ 4,155


	September 30, 2021		December 31, 2020
Prepaid insurance	$	1,040	$	465
Prepaid fees and services	1,201		1,452
Notes receivable, net of allowance	668		466
Assets pending settlement	400		218
Prepaid income taxes	1,756		103
Prepaid expenses and current assets - other	1,304		817
	$	6,369	$	3,521

Other assets consisted of the following (in thousands):


	September 30, 2021		December 31, 2020
Revolving line origination fees	$	2,108	$	423
Agent incentives advances	980		1,110
Notes receivable, net of allowance	949		521
Funds held by seized banking entities	3,239		130
Other assets	697		852
	$	7,973	$	3,036

During September 2021, local banking regulators in Mexico resolved to close and liquidate a local financial institution, citing a lack of compliance with minimum capital requirements. The Company had approximately $5.2 million on deposit with this bank when it was closed. In accordance with the banking regulations in Mexico, large depositors such as the Company will be paid once the assets of the financial institution are liquidated. Currently, it is difficult to predict the length of the liquidation process or if the proceeds from the asset liquidation will be sufficient to recover a portion or all of its funds on deposit. As of September 30, 2021, the Company recognized a pre-tax provision of $2.0 million in connection with the closure of the financial institution, which is included in other selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

Intangible assets on the condensed consolidated balance sheets of the Company consist of goodwill, agent relationships, trade name, developed technology and other intangible assets. Agent relationships, trade name and developed technology are all amortized over 15 years using an accelerated method that correlates with the projected realization of the benefit. The agent relationships intangible represents the network of independent sending agents; trade name refers to the Intermex name, branded on all agent locations and well recognized in the market; and developed technology includes the state-of-the-art system that the Company has continued to develop and improve ~~upon~~ over the past 20 years. Other intangible assets primarily relate to the acquisition of Company-operated stores, which are amortized on a straight line basis over 10 years. The determination of our intangible fair values includes several assumptions that are subject to various

~~Index~~

risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and ~~uncertainties. See below for further discussion on impairment.~~uncertainties, and no impairment charges were determined necessary to be recognized during the three and nine months ended September 30, 2021.

The following table presents the changes in goodwill and intangible assets (in thousands):

Goodwill Intangibles
Balance at December 31, 2019 $ 36,260 $ 27,381
Amortization expense 0 (5,213)
Balance at September 30, 2020 $ 36,260 $ 22,168


	Goodwill		Intangibles
Balance at December 31, 2020	$	36,260	$	20,430
Amortization expense	—		(3,870)
Balance at September 30, 2021	$	36,260	$	16,560

Amortization expense related to intangible assets for the next five years and thereafter is as follows (in thousands):

2020 $ 1,738
2021 5,161
2022 3,997
2023 2,989
2024 2,270
Thereafter 6,013
$ 22,168

Index


2021	$	1,291
2022	3,997
2023	2,989
2024	2,270
2025	1,717
Thereafter	4,296
	$	16,560

~~Due~~

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment amounted to ~~the COVID-19 pandemic that has resulted in a deterioration in macro-economic conditions~~$14.1 million and increased stock market volatility, the Company performed a qualitative assessment of goodwill during both the second and third quarter of 2020 to determine whether a quantitative test was necessary. Although our fair value measurements include some significant inputs, such as the Company’s forecasted revenues and assumed turnover of agent locations, that may have or will be affected by the pandemic, we believe that$13.0 million as of September 30, 2021 and December 31, 2020, respectively, net of $13.6 million and $10.9 million of accumulated depreciation, respectively. During the ~~effects of~~three months ended September 30, 2021, the ~~pandemic have not had a material negative effect on~~Company wrote-off $1.0 million in software development expenditures, which is included in other selling, general and administrative expenses in the ~~Company’s financial condition, results~~condensed consolidated statements of operations and cash flows. As a result, there are currently no indicators that the fair value of the Company’s goodwill is below its carrying amount based on our qualitative assessment. Therefore, we determined that a quantitative test was not necessary as of September 30, 2020.comprehensive income.

For our finite-lived intangibles, we also assessed during both the second and third quarter of 2020 whether there were events or changes in circumstances that indicated that the carrying amounts of our intangible assets may not be recoverable. Similar to our goodwill assessment above, we believe that as of September 30, 2020, the effects of the COVID-19 pandemic have not had a material negative effect on the company’s financial condition, results of operations and cash flows. As a result, there are currently no indicators that could require an impairment test. Therefore, we determined that the carrying amounts of our intangibles are recoverable as of September 30, 2020.

~~We will continue to monitor this evolving pandemic to determine the need, if any, to further evaluate for impairment our goodwill and intangible assets.~~

NOTE 67 – WIRE TRANSFERS AND MONEY ORDERS PAYABLE, NET

Wire transfers and money orders payable, net consisted of the following (in thousands):

September 30, 2020 December 31, 2019
Wire transfers payable, net $ 18,995 $ 16,058
Customer voided wires payable 13,888 10,937
Money orders payable 15,306 13,202
$ 48,189 $ 40,197


	September 30, 2021		December 31, 2020
Wire transfers payable, net	$	26,962	$	11,806
Customer voided wires payable	15,606		13,374
Money orders payable	16,952		16,566
	$	59,520	$	41,746

Customer voided wires payable consist primarily of wire transfers that were not completed because the recipient did not collect the funds within 30 days and the sender has not claimed the funds and, therefore, are considered unclaimed property. Unclaimed property laws of each state in the United States in which we operate, the District of Columbia, and Puerto Rico require us to track certain information for all of our money remittances and payment instruments and, if the funds underlying such remittances and instruments are unclaimed at the end of an applicable statutory abandonment period, require us to remit the proceeds of the unclaimed property to the appropriate jurisdiction. Applicable statutory abandonment periods range from three to seven years.

~~Index~~

NOTE 78 – ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities consisted of the following (in thousands):

September 30, 2020 December 31, 2019
Commissions payable to sending agents $ 11,866 $ 10,124
Accrued legal settlement (see Note 13) 2,925 3,250
Accrued salaries and benefits 2,413 2,374
Accrued bank charges 1,158 976
Accrued interest 12 17
Accrued legal fees 343 120
Accrued other professional fees 848 655
Accrued taxes 866 2,345
Deferred revenue loyalty program 2,602 2,495
Other 1,053 718
$ 24,086 $ 23,074


	September 30, 2021		December 31, 2020
Commissions payable to sending agents	$	15,048	$	12,500
Accrued salaries and benefits	3,674		2,957
Accrued bank charges	1,410		1,170
Accrued legal fees	65		75
Accrued other professional fees	1,244		826
Accrued taxes	1,199		1,276
Deferred revenue loyalty program	3,181		2,750
Other	1,287		826
	$	27,108	$	22,380

The following table shows the changes in the deferred revenue loyalty program liability (in thousands):

Index


Balance, December 31, ~~2019~~2020	$	~~2,495~~2,750
Revenue deferred during the period	~~535~~1,657
Revenue recognized during the period	~~(428)~~(1,226)
Balance, September 30, ~~2020~~2021	$	~~2,602~~3,181

NOTE 89 – DEBT

Debt consisted of the following (in thousands):

September 30, 2020 December 31, 2019
Term loan $ 91,298 $ 97,044
Less: Current portion of long-term debt (1)
(7,044) (7,044)
Less: Debt origination costs (1,914) (2,377)
$ 82,340 $ 87,623


	September 30, 2021		December 31, 2020
Term loan facility	$	86,406	$	89,383
	86,406		89,383
Less: Current portion of long-term debt (1)	(3,882)		(7,044)
Less: Debt origination costs	(2,343)		(1,760)
	$	80,181	$	80,579

(1)Current portion of long-term debt is net of debt origination costs of approximately $0.5 million and $0.6 million ~~both~~ at September 30, ~~2020~~2021 and December 31, ~~2019.~~2020, respectively.

The Company and certain of its domestic subsidiaries as borrowers ~~(the~~and the other guarantors from time to time party thereto (collectively, the “Loan Parties”) ~~have~~entered into a financing agreement ~~(as~~with a group of banking institutions, dated November 7, 2018 and further amended on December 7, 2018 (the “Original Credit Agreement”). The Original Credit Agreement provided for a $35.0 million revolving credit facility, a $90.0 million term loan facility and an up to $30.0 million incremental facility of which $12.0 million was utilized in 2019 for the term loan facility and $10.0 million was utilized in May of 2021 for the revolving credit facility (see below). The Original Credit Agreement also provided for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the Original Credit Agreement was November 7, 2023.

Effective as of May 12, 2021, the Company amended the ~~“Credit~~Original Credit Agreement by entering into Increase Joinder No. 2 (the “Joinder No. 2”) to the Original Credit Agreement, which was accounted for as a debt modification, under which the revolving line of credit commitment under the Original Credit Agreement was increased by $10.0 million to an aggregate of $45.0 million. The Joinder No. 2 did not have any impact to any of the terms of the term loan facility under the Original Credit Agreement. The Company incurred debt origination costs of $76.8 thousand in the second quarter of 2021 which were capitalized and will be amortized over the remaining life of the revolving line of credit facility, as described below, using the straight-line method, as it is not significantly different than the effective interest method.

On June 24, 2021, the Loan Parties entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with a group of banking institutions. The A&R Credit Agreement amended and restated in its entirety the Original Credit Agreement. The A&R Credit Agreement provides for a ~~$35~~$150.0 million revolving credit facility, ~~a $90~~an $87.5 million term loan facility and an uncommitted incremental facility, which may be utilized for additional revolving or term loans, of up to ~~$30 million incremental facility of which $12 million was utilized in the second quarter of 2019.~~$70.0 million. The A&R Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The proceeds of the term loan were used to refinance the $87.5 million principal amount of the existing term loan facility under the Original Credit Agreement, and the revolving credit facility is available for working capital, general corporate purposes and to pay fees and expenses in connection with this transaction. The maturity date of the A&R Credit Agreement is ~~November 7, 2023. As~~June 24, 2026.

This refinancing was accounted for as a debt modification. The balance of ~~September 30, 2020~~the unamortized debt origination costs of $1.8 million under the Original Credit Agreement, the origination costs paid to the Loan Parties of $1.0 million in connection with the term loan facility of the A&R Credit Agreement and ~~December 31, 2019, there were 0 outstanding amounts drawn on~~debt origination costs paid to the Loan Parties and third-party costs of $1.8 million incurred in connection with the revolving credit ~~facility.~~facility of the A&R Credit Agreement will be associated with the new arrangement, and therefore, they will be amortized over the remaining life of the A&R Credit Agreement using the straight-line method, as it is not significantly different than the effective interest method. Debt origination costs paid to third parties related to a portion of the term loan facility in connection with the A&R Credit Agreement were expensed as incurred during the second quarter of 2021.

~~Interest~~

At the election of the Company, interest on the term loan facility and revolving credit facility under the A&R Credit Agreement is determined by reference to either LIBOR (subject to replacement) or a “base rate”, in each case plus an applicable margin ~~of 4.50%~~ranging between 2.50% and 3.00% per annum for LIBOR loans ~~or 3.50%~~and between 1.50% and 2.00% per annum for base rate ~~loans.~~loans depending on the level of our consolidated leverage ratio, as calculated pursuant to the terms of the A&R Credit Agreement. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. The effective interest rates for the nine months ended September 30, ~~2020~~2021 for the term loan facility and revolving credit facility, which substantially related to the Original Credit Agreement, were ~~5.93%~~4.58% and ~~0.99%~~0.82%, respectively.

Index

Interest is payable (x)(i) generally on the last day of each interest period selected for LIBOR loans, but in any event, not less frequently than every three months, and (ii) on the last business day of each quarter for base rate loans and (y) at final maturity. The principal amount of the term loan facility under the A&R Credit Agreement must be repaid in consecutive quarterly installments of 5.0% in ~~year~~years 1 and 2, 7.5% in ~~years 2 and~~year 3, and 10.0% in years 4 and 5, in each case on the last day of each quarter, ~~which commenced~~commencing in ~~March 2019~~September 2021 with a final balloon payment at maturity. The term loans under the A&R Credit Agreement may be prepaid at any time without premium or penalty. Revolving loans may be borrowed, repaid and reborrowed from time to time in accordance with the terms and conditions of the A&R Credit Agreement. The Company is also required to repay the loans upon receipt of net proceeds from certain casualty events, upon the disposition of certain property and upon incurrence of indebtedness not permitted by the A&R Credit Agreement. In addition, the Company is required to make mandatory prepayments annually from excess cash flow if the Company’s consolidated leverage ratio (as calculated under the A&R Credit Agreement) is greater than or equal to 3.0, and the remainder of any such excess cash flow is contributed to the available amount which may be used for a variety of purposes, including investments and distributions.

~~Index~~

The A&R Credit Agreement contains financial covenants that require the Company to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00. The A&R Credit Agreement also contains covenants that limit the Company’s and its subsidiaries’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, ~~make dividends and distributions,~~ change the nature of their businesses, enter into certain transactions with affiliates or amend the terms of material indebtedness.

~~The~~

In addition, the A&R Credit Agreement ~~also contains financial covenants that require~~generally restricts the payment of dividends or cash distributions by the Company with certain exceptions, including the following: i) to ~~maintain a quarterly minimum fixed charge coverage ratio~~repurchase the Company’s common stock from current or former employees in an aggregate amount of ~~1.25:1.00~~up to $10.0 million per calendar year, and ~~a quarterly maximum consolidated leverage ratio of 3.25:1.00.~~ii) other restricted payments in an aggregate amount not to exceed $40.0 million plus the Available Amount (as defined in the A&R Credit Agreement).

The obligations under the A&R Credit Agreement are guaranteed by the Company and certain domestic subsidiaries of the Company and secured by liens on substantially all of the assets of the Loan Parties, subject to certain exclusions and limitations.

On April 20, 2020, the Company received funds under the Paycheck Protection Program (the “Program”) in the amount of $3.5 million. Although the Company believes that it met all eligibility criteria for a loan under the Program at the time of its application, subsequent to receiving the funds, the Small Business Administration (“SBA”), in consultation with the Department of the Treasury (“Treasury”), provided additional guidance to address public, borrower and lender questions concerning the eligibility criteria under the Program. Based on this guidance provided by the SBA and Treasury, the Company returned the funds received under the Program on April 29, 2020.

NOTE 910 – FAIR VALUE MEASUREMENTS

The Company determines fair value in accordance with the provisions of FASB guidance, Fair Value Measurements and Disclosures, which defines fair value as an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-level fair value hierarchy that prioritizes the inputs used to measure fair value was established. There are three levels of inputs used to measure fair value and for disclosure purposes. Level 1 relates to quoted market prices for identical assets or liabilities in active markets. Level 2 relates to observable inputs other than quoted prices included in Level 1. Level 3 relates to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s non-financial assets measured at fair value on a nonrecurring basis include goodwill and intangibles assets. The determination of our intangible fair values includes several assumptions and inputs (Level 3) that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. All other financial assets and liabilities are carried at amortized cost.

