Quantcast
Last updated on April 18, 2014 at 5:30 EDT

Coinstar, Inc. Announces 2012 Fourth Quarter And Full Year Results

February 7, 2013

BELLEVUE, Wash., Feb. 7, 2013 /PRNewswire/ — Coinstar, Inc. (Nasdaq: CSTR) today announced financial results for the fourth quarter and full year ended December 31, 2012.

“We are pleased with our performance in 2012, which drove annual revenue of more than $2 billion for the first time,” said Paul Davis, chief executive officer of Coinstar, Inc. “Our ongoing commitment to creating value for our consumers, our partners and, ultimately, our shareholders drove substantial progress on several growth initiatives that we outlined at the beginning of 2012, including Redbox Instant by Verizon, the launch of the Redbox Tickets pilot, Rubi coffee kiosks and our expansion into Canada. We made strategic investments across our business this year that we believe will generate new opportunities for growth as we move through 2013 and beyond.”

Financial highlights for the 2012 fourth quarter and full year included:

                    2012 Fourth
                      Quarter             2012 Full Year

    ·  Consolidated
     revenue                    $564.1 million           $2,202.0 million
    ·  Operating
     income                      $47.8 million             $262.8 million
    ·  Core
     adjusted
     EBITDA from
     continuing
     operations*
     (See Appendix
     A)                         $101.5 million             $469.7 million
    ·  Diluted
     earnings per
     share from
     continuing
     operations                  $0.75                      $4.67
    ·  Core diluted
     earnings per
     share*  (See
     Appendix A)                 $0.93                      $4.83
    ·  Net cash
     flows from
     operating
     activities
     from
     continuing
     operations                 $152.2 million             $463.9 million
    ·  Free cash
     flow from
     continuing
     operations*
     (See Appendix
     A)                          $77.3 million             $255.9 million
    *Refer to Appendix A for a
     discussion of non-GAAP
     financial measures,
     including the exclusion of
     certain non-core items.

“Our Q4 and full year results demonstrate our ability to effectively manage growth through challenges and continue to drive earnings and free cash flow,” said J. Scott Di Valerio, chief financial officer of Coinstar, Inc. “In 2012 we continued to make the investments, build the organization and refine the processes that are paving the way for additional growth in the long term. We are more focused than ever on executing on our plans to drive success for our company and our shareholders.”

Revenue for the fourth quarter of 2012 increased 8.4% to $564.1 million compared with the fourth quarter of 2011, driven primarily by Redbox revenue growth of 9.6% to $488.3 million primarily reflecting new kiosk installations. Coin revenue remained relatively flat at $74.5 million.

Operating income for the fourth quarter of 2012 was $47.8 million, which resulted in an operating margin of 8.5%, compared with operating income of $54.7 million and an operating margin of 10.5% in the fourth quarter of 2011. The decrease in operating margin was primarily driven by the operating results from the kiosks acquired as part of our NCR asset acquisition.

Income from continuing operations for the fourth quarter of 2012 was $22.9 million, or diluted earnings per share from continuing operations of $0.75, a decrease in diluted earnings per share of 25.0% compared with $31.5 million, or $1.00 per share, in the fourth quarter of 2011. Core diluted earnings per share from continuing operations for the fourth quarter of 2012 was $0.93, excluding non-core adjustments of $0.18 per share, compared with $1.03, excluding non-core adjustments of $0.03 per share in the fourth quarter of 2011.

Coinstar’s fourth quarter 2012 results include a negative impact of $6.4 million before taxes, or $0.13 on core diluted earnings per share from continuing operations attributable to the operating results of the kiosks acquired as part of the NCR asset acquisition.

For the 2012 full year revenue was $2.2 billion, an increase of 19.3% compared with 2011. Operating income for 2012 was $262.8 million, which resulted in an operating margin of 11.9%, compared with operating income of $209.9 million and an operating margin of 11.4% in 2011. Income from continuing operations for 2012 was $150.2 million, or $4.67 per diluted share, compared with income from continuing operations of $115.0 million, or $3.61 per diluted share, in 2011, an increase in diluted earnings per share of 29.4%. Core diluted earnings per share from continuing operations for the full year 2012 was $4.83, excluding non-core adjustments of $0.16 per share, compared with $3.67 per diluted share, excluding non-core adjustments of $0.06 per share in 2011.

