Coinstar Announces 2003 Revenue of $176.1 Million and $0.90 Per Fully Diluted Share; Fourth Quarter Results Were $46.4 Million in Revenue and $0.21 Per Fully Diluted Share.Business Editors BELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--Feb. 5, 2004 Coinstar Inc. (Nasdaq:CSTR CSTR Centre for Speech Technology Research CSTR Canister CSTR Continually Stirred Tank Reactor CSTR Center for Software Testing Research (Florida Tech) CSTR Combat System Trial Rehearsal (US DoD) ) today announced results for the three-month and full year periods ended December December: see month. 31, 2003. Highlights for the full year 2003 were as follows: -- Revenue -- $176.1 million -- 7.8% same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of growth -- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (1) -- $59.3 million (see Appendix A) -- Free cash flow(2) -- $32.3 million (see Appendix A) -- Total debt decrease of 52% to $17.5 million Highlights for the fourth quarter of 2003 were as follows: -- Quarterly revenue - $46.4 million -- 12.8% same store sales growth -- EBITDA(1) - $14.4 million (see Appendix A) -- Free cash flow(2) - $6.4 million (see Appendix A) For the fourth quarter of 2003, Coinstar Inc. achieved revenue of $46.4 million and net income of $4.4 million or $0.21 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to fourth quarter 2002 revenue of $41.7 million and net income of $49.4 million or $2.17 per fully diluted share. During the three months ended December 31, 2002, it was determined that after a long period of capital investment and subsequent operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , Coinstar's business was capable of sustaining long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitability. Therefore, as required under FAS 109, the Company recognized its deferred tax asset at that time, deriving a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax benefit of approximately $42.6 million or $1.87 per diluted share in 2002(3). Excluding the one-time benefit, and assuming a tax rate of 37%, Coinstar's net income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of would have been $4.3 million and $0.19 respectively reflecting an 11% quarter-over-quarter diluted earnings per share gain(3). The Company paid no federal income taxes in the fourth quarter of 2003 due to its net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . For the full year ended December 31, 2003, Coinstar Inc. achieved revenue of $176.1 million and net income of $19.6 million or $0.90 per fully diluted share. This compares to fiscal 2002 revenue of $155.7 million and net income of $58.5 million or $2.58 per fully diluted share. As previously stated, Coinstar recognized its deferred tax asset in fiscal 2002 which resulted in a one-time tax benefit of approximately $42.6 million or $1.87 per diluted share(3). Excluding that one-time gain, and assuming a tax rate of 37% for the full year, Coinstar's net income and diluted earnings per share would have been $10.1 million and $0.44 respectively reflecting a 105% increase in diluted earnings per share year-over-year(3). The Company paid no federal income taxes in 2003 due to its net operating loss carryforwards. Dave Cole, Chief Executive Officer of Coinstar Inc. stated, "In 2003, our organization once again pulled together to deliver excellent results. We boosted same-unit-performance significantly and broadened relationships with many of our 280 retail partners. Looking ahead, our goal is to use our market leadership and improved balance sheet to place new units in the field, develop new products and services that complement our existing network, and enhance our value add to our retail partners. As we deliver on that goal over time, we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall increase our ability to generate profits for our retail partners and our shareholders." Recent Events During the fourth quarter, the Company entered into a new multi-year agreement with Kroger The Kroger Co. (NYSE: KR) is an American retail supermarket chain and parent company, founded by Bernard Henry Kroger in 1883 in Cincinnati, Ohio. It reported over US$60 billion in sales during its most recent fiscal year and is the top grocery retailer in the country and Co. The agreement includes certain renewal and termination provisions. The Company also launched its new payroll debit card debit card, card that allows the cost of goods or services that are purchased to be deducted directly from the purchaser's checking account. They can also be used at automated teller machines for withdrawing cash from the user's checking account. service in conjunction with FSV FSV Fire Support Vehicle FSV Formula Super Vee (racing cars) FSV Future Scout Vehicle FSV Feline Sarcoma Virus FSV Fuel Shutoff Valve FSV Field Support Vessel FSV Fort Saint Vrain Payment Systems Ltd. (FSV). Coinstar plans to expand access to electronic payroll services from FSV to nearly its entire 10,000-plus-machine network. Electronic payroll functionality is currently available at approximately 1,000 Coinstar Centers in supermarkets across the country, and by April of this year, most Coinstar Centers will be enabled with wage statement and balance inquiry features. Also during the quarter, Coinstar made significant progress expanding the prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. wireless TOP-UP(TM) service and the Truth(R)
prepaid MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and (R) Card. Retailer acceptance was strong during the
fourth quarter with the Company now being installed and operating in
