This 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, 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 "Risk Factors," which are 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.

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 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 to react to the public health crisis with mitigation measures have
created and continue to cause significant uncertainties in the U.S. and global
economy, particularly as a new Delta variant of COVID-19 appears to be causing
an increase in COVID-19 cases. 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 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 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 and requiring use of
certain personal protective equipment at our call centers in Mexico and
Guatemala. As of June 30, 2021, all of our facilities are open and operating
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 the pandemic, our business
continues to function and, to date, our customer service has not been adversely
affected in any material respect. 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.

Although certain measures that restrict the normal course of operations of
businesses and consumers were still in place for the three and six months ended
June 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 six months ended June 30, 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 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, 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, as relevant and important, is included in the discussion of operating results below.

                                       21

————————————————– ——————————

Index

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
recent years, we expanded our services to allow remittances to Africa 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 generate revenue 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 our 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.
Since January 2020 through June 30, 2021, we have grown our agent network by
approximately 18.0%. For the three and six months ended June 30, 2021, principal
amount sent increased by approximately 53.2% and 42.2%, respectively, as
compared to the same periods in 2020 and total remittances processed were
approximately 10.1 million and 18.4 million, representing approximately a 33.4%
and 26.6% 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, 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; and consumer disclosure and
consumer protection laws, such as the California Consumer Privacy 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 and increased capital market
volatility;

• competition in the markets in which we operate;

• exchange rate volatility which could affect the volume of consumer remittances and / or affect our foreign exchange gains and losses;

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

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

                                       22

————————————————– ——————————

Index

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

• bank failures, persistent financial illiquidity or illiquidity of our clearing, cash management or custodial financial institutions;

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

• our ability to honor our debts and meet our credit facility requirements;

• interest rate risk associated with the elimination of LIBOR as the benchmark interest rate;

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

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

• 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;

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

• consumer fraud and other risks associated with customer authentication;

• weakness in we or international economic conditions;

• changes in immigration laws and their application;

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

• our ability to retain key personnel.

Throughout 2020 and the first half of 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, 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 parties for
their daily needs; however, long-term sustained appreciation of the Mexican peso
or Guatemalan quetzal as compared to the U.S. 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 compliance department, whose responsibility is to monitor transactions, detect and report suspicious activity, keep proper records, and train our employees and agents. An independent third party periodically reviews our policies and procedures and performs independent tests to assess the effectiveness of our anti-money laundering and banking secrecy compliance program. We also maintain a regulatory affairs and licensing department, under the direction of our director of regulatory affairs, 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
structure and marketing efforts. As a philosophy, we sell credible solutions to
our sending agents, not discounts or higher commissions, as
                                       23

————————————————– ——————————

Index

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 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;

• exemption from the adoption of new or revised financial accounting standards until they 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
communication of Critical Audit Matters ("CAMs") in the auditor's report. A CAM
is defined as any matter arising from the audit of the financial statements that
was communicated or required to be communicated to the 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, 2021, the market value of our common stock
that is held by non-affiliates approximated $488.5 million.

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.

Income

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.

Operating Expenses
Service Charges from Agents and Banks

Service charges primarily consist of agent commissions and bank fees. Service
charges 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 may
increase if banks or payer organizations increase their fee structure or sending
agents use higher fee methods to remit 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

                                       24

————————————————– ——————————

Index

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 $11.4 million is expected to
be recognized over a weighted-average period of 2.0 years.

Other sales, 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 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 credit losses and expenses
associated with increasing our network of agents. These expenses are expected to
continue to increase at a slower pace than the increase in our revenues.

Depreciation and amortization

Amortization consists largely of amortization of the computer hardware and software that supports our technology platform. Amortization of intangible assets is mainly related to our agent relationships, our trade name and the technology developed.

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 six months ended June 30, 2021 for the term loan facility
and revolving credit facility, which substantially related to the Original
Credit Agreement, were 5.19% and 0.98%, respectively. Interest on the term loan
and revolving credit 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 between 2.50% and
3.00% per annum for LIBOR loans and between 1.50% and 2.00% per annum for base
rate 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.

