Coinstar Posts Continued Strong Growth in the Second Quarter of 2000; Launches New Ad Campaign and Announces New Product Development.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)--Aug. 3, 2000 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 strong revenue growth and record cash flow before marketing from its core business in the second quarter of 2000. 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. Core Business Revenues for the United States core business were $24.5 million in the second quarter of 2000, an increase of 35 percent over the second quarter of 1999. Comparable revenues (for machines installed in the same location for more than one year) increased 12 percent. Direct contribution increased 38 percent to $12.9 million, as the direct contribution margin expanded to 52.6 percent in the second quarter of 2000, from 51.1 percent in the second quarter of 1999. 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 before marketing increased 59 percent to $8.1 million in the second quarter of 2000. As planned, the company had significantly higher marketing expenses related to the new advertising campaign. "We are investing in marketing activities to expand our loyal customer base and build brand equity for the future," said Dan Gerrity, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Coinstar. "Even with the stepped up investment in marketing, EBITDA increased 10 percent in the second quarter and for the first half of the year totaled almost $10 million." During the second quarter, the company installed 328 new units, bringing the total in the United States to 7,673 as of June June: see month. 30, 2000. For the first half of 2000, revenues, direct contribution, and EBITDA increased 34 percent, 37 percent, and 47 percent, respectively, from the first half of 1999. "We again demonstrated the excellent cash flow and growth characteristics of our core business," said Dan Gerrity. "In addition, we announced the development of new services that will leverage the coin counting infrastructure and launched a new advertising campaign to build usage and brand awareness." Effective Marketing In the second quarter of 2000, Coinstar launched a new advertising campaign designed to drive coin volume and build awareness of the Coinstar brand. "Eighty percent of our customers indicate that they would use our service again," explained Rich Stillman Stillman is a surname, and may refer to:
annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. stream, given the high repeat nature of our business." The new advertising was launched May 15, 2000, supporting roughly one-third of Coinstar's business. "During the second quarter, advertising met both goals by producing incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue growth and significantly enhancing consumer awareness of the Coinstar brand," said Stillman. In the third quarter, the company plans to extend this advertising into geographic areas representing approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two-thirds of its business. Coinstar also expanded the use of promotions with well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. brands to increase its visibility and offer greater value to its customers. Following its successful national promotion with the U.S. Mint, Coinstar announced two additional promotions in the second quarter. The "Lights, Camera, Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. " sweepstakes sweepstakes, contest or race, usually a horse race, on which a lottery is run. Prizes are awarded to the holders of winning tickets. In the case of a horse race, the draw is made from the names of all the horses entered in the race and vast numbers of blanks. , which teamed Coinstar with the Disney Channel  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. , targeted the teen market. In the late summer,
Coinstar is joining with Wherehouse
The Wherehouse, officially titled A. Wherehouse, is a warehouse located at 55 Pond Street in Waltham, Massachusetts. Music to offer a $3 savings coupon A certificate evidencing the obligation to pay an installment of interest or a dividend that must be cut and presented to its issuer for payment when it is due. Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer to customers who process at least $10 of change through a Coinstar machine. Leveraging the Network During the second quarter, Coinstar announced plans to use its nationwide network of more than 7,600 supermarket-based machines to deliver printable print·a·ble adj. 1. Capable of being printed or of producing a print: printable negatives. 2. Fit for publication: printable language. items ordered 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 . This service will give consumers a convenient place to pick up tickets to entertainment events, coupons COUPONS. Those parts of a commercial instrument which are. to be cut, and which are evidence of something connected with the contract mentioned in the instrument. They are generally attached to certificates of loan, where the interest is payable at particular periods, and, when the , and other high-value items. The company also announced an agreement with DataWave Systems (CDNX CDNX See Canadian Venture Exchange (CDNX). : DTV (Digital TeleVision) Transmitting TV using digital signals. The major DTV standards are ATSC (North America), DVB (Europe) and ISDB (Japan). All three use MPEG-2 video compression and Dolby Digital audio compression. DVB and ISDB also include MPEG audio compression. .V, OTCBB OTCBB See OTC Bulletin Board (OTCBB). : DWVSF) to develop the delivery of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. cash cards through its nationwide