The Company’s cash isbalances are representative of their fair ~~value~~values as these balances are comprised of deposits available on demand. ~~Accounts~~The carrying amounts of accounts receivable, prepaid wires, accounts payable and wire transfers and money orders payable are representative of their fair values because of the short turnover of these ~~items.~~instruments.

The Company’s financial liabilities include its revolving credit facility and term ~~loan.~~loan facility. The fair value of the term loan facility, which approximates book value, is estimated by discounting the future cash flows using a current market interest rate. The estimated fair value of the revolving credit facility would approximate face value given the payment schedule and interest rate structure, which approximates current market interest rates.

NOTE 1011 – ~~STOCKHOLDERS' EQUITY AND~~ SHARE-BASED COMPENSATION

On September 30, 2020, the Company entered into an underwriting agreement with certain selling stockholders and several underwriters relating to the underwritten public offering of 4.9 million shares of the Company’s common stock at a price to the public of $13.50 per share. The closing of the offering occurred on October 5, 2020. Also, on November 4, 2020, the underwriters completed the purchase of 0.7 million additional shares of common stock at the same price as the initial shares under a 30-day option granted by certain of the selling stockholders. The Company did not receive any of the proceeds from the offering. It did, however, incur approximately $0.5 million in certain costs, which are included in other selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive income.International Money Express, Inc. Omnibus Equity Compensation Plans

On June 26, 2020, at the 2020 Annual Meeting of Stockholders, the ~~Company's~~Company’s stockholders approved the International Money Express, Inc. 2020 Omnibus Equity Compensation Plan (the “2020 Plan”), which provides for the granting of stock-based incentive awards, including stock options, ~~and~~ restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) to employees and independent directors of the Company. There are 3.4 million shares of the ~~Company's~~Company’s common stock available for issuance under the 2020 Plan, including 0.4 million shares that were available for grant under the International Money Express, Inc. 2018 Omnibus

Index

Equity Compensation Plan (the “2018 Plan” and together with the 2020 Plan, the “Plans”). As of September 30, ~~2020, there are 0.3~~2021, 3.6 million ~~stock options granted~~shares remained available for future awards under the 2020 Plan. The 2018 Plan was terminated effective June 26, 2020. ~~Hereafter, we refer to the 2020 Plan and 2018 Plan together as the “Plans.”~~

Stock Options

The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model (“BSM”). The option pricing model requires the input of ~~certain~~highly subjective assumptions, including the grant date fair value of our common stock, expected volatility, risk-free interest rates, expected term and expected dividend yield. To determine the grant date fair value of the Company’s common stock, we use the closing market price of our common stock at the grant date. We also use an expected volatility based on the historical volatility of the

~~Index~~

~~Company's~~ Company’s common stock and the “simplified” method for calculating the expected life of our stock options as the options are “plain vanilla” and we do not have any significant historical post-vesting activity. We have elected to account for forfeitures as they occur. The risk-free interest rates are obtained from publicly available U.S. Treasury yield curve rates.

Share-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The stock options issued under the ~~Company’s~~ Plans have 10-year terms and generally vest in 4 equal annual installments beginning one year after the date of the grant. ~~During the nine months ended September 30, 2020, 0.7 million stock options vested.~~ The Company recognized compensation expense for stock options of approximately ~~$0.7~~$0.5 million and ~~$0.6~~$0.7 million for the three months ended September 30, 2021 and 2020, respectively, and ~~2019, respectively,~~$1.8 million and $1.9 million for ~~both~~ the nine months ended September 30, 2021 and 2020, ~~and 2019,~~respectively, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. As of September 30, ~~2020, there were 3.2 million outstanding stock options and~~2021, unrecognized compensation expense related to stock options of ~~$7.4~~approximately $3.5 million is expected to be recognized over a weighted-average period of ~~2.5~~1.5 years.

A summary of the stock option activity under the ~~Company’s~~ Plans during the nine months ended September 30, ~~2020~~2021 is presented below:

Number of
Options Weighted-Average
Exercise Price Weighted-Average
Remaining Contractual
Term (Years) Weighted-Average
Grant Date
Fair Value
Outstanding at December 31, 2019 2,905,219 $ 10.51 8.74 $ 3.58
Granted 555,000 $ 12.66 $ 5.54
Exercised (47,500) $ 9.98 $ 3.45
Forfeited (244,792) $ 11.66 $ 3.89
Outstanding at September 30, 2020 3,167,927 $ 10.81 8.24 $ 3.90
Exercisable at September 30, 2020 1,239,443 $ 10.11 7.88 $ 3.48


	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2020	2,714,902	$	10.97	8.19	$	4.03
Granted	—	$	—		$	—
Exercised	(621,082)	$	9.93		$	3.55
Forfeited	(120,125)	$	12.67		$	5.95
Outstanding at September 30, 2021	1,973,695	$	11.19	7.34	$	4.14

Exercisable at September 30, 2021	1,111,094	$	10.64	7.09	$	3.76

Restricted Stock Units and Share Awards

The RSUs ~~issued~~granted under the Plans to the Company’s ~~Plans~~employees generally vest in 4 equal annual installments beginning one year after the date of the grant, while RSUs issued to the Company’s independent directors vest on the ~~one-year~~one-year anniversary from the grant ~~date~~date. The Company recognized compensation expense for RSUs of approximately $0.3 million and $0.1 million for the three months ended September 30, 2021 and 2020, respectively, and $0.8 million and $0.2 million for the nine months ended September 30, 2021 and 2020, respectively, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive

Index

income. As of September 30, 2021, unrecognized compensation expense related to RSUs of approximately $3.0 million is expected to be recognized over a weighted-average period of 2.0 years.

A summary of the RSU activity during the nine months ended September 30, 2021 is presented below:


	Number of RSUs	Weighted-Average Grant Price
Nonvested at December 31, 2020	40,881	$	13.38
Granted	281,602	$	14.98
Vested	(33,381)	$	13.13
Forfeited	(43,554)	$	14.81
Nonvested at September 30, 2021	245,548	$	14.99

Under the 2020 Plan and effective October 1, 2020, the Lead Independent Director and Chairs of the Committees of the Board of Directors are granted, in aggregate, $64.0 thousand in awards of fully vested shares of the Company’s common stock, payable on a quarterly basis at the end of each quarter in payment of fees earned in such capacities. During the three and nine months ended September 30, 2021, 1,078 and 3,174 fully vested shares were granted to the Lead Independent Director and Chairs of the Committees of the Board of Directors resulting in compensation expense of $16.0 thousand and $48.0 thousand, respectively, recorded in the condensed consolidated statements of operations and comprehensive income.

Restricted Stock Awards

The RSAs issued under the ~~2020 Plan~~Plans to the Company’s employees generally vest ~~with respect to 25% of the shares on each of the first four anniversaries of~~in 4 equal annual installments beginning one year after the date of grant. The Company recognized compensation expense for ~~RSUs~~RSAs granted of ~~$89.1~~$78.8 thousand and ~~$17.5~~$179.8 thousand for the three ~~months ended September 30, 2020~~ and ~~2019, respectively, and $0.3 million and $0.1 million for the~~ nine months ended September 30, ~~2020 and 2019,~~2021, respectively, which isare included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. ~~During~~No compensation expense was recognized for the ~~nine months ended September 30, 2020, 10.0 thousand RSUs were granted to the Company's employees~~three and ~~0 RSUs vested. There were 0 forfeited RSUs during the~~ nine months ended September 30, 2020. As of September 30, ~~2020,~~2021, there was ~~$0.4~~$1.1 million of unrecognized compensation expense ~~for the restricted stock units,~~related to RSAs, which is expected to be recognized over a weighted-average period of ~~1.74~~2.2 years.

A summary of the RSA activity during the nine months ended September 30, 2021 is presented below:


	Number of RSAs	Weighted-Average Grant Price
Nonvested at December 31, 2020	—	$	—
Granted	88,215	$	14.17
Vested	—	$	—
Forfeited	—	$	—
Nonvested at September 30, 2021	88,215	$	14.17

Performance Stock Units

PSUs granted to the Company’s employees generally vest subject to attainment of performance criteria during the service period established by the Compensation Committee. Each PSU represents the right to receive one share of common stock, and the actual number of shares issuable upon vesting is determined based upon performance compared to financial performance targets. The PSUs vest based on the achievement of certain revenue parameters for a period of two years combined with a service period of three years. Compensation cost is recognized over the requisite service period when it is probable that the performance condition will be satisfied. The Company recognized compensation expense for PSUs of $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, which are included in salaries and benefits in the condensed consolidated statements of operations and comprehensive income. There was no compensation expense recognized for the three and nine months ended September 30, 2020. As of September 30, 2021, there was $1.9

Index

million of unrecognized compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 2.3 years.

A summary of the PSU activity during the nine months ended September 30, 2021 is presented below:


	Number of PSUs	Weighted-Average Remaining Contractual Term (Years)	Weighted-Average Grant Price
Nonvested at December 31, 2020	—	—	$	—
Granted	171,500		$	14.17
Vested	—		$	—
Forfeited	—		$	—
Nonvested at September 30, 2021	171,500	9.42	$	14.17

NOTE 12 – EQUITY

In August 2021, the Company's Board of Directors approved a stock repurchase program (the “Repurchase Program”) that authorizes the Company to purchase up to $40.0 million of outstanding shares of the Company’s common stock. Under the Repurchase Program, the Company is authorized to repurchase shares from time to time in accordance with applicable laws, both on the open market and in privately negotiated transactions and may include the use of derivative contracts or structured share repurchase agreements. The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of the Company’s common stock and the nature of other investment opportunities. The Repurchase Program may be limited, suspended or discontinued at any time without prior notice. The program does not have an expiration date. Under the terms of the A&R Credit Agreement, the Company has restrictions that limit the maximum amount of repurchases to (i) $40.0 million in the aggregate (plus the Available Amount as defined in the A&R Credit Agreement) and (ii) $10.0 million annually for shares held by any current or former officer, director, employee or consultant (or any spouses, ex-spouses or estates of the foregoing) of the Company or its subsidiaries.

The Company accounts for purchases of treasury stock under the cost method. Any direct costs incurred to acquire treasury stock are considered stock issue costs and added to the cost of the treasury stock. During the three and nine months ended September 30, 2021, the Company purchased 70,440 shares for an aggregate purchase price totaling $1.2 million. As of September 30, 2021, the remaining amount available for future share repurchases under the Repurchase Program was $38.8 million.

NOTE 1113 – EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income for the ~~period~~year by the weighted average number of common shares outstanding for the period. In computing dilutive earnings per share, basic earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including common stock options, RSUs, RSAs and ~~RSUs.~~PSUs.

~~Index~~

Below are basic and diluted earnings per share for the periods indicated (in thousands, except for share data):

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Net income for basic and diluted earnings per common share $ 9,498 $ 4,038 $ 24,164 $ 14,268
Shares:
Weighted-average common shares outstanding – basic 38,050,610 37,984,316 38,040,339 37,230,831
Effect of dilutive securities:
RSUs 12,721 19,222 9,570 16,555
Stock options 589,376 283,164 196,520 100,975
Warrants 0 0 0 17,010
Weighted-average common shares outstanding – diluted 38,652,707 38,286,702 38,246,429 37,365,371
Earnings per common share – basic $ 0.25 $ 0.11 $ 0.64 $ 0.38
Earnings per common share – diluted $ 0.25 $ 0.11 $ 0.63 $ 0.38

Index


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Net income for basic and diluted earnings per common share	$	11,507	$	9,498	$	33,711	$	24,164

Shares:
Weighted-average common shares outstanding – basic	38,647,931		38,050,610		38,441,767		38,040,339
Effect of dilutive securities:
RSUs	66,964		12,721		44,843		9,570
Stock options	539,111		589,376		548,371		196,520
RSAs	25,199		—		11,336		—
PSUs	56,846		—		25,305		—
Weighted-average common shares outstanding – diluted	39,336,051		38,652,707		39,071,622		38,246,429

Earnings per common share – basic	$	0.30	$	0.25	$	0.88	$	0.64
Earnings per common share – diluted	$	0.29	$	0.25	$	0.86	$	0.63

As of September 30, 2021, there were 0.4 million options excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As of September 30, 2020, there were 0.7 million options excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion of these would be anti-dilutive.

As discussed in Note 12, during the third quarter of 2021 the Company’s Board of Directors authorized the Repurchase Program, under which the Company repurchased 70,440 shares of treasury stock for $1.2 million in the three and nine months ended September 30, ~~2019, there were 0.4 million options excluded from the diluted earnings per share calculation because, under the treasury stock method, the inclusion~~2021. The effect of these ~~would be anti-dilutive. In April 2019,~~repurchases on the ~~Company executed~~Company’s weighted average shares outstanding for the three and nine months ended September 30, 2021 was a ~~tender offer for all warrants, subsequent~~reduction of 14,578 shares and 4,913 shares, respectively, due to ~~which all warrants ceased to exist.~~the timing of the repurchases.

NOTE 1214 – INCOME TAXES

A reconciliation between the income tax provision at the USU.S. statutory tax rate and the Company’s income tax provision on the condensed consolidated statements of operations and comprehensive income is below (in thousands, except for tax rates):

Three Months Ended
September 30, Nine Months Ended
September 30,
2020 2019 2020 2019
Income before income taxes $ 13,042 $ 6,291 $ 33,053 $ 20,204
US statutory tax rate 21 % 21 % 21 % 21 %
Income tax expense at statutory rate 2,739 1,321 6,941 4,243
State tax expense, net of federal 745 345 1,803 1,140
Foreign tax rates different from U.S. statutory rate 19 26 78 41
Non-deductible expenses 92 218 114 246
Credits (7) 8 (10) (1)
Other (44) 335 (37) 267
Total tax provision $ 3,544 $ 2,253 $ 8,889 $ 5,936


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Income before income taxes	$	15,136		$	13,042		$	45,316		$	33,053
U.S statutory tax rate	21		%	21		%	21		%	21		%
Income tax expense at statutory rate	3,179			2,739			9,516			6,941

State tax expense, net of federal	736			745			2,409			1,803
Foreign tax rates different from U.S. statutory rate	8			19			48			78
Non-deductible expenses	74			92			210			114
Credits	—			(7)			—			(10)
Other	(368)			(44)			(578)			(37)
Total tax provision	$	3,629		$	3,544		$	11,605		$	8,889

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

Index

As presented in the income tax reconciliation above, the tax provision recognized on the condensed consolidated statements of operations and comprehensive income was affected by state taxes, non-deductible expenses, share-based compensation ~~expenses~~expense and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

In January 2020, Intermex Holdings II, Inc., the Company's parent company prior to the 2018 merger, was notified by the IRS that its 2017 federal income tax return was selected for examination. In August 2020, the examination was closed with no changes to the reported tax.