Provision for income tax

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 June 30, 2021 on the
Company's U.S. federal or state deferred tax assets; however, a valuation
allowance has been recorded as of June 30, 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 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.

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 various unaffiliated retail establishments and 34
Company-operated stores throughout the United States and Canada. This is based
on the
                                       25

————————————————– ——————————

Index

corporate goals and how our chief operating decision maker, the CEO and President, monitors operational 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 June 30,                  Six Months Ended June 30,
(in thousands, except for share data)         2021                  2020                  2021                  2020

Income:

Transfer fees and money order, net $ 99,306 $ 72,793

         $      180,218          $  139,888
Foreign exchange gain, net                      16,655              11,660                  29,703              21,214
Other income                                       786                 609                   1,402               1,211
Total revenues                                 116,747              85,062                 211,323             162,313
Operating expenses:
Service charges from agents and banks           77,864              56,271                 141,237             108,498
Salaries and benefits                           10,175               7,069                  20,050              14,428
Other selling, general and
administrative expenses                          7,079               5,155                  12,582              10,492
Depreciation and amortization                    2,345               2,691                   4,679               5,381
Total operating expenses                        97,463              71,186                 178,548             138,799

Operating income                                19,284              13,876                  32,775              23,514

Interest expense                                 1,254               1,633                   2,594               3,503

Income before income taxes                      18,030              12,243                  30,181              20,011

Income tax provision                             4,803               3,265                   7,977               5,345

Net income                              $       13,227          $    8,978          $       22,204          $   14,666

Earnings per common share:
Basic                                   $         0.34          $     0.24          $         0.58          $     0.39
Diluted                                 $         0.34          $     0.24          $         0.57          $     0.39



Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
Revenues
Revenues for the above periods are presented below:

                                         Three Months Ended             % of             Three Months Ended             % of
($ in thousands)                           June 30, 2021              Revenues             June 30, 2020              Revenues

Income:

Wire transfer and money order fees, net  $        99,306                     85  %       $        72,793                     85  %
Foreign exchange gain, net                        16,655                     14  %                11,660                     14  %
Other income                                         786                      1  %                   609                      1  %
Total revenues                           $       116,747                    100  %       $        85,062                    100  %



Wire transfer and money order fees, net of $99.3 million for the three months
ended June 30, 2021 increased by $26.5 million from $72.8 million for the three
months ended June 30, 2020. This increase of $26.5 million was primarily due to
a 33.4% increase in
                                       26

————————————————– ——————————

Index

transaction volume compared to the second quarter of 2020, largely due to the
continued growth in our agent network, which increased by 17.9% from June 2020
to June 2021.

Revenues from foreign exchange gain, net of $16.7 million for the three months
ended June 30, 2021 increased by $5.0 million from $11.7 million for the three
months ended June 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 second quarter of 2021.

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

                                          Three Months Ended             % of             Three Months Ended             % of
($ in thousands)                            June 30, 2021              Revenues             June 30, 2020              Revenues
Operating expenses:
Service charges from agents and banks     $        77,864                     67  %       $        56,271                     66  %
Salaries and benefits                              10,175                      9  %                 7,069                      8  %
Other selling, general and administrative
expenses                                            7,079                      6  %                 5,155                      6  %
Depreciation and amortization                       2,345                      2  %                 2,691                      3  %
Total operating expenses                  $        97,463                     84  %       $        71,186                     83  %



Service charges from agents and banks - Service charges from agents and banks
were $77.9 million for the three months ended June 30, 2021 compared to $56.3
million for the three months ended June 30, 2020. The increase of $21.6 million
was primarily due to the increase in transaction volume described above.

Salaries and benefits - Salaries and benefits of $10.2 million for the three
months ended June 30, 2021 increased by $3.1 million from $7.1 million for the
three months ended June 30, 2020. The increase of $3.1 million is primarily due
to $2.3 million spent in talent acquisition and retention and increased wages to
recognize performance, and to support the continued growth of our business, $0.1
million increase in commission expense for our sales representatives and $0.7
million increase in share-based compensation as a result of new awards granted
in the three months ended June 30, 2021 and at the end of the first quarter of
2021.