For the full year, results include a negative impact of $14.5 million before taxes, or $0.28 on core diluted earnings per share from continuing operations attributable to the operating results of the kiosks acquired as part of the NCR asset acquisition.

Net cash flows from operating activities from continuing operations in the fourth quarter of 2012 was $152.2 million, compared with $144.9 million in the fourth quarter of 2011. Cash paid for capital expenditures for continuing operations for the fourth quarter of 2012 was $74.9 million, compared with $44.5 million in the fourth quarter of 2011.

Free cash flow from continuing operations for the fourth quarter of 2012 was $77.3 million, compared with $100.4 million in the fourth quarter of 2011, bringing the total to $255.9 million for the full year of 2012.

During the fourth quarter of 2012, the company repurchased approximately $76.7 million of its common stock representing 1.57 million shares at an average price of $48.71 per share. Of the total amount repurchased, $75.0 million was completed through an accelerated share repurchase agreement entered into on November 1 and concluded on December 28, 2012 and the remaining $1.7 million was completed through open market repurchases. During 2012, the company repurchased approximately $139.7 million of its common stock representing 2.80 million shares at an average price of $49.92 per share through a combination of a previously announced 10b5-1 plan, accelerated share repurchase agreements, and open market purchases. On December 31, 2012, there was $133.6 million remaining under the current Board authorization for stock repurchases. In January 2013, Coinstar’s board authorized the repurchase of an additional $250 million, plus the amount of cash proceeds received by the company from the exercise of stock options by its officers, directors and employees.

Guidance

For the 2013 full year, Coinstar management expects:

  • Consolidated revenue between $2.375 billion and $2.555 billion;
  • Core adjusted EBITDA from continuing operations between $473 million and $513 million;
  • Core diluted EPS from continuing operations between $4.91 and $5.51; and
  • Free cash flow from continuing operations between $180 million and $200 million.

For the 2013 first quarter, Coinstar management expects:

  • Consolidated revenue between $568 million and $593 million;
  • Core adjusted EBITDA from continuing operations between $95 million and $105 million; and
  • Core diluted EPS from continuing operations between $0.77 and $0.92.

Additional Information

Coinstar has provided additional comments on guidance in prepared remarks that also review the company’s 2012 fourth quarter and full year operating and financial results. The prepared remarks are posted on the Investor Relations section of the corporate website at www.coinstarinc.com along with this press release. The 2012 fourth quarter Segment Supplement, which provides historical data in Excel format, is also posted on the website.

Conference Call

Paul Davis and J. Scott Di Valerio will host a conference call today at 2:00 p.m. PST (5:00 p.m. EST) to answer questions related to the company’s business performance, financial results, guidance, and recent announcements. The conference call will be webcast live and archived on the Investor Relations section of Coinstar’s website www.coinstarinc.com. A recording of the call will be available approximately two hours after the call ends through February 21, 2013, at 888?843?7419 or 630?652?3042, passcode 3405 2768#.

About Coinstar, Inc.

Coinstar, Inc. (NASDAQ: CSTR) is a leading provider of automated retail solutions offering convenient services that make life easier for consumers and drive incremental traffic and revenue for retailers. The company’s core automated retail businesses include the well-known Redbox® self-service movie and video game rental and Coinstar® self-service coin-counting brands. The company has approximately 43,700 DVD kiosks and 20,300 coin-counting kiosks in supermarkets, drug stores, mass merchants, financial institutions, convenience stores, and restaurants. Redbox also offers DVD rentals through additional kiosks acquired from NCR Corporation in June 2012. For more information, visit www.coinstarinc.com.