~~Index~~

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The ~~Cares~~CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effects of COVID-19. The CARES Act provides various tax law changes in response to the COVID-19 pandemic, including increasing the ability to deduct interest expense, providing for deferral on tax deposits, and amending certain provisions of the previously enacted Tax Cuts and Jobs Act. After considering the provisions of the CARES Act, the Company determined that the CARES Act did not have a material effect on its annual effective tax rate and the income tax provision for the three and nine months ended on September 30, 2021 or 2020.

NOTE 1315 – COMMITMENTS AND CONTINGENCIES

Leases

The Company is a party to leases for office space, warehouses and Company-operated store locations. Rent expense under all operating leases, included in other selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income, amounted to approximately $0.6 million ~~and $0.5 million~~ for both the three months ended September 30, 2021 and 2020, and ~~2019, respectively,~~$1.8 million and $1.6 ~~million and $1.5~~ million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

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At September 30, ~~2020,~~2021, future minimum rental payments required under operating leases for the remainder of ~~2020~~2021 and thereafter are as follows (in thousands):

2020 $ 385
2021 1,374
2022 1,096
2023 882
2024 776
Thereafter 662
$ 5,175


2021	$	441
2022	1,519
2023	1,123
2024	937
2025	783
Thereafter	29
	$	4,832

Contingencies and Legal Proceedings

The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is the opinion of the Company’s management, based upon the information available at this time and the stage of the proceedings, that it is not possible to determine the probability of loss or estimate of damages, and therefore, the Company has not established a reserve for any of these ~~proceedings, except for the matter related to a complaint filed under the Telephone Consumer Protection Act of 1991 (the “TCPA claim”) described below.~~proceedings.

On May 30, 2019, Stuart Sawyer filed a putative class action complaint in the United States District Court for the Southern District of Florida asserting a claim under the TCPA, 47 U.S.C. § 227, et seq., based on allegations that since May 30, 2015, the Company had sent text messages to class members’ wireless telephones without their consent. Following a mediation held on October 7, 2019, the Company and the plaintiff entered into a term sheet providing the general terms for the settlement of the action, which was memorialized in a definitive Settlement Agreement on March 16, 2020 subject to subsequent Court approval. The Settlement Agreement provides for resolution of Mr. Sawyer's TCPA claims and the claims of a class of similarly situated individuals, as defined in the complaint, who received text messages from the Company during the period May 30, 2015 through October 7, 2019, and for the creation of a $3.25 million settlement fund that will be used to pay all class member claims, class counsel's fees and the costs of administering the settlement.

The Settlement Agreement also established procedures for the notification of claimants and the processing of claims. The settlement fund will be managed by a duly-appointed settlement administrator which will be authorized to communicate with class members, process claims and make payments from the fund in accordance with the terms of the Settlement Agreement and the final judgment in the case. No amount of the settlement fund will revert to the Company; instead, any unclaimed funds will be sent to a consumer advocacy organization approved by the Court.

The remaining balance of the amount payable under the Settlement Agreement of approximately $2.9 million is included in accrued and other liabilities in the condensed consolidated balance sheet as of September 30, 2020. The $2.9 million was paid to the settlement fund in October 2020.

The Company operates in all ~~U.S.~~50 states in the United States, 2 U.S. territories and 3 other countries. Money transmitters and their agents are under regulation by state and federal laws. Violations may result in civil or criminal penalties or a prohibition from providing money transfer services in a particular jurisdiction. It is the opinion of the Company’s management, based on information available at this time, that the expected outcome of regulatory examinations will not have a material adverse effect on either the results of operations or financial condition of the Company.

Regulatory Requirements

Pursuant to applicable licensing laws, certain domestic subsidiaries of the Company are required to maintain minimum tangible net worth and liquid assets (eligible securities) to cover the amount outstanding of wire transfers and money orders payable. As of September 30, ~~2020,~~2021, the Company’s subsidiaries were in compliance with these two requirements.

1922

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related Notes included in this Quarterly Report on Form 10-Q, as well as our Audited Consolidated Financial Statements and related Notes and MD&A included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q, including ~~risks related to the COVID-19 pandemic described in Pt. II, Item 1A,~~ “Risk ~~Factors” below~~Factors,” which isare incorporated in the MD&A by reference. See “Special Note Regarding Forward-Looking Statements” for additional factors relating to such statements, and see “Risk Factors” in the documents that we have filed with or furnished to the SEC for a discussion of certain risk factors applicable to our business, financial condition and results of operations. Past operating results are not necessarily indicative of operating results in any future periods.

~~Recent Developments~~

COVID-19 Update

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The pandemic has had and continues ~~affecting~~to have a significant effect on economic conditions in the United States of America (“United States” or “U.S.”), as the efforts of federal, state, local and foreign governments ~~reacted~~to react to the public health crisis with mitigation measures ~~creating~~have created and continue to cause significant uncertainties in the U.S. and global ~~economy.~~economy, particularly as new Delta and other variants of COVID-19 appear to be causing an increase in COVID-19 cases in certain places around the world. The extent to which the COVID-19 pandemic affects our business, operations and financial results depends, and will continue to depend, on numerous evolving factors that we may not be able to accurately ~~predict.~~predict such as the reduction or reimposition by government and health authorities of restrictions and progress in and effectiveness of vaccination efforts in the United States or in the countries in which we operate and conduct business.

In response to the pandemic, our top priority ~~has been~~continues being to take appropriate actions to protect the health and safety of our employees. We have adjusted standard operating procedures within our business operations to ensure continued worker safety, and are continually monitoring evolving health guidelines and responding to changes as appropriate. These procedures include reconfiguring facilities to reduce employee density, expanded and more frequent cleaning within facilities, implementation of appropriate and mandated distancing programs, employee temperature monitoring, frequent testing and requiring use of certain personal protective equipment at our ~~U.S. headquarters and~~ call centers in Mexico and Guatemala. ~~Initially, we temporarily closed our Company-operated stores and implemented a mandatory work-at-home program for~~As of September 30, 2021, all of our ~~administrative offices~~facilities are open and employees in all countries where we operate. Starting in the second quarter, however, we started to allow office-based employees to work from our offices on a voluntary basis, while maintaining the option to work at home and, as of September 30, 2020, all Company-operated stores have been reopenedoperating with adjustments to ensure compliance with social distancing and facial covering recommendations and requirements established by state and local regulations.

Notwithstanding the operational challenges created by ~~these measures,~~the pandemic, our business continues to function and, to date, our customer service has not been adversely affected in any material respect. ~~Despite these efforts,~~Nevertheless, the COVID-19 pandemic continues to pose the risk that we or our employees, sending and paying agents, as well as consumers and their beneficiaries, are or may become further restricted from conducting business activities, partially or completely, for an indefinite period of time, including due to shutdowns requested or mandated by governmental authorities or imposed by our management, or that the pandemic may otherwise interrupt or impair business activities. These risks could be magnified if the recent resurgence of COVID-19 illnesses continues or is not adequately contained and governmental authorities once again impose restrictions on commercial and social activities or businesses that employ our customers take actions that adversely affect the incomes of those employees.

The operational changes noted above had only a limited effect on the Company’s financial results for the three and nine month periods ended September 30, 2020. Although we saw a slight year over year decrease in our volume of transactions at the beginning of the pandemic, the three months ended September 30, 2020 have shown a year-over-year increase in volume and transactions, including an all-time high for one-month sales in August. The economic effects of the pandemic caused increased foreign exchange volatility, particularly with respect to the Mexican peso, which has created additional operational challenges; however, the overall effect on our results of operations to date has been positive. Despite positive trends during the third quarter, we continue to monitor this evolving pandemic and its potential effects on the Company’s operations.

Although ~~governmental authorities took~~certain measures that ~~restricted~~restrict the normal course of operations of businesses and consumers ~~that~~ were still in place for ~~much of~~ the ~~pandemic affected period, the Company~~three and ~~our sending agents are considered essential businesses under current federal guidance and~~nine months ended September 30, 2021, such measures did not have a material adverse effect on the Company’s financial condition, results of operations and cash flows for the three and nine ~~month periods~~months ended September 30, ~~2020.~~2021. Notwithstanding the foregoing, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively despite social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our financial condition, results of operations and cash flows is ~~dependent on~~subject to future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of

unemployment of our customers, inflation, interest rate levels and foreign exchange volatility, all of which remain uncertain and cannot be predicted at this time. If the global response to contain and remedy the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on its financial condition, results of operations and cash flows.

Further quantification and discussion of these pandemic related effects, to the extent relevant and material, are included in the discussion of results of operations below.

2023

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Overview

We are a rapidly growing and leading money remittance services company focused primarily on the United States to Latin America and the Caribbean (“LAC”) corridor, which includes Mexico, Central and South America and the Caribbean. In ~~2019,~~recent years, we expanded our services to allow remittances to Africa and Asia from the United States and also began offering sending services from Canada to Latin America and Africa. We utilize our proprietary technology to deliver convenient, reliable and value-added services to our customers through a broad network of sending and paying agents. Our remittance services, which include a comprehensive suite of ancillary financial processing solutions and payment services, are available in all 50 states in the U.S., Washington D.C., Puerto Rico and 13 provinces in Canada, where customers can send money to beneficiaries in 17 LAC countries, seven countries in Africa and two countries in Asia. Our services are accessible in person through over 100,000 independent sending and paying agents and 34 Company-operated stores, as well as online and via Internet-enabled mobile devices. Additionally, we have expanded our product and service portfolio to include online payment options, pre-paid debit cards and direct deposit payroll cards, which may present different cost, demand, regulatory and risk profiles relative to our core remittance business.

Money remittance services to LAC countries, primarily Mexico and Guatemala, are the primary source of our revenue. These services involve the movement of funds on behalf of an originating customer for receipt by a designated beneficiary at a designated receiving location. Our remittances to LAC countries are primarily generated in the United States by customers with roots in Latin American and Caribbean countries, many of whom do not have an existing relationship with a traditional full-service financial institution capable of providing the services we offer. We provide these customers with flexibility and convenience to help them meet their financial needs. We believe many of our customers who use our services may have access to traditional banking services, but prefer to use our services based on reliability, convenience and value. We generate money remittance revenue from fees paid by our customers (i.e., the senders of funds), which we share with our sending agents in the originating country and our paying agents in the destination country. Remittances paid in local currencies that are not pegged to the U.S. dollar can also ~~earn~~generate revenue ~~through~~if we are successful in our daily management of currency exchange spreads.

Our money remittance services enable our customers to send funds through our broad network of locations in the United States and Canada that are primarily operated by third-party businesses, as well as through 34our Company-operated stores. Transactions are processed and payment is collected by our agent (“sending agent(s)”) and those funds become available for pickup by the beneficiary at the designated destination, usually within minutes, at any Intermex payer location (“paying agent(s)”). We refer to our sending agents and our paying agents collectively as agents. In addition, our services are offered digitally through Intermexonline.com and via Internet-enabled mobile devices. ~~We currently operate in the United States, Mexico, Guatemala, Canada and 15 additional countries in LAC corridor, seven countries in Africa and two in Asia.~~ Since January ~~2019~~2020 through September 30, ~~2020,~~2021, we have grown our ~~sending~~ agent network by ~~more than 13% and increased our remittance transactions volume by~~ approximately ~~15%~~20.9%. InFor the three and nine months ended September 30, ~~2020, we processed~~2021, principal amount sent increased by approximately ~~8.5 million~~36.5% and ~~23.1 million remittances, respectively, representing approximately 13% and 10% growth in transactions,~~40.0%, respectively, as compared to the same periods in ~~2019.~~2020 and total remittances processed were approximately 10.5 million and 29.0 million, representing approximately a 23.4% and 25.4% increase, respectively, as compared to the same periods in 2020.

As a non-bank financial institution in the United States, we are regulated by the Department of Treasury, the Internal Revenue Service, FinCEN, the Consumer Financial Protection Bureau, ~~(“CFPB”),~~ the Department of Banking and Finance of the State of Florida and additionally by the various regulatory institutions of those states in which we hold an operating license. We are duly registered as a Money Service Business (“MSB”) with FinCEN, the financial intelligence unit of the U.S. Department of the Treasury. We are also subject to a wide range of regulations in the United States and other countries, including anti-money laundering laws and regulations; financial services regulations; currency control regulations; anti-bribery laws; money transfer and payment instrument licensing laws; escheatment laws; privacy, data protection and information security laws, such as the Graham-Leach-Bliley ~~Act (“GLBA”);~~Act; and consumer disclosure and consumer protection laws, such as the California Consumer Privacy ~~Act (“CCPA”).~~Act.

Key Factors and Trends Affecting our Business

Various trends and other factors have affected and may continue to affect our business, financial condition and operating results, including, but not limited to:

•the COVID-19 pandemic, responses thereto and the economic and market effects thereof, including unemployment levels, inflation, recovery from related adverse economic effects, and increased capital market volatility;

•competition in the markets in which we operate;

•volatility in foreign exchange rates that could affect the volume of consumer remittance activity and/or affect our foreign exchange related gains and losses;

•cyber-attacks or disruptions to our information technology environment, computer network systems and data centers;

•
~~our ability to maintain agent relationships on terms consistent with those currently in place;~~

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•our ability to maintain banking relationships necessary for us to conduct our business;

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•credit risks from our agents and the financial institutions with which we do business;

•bank failures, sustained financial illiquidity, or illiquidity at our clearing, cash management or custodial financial institutions;

•new technology or competitors that disrupt the current ecosystem by introducing digital platforms;

•our ability to satisfy our debt obligations and remain in compliance with our credit facility requirements;

•interest rate risk from elimination of LIBOR as a benchmark interest rate;

•our success in developing and introducing new products, services and infrastructure;

•customer confidence in our brand and in consumer money transfers generally;

•our ability to maintain compliance with ~~the~~ regulatory requirements of the jurisdictions in which we operate or plan to operate;

•international political factors or implementation of tariffs, border taxes or restrictions on remittances or transfers of money out of the United States and Canada;

•changes in U.S. tax ~~laws and unfavorable outcomes of tax positions we take;~~laws;

•political instability, currency restrictions and volatility in countries in which we operate or plan to operate;

•consumer fraud and other risks relating to customer authentication;

•weakness in U.S. or international economic conditions;

•~~change or disruption~~changes in ~~international migration patterns;~~immigration laws and their enforcement;

•our ability to protect our brand and intellectual property rights; and

•our ability to retain key personnel.

Throughout ~~2020,~~2021, Latin American political and economic conditions have remained unstable, as evidenced by high unemployment rates in key markets, currency reserves, currency controls, restricted lending activity, weak currencies and low consumer confidence, ~~and~~some of which reflects the impact of the COVID-19 pandemic, among other factors. Specifically, continued political and economic unrest in parts of Mexico and some countries in South America contributed to volatility. Our business has generally been resilient during times of economic instability as money remittances are essential to many recipients, with the funds used by the receiving ~~party~~parties for their daily needs; however, long-term sustained appreciation of the Mexican peso or Guatemalan quetzal as compared to the U.S. ~~Dollar~~dollar could negatively affect our revenues and profitability.