Other selling, general and administrative expenses - Other selling, general and
administrative expenses of $7.1 million for the three months ended June 30, 2021
increased by $1.9 million from $5.2 million for the three months ended June 30,
2020.

The increase is the result of:

•$0.8 million - increase in advertising and promotion expenses as last year we
curtailed these activities because of the COVID-19 pandemic;
•$0.6 million - higher professional fees, travel and other operating expenses to
support our business growth, some of which expenses were reduced last year by
the COVID-19 pandemic;
•$0.4 million - higher IT related expenses incurred to sustain our business
expansion and improve our technology environment; and
•$0.1 million - increase in provision for credit losses, as write-offs were
higher in the three months ended June 30, 2021.

Depreciation and amortization - Depreciation and amortization of $2.3 million
for the three months ended June 30, 2021 decreased by $0.4 million from $2.7
million for the three months ended June 30, 2020. This decrease is mainly due to
approximately $0.5 million less amortization related to our trade name,
developed technology and agent relationships during the second quarter 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
$0.1 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 $1.3 million for the three months ended
June 30, 2021 decreased by $0.3 million from $1.6 million for the three months
ended June 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.

                                       27

————————————————– ——————————

Index

Income tax provision - Income tax provision was $4.8 million for the three
months ended June 30, 2021, which represents an increase of $1.5 million from an
income tax provision of $3.3 million for the three months ended June 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 $13.2 million for the three months ended June 30, 2021
compared to net income of $9.0 million for the three months ended June 30, 2020,
which resulted in an increase of $4.2 million due to the same factors discussed
above.

Non-GAAP Financial Measures
We use Adjusted Net Income, Adjusted Earnings 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 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. 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 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 amounts required 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 non-cash component of stock-based compensation;

• Adjusted EBITDA does not reflect the impact of earnings or expenses resulting from matters that we do not consider to reflect, on a recurring basis, our day-to-day 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.

Adjusted net earnings 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, 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.

                                       28

————————————————– ——————————

Index

Adjusted earnings per share – basic and diluted is calculated by dividing adjusted net income by the weighted average of outstanding GAAP common shares (basic and diluted).

Adjusted Net Income for the three months ended June 30, 2021 was $15.3 million,
representing an increase of $4.5 million, or 41.2%, from Adjusted Net Income of
$10.8 million for the three months ended June 30, 2020. The increase in Adjusted
Net Income was primarily due to the increase in revenues of $31.7 million,
offset primarily by an increase in service charges from agents and banks of
$21.6 million due to higher transaction volume.

The following table shows the reconciliation of net income, our closest GAAP measure, to adjusted net income:

                                                                     Three Months Ended June 30,
(in thousands, except for per share data)                            2021                    2020
Net Income                                                     $       13,227          $       8,978
Adjusted for:
Share-based compensation (a)                                            1,374                    686
TCPA settlement (b)                                                         -                     23
Other charges and expenses (c)                                            176                     97
Amortization of intangibles (d)                                         1,263                  1,710
Income tax benefit related to adjustments (e)                            (763)                  (671)
Adjusted Net Income                                            $       

15,277 $ 10,823

Adjusted Earnings per Share
Basic                                                          $         0.40          $        0.28
Diluted                                                        $         0.39          $        0.28

Weighted-average common shares outstanding
Basic                                                              38,433,748             38,035,279
Diluted                                                            39,027,414             38,047,792



(a)Equity awards were granted to employees and independent directors of the
Company.
(b)Represents legal fees for the settlement of a class action lawsuit related to
the TCPA.
(c)Includes loss on disposal of fixed assets and foreign currency (gains)
losses.
(d)Represents the amortization of certain intangible assets that resulted from
the application of push-down accounting.
(e)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.
                                       29

————————————————– ——————————

Index

Adjusted Earnings per Share - Basic for the three months ended June 30, 2021 was
$0.40, representing an increase of $0.12, or 42.9%, compared to $0.28 for the
three months ended June 30, 2020.

