Business Context and Reporting Period
Company: International Money Express, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 8, 2018
Reporting Period: The filing reports on events occurring on November 7, 2018, and references financial results for the third quarter of 2018.
Key Financial Metrics and Debt Structure
This filing details a new material definitive agreement regarding debt financing rather than providing a full set of financial statements. Key metrics from the new Credit Agreement include:
- Total Facility Size: $155 million total capacity ($35 million revolving credit facility, $90 million term loan, and up to $30 million incremental facility).
- Interest Rates: LIBOR + 4.50% or Base Rate + 3.50%.
- Unused Fee: 0.35% per annum on the revolving credit facility.
- Maturity Date: November 7, 2023.
- Repayment Schedule (Term Loan): Quarterly installments starting March 2019 (5% in Year 1, 7.5% in Years 2-3, 10% in Years 4-5).
- Use of Proceeds: Repayment of existing indebtedness, working capital, and transaction fees.
Material Changes and Covenants
The primary material change is the entry into a new Credit Agreement with KeyBank National Association and a group of lenders, replacing or refinancing existing indebtedness. The agreement imposes significant financial and operational covenants:
- Financial Covenants:
- Minimum quarterly fixed charge coverage ratio of 1.25:1.00.
- Maximum quarterly consolidated leverage ratio of 3.25x.
- Operational Covenants: Restrictions on granting liens, incurring additional debt, making acquisitions, disposing of assets, paying dividends, and changing the nature of the business.
- Prepayment Requirements: Mandatory prepayments from excess cash flow (0% to 50% based on leverage ratio) and proceeds from casualty events or asset dispositions.
Guidance, Outlook, and Risks
Results of Operations: The Company issued a press release on November 8, 2018, announcing third-quarter 2018 financial results. However, the specific revenue, profit, or cash flow figures are contained in Exhibit 99.1 and are not explicitly detailed within the text of this 8-K filing.
Risks and Contingencies:
- Covenant Compliance: The Company must maintain specific leverage and coverage ratios; failure to do so could trigger a default.
- Collateral: Obligations are secured by liens on substantially all assets of the loan parties.
- Liquidity Constraints: Mandatory prepayments based on excess cash flow may limit available liquidity for other corporate purposes.
Investor Verification Checklist
- Verify the specific Q3 2018 revenue and net income figures in the press release (Exhibit 99.1) referenced in Item 2.02.
- Confirm the Company's current consolidated leverage ratio and fixed charge coverage ratio to ensure compliance with the new 3.25x and 1.25:1.00 covenants.
- Review the full text of the Credit Agreement (Exhibit 10.1) for specific definitions of "Excess Cash Flow" and "EBITDA" to understand prepayment obligations.
- Assess the impact of the mandatory quarterly principal repayments on future free cash flow projections.