Money remittance businesses have continued to be subject to strict legal and regulatory requirements, and we continue to focus on and regularly review our compliance programs. In connection with these reviews, and in light of regulatory complexity and heightened attention of governmental and regulatory authorities related to cybersecurity and compliance activities, we have made, and continue to make, enhancements to our processes and systems designed to detect and prevent cyber-attacks, consumer fraud, money laundering, terrorist financing and other illicit activities, along with enhancements to improve consumer protection, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and similar regulations outside the United States. In coming periods, we expect these and future enhancements will continue to result in changes to certain of our business practices and may result in increased costs.

We maintain a ~~regulatory~~ compliance department, ~~under~~ the ~~direction~~responsibility of ~~our experienced Chief Administrative and Compliance Officer, whose foremost responsibility~~which is to monitor transactions, detect and report suspicious activity, maintain ~~financial~~appropriate records and train our employees and agents. An independent third-party ~~consulting firm~~ periodically reviews our policies and procedures and performs independent testing to ~~ensure~~assess the ~~efficacy~~effectiveness of our anti-money laundering and ~~regulatory~~Bank Secrecy Act compliance program. We also maintain a regulatory affairs and licensing department, under the direction of our Chief Regulatory Affairs Officer, whose responsibility is to manage regulatory affairs and licensing.

The market for money remittance services is very competitive. Our competitors include a small number of large money remittance providers, financial institutions, banks and a large number of small niche money remittance service providers that serve select regions. We compete with larger companies, such as Western Union, MoneyGram and Euronet, and a number of other smaller MSB entities. We generally compete for money remittance agents on the basis of value, service, quality, technical and operational differences, commission

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structure and marketing efforts. As a philosophy, we sell credible solutions to our sending agents, not discounts or higher commissions, as

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is typical for the industry. We compete for money remittance customers on the basis of trust, convenience, service, efficiency of outlets, value, technology and brand recognition.

We have encountered and continue to expect to encounter increasing competition as new electronic platforms emerge that enable customers to send and receive money through a variety of channels, but we do not expect adoption rates to be as significant in the near term for the customer segment we serve. Regardless, we continue to innovate in the industry by differentiating our money remittance business through programs to foster loyalty among agents as well as customers and have expanded our channels through which our services are accessed to include online and mobile offerings ~~in preparation for~~which are experiencing customer adoption.

We qualify as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), enacted on April 5, 2012. An “emerging growth company” can take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” These provisions include:

•an exemption from the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act in the assessment of the emerging growth company’s internal control over financial reporting;

•an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies; and

•an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or ~~a supplement to~~communication of Critical Audit Matters (“CAMs”) in the auditor’s ~~report in which the auditor would be required to provide additional information about~~report. A CAM is defined as any matter arising from the audit ~~and~~of the financial statements ofthat was communicated or required to be communicated to the ~~issuer.~~audit committee and that (1) relates to accounts or disclosures that are material to the financial statements; and (2) involves especially challenging, subjective, or complex auditor judgment.

We will remain an “emerging growth company” until the earlier of (1) the earliest of the last day of the fiscal year (a) following January 19, 2022, the fifth anniversary of us becoming a publicly-traded company, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. As of June 30, ~~2020,~~2021, the market value of our common stock that is held by non-affiliates approximated ~~$308.0~~$488.5 million.

~~Secondary Offering~~

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, service charges from agents and banks, salaries and benefits, other selling, general and administrative expenses and net income. To help us assess our performance with these key indicators, we use Adjusted net income, Adjusted earnings per share and Adjusted EBITDA as non-GAAP financial measures. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure our revenue and cost performance as a supplement to our U.S. GAAP consolidated financial statements. See the “Adjusted Net Income and Adjusted Earnings per Share” and “Adjusted EBITDA” sections below for reconciliations of these non-GAAP financial measures to net income and earnings per share, our closest GAAP measures.

Revenues

Transaction volume is the primary generator of revenue in our business. Revenue on transactions is derived primarily from transaction fees paid by customers to transfer money. Revenues per transaction vary based upon send and receive locations and the amount sent. In certain transactions involving different send and receive currencies, we generate foreign exchange gains based on the difference between the set exchange rate charged by us to the sender and the rate available to us in the wholesale foreign exchange market.

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Operating Expenses

Service Charges from Agents and Banks

Service charges ~~and fees~~ primarily consist of agent commissions and bank fees. Service charges ~~and fees~~ vary based on agent commission percentages and the amount of fees charged by the banks. Sending agents earn a commission on each transaction they process of approximately 50% of the transaction fee. Service charges ~~and fees~~ may increase if banks or payer organizations increase their fee structure or sending agents use higher fee methods to remit ~~the~~ funds to us. Service charges also vary based on the method the customer selects to send the transfer and the payer organization that facilitates the transaction.

Salaries and Benefits

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Salaries and benefits include cash and share-based compensation associated with our corporate employees and sales team as well as employees at our Company-operated stores. Corporate employees include management, customer service, compliance, information technology, operations, finance and human resources. Our sales team, located throughout the United States and Canada, is focused on supporting and growing our sending agent network. Share-based compensation is recognized as an expense on a straight-line basis over the requisite service period; unrecognized compensation expense related to options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and performance stock units (“PSUs”) of approximately $9.6 million is expected to be recognized over a weighted-average period of 1.9 years.

Other Selling, General and Administrative

General and administrative expenses primarily consist of fixed overhead expenses associated with our operations, such as information technology, telecommunications, rent, insurance, professional services, non-income taxes, facilities maintenance and other similar types of operating expenses. A portion of these expenses relate to our 34 Company-operated stores; however, the majority relate to the overall business and compliance requirements of a regulated publicly traded financial services company. Selling expenses include expenses such as advertising and promotion, provision for ~~bad debt~~credit losses and expenses associated with increasing our network of agents. These expenses are expected to continue to increase ~~in line with~~at a slower pace than the increase in our revenues.

Depreciation and Amortization

Depreciation largely consists of depreciation of computer equipment and software that supports our technology platform. Amortization of intangible assets is primarily related to our agent relationships, trade name and developed technology.

Non-Operating Expenses

Interest Expense

Interest expense consists primarily of interest associated with our debt, which consists of a term loan facility and a revolving credit facility. The effective interest rates for the nine months ended September 30, ~~2020~~2021 for the term loan facility and revolving credit facility, which substantially related to the Original Credit Agreement, were ~~5.93%~~4.58% and ~~0.99%~~0.82%, respectively. Interest on the term loan ~~facility~~ and revolving credit ~~facility~~facilities is determined by reference to either LIBOR (subject to replacement) or a “base rate”, in each case plus an applicable margin, under the amended and restated credit agreement, of ~~4.50%~~between 2.50% and 3.00% per annum for LIBOR loans ~~or 3.50%~~and between 1.50% and 2.00% per annum for base rate ~~loans.~~loans depending on the level of our consolidated leverage ratio. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum.

Income tax provision

Our income tax provision includes the expected benefit of all deferred tax assets, including our net operating loss carryforwards. With few exceptions, our net operating loss carryforwards will expire from 2029 through 2037. After consideration of all evidence, both positive and negative, management has determined that no valuation allowance is required at September 30, ~~2020~~2021 on the ~~Company's~~Company’s U.S. federal or state deferred tax assets; however, a valuation allowance ~~of $0.1 million~~has been recorded as of September 30, ~~2020 has been recorded~~2021 on deferred tax assets associated with Canadian net operating loss carryforwards. Our income tax provision reflects the effects of state taxes, non-deductible expenses, share-based compensation ~~expenses,~~expense, and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

Net Income

Net income is determined by subtracting operating and non-operating expenses from revenues.

Earnings per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding for each period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares and common share equivalents outstanding for each period. Diluted earnings per share reflects the potential dilution that could occur if outstanding stock options at the presented dates are exercised and shares of restricted stock units, restricted stock awards and performance stock units have vested, using the treasury stock method. Treasury stock shares that have been repurchased are not considered outstanding and therefore are excluded from the weighted average number of common shares outstanding calculation.

Segments

Our business is organized around one reportable segment that provides money transmittal services between the United States and Canada to Mexico, Guatemala and other countries in Latin America, Africa and Asia through a network of authorized agents located in

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various unaffiliated retail establishments and 34 Company-operated stores throughout the ~~U.S.~~United States and Canada. This is based on the objectives

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of the business and how our chief operating decision maker, the CEO and President, monitors operating performance and allocates resources.

Results of Operations

The following table summarizes key components of our results of operations for the periods indicated:

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2020 2019 2020 2019
Revenues:
Wire transfer and money order fees, net $ 82,646 $ 72,468 $ 222,534 $ 201,410
Foreign exchange gain, net 12,296 12,272 33,510 33,297
Other income 652 594 1,863 1,652
Total revenues 95,594 85,334 257,907 236,359
Operating expenses:
Service charges from agents and banks 63,904 56,319 172,403 156,510
Salaries and benefits 8,084 7,612 22,512 22,806
Other selling, general and administrative expenses 6,336 9,788 16,827 20,850
Depreciation and amortization 2,698 3,179 8,079 9,486
Total operating expenses 81,022 76,898 219,821 209,652
Operating income 14,572 8,436 38,086 26,707
Interest expense 1,530 2,145 5,033 6,503
Income before income taxes 13,042 6,291 33,053 20,204
Income tax provision 3,544 2,253 8,889 5,936
Net income $ 9,498 $ 4,038 $ 24,164 $ 14,268


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except for share data)	2021		2020		2021		2020
Revenues:
Wire transfer and money order fees, net	$	104,191	$	82,646	$	284,409	$	222,534
Foreign exchange gain, net	15,643		12,296		45,347		33,510
Other income	873		652		2,275		1,863
Total revenues	120,707		95,594		332,031		257,907
Operating expenses:
Service charges from agents and banks	81,416		63,904		222,654		172,403
Salaries and benefits	10,859		8,084		30,909		22,512
Other selling, general and administrative expenses	9,966		6,336		22,549		16,827
Depreciation and amortization	2,362		2,698		7,041		8,079
Total operating expenses	104,603		81,022		283,153		219,821

Operating income	16,104		14,572		48,878		38,086

Interest expense	968		1,530		3,562		5,033

Income before income taxes	15,136		13,042		45,316		33,053

Income tax provision	3,629		3,544		11,605		8,889

Net income	$	11,507	$	9,498	$	33,711	$	24,164

Earnings per common share:
Basic	$	0.30	$	0.25	$	0.88	$	0.64
Diluted	$	0.29	$	0.25	$	0.86	$	0.63

Three Months Ended September 30, ~~2020~~2021 Compared to Three Months Ended September 30, ~~2019~~2020

Revenues

Revenues for the above periods are presented below:

($ in thousands) Three Months
Ended September 30,
2020 %
of
Revenues Three Months
Ended September 30,
2019 %
of
Revenues
Revenues:
Wire transfer and money order fees, net $ 82,646 86 % $ 72,468 85 %
Foreign exchange gain, net 12,296 13 % 12,272 14 %
Other income 652 1 % 594 1 %
Total revenues $ 95,594 100 % $ 85,334 100 %


($ in thousands)	Three Months Ended September 30, 2021		% of Revenues		Three Months Ended September 30, 2020		% of Revenues
Revenues:
Wire transfer and money order fees, net	$	104,191	86	%	$	82,646	86	%
Foreign exchange gain, net	15,643		13	%	12,296		13	%
Other income	873		1	%	652		1	%
Total revenues	$	120,707	100	%	$	95,594	100	%

Index

Wire transfer and money order fees, net of $104.2 million for the three months ended September 30, 2021 increased by $21.6 million from $82.6 million for the three months ended September 30, ~~2020 increased by $10.1 million from $72.5 million for the three months ended September 30, 2019. This~~2020. The increase of ~~$10.1~~$21.6 million was primarily due to a ~~13%~~23.4% increase in transaction volume compared to the third quarter of ~~2019,~~2020, largely due to the continued growth in our agent network, which ~~has~~ increased by 5%17.7% from September ~~2019~~2020 to September ~~2020.~~2021.

Revenues from foreign exchange gain, net of $15.6 million for the three months ended September 30, 2021 increased by $3.3 million from $12.3 million for the three months ended September 30, ~~2020 remained consistent with $12.3 million for the three months ended September 30, 2019~~2020. This increase was primarily due to ~~lower~~higher transaction volume achieved by growth in our agent network and a higher average amount sent by our customers, primarily as a result of increased foreign exchange volatility in the Mexican peso during the ~~quarter.~~third quarter of 2021.

~~Index~~

Operating Expenses

Operating expenses for the above periods are presented below:

($ in thousands) Three Months
Ended September 30,
2020 %
of
Revenues Three Months
Ended September 30,
2019 %
of
Revenues
Operating expenses:
Service charges from agents and banks $ 63,904 67 % $ 56,319 66 %
Salaries and benefits 8,084 8 % 7,612 9 %
Other selling, general and administrative expenses 6,336 7 % 9,788 11 %
Depreciation and amortization 2,698 3 % 3,179 4 %
Total operating expenses $ 81,022 85 % $ 76,898 90 %


($ in thousands)	Three Months Ended September 30, 2021		% of Revenues		Three Months Ended September 30, 2020		% of Revenues
Operating expenses:
Service charges from agents and banks	$	81,416	67	%	$	63,904	67	%
Salaries and benefits	10,859		9	%	8,084		8	%
Other selling, general and administrative expenses	9,966		8	%	6,336		7	%
Depreciation and amortization	2,362		2	%	2,698		3	%
Total operating expenses	$	104,603	87	%	$	81,022	85	%

Service charges from agents and banks — Service charges from agents and banks were ~~$63.9~~$81.4 million ~~or 67% of revenues,~~ for the three months ended September 30, ~~2020~~2021 compared to ~~$56.3~~$63.9 million ~~or 66% of revenues,~~ for the three months ended September 30, ~~2019.~~2020. The increase of ~~$7.6~~$17.5 million was primarily due to the increase in transaction volume described above.

Salaries and benefits — Salaries and benefits of $10.9 million for the three months ended September 30, 2021 increased by $2.8 million from $8.1 million for the three months ended September 30, ~~2020 increased by $0.5 million from $7.6 million for the three months ended September 30, 2019.~~2020. The increase of ~~$0.5~~$2.8 million is primarily due to ~~$0.6~~$2.0 million spent in talent acquisition and retention and increased wages and bonuses to recognize performance and to support the continued growth of our business, ~~and~~ $0.2 ~~increase in stock based compensation. These increases are offset by a $0.3~~ million ~~decrease~~increase in commission expense for our sales representatives ~~primarily due to~~and $0.3 million increase in share-based compensation as a ~~lower than expected gross margin achieved compared to established goals.~~result of new awards granted throughout 2021.

Other selling, general and administrative expenses — Other selling, general and administrative expenses of $10.0 million for the three months ended September 30, 2021 increased by $3.7 million from $6.3 million for the three months ended September 30, ~~2020 decreased by $3.5 million from $9.8 million for the three months ended September 30, 2019.~~

~~The decrease was the result of:~~

•~~$3.3 million - nonrecurrence of settlement and legal fees associated with a Telephone Consumer Protection Act of 1991 (“TCPA”) class action lawsuit in 2019;~~

•~~$0.3 million - reduction in advertising and promotion expense due to a change in marketing strategy;~~

•~~$0.3 million - lower legal and professional fees in connection with secondary offerings of the Company’s common stock; and~~

•~~$0.3 million - decrease in travel expenses due to reduced employee travel during the COVID-19 pandemic.~~2020.