Safe Harbor for Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “anticipate,” “goals,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding Coinstar, Inc.’s anticipated growth and future operating results, including 2013 first quarter and 2013 full year results. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Coinstar, Inc. and Redbox, as well as from risks and uncertainties beyond Coinstar, Inc.’s control. Such risks and uncertainties include, but are not limited to,

  • competition from other digital entertainment providers,
  • the ability to achieve the strategic and financial objectives for our entry into a new business,
  • our limited ability to direct the management or policies of the new joint venture with Verizon Communications,
  • failure to receive the expected benefits of the NCR relationship,
  • the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers and suppliers,
  • payment of increased fees to retailers, suppliers and other third-party providers, including financial service providers,
  • the inability to receive delivery of DVDs on the date of their initial release to the general public, or shortly thereafter, or in sufficient quantity, for home entertainment viewing,
  • noteholders electing to convert our convertible notes,
  • the effective management of our content library,
  • the ability to attract new retailers, penetrate new markets and distribution channels and react to changing consumer demands,
  • the ability to achieve the strategic and financial objectives for our entry into or expansion of new businesses,
  • the ability to adequately protect our intellectual property, and
  • the application of substantial federal, state, local and foreign laws and regulations specific to our business.

The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review “Risk Factors” described in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These forward-looking statements reflect Coinstar, Inc.’s expectations as of the date of this release. Coinstar, Inc. undertakes no obligation to update the information provided herein.

(Financial Statements Follow)

Appendix A

Non-GAAP Financial Measures

Non-GAAP measures may be provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”).

We use the following non-GAAP financial measures to evaluate our financial results:

  • Core adjusted EBITDA from continuing operations;
  • Core diluted earnings per share (“EPS”) from continuing operations; and
  • Free cash flow from continuing operations.

These measures, the definitions of which are presented below, are non-GAAP because they exclude certain amounts which are included in the most directly comparable measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for our GAAP financial measures and may not be comparable with similarly titled measures of other companies.

Core and Non-Core Results

We distinguish our core activities, those associated with our primary operations, from non-core activities. Non-core activities are primarily nonrecurring events or events we do not control. Our non-core adjustments include i) deal fees primarily related to the NCR Asset Acquisition, ii) income or loss from equity method investments, which represents our share of income or loss from entities we do not consolidate or control, and iii) a gain on the grant of a license to use certain Redbox trademarks to Redbox Instant by Verizon (“Non-Core Adjustments”). We believe investors should consider our core results because they are more indicative of our ongoing performance and trends and are more consistent with how management evaluates our operational results and trends.

Core Adjusted EBITDA from Continuing Operations

Our non-GAAP financial measure core adjusted EBITDA from continuing operations is defined as earnings before depreciation, amortization and other; interest expense, net; income taxes; share-based payments expense; and Non-Core Adjustments.

A reconciliation of core adjusted EBITDA from continuing operations to income from continuing operations, the most comparable GAAP financial measure, is presented in the following table:

                                                                                                    Three Months Ended              Twelve Months Ended
                                                                                                       December 31,                     December 31,
                                                                                                       ------------                     ------------
    Dollars in thousands                                                          2012                            2011                             2012                 2011
    --------------------                                                          ----                            ----                             ----                 ----
    Income from continuing operations                                                      $22,885                         $31,522                         $150,230           $114,951
                                       Depreciation, amortization, and other                                    47,616                           39,245              184,525            148,218
                                       Interest expense, net                                                     4,615                            4,944               15,648             23,822
                                       Income taxes                                                             10,908                           17,862               91,516             69,777
                                       Share-based payments expense(1)                                           6,218                            6,849               19,362             16,211

                                       Adjusted EBITDA from continuing operations                               92,242                          100,422              461,281            372,979
    Non-core adjustments:
                                       Deal fees                                                                     -                            1,122                3,235              1,603
                                       Loss from equity method investments                                       9,278                              711               24,684              1,591
                                        Gain on formation of Redbox Instant by
                                        Verizon                                                                      -                                -              (19,500)                 -

                                       Core adjusted EBITDA from continuing operations                        $101,520                         $102,255             $469,700           $376,173
                                                                                                              ========                         ========             ========           ========

    (1) Includes non-cash share-based compensation for executives, non-employee directors and employees as well as share-based payments for content arrangements.

Core Diluted EPS from Continuing Operations

Our non-GAAP financial measure core diluted EPS from continuing operations is defined as diluted earnings per share from continuing operations excluding Non-Core Adjustments, net of applicable taxes.