network."We've we've Contraction of we have. we've have invested heavily in the infrastructure to support our coin counting business. Now we can lever lever, simple machine consisting of a bar supported at some stationary point along its length and used to overcome resistance at a second point by application of force at a third point. The stationary point of a lever is known as its fulcrum. these unique assets -- including our coast-to-coast coast-to-coast adj. Reaching, airing, or traveling from one coast to another, especially across a nation or continent: a coast-to-coast flight; coast-to-coast sports coverage on TV. interactive network of machines, world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. field service organization, and strong retailer relationships -- to offer new products and services, thereby layering additional revenue streams on top of our existing, rapidly expanding revenue base," stated Gerrity. Coinstar International Coinstar now has pilot units with the top three supermarket supermarket Large retail store operated on a self-service basis, selling groceries, produce, meat, bakery and dairy products, and sometimes nonfood goods. Supermarkets were first established in the U.S. during the 1930s as no-frills retail stores offering low prices. retailers in the United Kingdom. During the second quarter, the company installed a pilot with Asda, the United Kingdom's third largest food retailer, and extended its test with Sainsbury. "As with our other U.K. pilots, the Asda installation is performing above expectations, and we are receiving excellent customer response to the Coinstar service," added Gerrity. Meals.com As announced in a separate release today, Coinstar's 89-percent owned subsidiary, Meals.com, continued to help food retailers and packaged goods Noun 1. packaged goods - groceries that are packaged for sale foodstuff, grocery - (usually plural) consumer goods sold by a grocer plural, plural form - the form of a word that is used to denote more than one manufacturers build their businesses. Through its family of Web sites and the Shopper in-store kiosk kiosk Originally, in Islamic architecture, an open circular pavilion consisting of a roof supported by pillars. The word has been applied to a Turkish summer garden pavilion and a type of early Persian mosque. , Meals.com uses the power of technology to connect consumers, retailers, and manufacturers in a highly targeted manner. "The pilot of Meals.com's Shopper at Ukrop's is progressing well," said Jens JENS Japan Enhanced Network Services Molbak, CEO of Meals.com. "Furthermore, we've established momentum in signing additional advertisers and Web site partners. Meals.com now has agreements with ten advertisers and seven private-label versions of its Web site, compared with one private label Web site and five advertisers at the beginning of the year." "We've also demonstrated Meals ability to leverage Coinstar's key assets, including its excellent retailer relationships, extensive service capabilities, and sophisticated computer network," continued Molbak. "In addition, we greatly enhanced our management team with the addition of senior talent from well-respected consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and companies." Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Results On a consolidated basis, Coinstar's revenues increased 35 percent year-over-year, in the second quarter of 2000. EBITDA declined 33 percent, due to the consolidation of its rapidly developing subsidiary, Meals.com. The resulting net loss was $5.5 million, or 27 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with a loss of $4.1 million, or 26 cents per share, in the second quarter of 1999. "We continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the rich opportunities to expand our network of Coinstar machines," concluded Gerrity. "And we plan to add new products and services, leveraging our existing nationwide network and infrastructure." About Coinstar Inc. Coinstar Inc. (Nasdaq:CSTR) and its subsidiaries, Meals.com and Coinstar International, use technology to deliver time and money saving services to consumers in their local supermarkets. Coinstar's 7,600 strong network of machines is currently available to 125 million consumers in 42 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , as well as 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. Consumers can visit www.findcoinstar.com or call 800/928-CASH to find the nearest Coinstar(R) machine. 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. that involve a number of risks and uncertainties. Actual results could differ materially from the results identified or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in any forward-looking statement discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the risks that are more fully described under the caption "Risk Factors" included in the most recent reports filed with the Securities and Exchange Commission by Coinstar Inc.
Coinstar Business Segments
Selected Financial and Other Data
(Dollars in thousands)
(Unaudited)
Three months ended Six months ended
---------------------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
--------- ------- -------- ----------
United States Core
Revenue $ 24,521 $ 18,212 $ 45,447 $ 33,988
Expenses
Direct operating 11,627 8,900 21,907 16,789
-------- -------- -------- --------
Direct contribution(1) 12,894 9,312 23,540 17,199
Regional marketing 3,567 989 4,060 2,308
Product research
and development 808 669 1,552 1,386
Selling, general
and administrative 3,987 3,538 8,062 6,793
-------- -------- -------- --------
EBITDA(1) 4,532 4,116 9,866 6,712
Depreciation
and amortization 6,021 4,483 11,807 8,586
-------- -------- -------- --------
Loss from operations (1,489) (367) (1,941) (1,874)
Other income (expense)
Interest expense, net (1,548) (2,855) (2,864) (5,538)
Other 132 110 257 211
-------- -------- -------- --------
Net Loss $ (2,905) $ (3,112) $ (4,548) $ (7,201)
-------- -------- --------- ---------
International
Revenue $ 150 $ 46 $ 248 $ 61
Total operating expenses $ 358 $ 496 $ 689 $ 831
Meals.com
Revenue $ 43 -- $ 57 --
Total operating expenses $ 2,261 $ 469 $ 4,102 $ 591
Other Data
Consolidated capital
expenditures $ 7,215 $ 8,382 $ 12,483 $ 13,369
(1) Refer to the Company's Annual Report on form 10-K for
discussion and use of these measures.