~~These decreases were partially offset by:~~The increase was primarily the result of:

•$1.7 million - relating to the losses in two separate closures of financial institutions in Mexico. These amounted to $2.0 million and $0.3 million in September 2021 and 2020, respectively;

•$0.4 million - increase in advertising and promotion expenses, as last year we curtailed these activities because of the COVID-19 pandemic;

•$1.0 million in a write-off of software development expenditures in the third quarter of 2021;

•$0.7 million - higher travel and other operating expenses to support our business growth, some of which expenses were reduced last year due to the COVID-19 pandemic; and

•$0.3 million - higher IT related expenses incurred to sustain our business ~~expansion;~~expansion and to improve our technology environment.

These increases were partially offset by:

•$~~0.3~~0.5 million - ~~loss~~reduction in professional services expenses, as the three months ended September 30, 2020 included expenses incurred for a secondary public offering, which did not reoccur in the ~~closure of a financial institution in Mexico.~~three months ended September 30, 2021;

Depreciation and amortization — Depreciation and amortization of $2.4 million for the three months ended September 30, 2021 decreased by $0.3 million from $2.7 million for the three months ended September 30, ~~2020 decreased by $0.5 million from $3.2 million for the three months ended September 30, 2019.~~2020. This decrease is mainly due to ~~$0.6~~approximately $0.4 million less amortization related to our trade name, developed technology and agent relationships during the third quarter of ~~2020~~2021, as these intangibles are being amortized on an accelerated basis, which declines over time. This decrease was partially offset by an increase in depreciation of $0.1 million associated primarily with additional computer equipment acquired to support our growing business and sending agent network.

Index

Non-Operating Expenses

Interest expense — Interest expense of $1.0 million for the three months ended September 30, 2021 decreased by $0.5 million from $1.5 million for the three months ended September 30, ~~2020 decreased by $0.6 million from $2.1~~2020. The decrease was primarily due to lower market interest rates paid under the credit agreements (as described below) and lower drawings under our revolving credit facility.

Income tax provision — Income tax provision was $3.6 million for the three months ended September 30, ~~2019. The decrease~~2021, which represents an increase of ~~$0.6~~$0.1 million ~~was primarily due to a reduction in interest rates paid under the Credit Agreement (as defined below) and lower drawings under the revolving credit facility.~~

~~Income tax provision~~ ~~— Income~~from an income tax provision of $3.5 million for the three months ended September 30, ~~2020 increased by $1.2 million from an income tax provision of $2.3 million for the three months ended September 30, 2019.~~2020. The increase in the income tax provision was mainly attributable to higher taxable income resulting from higher ~~revenues.~~revenues from our growth.

~~Index~~

Net Income

We reported net income of $11.5 million for the three months ended September 30, 2021 compared to net income of $9.5 million for the three months ended September 30, 2020, ~~compared to net income of $4.0 million for the three months ended September 30, 2019, representing~~which resulted in an increase of ~~$5.5~~$2.0 million ~~or 138%,~~ due to the same factors discussed above.

Non-GAAP Financial Measures

We use Adjusted Net Income, Adjusted Earnings ~~Per~~per Share and Adjusted EBITDA to evaluate our performance, both internally and as compared with our peers, because these measures exclude certain items that may not be indicative of our core operating results, as well as items that can vary widely among companies within our industry. For example, non-cash compensation costs can be subject to volatility from changes in the market price per share of our common stock or variations in the value and number of shares granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period and amortization of intangibles expense is primarily related to the effects of push down accounting resulting from ~~our 2018 merger.~~acquisitions.

We present these non-GAAP financial measures because we believe they are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. ~~Further,~~Furthermore, we believe they are helpful in highlighting trends in our operating results by focusing on our core operating results and are useful to evaluate our performance in conjunction with our GAAP financial measures. Adjusted Net Income, Adjusted Earnings ~~Per~~per Share and Adjusted EBITDA are non-GAAP financial measures and should not be considered as an alternative to operating income, net income or earnings per share as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to GAAP measures.

Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business because it excludes, among other things, the effects of certain transactions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the jurisdictions in which we operate and capital investments.

In particular, Adjusted EBITDA is subject to certain limitations, including the following:

•Adjusted EBITDA does not reflect interest expense, or the amounts necessary to service interest or principal payments on our Credit Agreement;

•Adjusted EBITDA does not reflect income tax provision (benefit), and because the payment of taxes is part of our operations, tax provision is a necessary element of our costs and ability to operate;

•Although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any costs of such replacements;

•Adjusted EBITDA does not reflect the noncash component of share-based compensation;

•Adjusted EBITDA does not reflect the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations; and

•other companies in our industry may calculate Adjusted EBITDA or similarly titled measures differently than we do, limiting its usefulness as a comparative measure.

We adjust for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, as well as our other non-GAAP financial measures, only as supplemental information.

Index

Adjusted Net Income and Adjusted Earnings per Share

Adjusted Net Income is defined as net income adjusted to add back certain charges and expenses, such as non-cash amortization of intangible assets resulting from push-down accounting, which will recur in future periods until these assets have been fully amortized, ~~and excludes the amortization of other intangible assets related to the acquisition of Company-operated stores,~~ non-cash compensation costs, litigation settlements and other items set forth in the table below, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

Adjusted Earnings per Share - Basic and Diluted is calculated by dividing Adjusted Net Income by GAAP weighted-average common shares outstanding (basic and diluted).

~~Index~~

Adjusted Net Income for the three months ended September 30, ~~2020~~2021 was ~~$12.2~~$15.7 million, representing an increase of ~~$2.7~~$3.5 million, or ~~28%~~28.3%, from Adjusted Net Income of ~~$9.5~~$12.2 million for the three months ended September 30, ~~2019.~~2020. The increase in Adjusted Net Income was primarily due to the increase in revenues of ~~$10.3~~$25.1 million, offset primarily by an increase in service charges from agents and banks of ~~$7.6~~$17.5 million due to higher transaction volume.

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted Net Income:

Three Months Ended September 30,
(in thousands, except for per share data) 2020 2019
Net Income $ 9,498 $ 4,038
Adjusted for:
Share-based compensation (a) 801 634
Offering costs (b) 479 766
TCPA settlement (c) 12 3,358
Loss on bank closure (d) 252 —
Other charges and expenses (e) 282 86
Amortization of intangibles (f) 1,710 2,312
Income tax benefit related to adjustments (g) (822) (1,654)
Adjusted Net Income $ 12,212 $ 9,540
Adjusted Earnings per Share
Basic and diluted $ 0.32 $ 0.25
Weighted-average common shares outstanding
Basic 38,050,610 37,984,316
Diluted 38,652,707 38,286,702


	Three Months Ended September 30,
(in thousands, except for per share data)	2021		2020
Net Income	$	11,507	$	9,498
Adjusted for:
Share-based compensation (a)	1,112		801
Offering costs (b)	—		479
TCPA settlement (c)	—		12
Loss on bank closures (d)	2,000		252
Other charges and expenses (e)	1,300		282
Amortization of intangibles (f)	1,264		1,710
Income tax benefit related to adjustments (g)	(1,514)		(822)
Adjusted Net Income	$	15,669	$	12,212

Adjusted Earnings per Share
Basic	$	0.41	$	0.32
Diluted	$	0.40	$	0.32

Weighted-average common shares outstanding
Basic	38,647,931		38,050,610
Diluted	39,336,051		38,652,707

(a)~~Stock options and restricted stock~~Equity awards were granted to employees and independent directors of the Company.

(b)Represents expenses incurred for professional and legal fees in connection with secondary offerings of the Company’s common stock.

(c)Represents legal fees ~~and charge~~ for the settlement of a class action lawsuit related to the TCPA.

(d)Represents ~~a loss~~two separate losses during the three months ended September 30, 2021 and 2020, respectively related to the closure of a financial ~~institution~~institutions in Mexico.

(e)~~Includes~~Represents primarily loss on disposal of fixed assets, including a write-off of software development expenditures in amount of $1.0 million during the three months ended September 30, 2021 and foreign currency (gains) losses.

(f)Represents the amortization of certain intangible assets that resulted from the application of push-down accounting.

(g)Represents the current and deferred tax impact of the taxable adjustments to net income using the Company’s blended federal and state tax rate for each period. Relevant tax-deductible adjustments include all adjustments to net income.

Index

Adjusted Earnings per Share - Basic ~~and~~for the three months ended September 30, 2021 was $0.41, representing an increase of $0.09, or 28.1%, compared to $0.32 for the three months ended September 30, 2020.

Adjusted Earnings per Share - Diluted for the three months ended September 30, ~~2020~~2021 was ~~$0.32,~~$0.40, representing an increase of ~~$0.07,~~$0.08, or ~~28%~~25.0%, compared to ~~$0.25~~$0.32 for the three months ended September 30, ~~2019.~~2020.

The following table presents the reconciliation of GAAP Earnings per Share, our closest GAAP measure, to Adjusted Earnings per Share:

Three Months Ended September 30,
2020 2019
GAAP Earnings per Share - Basic and Diluted $ 0.25 $ 0.11
Adjusted for:
Share-based compensation 0.02 0.02
Offering costs 0.01 0.02
TCPA settlement NM 0.09
Loss on bank closure 0.01 —
Other charges and expenses 0.01 NM
Amortization of intangibles 0.04 0.06
Income tax benefit related to adjustments (0.02) (0.04)
Adjusted Earnings per Share - Basic and Diluted $ 0.32 $ 0.25


	Three Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic and Diluted
GAAP Earnings per Share	$	0.30	$	0.29	$	0.25
Adjusted for:
Share-based compensation	0.03		0.03		0.02
Offering costs	—		—		0.01
TCPA settlement	—		—		NM
Loss on bank closures	0.05		0.05		0.01
Other charges and expenses	0.03		0.03		0.01
Amortization of intangibles	0.03		0.03		0.04
Income tax benefit related to adjustments	(0.04)		(0.04)		(0.02)
Adjusted Earnings per Share	$	0.41	$	0.40	$	0.32

~~Index~~

NM - Per share amounts are not meaningful.

The table above may contain slight summation differences due to rounding.

Adjusted EBITDA

Adjusted EBITDA is defined as net income before depreciation and amortization, interest expense, income taxes, and also adjusted to add back certain charges and expenses, such as non-cash compensation costs and other items set forth in the table below, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

Adjusted EBITDA for the three months ended September 30, ~~2020~~2021 was ~~$19.1~~$22.9 million, representing an increase of ~~$2.6~~$3.8 million, or ~~16%~~19.8%, from ~~$16.5~~$19.1 million for the three months ended September 30, ~~2019.~~2020. The increase in Adjusted EBITDA was primarily due to the increase in revenues of ~~$10.3~~$25.1 million, offset primarily by an increase in service charges from agents and banks of ~~$7.6~~$17.5 million due to an increase in transaction volume.

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted EBITDA:

Three Months Ended September 30,
(in thousands) 2020 2019
Net Income $ 9,498 $ 4,038
Adjusted for:
Interest expense 1,530 2,145
Income tax provision 3,544 2,253
Depreciation and amortization 2,698 3,179
EBITDA 17,270 11,615
Share-based compensation (a) 801 634
Offering costs (b) 479 766
TCPA settlement (c) 12 3,358
Loss on bank closure (d) 252 —
Other charges and expenses (e) 282 86
Adjusted EBITDA $ 19,096 $ 16,459


	Three Months Ended September 30,
(in thousands)	2021		2020
Net Income	$	11,507	$	9,498
Adjusted for:
Interest expense	968		1,530
Income tax provision	3,629		3,544
Depreciation and amortization	2,362		2,698
EBITDA	18,466		17,270
Share-based compensation (a)	1,112		801
Offering costs (b)	—		479
TCPA settlement (c)	—		12
Loss on bank closures (d)	2,000		252
Other charges and expenses (e)	1,300		282
Adjusted EBITDA	$	22,878	$	19,096

Index

(a)~~Stock options~~Equity awards were granted to employees and ~~restricted stock~~independent directors of the Company.

(b)Represents expenses incurred for professional and legal fees in connection with secondary offerings of the Company’s common stock.

(c)Represents legal fees for the settlement of a class action lawsuit related to the TCPA.

(d)Represents two separate losses during the three months ended September 30, 2021 and 2020, respectively related to the closure of financial institutions in Mexico.

(e)Represents primarily loss on disposal of fixed assets, including a write-off of software development expenditures in an amount of $1.0 million during the three months ended September 30, 2021 and foreign currency (gains) losses.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Revenues

Revenues for the above periods are presented below:


($ in thousands)	Nine Months Ended September 30, 2021		% of Revenues		Nine Months Ended September 30, 2020		% of Revenues
Revenues:
Wire transfer and money order fees, net	$	284,409	86	%	$	222,534	86	%
Foreign exchange gain, net	45,347		13	%	33,510		13	%
Other income	2,275		1	%	1,863		1	%
Total revenues	$	332,031	100	%	$	257,907	100	%

Wire transfer and money order fees, net of $284.4 million for the nine months ended September 30, 2021 increased by $61.9 million from $222.5 million for the nine months ended September 30, 2020. The increase of $61.9 million was primarily due to a 25.4% increase in transaction volume compared to the nine months ended September 30, 2020, largely due to the continued growth in our agent network, which increased by 17.7% from September 2020 to September 2021.

Revenues from foreign exchange gain, net of $45.3 million for the nine months ended September 30, 2021 increased by $11.8 million from $33.5 million for the nine months ended September 30, 2020. This increase was primarily due to higher transaction volume achieved by growth in our agent network and a higher average amount sent by our customers primarily as a result of increased foreign exchange volatility in the Mexican peso during the first nine months of 2021.

Operating Expenses

Operating expenses for the above periods are presented below:


($ in thousands)	Nine Months Ended September 30, 2021		% of Revenues		Nine Months Ended September 30, 2020		% of Revenues
Operating expenses:
Service charges from agents and banks	$	222,654	67	%	$	172,403	67	%
Salaries and benefits	30,909		9	%	22,512		9	%
Other selling, general and administrative expenses	22,549		7	%	16,827		7	%
Depreciation and amortization	7,041		2	%	8,079		3	%
Total operating expenses	$	283,153	85	%	$	219,821	85	%

Service charges from agents and banks — Service charges from agents and banks were $222.7 million for the nine months ended September 30, 2021 compared to $172.4 million for the nine months ended September 30, 2020. The increase of $50.3 million was primarily due to the increase in transaction volume described above.