Adjusted Earnings per Share - Diluted for the three months ended June 30, 2021
was $0.39, representing an increase of $0.11, or 39.3%, compared to $0.28 for
the three months ended June 30, 2020.

The following table shows the reconciliation of GAAP earnings per share, our closest GAAP measure, to adjusted earnings per share:

                                                                 Three Months Ended June 30,
                                                              2021                                2020
                                                   Basic                Diluted             Basic and Diluted
GAAP Earnings per Share                       $       0.34          $       0.34          $             0.24
Adjusted for:
Share-based compensation                              0.04                  0.04                        0.02
TCPA settlement                                          -                     -                             NM
Other charges and expenses                                 NM                    NM                          NM
Amortization of intangibles                           0.03                  0.03                        0.04
Income tax benefit related to adjustments            (0.01)                (0.02)                      (0.02)
Adjusted Earnings per Share                   $       0.40          $       0.39          $             0.28



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 June 30, 2021 was $23.2 million,
representing an increase of $5.8 million, or 33.4%, from $17.4 million for the
three months ended June 30, 2020. The increase in Adjusted EBITDA was primarily
due to the increase in revenues of $31.7 million, offset primarily by an
increase in service charges from agents and banks of $21.6 million due to an
increase in transaction volume.

The following table shows the reconciliation of net income, our closest GAAP measure, to Adjusted EBITDA:

                                         Three Months Ended June 30,
(in thousands)                               2021                   2020
Net Income                        $       13,227                 $  8,978
Adjusted for:
Interest expense                           1,254                    1,633
Income tax provision                       4,803                    3,265
Depreciation and amortization              2,345                    2,691
EBITDA                                    21,629                   16,567
Share-based compensation (a)               1,374                      686
TCPA settlement (b)                            -                       23
Other charges and expenses (c)               176                       97
Adjusted EBITDA                   $       23,179                 $ 17,373



(a)Equity awards were granted to employees and independent directors of the
Company.
(b)Represents legal fees for the settlement of a class action lawsuit related to
the TCPA.
(c)Includes loss on disposal of fixed assets and foreign currency (gains)
losses.

                                       30

————————————————– ——————————

Index

Six months ended June 30, 2021 Compared to the six months ended June 30, 2020
Income Income for the above periods is shown below:

                                           Six Months Ended               % of               Six Months Ended               % of
($ in thousands)                            June 30, 2021               Revenues              June 30, 2020               Revenues

Income:

Wire transfer and money order fees, net  $         180,218                     85  %       $         139,888                     86  %
Foreign exchange gain, net                          29,703                     14  %                  21,214                     13  %
Other income                                         1,402                      1  %                   1,211                      1  %
Total revenues                           $         211,323                    100  %       $         162,313                    100  %



Wire transfer and money order fees, net of $180.2 million for the six months
ended June 30, 2021 increased by $40.3 million from $139.9 million for the six
months ended June 30, 2020. This increase of $40.3 million was primarily due to
a 26.6% increase in transaction volume compared to the six months ended June 30,
2020, largely due to the continued growth in our agent network, which increased
by 17.9% from June 2020 to June 2021.

Revenues from foreign exchange gain, net of $29.7 million for the six months
ended June 30, 2021 increased by $8.5 million from $21.2 million for the six
months ended June 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 six months of 2021.

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

                                            Six Months Ended               % of               Six Months Ended               % of
($ in thousands)                             June 30, 2021               Revenues              June 30, 2020               Revenues
Operating expenses:
Service charges from agents and banks     $         141,237                     67  %       $         108,498                     67  %
Salaries and benefits                                20,050                      9  %                  14,428                      9  %
Other selling, general and administrative
expenses                                             12,582                      6  %                  10,492                      7  %
Depreciation and amortization                         4,679                      2  %                   5,381                      3  %
Total operating expenses                  $         178,548                     84  %       $         138,799                     86  %



Service charges from agents and banks - Service charges from agents and banks
were $141.2 million for the six months ended June 30, 2021 compared to $108.5
million for the six months ended June 30, 2020. The increase of $32.7 million
was primarily due to the increase in transaction volume described above.