over 600 locations with these services. This result was approximately
20% higher than previously announced 2003 goals."We are very pleased to extend our partnership with Kroger. We're we're Contraction of we are. we're we are already placing new units throughout their system, and are working closely at the local level to increase awareness and new usage," stated Rich Stillman Stillman is a surname, and may refer to:
Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. For the full year ended December 31, 2003, the Company repurchased 933,714 shares at an average price of $16.37 per share. The aggregate expenditure totaled $15.3 million. For the three months ended December 31, 2003, the Company repurchased 119,800 shares at an average price of $16.55 per share. The aggregate expenditure totaled about $2.0 million. 2004 Expectations Based on the current outlook, the Company is providing guidance for the quarter ending March 31, 2004, as follows: -- Revenue -- $38.5 to $40.5 million -- Fully diluted, fully taxed earnings per share -- $0.15 to $0.20 Coinstar is also providing updated guidance for the full year ending December 31, 2004, as follows: -- Revenue -- $178 to $188 million -- Fully diluted, fully taxed earnings per share -- $0.80 to $0.95 Conference Call Coinstar Inc. announced that a conference call to discuss the fourth quarter will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the today, Thursday Thursday: see week. , February February: see month. 5, 2004, at 4:30 p.m. Eastern time. The Webcast will be hosted at the Investor section of Coinstar's Web site at www.coinstar.com. About Coinstar Inc. Coinstar Inc. owns and operates the only multi-national network of supermarket-based machines that offer self-service coin counting and other electronic services. The company has more than 10,800 machines linked by a sophisticated interactive network throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , as well as in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and the United Kingdom. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Coinstar, Inc.'s anticipated growth and future operating results that involve a number of risks and uncertainties. These are forward-looking statements for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The words "believe," "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 for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . The forward-looking statements are not guarantees of future performance and actual results may vary significantly from the results expressed or implied in such statements. Differences may result from actions taken by Coinstar, Inc., as well as from risks and uncertainties beyond the Company's control. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause or contribute to such differences include, but are not limited to, the ability to bring new and repeat customers to Coinstar(R) machines, the ability to obtain new agreements with potential retail partners for the installation of Coinstar units and the retention of the current agreements with our existing retail partners on terms that are not materially adverse to the company, additional potential competitors, legal or governmental regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. action and uncertainties relating to the ultimate success of new business initiatives (including prepaid services and FSV), including but not limited to the ability to attract customers and reach agreements with retail and other partners. The foregoing list of risks and uncertainties is illustrative il·lus·tra·tive adj. Acting or serving as an illustration. il·lus tra·tive·ly adv.Adj. 1. , but by no means exhaustive. For more information on factors that may affect future performance, please review the most recent reports filed with the Securities and Exchange Commission by Coinstar, Inc. These forward-looking statements reflect Coinstar, Inc.'s expectations as of February 5, 2004. Coinstar, Inc. undertakes no obligation to update the information provided herein. Coinstar is a registered trademark of Coinstar, Inc. TOP-UP is a trademark of Pukka puk·ka also puck·a adj. 1. Genuine; authentic. 2. Superior; first-class. [Hindi pakk Inc., Coinstar, Inc.'s wholly-owned subsidiary. All other trademarks are the property of their respective owners. Appendix A (in thousands unless otherwise noted) Non GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures Non GAAP measures are provided as a complement to results provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP"). Non GAAP measures are not a substitute for measures computed in accordance with GAAP. Definitions of such non GAAP measurements are provided below. These definitions are provided to allow the reader to reconcile non GAAP data to that calculated in accordance with GAAP. Our non GAAP measures may be different from the presentation of financial information by other companies. (1) EBITDA represents earnings before net interest expense, income taxes, depreciation, and amortization. We believe EBITDA is an important non GAAP measure as it provides useful cash flow information regarding our ability to service, incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. or pay down indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and for purposes of calculating certain debt covenants. In addition, management uses such non GAAP measures internally to evaluate the Company's performance and manage its operations. See below for reconciliation of most comparable GAAP measurements to EBITDA.
