International Money Express(IMXI) - 2019 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2019, were $82.7 million, an increase of 17.3% from $70.4 million in the same period of 2018[136]. - Total revenues for the six months ended June 30, 2019, were $151.0 million, up from $126.3 million in 2018, driven by a 22% increase in transaction volume[166]. - Net income for the three months ended June 30, 2019, was $7.1 million, compared to $1.8 million in the same period of 2018, marking a significant improvement[146]. - Net income for the six months ended June 30, 2019, was $10,230,000, a significant increase from $1,304,000 in the same period of 2018[178]. - Adjusted Net Income for the three months ended June 30, 2019, was $9.6 million, a 48% increase from $6.5 million in the same period of 2018[150]. - Adjusted net income for the six months ended June 30, 2019, was $15.4 million, a 57% increase from $9.8 million in 2018[176]. - Adjusted EBITDA for the three months ended June 30, 2019, was $16.3 million, representing a 23% increase from $13.3 million for the same period in 2018[160]. - Adjusted EBITDA for the six months ended June 30, 2019, was $27,028,000, representing a 22% increase from $22,168,000 in 2018[180]. Transaction Growth - The company processed approximately 7.4 million and 13.5 million remittances in the three and six months ended June 30, 2019, representing approximately 20% and 22% growth in transactions compared to the same periods in 2018[105]. - The company has grown its agent network by more than 123% since January 2015 through June 30, 2019, and increased remittance transaction volume by approximately 144%[105]. - Wire transfer and money order fees increased by $11.1 million to $70.5 million, driven by a 20% increase in transaction volume and a 17% growth in the agent network[137]. - Wire transfer and money order fees increased by $21.7 million to $128.9 million for the six months ended June 30, 2019, accounting for 85% of total revenues[166]. - Service charges from agents and banks were $54.6 million, accounting for 66% of revenues, reflecting an increase of $8.3 million due to the same 20% increase in transaction volume[139]. Operating Expenses - Total operating expenses for the three months ended June 30, 2019, were $70.7 million, representing 86% of total revenues, compared to 92% in the same period of 2018[139]. - Operating expenses for the six months ended June 30, 2019, totaled $132.8 million, representing 87% of revenues, compared to 93% in 2018[168]. - The company expects operating expenses to continue to rise in line with revenue growth, particularly in relation to expanding its agent network and compliance costs[128]. Regulatory and Compliance - The company maintains a regulatory compliance department to monitor transactions and detect suspicious activity, ensuring adherence to various legal and regulatory requirements[110]. - The company qualifies as an "emerging growth company" and can take advantage of certain exemptions from various reporting requirements until it reaches specific revenue or market value thresholds[113]. Market and Competition - The company expects to continue facing increasing competition as new technologies emerge, but does not anticipate significant adoption rates in the near term for its customer segment[112]. - The company has experienced political and economic instability in Latin America, which could impact revenues and profitability if sustained appreciation of local currencies occurs[108]. Financial Position - Total indebtedness as of June 30, 2019, was $134,598,000, including $99,600,000 from the term loan facility and $35,000,000 from the revolving facility[197]. - Cash and restricted cash at the end of the period was $106,884,000, compared to $61,976,000 at the end of June 30, 2018[199]. - The company expects to fund liquidity requirements through internally generated funds and borrowings under its revolving credit facility[188]. - The effective interest rates as of June 30, 2019, were 7.82% for the term loan and 8.34% for the revolving credit facility[191]. - Contractual obligations total $175,268,000, with principal debt payments of $134,598,000 due over the next several periods[203]. Risk Management - The company actively manages foreign currency risk, particularly related to operations in Latin America, with a focus on minimizing exposure through timely settlements[210]. - The company is exposed to credit risk related to receivable balances from sending agents, with $1.6 million in outstanding notes receivable as of June 30, 2019[217]. - The provision for bad debt was approximately $0.6 million for the six months ended June 30, 2019, representing 0.4% of total revenues, compared to $0.4 million or 0.3% of total revenues for the same period in 2018[218]. Accounting and Standards - The company adopted a new accounting standard for revenue recognition on January 1, 2019, which modified existing standards[208].