Consolidated Statements of Operations
and Condensed Balance Sheets
(Dollars in thousands)
(Unaudited)
Three months ended Six months ended
------------------- -------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------------------- ------------------
Statements of Operations
Revenue $ 24,714 $ 18,258 $ 45,752 $ 34,049
Expenses
Direct operating 11,733 9,176 22,155 17,114
Regional marketing 3,567 1,012 4,059 2,331
Product research
and development 1,710 1,155 3,443 2,095
Selling, general
and administrative 5,502 3,628 10,558 7,009
Depreciation and
amortization 6,409 4,580 12,575 8,682
-------- -------- ------ --------
Loss from operations (4,207) (1,293) (7,038) (3,182)
Other income (expense)
Interest income 476 118 1,033 280
Interest expense (2,081) (2,993) (4,061) (5,844)
Other 68 19 131 62
-------- -------- ------ --------
Net loss before
minority interest (5,744) (4,149) (9,935) (8,684)
Minority interest 287 -- 537 --
-------- -------- -------- --------
Net loss $ (5,457) $ (4,149) $ (9,398) $ (8,684)
-------- -------- -------- --------
Net loss per share,
basic and diluted $ (0.27) $ (0.26) $ (0.46) $ (0.56)
Weighted shares
outstanding,
basic and diluted
(thousands) 20,239 15,852 20,216 15,607
June 30, June 30,
2000 1999
------- --------
Balance Sheets
Assets
Current Assets
Cash and cash
equivalents $83,692 $117,249
Short-term investments
available for sale -- 5,821
Prepaid expenses and
other current assets 4,477 1,525
-------- --------
Total current assets 88,169 124,595
Property and equipment, net 69,450 58,893
Other assets 5,474 3,727
-------- --------
Total $163,093 $187,215
-------- --------
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $5,042 $4,724
Accrued liabilities 44,126 32,658
Current portion of
long-term debt 777 1,443
-------- --------
Total current liabilities 49,945 38,825
Long-term obligations 61,372 91,120
Minority interest 4,963 --
Total stockholders' equity 46,813 57,270
-------- --------
Total $163,093 $187,215
-------- --------
Coinstar United States Core Business
Selected Quarterly Financial Data
(Dollars in thousands except per unit data)
(Unaudited)
Three Months Ended
---------------------------------------------
June 30, Sep. 30, Dec. 31, Mar. 31, June 30
1998 1998 1998 1999 1999
------- ------- ------- ------- --------
Number of new Coinstar
units installed 498 406 375 416 540
Installed base of Coinstar
units at end of period 4,029 4,435 4,810 5,226 5,766
Designated marketing areas 49 57 58 62 72
Average age of
network (months) 14.8 15.9 17.6 19.0 19.8
Average units installed 3,790 4,272 4,574 4,962 5,457
Dollar volume of
coins processed $139,625 $180,893 $187,241 $177,258 $204,629
Revenue $10,472 $13,567 $14,792 $15,776 $18,212
Annualized revenue
per average
installed unit $11,052 $12,704 $12,936 $12,717 $13,350
Direct contribution(1) $4,330 $6,426 $7,334 $7,887 $9,312
Direct contribution
margin (%) 41.4% 47.4% 49.6% 50.0% 51.1%
Annualized direct
contribution per average
installed unit $4,570 $6,017 $6,414 $6,357 $6,826
EBITDA(1) before
regional marketing $(485) $2,143 $2,987 $3,915 $5,105
Regional marketing $854 $930 $1,077 $1,319 $989
EBITDA $(1,339) $1,213 $1,910 $2,596 $4,116
EBITDA margin (%) (13%) 9% 13% 16% 23%
Depreciation and
amortization $3,120 $3,635 $3,668 $4,103 $4,483
Interest expense, net $2,262 $2,484 $2,619 $2,683 $2,855
Net loss $(6,669) $(4,847) $(4,302) $(4,089) $(3,112)
(1) Refer to the Company's Annual Report on form 10-K for
discussion and use of these measures.
Coinstar United States Core Business
Selected Quarterly Financial Data
(Dollars in thousands except per unit data)
(Unaudited)
Three Months Ended
--------------------------------------------
Sep. 30, Dec. 31, Mar. 31, June 30,
1999 1999 2000 2000
------- ------- ------- ----------
Number of new Coinstar
units installed 668 488 423 328
Installed base of
Coinstar units at
end of period 6,434 6,922 7,345 7,673
Designated marketing
areas 80 83 83 90
Average age of
network (months) 20.3 21.4 22.9 24.5
Average units
installed 6,116 6,691 7,130 7,477
Dollar volume of
coins processed $ 243,213 $ 245,315 $ 235,125 $ 275,512
Revenue $ 21,646 $ 21,833 $ 20,926 $ 24,521
Annualized revenue
per average
installed unit $ 14,158 $ 13,052 $ 11,740 $ 13,118
Direct contribution(1) $ 11,469 $ 11,363 $ 10,646 $ 12,894
Direct contribution
margin (%) 53.0% 52.1% 50.9% 52.6%
Annualized direct
contribution per
average
installed unit $ 7,501 $ 6,793 $ 5,973 $ 6,898
EBITDA(1) before
regional marketing $ 6,200 $ 6,802 $ 5,827 $ 8,099
Regional marketing $ 1,317 $ 2,756 $ 493 $ 3,567
EBITDA $ 4,883 $ 4,046 $ 5,334 $ 4,532
EBITDA margin (%) 23% 19% 25% 19%
Depreciation and
amortization $ 5,570 $ 5,628 $ 5,786 $ 6,021
Interest expense,
net $ 1,880 $ 1,327 $ 1,316 $ 1,548
Net loss $ (3,252) $ (6,210) $ (1,643) $ (2,905)
(1) Refer to the Company's Annual Report on form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for discussion and use of these measures. |
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