Quarter ended Year ended
Dec. 31, 2003 Dec. 31, 2003
Net cash provided by operating
activities $ 20,397 $ 53,502
Changes in operating assets and
liabilities (6,369) 3,690
Other non-cash items - 65
Net interest expense 182 1,000
Cash paid for taxes 232 1,015
------------- --------------
EBITDA $ 14,442 $ 59,272
============= ==============
(2) We believe free cash flow is an important non GAAP measure as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness and repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. our common stock. Free cash flow may be reconciled from net cash provided by operations, the most directly comparable GAAP measure, as follows:
Quarter ended Year ended
Dec. 31, 2003 Dec. 31, 2003
Net cash provided by operating
activities $ 20,397 $ 53,502
Changes in operating assets and
liabilities (6,369) 3,690
Capital expenditures (7,629) (24,891)
------------- --------------
Free cash flow $ 6,399 $ 32,301
============= ==============
(3) Certain measures of net income and earnings per share included in the footnoted sentences are non GAAP measures. We have provided these numbers because we believe they help provide shareholders a meaningful method to compare the quarter on quarter and year on year net income and earnings per share excluding the effect of the one-time tax benefit of approximately $42.6 million that the Company recognized in the fourth quarter of 2002.
Coinstar, Inc.
Consolidated Statements of Operations(1)
(in thousands, except per share data)
(unaudited)
Three months ended Year ended
----------------- -------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
------- ------- -------- --------
Revenue $46,366 $41,651 $176,136 $155,675
Expenses:
Direct operating 20,590 18,010 76,826 67,788
Sales and marketing 4,730 3,239 11,119 9,273
Product research and
development 1,389 1,249 5,772 4,997
Selling, general and
administrative 5,222 5,510 23,200 22,140
Depreciation and
amortization 7,282 6,428 27,144 25,810
------- ------- -------- --------
Income from operations 7,153 7,215 32,075 25,667
Other income (expense):
Interest and other
income, net 41 92 263 309
Interest expense (216) (457) (1,210) (3,710)
Early retirement of
debt -- -- -- (6,308)
------- ------- -------- --------
Income before income taxes 6,978 6,850 31,128 15,958
Income taxes (2,548) 42,555 (11,573) 42,555
------- ------- -------- --------
Net income $ 4,430 $49,405 $ 19,555 $ 58,513
======= ======= ======== ========
Net income per share:
Basic $ 0.21 $ 2.25 $ 0.91 $ 2.68
Diluted $ 0.21 $ 2.17 $ 0.90 $ 2.58
Weighted shares outstanding:
Basic 21,264 21,996 21,489 21,820
Diluted 21,490 22,720 21,788 22,723
Capital expenditures $ 7,629 $ 6,166 $ 24,891 $ 22,375
(1) These consolidated statements of operations are prepared in
accordance with accounting principles generally accepted in the
United States of America.
Coinstar, Inc.
Consolidated Balance Sheets(1)
(in thousands)
(unaudited)
December 31, December 31,
2003 2002
------------ ---------
Assets
Current assets:
Cash and cash equivalents $ 38,882 $ 41,560
Cash being processed 60,782 61,283
Deferred income taxes 10,161 10,096
Prepaid expenses and other
current assets 3,043 2,409
------------ ---------
Total current assets 112,868 115,348
Property and equipment:
Coinstar units 176,329 156,182
Computers 9,197 8,882
Office furniture and equipment 1,382 1,291
Leased vehicles 3,957 4,314
Leasehold improvements 705 681
------------ ---------
Total property and equipment 191,570 171,350
Accumulated depreciation (130,800) (110,807)
------------ ---------
Total property and equipment, net 60,770 60,543
Deferred income taxes 28,665 39,719
Other assets, net 1,771 1,026
------------ ---------
Total assets $ 204,074 $ 216,636
============ =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,128 $ 3,176
Accrued liabilities payable to
retailers 60,782 61,283
Accrued liabilities 9,513 10,180
Current portion of long-term debt and
capital lease obligations 14,188 14,916
------------ ---------
Total current liabilities 86,611 89,555
Long-term debt and capital lease
obligations 3,273 21,830
------------ ---------
Total liabilities 89,884 111,385
Stockholders' equity:
Common stock 191,370 187,473
Accumulated deficit (55,798) (75,353)
Treasury stock (22,783) (7,496)
Accumulated other comprehensive income 1,401 627
------------ ---------
Total stockholders' equity 114,190 105,251
------------ ---------
Total liabilities and
stockholders' equity $ 204,074 $ 216,636
============ =========
(1) These consolidated balance sheets are prepared in accordance with
accounting principles generally accepted in the United States of
America.
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