A reconciliation of core diluted EPS from continuing operations to diluted EPS from continuing operations, the most comparable GAAP financial measure, is presented in the following table:

                                                   Three Months Ended                Twelve Months Ended
                                                                                         December 31,                December 31,
                                                                                         ------------                ------------
                                                                  2012                 2011                  2012                    2011
                                                                  ----                 ----                  ----                    ----
    Diluted EPS from continuing
     operations                                                  $0.75                $1.00                 $4.67                   $3.61
    Non-core adjustments, net of
     tax:(1)
       Deal fees                                                     -                 0.02                  0.06                    0.03
       Loss from equity method
        investments                                               0.18                 0.01                  0.48                    0.03
       Gain on formation of Redbox
        Instant by Verizon                                           -                    -                 (0.38)                      -
                                                                   ---                  ---                 -----                     ---
    Core diluted EPS from continuing
     operations                                                  $0.93                $1.03                 $4.83                   $3.67
                                                                 =====                =====                 =====                   =====
    (1) Non-Core Adjustments are presented after-tax using the
     applicable effective tax rate for the respective periods.

Free Cash Flow from Continuing Operations

Our non-GAAP financial measure free cash flow from continuing operations is defined as net cash provided by operating activities from continuing operations after capital expenditures. We believe free cash flow from continuing operations is an important non-GAAP measure as it provides additional information to users of the financial statements regarding our ability to service, incur or pay down indebtedness and repurchase our common stock. The table below provides a reconciliation of net cash provided by operating activities from continuing operations, the most comparable GAAP financial measure, to free cash flow from continuing operations:

                                                                         Three Months Ended       Twelve Months Ended
                                                                               December 31,          December 31,
                                                                               ------------          ------------
    Dollars in thousands                                                      2012               2011           2012        2011
                                                                              ----               ----           ----        ----
    Net cash provided by operating activities from continuing operations  $152,212           $144,877       $463,906    $406,516
    Purchase of property and equipment                                     (74,873)           (44,457)      (208,054)   (179,236)
                                                                           -------             -------       --------   --------
             Free cash flow from continuing operations                   $77,339            $100,420       $255,852   $227,280

                                                                                                         COINSTAR, INC.
                                                                                         CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                              (in thousands, except per share data)
                                                                                                           (unaudited)

                                                                                                                                         Three Months Ended       Twelve Months Ended
                                                                                                                                            December 31,              December 31,
                                                                                                                                            ------------              ------------
                                                                                                                                                           2012      2011                   2012        2011
                                                                                                                                                           ----      ----                   ----        ----

    Revenue                                                                                                                                            $564,082  $520,455             $2,202,043  $1,845,372

    Expenses:
                                                   Direct operating                                                                                     404,227   365,664              1,502,977   1,283,351
                                                   Marketing                                                                                              7,555     8,307                 27,635      29,004
                                                   Research and development                                                                               3,229     4,018                 13,913      11,557
                                                   General and administrative                                                                            53,626    48,562                210,235     163,357
                                                   Depreciation and other                                                                                45,568    38,560                179,147     145,478
                                                   Amortization of intangible assets                                                                      2,048       685                  5,378       2,740
    Total expenses                                                                                                                                      516,253   465,796              1,939,285   1,635,487
                                                                                                                                                        -------   -------              ---------   ---------

    Operating income                                                                                                                                     47,829    54,659                262,758     209,885

    Other income (expense):
                                                   Income (loss) from equity method investments, net                                                     (9,278)     (711)                (5,184)     (1,591)
                                                   Interest expense, net                                                                                 (4,615)   (4,944)               (15,648)    (23,822)
                                                   Other, net                                                                                              (143)      380                   (180)        256

    Total other income (expense)                                                                                                                        (14,036)   (5,275)               (21,012)    (25,157)
                                                                                                                                                        -------    ------                -------     -------

    Income from continuing operations before income taxes                                                                                                33,793    49,384                241,746     184,728
    Income tax expense                                                                                                                                  (10,908)  (17,862)               (91,516)    (69,777)
                                                                                                                                                        -------   -------                -------     -------
    Income from continuing operations                                                                                                                    22,885    31,522                150,230     114,951
    Loss from discontinued operations, net of tax                                                                              -                              -         -                (11,068)
                                                                                                                             ---                            ---       ---                -------
    Net income                                                                                                                                           22,885    31,522                150,230     103,883
                                                                                                                                                         ------    ------                -------     -------