Salaries and benefits — Salaries and benefits of $30.9 million for the nine months ended September 30, 2021 increased by $8.4 million from $22.5 million for the nine months ended September 30, 2020. The increase of $8.4 million is primarily due to $5.4 million spent in talent acquisition and retention and increased wages and bonuses to recognize performance, and to support the continued growth

Index

of our business, a $1.0 million increase in commission expense for our sales representatives and $1.2 million increase in share-based compensation as a result of new awards granted in the first nine months of 2021.

Other selling, general and administrative expenses — Other selling, general and administrative expenses of $22.5 million for the nine months ended September 30, 2021 increased by $5.7 million from $16.8 million for the nine months ended September 30, 2020.

The increase was primarily the result of:

•$1.7 million - relating to the losses in two separate closures of financial institutions in Mexico. These amounted to $2.0 million and $0.3 million in September 2021 and 2020, respectively;

•$1.5 million - increase in advertising and promotion expenses as last year we curtailed these activities because of the COVID-19 pandemic;

•$1.0 million in a write-off of software development expenditures in the third quarter of 2021;

•$1.3 million - higher other operating expenses to support our business growth, some of which expenses were reduced last year due to the COVID-19 pandemic; and

•$1.0 million - higher IT related expenses incurred to sustain our business expansion and improve our technology environment.

These increases were partially offset by:

•$0.5 million - reduction in professional services expenses as the nine months ended September 30, 2020 include expenses incurred for a secondary offering, which did not reoccur in the nine months ended September 30, 2021;

•$0.4 million - reduction in provision for credit losses, as the nine months ended September 30, 2020 include certain losses resulting from the deterioration of the creditworthiness of a small number of sending agents rather than the result of sending agents that were adversely affected by the COVID-19 pandemic.

Depreciation and amortization — Depreciation and amortization of $7.0 million for the nine months ended September 30, 2021 decreased by $1.1 million from $8.1 million for the nine months ended September 30, 2020. This decrease is mainly due to $1.4 million less amortization related to our trade name, developed technology and agent relationships during the first half of 2021, as these intangibles are being amortized on an accelerated basis, which declines over time. This decrease was partially offset by an increase in depreciation of $0.3 million associated primarily with additional computer equipment acquired to support our growing business and sending agent network.

Non-Operating Expenses

Interest expense — Interest expense of $3.6 million for the nine months ended September 30, 2021 decreased by $1.4 million from $5.0 million for the nine months ended September 30, 2020. The decrease was primarily due to lower market interest rates paid under the credit agreements (as described below) and lower drawings under our revolving credit facility.

Income tax provision — Income tax provision was $11.6 million for the nine months ended September 30, 2021, which represents an increase of $2.7 million from an income tax provision of $8.9 million for the nine months ended September 30, 2020. The increase in the income tax provision was mainly attributable to higher taxable income resulting from higher revenues from our growth.

Net Income

We reported net income of $33.7 million for the nine months ended September 30, 2021 compared to net income of $24.2 million for the nine months ended September 30, 2020, which resulted in an increase of $9.5 million due to the same factors discussed above.

Non-GAAP Financial Measures

Adjusted Net Income and Adjusted Earnings per Share

Adjusted Net Income (previously defined and used as described above) for the nine months ended September 30, 2021 was $41.6 million, representing an increase of $11.0 million, or 35.7%, from Adjusted Net Income of $30.6 million for the nine months ended September 30, 2020. The increase in Adjusted Net Income was primarily due to the increase in revenues of $74.1 million, offset primarily by an increase in service charges from agents and banks of $50.3 million due to higher transaction volume.

Index

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted Net Income:


	Nine Months Ended September 30,
(in thousands, except for per share data)	2021		2020
Net Income	$	33,711	$	24,164
Adjusted for:
Share-based compensation (a)	3,382		2,209
Offering costs (b)	—		479
TCPA settlement (c)	—		58
Loss on bank closures (d)	2,000		252
Other charges and expenses (e)	1,593		526
Amortization of intangibles (f)	3,789		5,131
Income tax benefit related to adjustments (g)	(2,896)		(2,188)
Adjusted Net Income	$	41,579	$	30,631

Adjusted Earnings per Share
Basic	$	1.08	$	0.81
Diluted	$	1.06	$	0.80

Weighted-average common shares outstanding
Basic	38,441,767		38,040,339
Diluted	39,071,622		38,246,429

(a)Equity awards were granted to employees and independent directors of the Company.

(b)Represents expenses incurred for professional and legal fees in connection with secondary offerings for the Company’s common stock.

(c)Represents legal fees ~~and charge~~ for the settlement of a class action lawsuit related to the TCPA.

(d)Represents ~~a loss in~~two separate losses during the three months ended September 30, 2021 and 2020, respectively related to the closure of a financial ~~institution~~institutions in Mexico.

(e)~~Includes~~Represents primarily loss on disposal of fixed assets, including a write-off of software development expenditures in an amount of $1.0 million in the third quarter of 2021 and foreign currency (gains) losses.

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~Revenues~~

~~Revenues for the above periods are presented below:~~

($ in thousands) Nine Months
Ended September 30,
2020 %
of
Revenues Nine Months
Ended September 30,
2019 %
of
Revenues
Revenues:
Wire transfer and money order fees, net $ 222,534 86 % $ 201,410 85 %
Foreign exchange gain, net 33,510 13 % 33,297 14 %
Other income 1,863 1 % 1,652 1 %
Total revenues $ 257,907 100 % $ 236,359 100 %

Wire transfer and money order fees, net of $222.5 million for the nine months ended September 30, 2020 increased by $21.1 million from $201.4 million for the nine months ended September 30, 2019. This increase of $21.1 million was primarily due to a 10% increase in transaction volume compared to the nine months ended September 30, 2019, largely due to the continued growth in our agent network, which has increased by 5% from September 2019 to September 2020.

~~Index~~

Revenues from foreign exchange gain, net of $33.5 million for the nine months ended September 30, 2020 increased by $0.2 million from $33.3 million for the nine months ended September 30, 2019. This increase was primarily due to higher transaction volume resulting from growth in our agent network and a higher average amount sent by our customers as a result of increased foreign exchange volatility due to the pandemic for the first half of the year.

~~Operating Expenses~~

~~Operating expenses for the above periods are presented below:~~

($ in thousands) Nine Months
Ended September 30,
2020 %
of
Revenues Nine Months
Ended September 30,
2019 %
of
Revenues
Operating expenses:
Service charges from agents and banks 172,403 67 % $ 156,510 66 %
Salaries and benefits 22,512 9 % 22,806 10 %
Other selling, general and administrative expenses 16,827 7 % 20,850 9 %
Depreciation and amortization 8,079 3 % 9,486 4 %
Total operating expenses $ 219,821 85 % $ 209,652 89 %

~~Service charges from agents and banks~~ — Service charges from agents and banks were $172.4 million, or 67% of revenues, for the nine months ended September 30, 2020 compared to $156.5 million, or 66% of revenues, for the nine months ended September 30, 2019. The increase of $15.9 million was primarily due to the increase in transaction volume described above.

~~Salaries and benefits~~ — Salaries and benefits of $22.5 million for the nine months ended September 30, 2020 decreased by $0.3 million from $22.8 million for the nine months ended September 30, 2019. The decrease of $0.3 million is primarily due to a $1.0 million decrease in commission expense for our representatives primarily due to lower than expected gross margin achieved compared to established goals. This decrease is offset by an increase of $0.4 million in increased wages, largely in management and other areas to support our growing operations and a $0.3 million increase related to share-based compensation.

~~Other selling, general and administrative expenses~~ — Other selling, general and administrative expenses of $16.8 million for the nine months ended September 30, 2020 decreased by $4.1 million from $20.9 million for the nine months ended September 30, 2019.

~~The decrease was the result of:~~

•~~$3.3 million - nonrecurrence of settlement and legal fees associated with a TCPA class action lawsuit in 2019;~~

•~~$1.2 million - primarily lower legal and professional fees in connection with secondary offerings of the Company’s common stock and an exchange offer for warrants (“Warrant Offer”);~~

•~~$0.9 million - decrease in travel expenses due to reduced employee travel during the COVID-19 pandemic; and~~

~~These decreases were partially offset by:~~

•~~$0.8 million - higher IT related expenses incurred to sustain our business expansion;~~

•~~$0.3 million - loss incurred in the closure of a financial institution in Mexico; and~~

•$0.2 million - increase in provision for bad debt as write-offs were higher in the 2020 period, resulting primarily from the deterioration of the creditworthiness of a small number of sending agents during the first quarter that were affected by events other than the COVID-19 pandemic.

~~Depreciation and amortization~~ — Depreciation and amortization of $8.1 million for the nine months ended September 30, 2020 decreased by $1.4 million from $9.5 million for the nine months ended September 30, 2019. This decrease is mainly due to $1.8 million less amortization related to our trade name, developed technology and agent relationships during the nine months ended September 30, 2020 as these intangibles are being amortized on an accelerated basis, which declines over time. This decrease was partially offset by an increase in depreciation of $0.4 million associated primarily with additional computer equipment to support our growing business and sending agent network.

~~Non-Operating Expenses~~

~~Interest expense~~ — Interest expense was $5.0 million for the nine months ended September 30, 2020, representing a decrease of $1.5 million from $6.5 million for the nine months ended September 30, 2019. The decrease of $1.5 million was primarily due to a reduction in interest rates paid under the Credit Agreement (as defined below) and lower drawings under the revolving credit facility.

~~Index~~

~~Income tax provision~~ — Income tax provision was $8.9 million for the nine months ended September 30, 2020, representing an increase of $3.0 million from an income tax provision of $5.9 million for the nine months ended September 30, 2019. This increase was mainly attributable to higher taxable income primarily as a result of higher revenues.

~~Net Income~~

We reported net income of $24.2 million for the nine months ended September 30, 2020 compared to net income of $14.3 million for the nine months ended September 30, 2019, representing an increase of $9.9 million or 69%, due to the same factors discussed above.

~~Non-GAAP Financial Measures~~

~~Adjusted Net Income and Adjusted Earnings per Share~~

Adjusted Net Income (previously defined and used as described above) for the nine months ended September 30, 2020 was $30.6 million, representing an increase of $5.6 million or 22% from Adjusted Net Income of $25.0 million for the nine months ended September 30, 2019. The increase in Adjusted Net Income was primarily due to the increase in revenues of $21.5 million, offset primarily by an increase in service charges from agents and banks of $15.9 million due to higher transaction volume.

~~The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted Net Income:~~

Nine Months Ended September 30,
(in thousands, except for per share data) 2020 2019
Net Income $ 24,164 $ 14,268
Adjusted for:
Share-based compensation (a) 2,209 1,894
Offering costs (b) 479 1,665
TCPA settlement (c) 58 3,358
Loss on bank closure (d) 252 —
Other employee severance (e) — 172
Other charges and expenses (f) 526 205
Amortization of intangibles (g) 5,131 6,936
Income tax benefit related to adjustments (h) (2,188) (3,526)
Adjusted Net Income $ 30,631 $ 24,972
Adjusted Earnings per Share
Basic $ 0.81 $ 0.67
Diluted $ 0.80 $ 0.67
Weighted-average common shares outstanding
Basic 38,040,339 37,230,831
Diluted 38,246,429 37,365,371

~~(a)Stock options and restricted stock were granted to employees and independent directors of the Company.~~

~~(b)Represents expenses incurred for professional and legal fees in connection with secondary offerings for the Company’s common stock and Warrants Offer.~~

~~(c)Represents legal fees and charge for the settlement of a class action lawsuit related to the TCPA.~~

~~(d)Represents a loss in the nine months ended September 30, 2020 related to the closure of a financial institution in Mexico.~~

~~(e)Represents severance costs incurred during the nine months ended September 30, 2019 related to departmental changes.~~

(f)~~Includes loss on disposal of fixed assets and foreign currency (gains) losses.~~

~~(g)~~Represents the amortization of certain intangible assets that resulted from the application of push-down accounting.

~~(h)~~(g)Represents the current and deferred tax impact of the taxable adjustments to net income using the Company’s blended federal and state tax rate for each period. Relevant tax-deductible adjustments include all adjustments to net income.

3135

Index

Adjusted Earnings per Share - Basic (previously defined and used as described above) for the nine months ended September 30, ~~2020~~2021 was ~~$0.81,~~$1.08, representing an increase of ~~$0.14,~~$0.27, or ~~21%~~33.3%, compared to ~~$0.67~~$0.81 for the nine months ended September 30, ~~2019.~~2020.

Adjusted Earnings per Share - Diluted (previously defined and used as described above) for the nine months ended September 30, ~~2020~~2021 was ~~$0.80,~~$1.06, representing an increase of ~~$0.13,~~$0.26 or ~~19%~~32.5%, compared to ~~$0.67~~$0.80 for the nine months ended September 30, ~~2019.~~2020.

The following table presents the reconciliation of GAAP Earnings per Share, our closest GAAP measure, to Adjusted Earnings per Share:

Nine Months Ended September 30,
2020 2019
Basic Diluted Basic and Diluted
GAAP Earnings per Share $ 0.64 $ 0.63 $ 0.38
Adjusted for:
Share-based compensation 0.06 0.06 0.05
Offering costs 0.01 0.01 0.05
TCPA settlement NM NM 0.09
Loss on bank closure 0.01 0.01 —
Other employee severance — — NM
Other charges and expenses 0.01 0.01 0.01
Amortization of intangibles 0.13 0.13 0.19
Income tax benefit related to adjustments (0.06) (0.06) (0.09)
Adjusted Earnings per Share $ 0.81 $ 0.80 $ 0.67


	Nine Months Ended September 30,
	2021				2020
	Basic		Diluted		Basic		Diluted
GAAP Earnings per Share	$	0.88	$	0.86	$	0.64	$	0.63
Adjusted for:
Share-based compensation	0.09		0.09		0.06		0.06
Offering costs	—		—		0.01		0.01
TCPA settlement	—		—		NM		NM
Loss on bank closures	0.05		0.05		0.01		0.01
Other charges and expenses	0.04		0.04		0.01		0.01
Amortization of intangibles	0.10		0.10		0.13		0.13
Income tax benefit related to adjustments	(0.08)		(0.07)		(0.06)		(0.06)
Adjusted Earnings per Share	$	1.08	$	1.06	$	0.81	$	0.80

NM - Per share amounts are not meaningful.

The table above may contain slight summation differences due to rounding.

Adjusted EBITDA

Adjusted EBITDA (previously defined and used as described above) for the nine months ended September 30, ~~2020~~2021 was ~~$49.7~~$62.9 million, representing an increase of ~~$6.2~~$13.2 million, or ~~14%~~26.6%, from ~~$43.5~~$49.7 million for the nine months ended September 30, ~~2019.~~2020. The increase in Adjusted EBITDA was primarily due to the increase in revenues of ~~$21.5~~$74.1 million, offset primarily by an increase in service charges from agents and banks of ~~$15.9~~$50.3 million due to an increase in transaction volume.