Salaries and benefits - Salaries and benefits of $20.1 million for the six
months ended June 30, 2021 increased by $5.7 million from $14.4 million for the
six months ended June 30, 2020. The increase of $5.7 million is primarily due to
$4.0 million spent in talent acquisition and retention and increased wages to
recognize performance, and to support the continued growth of our business, a
$0.8 million increase in commission expense for our sales representatives and
$0.9 million increase in share-based compensation as a result of new awards
granted in the first six months of 2021.

Other selling, general and administrative expenses - Other selling, general and
administrative expenses of $12.6 million for the six months ended June 30, 2021
increased by $2.1 million from $10.5 million for the six months ended June 30,
2020.

The increase is the result of:

                                       31

————————————————– ——————————

Index

•$1.1 million - increase in advertising and promotion expenses as last year we
curtailed these activities because of the COVID-19 pandemic;
•$0.7 million - higher professional fees and other operating expenses to support
our business growth, some of which expenses were reduced last year by the
COVID-19 pandemic; and
•$0.7 million - higher IT related expenses incurred to sustain our business
expansion and improve our technology environment.

These increases were partially offset by:

•$0.4 million - reduction in provision for credit losses, as the six months
ended June 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 $4.7 million
for the six months ended June 30, 2021 decreased by $0.7 million from $5.4
million for the six months ended June 30, 2020. This decrease is mainly due to
$0.9 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 $0.2 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 $2.6 million for the six months ended
June 30, 2021 decreased by $0.9 million from $3.5 million for the six months
ended June 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 $8.0 million for the six months
ended June 30, 2021, which represents an increase of $2.7 million from an income
tax provision of $5.3 million for the six months ended June 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 $22.2 million for the six months ended June 30, 2021
compared to net income of $14.7 million for the six months ended June 30, 2020,
which resulted in an increase of $7.5 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 six
months ended June 30, 2021 was $25.9 million, representing an increase of $7.5
million, or 40.7%, from Adjusted Net Income of $18.4 million for the six months
ended June 30, 2020. The increase in Adjusted Net Income was primarily due to
the increase in revenues of $49.0 million, offset primarily by an increase in
service charges from agents and banks of $32.7 million due to higher transaction
volume.

                                       32

————————————————– ——————————

Index

The following table shows the reconciliation of net income, our closest GAAP measure, to adjusted net income:

                                                        Six Months Ended June 30,
(in thousands, except for per share data)                 2021              

2020

Net Income                                      $      22,204               $     14,666
Adjusted for:
Share-based compensation (a)                            2,270               

1,408

TCPA settlement (b)                                         -               

46

Other charges and expenses (c)                            293               

244

Amortization of intangibles (d)                         2,525               

3421

Income tax benefit related to adjustments (e)          (1,382)                    (1,366)
Adjusted Net Income                             $      25,910               $     18,419

Adjusted Earnings per Share
Basic                                           $        0.68               $       0.48
Diluted                                         $        0.67               $       0.48

Weighted-average common shares outstanding
Basic                                              38,336,977                 38,035,146
Diluted                                            38,937,699                 38,043,233



(a)Equity awards were granted to employees and independent directors of the
Company.
(b)Represents legal fees for the settlement of a class action lawsuit related to
the TCPA.
(c)Includes loss on disposal of fixed assets and foreign currency (gains)
losses.
(d)Represents the amortization of certain intangible assets that resulted from
the application of push-down accounting.
(e)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.

Adjusted Earnings per Share - Basic (previously defined and used as described
above) for the six months ended June 30, 2021 was $0.68, representing an
increase of $0.20, or 41.7%, compared to $0.48 for the six months ended June 30,
2020.

Adjusted Earnings per Share - Diluted (previously defined and used as described
above) for the six months ended June 30, 2021 was $0.67, representing an
increase of $0.19, or 39.6%, compared to $0.48 for the six months ended June 30,
2020.