    Other comprehensive income:
                                                   Foreign currency translation adjustment                                                                 (294)     (133)                 1,048        (255)
                                                   Reclassification of interest rate hedges to interest expense                                               -         -                      -         896
                                                   Loss on short-term investments                                                                             -         -                      -         (20)
                                                   Income tax expense related to items of other comprehensive income                                          -         -                      -        (342)

    Other comprehensive income, net of tax                                                                                                                 (294)     (133)                 1,048         279
                                                                                                                                                           ----      ----                  -----         ---
    Comprehensive income                                                                                                                                $22,591   $31,389               $151,278    $104,162

    Basic earnings (loss) per share:
                                                   Continuing operations                                                                                  $0.78     $1.04                  $4.96       $3.76
                                                   Discontinued operations                                                                                    -         -                      -       (0.36)

    Basic earnings per share                                                                                                                              $0.78     $1.04                  $4.96       $3.40

    Diluted earnings (loss) per share:
                                                   Continuing operations                                                                                  $0.75     $1.00                  $4.67       $3.61
                                                   Discontinued operations                                                                                    -         -                      -       (0.35)

    Diluted earnings per share                                                                                                                            $0.75     $1.00                  $4.67       $3.26

    Weighted average shares used in basic per share calculations                                                                                         29,380    30,261                 30,305      30,520
    Weighted average shares used in diluted per share calculations                                                                                       30,619    31,605                 32,174      31,869

                                                                                                                          COINSTAR, INC.
                                                                                                                   CONSOLIDATED BALANCE SHEETS
                                                                                                                (in thousands, except share data)
                                                                                                                           (unaudited)

                                                                                                                                                                                                                                                  December 31,
                                                                                                                                                                                                                                                  2012                     2011
                                                                                                                                                                                                                                                  ----                     ----
                     Assets
                     Current Assets:
                     Cash and cash equivalents                                                                                                                                                                                   $282,894                 $341,855
                     Accounts receivable, net of allowances of $2,003 and $1,586                                                                                                                                                   58,331                   41,246
                     Content library                                                                                                                                                                                              177,409                  142,386
                     Deferred income taxes                                                                                                                                                                                          7,187                   84,228
                     Prepaid expenses and other current assets                                                                                                                                                                     29,686                   25,274
                                                                                                                                                                                                                                   ------                   ------
                                                                                  Total current assets                                                                                                                                         555,507                  634,989

                     Property and equipment, net                                                                                                                                                                                  571,358                  499,178
                     Notes receivable                                                                                                                                                                                              26,731                   24,374
                     Deferred income taxes                                                                                                                                                                                          1,373                      647
                     Goodwill and other intangible assets                                                                                                                                                                         358,829                  274,583
                     Other long-term assets                                                                                                                                                                                        47,927                   17,066

                     Total assets                                                                                                                                                                                              $1,561,725               $1,450,837

                     Liabilities and Stockholders' Equity
                     Current Liabilities:
                     Accounts payable                                                                                                                                                                                            $250,588                 $175,550
                     Accrued payable to retailers                                                                                                                                                                                 138,413                  127,450
                     Other accrued liabilities                                                                                                                                                                                    146,125                  148,996
                     Current portion of long-term debt                                                                                                                                                                             15,529                   13,986
                     Current portion of capital lease obligations                                                                                                                                                                  13,350                   12,057
                                                                                                                                                                                                                                   ------                   ------
                                                                                  Total current liabilities                                                                                                                                    564,005                  478,039

                     Long-term debt and other long-term liabilities                                                                                                                                                               341,179                  359,288
                     Capital lease obligations                                                                                                                                                                                     15,702                   11,768
                     Deferred tax liabilities                                                                                                                                                                                      91,751                   87,840

                     Total liabilities                                                                                                                                                                                          1,012,637                  936,935