The following table presents the reconciliation of Net Income, our closest GAAP measure, to Adjusted EBITDA:

Nine Months Ended September 30,
(in thousands) 2020 2019
Net Income $ 24,164 $ 14,268
Adjusted for:
Interest expense 5,033 6,503
Income tax provision 8,889 5,936
Depreciation and amortization 8,079 9,486
EBITDA 46,165 36,193
Share-based compensation (a) 2,209 1,894
Offering costs (b) 479 1,665
TCPA settlement (c) 58 3,358
Loss on bank closure (d) 252 —
Other employee severance (e) — 172
Other charges and expenses (f) 526 205
Adjusted EBITDA $ 49,689 $ 43,487


	Nine Months Ended September 30,
(in thousands)	2021		2020
Net Income	$	33,711	$	24,164
Adjusted for:
Interest expense	3,562		5,033
Income tax provision	11,605		8,889
Depreciation and amortization	7,041		8,079
EBITDA	55,919		46,165
Share-based compensation (a)	3,382		2,209
Offering costs (b)	—		479
TCPA settlement (c)	—		58
Loss on bank closures (d)	2,000		252
Other charges and expenses (e)	1,593		526
Adjusted EBITDA	$	62,894	$	49,689

(a)~~Stock options and restricted stock~~Equity awards were granted to employees and independent directors of the Company.

(b)Represents expenses incurred for professional and legal fees in connection with secondary offerings for the Company’s common ~~stock and Warrants Offer.~~stock.

3236

Index

(c)Represents legal fees ~~and charge~~ for the settlement of a class action lawsuit related to the TCPA.

(d)Represents ~~a loss in~~two separate losses during the ~~nine~~three months ended September 30, 2021 and 2020, respectively related to the closure of a financial ~~institution~~institutions in Mexico.

(e)Represents ~~severance costs incurred during the nine months ended September 30, 2019 related to departmental changes.~~

~~(f)Includes~~primarily loss on disposal of fixed assets, including a write-off of software development expenditures in an amount of $1.0 million in the third quarter of 2021 and foreign currency (gains) losses.

Liquidity and Capital Resources

We consider liquidity in terms of cash flows from operations and their sufficiency to fund business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. In particular, to meet our payment service obligations at all times, we must have sufficient highly liquid assets and be able to move funds on a timely basis.

Our principal sources of liquidity are our cash generated by operating activities supplemented with borrowings under our revolving credit facility. Our primary cash needs are for ~~day to day~~day-to-day operations, to pay interest and principal on our indebtedness, to fund working capital requirements and to make capital expenditures.

Notwithstanding the recent effects of the COVID-19 pandemic in the U.S. economy, we have funded and still expect to continue funding our liquidity requirements through internally generated funds, supplemented in the ordinary course, with borrowings under our revolving credit facility. While our operating cash flows may be affected by the economic conditions resulting from the pandemic and other factors, we maintain a strong cash balance position and have access to committed funding sources, which we have used only on a limited and ordinary course basis during the nine months ended September 30, ~~2020.~~2021. Therefore, we believe that our projected cash flows generated from operations, together with borrowings under our revolving credit facility are sufficient to fund our principal debt payments, interest expense, our working capital needs and our expected capital expenditures for at least the next twelve months. We will, however, continue to evaluate the nature and extent of these potential impacts to our business and liquidity and capital resources and take action, as necessary, to preserve adequate liquidity, such as limiting discretionary spending and re-prioritizing our capital projects, to ensure that our business can continue to operate during these uncertain times.

The Company and certain of its domestic subsidiaries as borrowers ~~maintain~~and the other guarantors from time to time party thereto (collectively, the “Loan Parties”) entered into a financing agreement ~~(as amended, the “Credit Agreement”)~~ with a group of banking ~~institutions.~~institutions, dated November 7, 2018 and further amended on December 7, 2018 (the “Original Credit Agreement”). The Original Credit Agreement ~~provides~~provided for a $35.0 million revolving credit facility, a $90.0 million term loan facility and an up to a $30.0 million incremental facility of which $12.0 million was ~~primarily used to pay~~utilized for the ~~cash portion~~term loan facility in 2019 and $10.0 million was utilized for the revolving credit facility in May of 2021 (see below). The Original Credit Agreement also provided for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The maturity date of the ~~tender offer~~Original Credit Agreement was November 7, 2023.

Effective as of May 12, 2021, the Company amended the Original Credit Agreement by entering into Increase Joinder No. 2 (the “Joinder No. 2”) to ~~purchase warrants during~~ the ~~second quarter~~Original Credit Agreement, under which the revolving line of ~~2019~~credit commitment under the Original Credit Agreement was increased by $10.0 million to an aggregate of $45.0 million. The Joinder No. 2 did not have any impact to any of the terms of the term loan facility under the Original Credit Agreement.

On June 24, 2021, the Loan Parties entered into an Amended and Restated Credit Agreement (the ~~“Offer”~~“A&R Credit Agreement”). with a group of banking institutions. The A&R Credit Agreement amended and restated in its entirety the Original Credit Agreement. The A&R Credit Agreement provides for a $150.0 million revolving credit facility, an $87.5 million term loan facility and an uncommitted incremental facility, which may be utilized for additional revolving or term loans, of up to $70.0 million. The A&R Credit Agreement also provides for the issuance of letters of credit, which would reduce availability under the revolving credit facility. The proceeds of the term loan were used to refinance the $87.5 million principal amount of the existing term loan under the Original Credit Agreement, and the revolving credit facility is available for working capital, general corporate purposes and to pay fees and expenses in connection with this transaction. The maturity date of the A&R Credit Agreement is ~~November 7, 2023.~~June 24, 2026.

~~Interest~~

As of September 30, 2021, we had total indebtedness of $86.4 million, consisting of borrowings under the term loan facility, excluding debt origination costs of $2.3 million. There were $220.0 million of additional borrowings available under these facilities as of September 30, 2021.

At the election of the Company, interest on the term loan facility and revolving credit ~~facilities of~~facility under the A&R Credit Agreement is determined by reference to either LIBOR (subject to replacement) or a “base rate”, in each case plus an applicable margin ~~of 4.50%~~ranging between 2.50% and 3.00% per annum for LIBOR loans ~~or 3.50%~~and between 1.50% and 2.00% per annum for base rate ~~loans.~~loans depending on the level of our consolidated leverage ratio, as calculated pursuant to the terms of the A&R Credit Agreement. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. The effective interest rates for the nine months ended September 30, ~~2020~~2021 for the term loan facility and revolving credit facility, which substantially related to the Original Credit Agreement, were ~~5.93%~~4.58% and ~~0.99%~~0.82%, respectively.

Index

in years 1 and 2, 7.5% in year ~~1, 7.5% in years 2 and~~ 3, and ~~10%~~10.0% in years 4 and 5, in each case on the last day of each quarter, ~~which commenced~~commencing in ~~March 2019~~September 2021 with a final balloon payment at maturity. The term loans under the A&R Credit Agreement may be prepaid at any time without ~~payment~~premium or penalty. Revolving loans may be borrowed, repaid and reborrowed from time to time in accordance with the terms and conditions of the A&R Credit Agreement. The Company is also required to repay the loans upon receipt of net proceeds from certain casualty events, upon the disposition of certain property and upon incurrence of indebtedness not permitted by the A&R Credit Agreement. In addition, the Company is required to make mandatory prepayments annually from excess cash flow if the Company’s consolidated leverage ratio (as calculated under the A&R Credit Agreement) is greater than or equal to 3.0, and the remainder of any such excess cash flow is contributed to the available amount which may be used for a variety of purposes, including investments and distributions.

The A&R Credit Agreement contains financial covenants that require the Company to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00. As of September 30, 2021, we were in compliance with the covenants of the A&R Credit Agreement. The A&R Credit Agreement also contains covenants that limit the Company’s and its subsidiaries’ ability to, among other things, grant liens, incur additional indebtedness, make acquisitions or investments, dispose of certain assets, ~~make dividends and distributions,~~ change the nature of their businesses, enter into certain transactions with affiliates or amend the terms of material indebtedness. ~~The~~

In addition, the A&R Credit Agreement ~~allows for redemptions~~generally restricts the payment of dividends or ~~acquisitions~~cash distributions by the Company with certain exceptions, including the following: i) to repurchase the Company’s common stock from current or former employees in an aggregate amount of up to $10.0 million per calendar year, and ii) other restricted payments in an aggregate amount not to exceed $40.0 million plus the Available Amount (as defined in the A&R Credit Agreement).

The obligations under the A&R Credit Agreement are guaranteed by the Company and certain domestic subsidiaries of the ~~Company’s equity interests~~Company and secured by liens on substantially all of the assets of the Loan Parties, subject to certain ~~dollar~~exclusions and limitations.

The Credit Agreement also contains financial covenants that require the Company to maintain a quarterly minimum fixed charge coverage ratio of 1.25:1.00 and a quarterly maximum consolidated leverage ratio of 3.25:1.00.

~~As of September 30, 2020, we were in compliance with the covenants of the Credit Agreement.~~

As of September 30, 2020, we had total indebtedness of $91.3 million, consisting of borrowings under the term loan facility, excluding debt origination costs of $1.9 million. There were $53.0 million of additional borrowings available under these facilities as of September 30, 2020.

~~Index~~

~~Program. Based on this guidance provided by the SBA and Treasury, the Company returned the funds received under the Program on April 29, 2020.~~

Our indebtedness could adversely affect our ability to raise additional capital, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk and prevent us from meeting our obligations. See “Risk Factors—Risks Relating to Our Indebtedness—We have a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our business, financial condition and results of operations” included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Cash Flows

The following table summarizes the changes to our cash flows for the periods presented:

Nine Months Ended September 30,
(in thousands) 2020 2019
Statement of Cash Flows Data:
Net cash provided by operating activities $ 31,597 $ 57,147
Net cash used in investing activities (2,770) (4,067)
Net cash used in financing activities (5,726) (31,950)
Effect of exchange rate changes on cash (151) 30
Net increase in cash 22,950 21,160
Cash, beginning of period 86,117 73,029
Cash, end of period $ 109,067 $ 94,189


	Nine Months Ended September 30,
(in thousands)	2021		2020
Statement of Cash Flows Data:
Net cash provided by operating activities	$	60,705	$	31,597
Net cash used in investing activities	(5,523)		(2,770)
Net cash used in financing activities	(4,733)		(5,726)
Effect of exchange rate changes on cash	(224)		(151)
Net increase in cash	50,225		22,950

Cash, beginning of period	74,907		86,117
Cash, end of period	$	125,132	$	109,067

Operating Activities

Net cash provided by operating activities was $60.7 million for the nine months ended September 30, 2021, an increase of $29.1 million from net cash provided by operating activities of $31.6 million for the nine months ended September 30, ~~2020, representing a decrease of $25.5 million from net cash provided by operating activities of $57.1 million for the nine months ended September 30, 2019.~~2020. The ~~decrease~~increase is a result of ~~a $35.5~~$19.4 million ~~change~~changes in working capital, which ~~may vary from period to period~~varies due to timing of transmittal orders and payments, ~~offset~~and by additional cash generated by our operating results for the nine months ended September 30, ~~2020,~~2021, which ~~benefited from~~were positively affected by the further growth of the business.

Investing Activities

Net cash used in investing activities was $5.5 million for the nine months ended September 30, 2021, representing an increase of $2.7 million from net cash used in investing activities of $2.8 million for the nine months ended September 30, ~~2020, representing~~2020. This increase was

Index

primarily due to higher purchases of computer equipment during the nine months ended September 30, 2021 as a ~~decrease~~result of ~~$1.3 million from net~~the continued expansion of our business, as well as, upgrades of equipment used by our sending agent network.

Financing Activities

Net cash used in ~~investing~~financing activities ~~of $4.1~~was $4.7 million for the nine months ended September 30, ~~2019. This decrease~~2021, which primarily consisted of a $40.1 million repayment and $2.9 million of debt origination costs in ~~cash used~~connection with the refinancing of the Original Credit Agreement, $2.9 million in ~~investing activities was primarily~~scheduled quarterly payments due on the term loan facility, $1.2 million of repurchases of common stock and $0.8 million of payments for stock-based awards for shares withheld in connection with stock-based compensation arrangements and related payments to ~~lower purchases~~taxing authorities, offset by $40.2 million borrowings in connection with the refinancing of ~~property~~the Original Credit Agreement and ~~equipment and no acquisitions~~$3.2 million in proceeds from issuance of ~~agent locations during~~stock as a result of the ~~nine months ended September 30, 2020.~~exercise of options.

~~Financing Activities~~

Net cash used in financing activities was $5.7 million for the nine months ended September 30, 2020, which consisted of scheduled quarterly repayments due on the term loan ~~facility, offset by proceeds from issuance of stock as a result of the exercise of options.~~facility.

Net cash used in financing activities was $32.0 million for the nine months ended September 30, 2019, which consisted of $30.0 million in revolving credit line repayments, $10.0 million related to payments made in connection with the Offer, $3.7 million in quarterly payments due on the term loan and payment of debt origination costs associated with an amendment to the Credit Agreement, offset by $12.0 million in borrowings under the Credit Agreement.

~~Index~~

Contractual Obligations

The following table includes aggregated information about contractual obligations that affect our liquidity and capital needs. At September 30, ~~2020,~~2021, our contractual obligations over the next several periods were as follows:

(in thousands) Total Less than
1 year 1 to 3 years 3 to 5 years More than
5 years
Debt, principal payments $ 91,298 $ 7,661 $ 19,792 $ 63,845 $ —
Interest payments 11,970 4,286 7,331 353 —
Non-cancelable operating leases 5,175 1,441 2,092 1,537 105
Total $ 108,443 $ 13,388 $ 29,215 $ 65,735 $ 105


(in thousands)	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
Debt, principal payments	$	86,406	$	4,375	$	12,031	$	70,000	$	—
Interest payments	11,636		2,740		5,101		3,795		—
Non-cancelable operating leases	4,832		1,635		2,154		1,043		—
Total	$	102,874	$	8,750	$	19,286	$	74,838	$	—

Our condensed consolidated balance sheet reflects ~~$89.4~~$84.1 million of debt as of September 30, ~~2020,~~2021, as the principal payment obligations of ~~$91.3~~$86.4 million are gross of unamortized debt origination costs. The above table reflects the principal and interest of the ~~revolver~~revolving credit facility and term loan facility under the A&R Credit Agreement that will be paid through the ~~maturity~~term of the debt using the rates in effect on September 30, ~~2020~~2021 and assuming no voluntary prepayments of principal.

Non-cancelable operating leases include various office leases, including our office headquarters.

Off-Balance Sheet Arrangements

We are 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 that either have, or are reasonably likely to have, a current or future material effect on our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect amounts reported in our condensed consolidated financial statements and related notes, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates its accounting policies, estimates and judgments on an on-going basis. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. Our Critical Accounting Policies and Estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, for which there were no material changes, except as disclosed below for the estimate over the allowance for credit losses, included the following:

•Revenue Recognition

•Accounts Receivable and Allowance for Credit Losses

•Goodwill and Intangible Assets

•Income Taxes

Index

Change in Accounting Estimate to Calculate the Allowance for Credit Losses

Recent Accounting Pronouncements

Refer to Note 1 of our unaudited condensed consolidated financial statements included in this filing for further information on recent accounting pronouncements.