The following table shows the reconciliation of GAAP earnings per share, our closest GAAP measure, to adjusted earnings per share:

                                                                  Six Months Ended June 30,
                                                              2021                                2020
                                                   Basic                Diluted             Basic and Diluted
GAAP Earnings per Share                       $       0.58          $       0.57          $             0.39
Adjusted for:
Share-based compensation                              0.06                  0.06                        0.04
TCPA settlement                                          -                     -                             NM
Other charges and expenses                            0.01                  0.01                        0.01
Amortization of intangibles                           0.07                  0.07                        0.09
Income tax benefit related to adjustments            (0.04)                (0.04)                      (0.04)
Adjusted Earnings per Share                   $       0.68          $       0.67          $             0.48



NM - Per share amounts are not meaningful.
The table above may contain slight summation differences due to rounding.
                                       33

————————————————– ——————————

  Index

Adjusted EBITDA


Adjusted EBITDA (previously defined and used as described above) for the six
months ended June 30, 2021 was $40.0 million, representing an increase of $9.4
million, or 30.8%, from $30.6 million for the six months ended June 30, 2020.
The increase in Adjusted EBITDA was primarily due to the increase in revenues of
$49.0 million, offset primarily by an increase in service charges from agents
and banks of $32.7 million due to an increase in transaction volume.

The following table shows the reconciliation of net income, our closest GAAP measure, to Adjusted EBITDA:

                                        Six Months Ended June 30,
(in thousands)                              2021                 2020
Net Income                        $      22,204               $ 14,666
Adjusted for:
Interest expense                          2,594                  3,503
Income tax provision                      7,977                  5,345
Depreciation and amortization             4,679                  5,381
EBITDA                                   37,454                 28,895
Share-based compensation (a)              2,270                  1,408
TCPA settlement (b)                           -                     46
Other charges and expenses (c)              293                    244
Adjusted EBITDA                   $      40,017               $ 30,593



(a)Equity awards were granted to employees and independent directors of the
Company.
(b)Represents legal fees for the settlement of a class action lawsuit related to
the TCPA.
(c)Includes loss on disposal of fixed assets 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 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 six months ended June 30, 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.

The Company and certain of its domestic subsidiaries as borrowers and the other
guarantors from time to time party thereto (collectively, the "Loan Parties")
entered into a financing agreement 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 million revolving
credit facility, a $90 million term loan facility and an up to $30 million
incremental facility of which $12 million was utilized for the term loan
facility in 2019 and $10 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 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 the Original
Credit Agreement, under which the revolving line of credit commitment under the
Original Credit Agreement was increased by $10 million to an aggregate of $45
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.
                                       34

————————————————– ——————————

Index

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 $150 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 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 June 24, 2026.

As of June 30, 2021, we had total indebtedness of $87.5 million, consisting of
borrowings under the term loan facility, excluding debt origination costs of
$2.5 million. There were $220.0 million of additional borrowings available under
these facilities as of June 30, 2021.

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 ranging between 2.50% and 3.00% per annum for LIBOR loans and
between 1.50% and 2.00% per annum for base rate 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 six months ended June 30, 2021 for the term loan facility
and revolving credit facility, which substantially related to the Original
Credit Agreement, were 5.19% and 0.98%, respectively.

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 years 1 and 2, 7.5% in year 3, and 10.0% in years 4 and 5, in each case
on the last day of each quarter, commencing in 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.

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 June 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,
change the nature of their businesses, enter into certain transactions with
affiliates or amend the terms of material indebtedness.

In addition, the A&R Credit Agreement generally restricts the payment of dividends or cash distributions by the Company with certain exceptions, including the following: i) to redeem common shares of the Company from current or former employees for a full amount. can $ 10 million per calendar year, and ii) other restricted payments for a total amount not exceeding $ 40 million plus the Available Amount (as defined in the A&R Credit Agreement).

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

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, 2020.

                                       35

————————————————– ——————————

Index

© Edgar online, source Previews


Source link

About The Author

Related Posts