                     Commitments and contingencies

                     Stockholders' Equity:
                      Preferred stock, $0.001 par value -5,000,000 shares
                      authorized; no shares
                                                                                  issued or outstanding                                                                                                                                              -                        -
                     Common stock, $0.001 par value - 60,000,000 authorized;
                                                                                  35,797,592 and 35,251,932 shares issued;
                                                                                  28,626,323 and 30,879,778 shares outstanding                                                                                                                 504,881                  481,249
                     Treasury stock                                                                                                                                                                                              (293,149)                (153,425)
                     Retained earnings                                                                                                                                                                                            338,979                  188,749
                     Accumulated comprehensive loss                                                                                                                                                                                (1,623)                  (2,671)
                                                                                                                                                                                                                                   ------                   ------
                                                                                  Total stockholders' equity                                                                                                                                   549,088                  513,902
                                                                                                                                                                                                                                               -------                  -------
                     Total liabilities and stockholders' equity                                                                                                                                                                $1,561,725               $1,450,837

                                            COINSTAR, INC.
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (in thousands)
                                               (unaudited)

                                                                                                            Three Months Ended                    Twelve Months Ended
                                                                                                               December 31,                           December 31,
                                                                                                               ------------                           ------------
                                                                                                                                2012                             2011                   2012                    2011
                                                                                                                                ----                             ----                   ----                    ----
    Operating Activities:
    Net income                                                                                                                           $22,885                          $31,522               $150,230                $103,883
    Adjustments to reconcile net income to net cash flows from operating activities from continuing
     operations:

                                                                                                     Depreciation and other                                    45,568                 38,560                 179,147                 145,478
                                                                                                      Amortization of intangible
                                                                                                      assets and deferred financing
                                                                                                      fees                                                      2,579                  1,216                   7,504                   5,182
                                                                                                     Share-based payments expense                               6,218                  6,849                  19,362                  16,211
                                                                                                      Excess tax benefits on share-
                                                                                                      based payments                                              (67)                   (40)                 (5,740)                 (2,471)
                                                                                                     Deferred income taxes                                     14,383                 13,161                  87,573                  60,076
                                                                                                      Loss from discontinued
                                                                                                      operations, net of tax                                        -                      -                       -                  11,068
                                                                                                      Loss from equity method
                                                                                                      investments, net                                          9,278                    711                   5,184                   1,591
                                                                                                      Non-cash interest on
                                                                                                      convertible debt                                          1,839                  1,694                   7,109                   6,551
                                                                                                     Other                                                          7                    635                  (4,100)                    (95)
    Cash flows from changes in operating assets and liabilities from continuing operations
                                                                                                                              49,522                           50,569                 17,637                  59,042
                                                                                                      Net cash flows from operating
                                                                                                      activities from continuing
                                                                                                      operations                                              152,212                144,877                 463,906                 406,516

    Investing Activities:
    Purchases of property and equipment                                                                                      (74,873)                         (44,457)             (208,054)                (179,236)
    Proceeds from sale of property and equipment                                                                                 312                              143                  1,131                     695
    Proceeds from sale of businesses, net                                                                                          -                           (4,001)                     -                   8,220
    Acquisition of NCR DVD kiosk business                                                                                          -                                -              (100,000)                       -
    Equity investments                                                                                                             -                           (2,592)               (39,727)                 (4,912)
                                                                                                                                 ---                           ------                -------                  ------
                                                                                                      Net cash flows from investing
                                                                                                      activities from continuing
                                                                                                      operations                                              (74,561)               (50,907)               (346,650)               (175,233)

    Financing Activities:
    Principal payments on capital lease obligations and other debt                                                            (3,190)                          (6,057)               (16,392)                (28,202)
    Borrowings from term loan                                                                                                      -                                -                      -                 175,000
    Principal payments on term loan and repurchase of convertible debt                                                       (23,845)                          (2,188)               (31,513)                 (4,375)
    Net payments on credit facility                                                                                                -                                -                      -                (150,000)
    Financing costs associated with credit facility                                                                                -                                -                      -                  (4,196)
    Excess tax benefits related to share-based payments                                                                           67                               40                  5,740                   2,471
    Repurchases of common stock and ASR program                                                                              (76,654)                               -              (139,724)                 (63,349)
    Proceeds from exercise of stock options                                                                                      558                            1,079                  4,592                   3,261
                                                                                                                                 ---                            -----                  -----                   -----
                                                                                                      Net cash flows from financing
                                                                                                      activities from continuing
                                                                                                      operations                                             (103,064)                (7,126)               (177,297)                (69,390)