Index

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

We manage foreign currency risk through the structure of the business and an active risk management process. We currently settle with our payers in Latin America primarily by entering into foreign exchange spot transactions with local and foreign currency providers (“counterparties”). The foreign currency exposure on our foreign exchange spot transactions is limited by the fact that all transactions are settled within two business days from trade date. Foreign currency fluctuations, however, may negatively affect our average exchange gain per transaction.

In addition, included in wire transfer and money orders payable, net in our condensed consolidated balance sheets as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, there are ~~$7.6~~$24.9 million and ~~$9.9~~$7.6 million, respectively, of wires payable denominated in foreign currencies, primarily in Mexican pesos and Guatemalan quetzales.

Also, included in prepaid wires, net in our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, there are $2.9 million and $50.1 million, respectively, of prepaid wires denominated in foreign currencies, primarily Mexican pesos and Guatemalan quetzales.

We are also exposed to changes in currency rates as a result of our investments in foreign operations and revenues generated in currencies other than the U.S. dollar. Revenues and profits generated by international operations will increase or decrease because of changes in foreign currency exchange rates. This foreign currency risk is related primarily to our operations in our foreign subsidiaries. Revenues from our foreign subsidiaries represent less than 1% of our consolidated revenues for the ~~three and~~ nine months ended September 30, ~~2020 and 2019, respectively.~~2021. Therefore, a 10% increase or decrease in these currency rates against the U.S. ~~Dollar~~dollar would result in a ~~minimal~~de minimis change to our overall operating results.

The spot and average exchange rates for Mexico, Guatemala and Canada currencies to U.S. dollar are as follows:


	2021		2020
	Spot(1)	Average(2)	Spot(1)	Average(2)
U.S. dollar/Mexico Peso	20.56	20.12	19.89	21.79
U.S. dollar/Guatemala Quetzal	7.72	7.73	7.79	7.69
U.S. dollar/Canadian Dollar	1.27	1.25	1.28	1.35

(1)Spot exchange rates are as of September 30, ~~2020~~2021 and December 31, 2019 were 22.16 and 18.86 for the U.S. dollar/Mexican peso, respectively, 7.77 and 7.69 for the U.S. dollar/Guatemalan quetzal, respectively, and 1.34 and 1.31 for the U.S. dollar/Canadian dollar, respectively. The average2020.

(2)Average exchange rates are for the nine months ended September 30, ~~2020~~2021 and 2019 were 21.79 and 19.24 for the U.S. dollar/Mexican peso, respectively, and 7.69 for both periods for the U.S. dollar/Guatemalan quetzal. The average exchange rates for the U.S. dollar/Canadian dollar for the nine months ended September 30, 2020 was 1.35 and the average rate for the 3 months ended September 30, 2019 was 1.32. We commenced operations in Canada during the third quarter of 2019, therefore, information prior to this period has not been presented. 2020.

Long-term sustained appreciation of the Mexican peso or Guatemalan quetzal as compared to the U.S. dollar could ~~negatively~~ affect our margins.

Beginning in March 2020, we have experienced increased volatility in the U.S. dollar/Mexican peso rates related to economic effects of the COVID-19 pandemic, as well as actions taken by governments and central banks in response to the pandemic. We continue to expect an increase in volatility in foreign exchange rates and depreciation against the U.S. dollar, especially for the Mexican peso, during 2020. We cannot, however, reasonably estimate the duration or extent of that volatility.

Interest Rate Risk

Interest on the term loan facility and revolving credit facility under the A&R Credit Agreement is determined by reference to either LIBOR (subject to replacement) or a “base rate”, in each case plus an applicable margin ~~of 4.50%~~ranging between 2.50% and 3.00% per annum for LIBOR loans ~~or 3.50%~~and between 1.50% and 2.00% per annum for base rate ~~loans.~~loans depending on the level of our consolidated leverage ratio. The Company is also required to pay a fee on the unused portion of the revolving credit facility equal to 0.35% per annum. Because interest expense is subject to fluctuation, if interest rates increase, our debt service obligations on such variable rate indebtedness would increase even though the amount borrowed remained the same. Accordingly, an increase in interest rates would adversely affect our profitability. Due to the economic effects of the COVID-19 pandemic, market interest rates have declined significantly, with the 10-year Treasury bond yield falling below 1.00% on March 3, 2020 and averaging 0.65% for the three months ended September 30, 2020, and the 30-day LIBOR rate decreasing to 0.15% as of September 30, 2020, favorably affecting interest expense on the variable-rate portion of our debt during the three months ended September 30, 2020. We cannot predict, however, whether or for how long interest rates will remain at these low levels.

As of September 30, ~~2020,~~2021, we had ~~$91.3~~$86.4 million in outstanding borrowings under the term ~~loan.~~loan and revolving credit facility. A hypothetical 1% increase or decrease in the interest rate on our indebtedness as of September 30, ~~2020~~2021 would have increased or decreased cash interest expense on our term loan facility by approximately $0.9 million per annum.

Credit Risk

We maintain certain cash balances in various U.S. banks, which at times, may exceed federally insured limits. We have not incurred any losses on these accounts. In addition, we maintain various bank accounts in Mexico, Guatemala and Canada, which are not insured. ~~Other than an isolated instance in~~During the ~~three~~nine months ended September 30, ~~2020,~~2021, we have not incurred any losses on these uninsured ~~accounts.~~accounts with the exception of a $2.0 million provision we recorded as a result of the closure of a financial institution in Mexico during the third quarter of 2021 (see Note 4). To manage our ~~exposures~~exposure to credit risk with respect to cash balances and other credit risk ~~exposures~~exposure resulting from our relationships with banks and financial institutions, we regularly review cash concentrations, and we attempt to diversify our cash balances among global financial institutions.

Index

We are also exposed to credit risk related to receivable balances from sending agents. We perform a credit review before each agent signing and conduct ongoing analyses of sending agents and certain other parties we transact with directly. As of September 30, ~~2020,~~2021, we also had ~~$1.3~~$1.7 million outstanding of notes receivable from sending agents. Most of the notes are collateralized by personal guarantees from the sending agents and by assets from their businesses. Due to the COVID-19 pandemic, it is possible we could be adversely affected by credit losses, such as those related to our outstanding notes receivables from sending agents. At the date of this report, however, we are not aware of any significant exposure and are continuing to monitor our credit risk.

Our provision for ~~bad debt~~credit losses was approximately $1.0 million for the nine months ended September 30, 2021 (0.3% of total revenues) and $1.4 million for the nine months ended September 30, 2020 (0.6% of total revenues) ~~and $1.2 million~~. The decrease in our provision for ~~the nine months ended September 30, 2019 (0.5% of total revenues) as write-offs were higher~~credit losses in the nine months ended September 30, 2021 is due to the 2020 provision inclusion of losses resulting ~~primarily~~ from the deterioration of the creditworthiness of a small number of sending agents ~~during~~rather than the ~~first quarter~~result of sending agents that were adversely affected by ~~events other than~~ the COVID-19 pandemic. Furthermore, the Company implemented a change to the allowance for credit losses methodology as noted above. The impact from the change in accounting estimate for the allowance for credit losses was not material.

3639

Index

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and related forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and President, and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within an organization have been detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, our Chief Executive Officer and President, and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, ~~2020.~~2021. Based on their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective and operating to provide reasonable assurance that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and President, and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure as of September 30, ~~2020.~~2021.

Changes in Internal Control Over Financial Reporting

~~Notwithstanding operational changes in response to the COVID-19 pandemic, during~~During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Index

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to various claims, charges and litigation matters that arise in the ordinary course of business. We believe these actions are a normal incident of the nature and kind of business in which we are engaged. While it is not feasible to predict the outcome of these matters with certainty, we do not believe that any asserted or unasserted legal claims or proceedings, individually or in the aggregate, will have a material and adverse effect on our business, financial condition and results of operations.

Reference is made to Note 1315 – Commitments and Contingencies in the Unaudited Condensed Consolidated Financial Statements of International Money Express, Inc. contained elsewhere in this Quarterly Report on Form 10–Q for information regarding certain legal proceedings to which we are a party, which information is incorporated by reference herein.

ITEM 1A. RISK FACTORS

~~Except as set forth below, there~~There have been no material changes to our principal risks that we believe are material to our business, results of operations and financial condition, from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 (the ~~“2019~~“2020 Form 10-K”). Prospective investors are encouraged to consider the risks described in our ~~2019~~2020 Form 10-K, our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q and in our ~~2019~~2020 Form 10-K, and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

~~Our financial condition, results of operations, business and cash flow may be negatively affected by a public health crises such as the recent coronavirus (COVID-19) pandemic.~~

We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases. During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (“COVID-19”). The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption, including significant volatility in the capital markets. The extent to which the COVID-19 pandemic affects our business, operations, financial results and the trading price of our common stock will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope and possible resurgence of the pandemic; governmental and business actions that have been and continue to be taken in response to the pandemic (including mitigation efforts such as stay at home and other social distancing orders) and the impact of the pandemic on economic activity and actions taken in response (including stimulus efforts such as the Families First Coronavirus Act and the CARES Act).

A public health epidemic or pandemic, such as the COVID-19 pandemic, can have a material adverse effect on the demand for our money remittance services to the extent it impacts the markets in which we operate, and poses the risk that we or our employees, network of agents and consumers and their beneficiaries may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns requested or mandated by governmental authorities, or that such epidemic may otherwise interrupt or impair business activities. In the first nine months of 2020 we have been subject, on a limited basis, to such shutdowns. We have adjusted standard operating procedures within our business operations to ensure the continued safety of our workers, continue to take further actions to mitigate the impact of the pandemic on our business, and are continually monitoring evolving health guidelines, as well as market conditions, and responding to changes as appropriate. Despite these efforts, the COVID-19 pandemic continues to pose the risk that we or our employees, sending and paying agents, as well as consumers and their beneficiaries, may be prevented from conducting business activities, partially or completely, for an indefinite period of time, including due to shutdowns requested or mandated by governmental authorities or imposed by our management, or that the pandemic may otherwise interrupt or impair business activities.

Adjustments to our operating procedures as a result of the COVID-19 pandemic only had a limited effect on the Company’s financial condition, results of operations and cash flows for the three and nine months ended September 30, 2020, however, we will continue to monitor this evolving pandemic and its potential effects on the Company’s operations. The Company and our sending agents are considered essential businesses under current federal guidance, however, the Company’s business is dependent upon the willingness and ability of its employees, network of agents and consumers to conduct money transfer services and the ultimate effects of the economic disruption caused by the pandemic and responses thereto. Although the Company’s operations continued effectively in the first nine months of 2020 despite store closures, social distancing and other measures taken in response to the pandemic, the ultimate impact of the COVID-19 pandemic on our results of operations and financial condition is dependent on future developments, including the duration of the pandemic and the related extent of its severity, as well as its impact on the economic conditions, particularly the level of unemployment of our customers, which remain uncertain and cannot be predicted at this time. If the global response to contain the COVID-19 pandemic escalates further or is unsuccessful, or if governmental decisions to ease pandemic related restrictions are ineffective, premature or counterproductive, the Company could experience a material adverse effect on the Company's financial condition, results of operations and cash flows.

~~Index~~

In addition, to protect our workers, we are utilizing work from home measures. Despite our implementation of security measures, there is no guarantee that the data security and privacy safeguards we have put in place will be completely effective or that we will not encounter some of the common risks associated with employees accessing Company data and systems remotely.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~Issuer Purchases of Equity Securities

The following table provides information about repurchases of our common stock during the quarter ended September 30, 2021:


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet be Purchased under the Program (b)
July 1 through July 31	—	$	—	—	$	40,000,000
August 1 through August 31	69,914	$	17.77	20,277	$	39,639,736
September 1 through September 30	50,163	$	16.90	50,163	$	38,794,786
Total	120,077			70,440

(a)Includes 20,277 and 50,163 shares purchased in August and September 2021, respectively, under the Repurchase Program, which was publicly announced on August 18, 2021 with a maximum authorized amount of $40.0 million, and 49,637 shares withheld for income tax purposes in connection with shares issued under compensation and benefit programs in August of 2021. The Repurchase Program does not have an expiration date.

(b)As of September 30, 2021, the remaining amount available for share repurchases under the Repurchase Program is $38.8 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

Index

ITEM 6. EXHIBITS


Exhibit No.			Document

~~4.1~~*			~~Shareholders Agreement Waiver, dated October 5, 2020, among the Company, FinTech Investor Holdings II and SPC Intermex Representative LLC.~~

~~10.1~~*†			~~Form of RSU Agreement (Employees) pursuant to the International Money Express, Inc. 2020 Omnibus Equity Compensation Plan.~~

31.1*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act - Chief Executive Officer

31.2*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act - Chief Financial Officer

32.1*#			Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350.

32.2*#			Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350.

101.INS			Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase

104*			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2020,~~2021, formatted in Inline XBRL (included with the Exhibit 101 attachments).

†~~Management contract or compensatory plan or arrangement.~~

*Filed herewith.

# Furnished herewith.

Index

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


~~Date: November 6, 2020~~

International Money Express, Inc. (Registrant)

Date: November 5, 2021	By:	/s/ Robert Lisy
		Robert Lisy
		Chief Executive Officer and President

~~Date: November 6, 2020~~

~~International Money Express, Inc.~~(Principal Executive Officer)


Date: November 5, 2021	By:	/s/ ~~Tony Lauro II~~Andras Bende
		~~Tony Lauro II~~Andras Bende
		Chief Financial Officer
		(Principal Financial Officer)

4143


	Goodwill		Intangibles
Balance at December 31, 2019	$	36,260	$	27,381
Amortization expense	0		(5,213)
Balance at September 30, 2020	$	36,260	$	22,168


2020	$	1,738
2021	5,161
2022	3,997
2023	2,989
2024	2,270
Thereafter	6,013
	$	22,168


	September 30, 2020		December 31, 2019

Term loan	$	91,298	$	97,044

Less: Current portion of long-term debt (1)	(7,044)		(7,044)
Less: Debt origination costs	(1,914)		(2,377)
	$	82,340	$	87,623


($ in thousands)	Three Months Ended September 30, 2020		% of Revenues		Three Months Ended September 30, 2019		% of Revenues
Revenues:
Wire transfer and money order fees, net	$	82,646	86	%	$	72,468	85	%
Foreign exchange gain, net	12,296		13	%	12,272		14	%
Other income	652		1	%	594		1	%
Total revenues	$	95,594	100	%	$	85,334	100	%


($ in thousands)	Nine Months Ended September 30, 2020		% of Revenues		Nine Months Ended September 30, 2019		% of Revenues
Revenues:
Wire transfer and money order fees, net	$	222,534	86	%	$	201,410	85	%
Foreign exchange gain, net	33,510		13	%	33,297		14	%
Other income	1,863		1	%	1,652		1	%
Total revenues	$	257,907	100	%	$	236,359	100	%