    Effect of exchange rate changes on cash                                                                                     (151)                            (289)                 1,080                    (454)
                                                                                                                                ----                             ----                  -----                    ----

    Increase (decrease) in cash and cash equivalents from continuing operations                                              (25,564)                          86,555                (58,961)                161,439

    Cash flows from discontinued operations:
    Operating cash flows                                                                                                           -                                -                      -                   9,678
    Investing cash flows                                                                                                           -                                -                      -                 (12,678)
                                                                                                      Net cash flows from
                                                                                                      discontinued operations                                       -                      -                       -                  (3,000)

    Increase (decrease) in cash and cash equivalents                                                                         (25,564)                          86,555                (58,961)                158,439
    Cash and cash equivalents:
    Beginning of period                                                                                                      308,458                          255,300                341,855                 183,416
                                                                                                                             -------                          -------                -------                 -------
    End of period                                                                                                                       $282,894                         $341,855               $282,894                $341,855

                Coinstar, Inc.
         Business Segment Information
                (in thousands)
                  (unaudited)

    As a complement to our Consolidated
     Statements of Comprehensive Income,
     we are providing the following
     information related to our business
     segments, which includes segment
     operating income (loss). Management,
     including our chief executive
     officer, evaluates the performances
     of our business segments primarily on
     segment revenue and segment operating
     income from continuing operations
     before depreciation, amortization and
     other, and certain share-based
     payments ("segment operating
     income"). We utilize segment revenue
     and segment operating income because
     we believe they provide useful
     information for effectively
     allocating resources among business
     segments, evaluating the health of
     our business segments based on
     metrics that management can actively
     influence, and gauging our
     investments and our ability to
     service, incur or pay down debt.
                         Three Months Ended December 31, Twelve Months Ended December 31,
                         ------------------------------- --------------------------------
    Dollars in thousands          2012                       2011        2012                   2011
    --------------------          ----                       ----        ----                   ----
    Revenue:
    Redbox                    $488,325                   $445,591  $1,908,773             $1,561,598
    Coin                        74,464                     74,448     290,761                282,382
    New Ventures                 1,293                        416       2,509                  1,392
                                 -----                        ---       -----                  -----
    Consolidated revenue      $564,082                   $520,455  $2,202,043             $1,845,372
                              ========                   ========  ==========             ==========
    Segment operating income reconciled to GAAP operating income

                                                                                                                           Three Months Ended          Twelve Months Ended
                                                                                                                              December 31,                 December 31,
                                                                                                                              ------------                 ------------
    Dollars in thousands                                                                                  2012                  2011            2012                 2011
    --------------------                                                                                  ----                  ----            ----                 ----
    Segment operating income
     (loss)(1)
                                                                 Redbox(2)                                       $80,012               $76,595       $386,753              $284,932
                                                                 Coin                                             26,300                25,678         99,261               100,966
                                                                 New Ventures                                     (7,169)               (6,068)       (25,484)              (17,815)

                                                                 Subtotal                                         99,143                96,205        460,530               368,083

    Depreciation, amortization and
     other:
                                                                 Redbox                                           38,812                30,062        148,068               115,430
                                                                 Coin                                              8,520                 9,176         36,108                31,922
                                                                 New Ventures                                        284                     7            349                   866

                                                                  Total depreciation, amortization
                                                                  and other                                       47,616                39,245        184,525               148,218

                                                                  Share-based
                                                                  compensation
                                                                  expense                                          3,698                 2,301         13,247                 9,980

    Operating income (loss):
                                                                 Redbox                                           41,200                46,533        238,685               169,502
                                                                 Coin                                             17,780                16,502         63,153                69,044
                                                                 New Ventures                                     (7,453)               (6,075)       (25,833)              (18,681)
                                                                  Share-based
                                                                  compensation
                                                                  expense                                         (3,698)               (2,301)       (13,247)               (9,980)

                                                                 Total operating income                          $47,829               $54,659       $262,758              $209,885
                                                                                                                 =======               =======       ========              ========

                                                                  (1) Operating income (loss) before depreciation, amortization and
                                                                  other, and share-based compensation expense
                                                                  (2) Share-based payments expense related to our content
                                                                  arrangements have been allocated to our Redbox segment

SOURCE Coinstar, Inc.


Source: PR Newswire