Coinstar Provides Guidance for 2003 and 2004; Forecasts Continued Solid Growth and Expanding Net Income.

Business Editors

BELLEVUE, Wash.--(BUSINESS WIRE)--Nov. 20, 2002

Coinstar Inc. (Nasdaq:CSTR) today announced guidance for 2003 and preliminary financial targets for 2004, reflecting solid growth in the core coin counting business.

North American Core Business

For 2003, the company has provided the following guidance for its North American core business:

         Revenues                                 $167 to $173 million

         Direct contribution                      $94 to $99 million

         EBITDA                                   $57 to $62 million

         Net income                               $32 to $37 million

         Earnings per share                       $1.37 to $1.58

"We are actively pursuing new product opportunities that leverage our existing network--products that could provide substantial new revenue streams for Coinstar," said Dave Cole, chief executive officer of Coinstar. "As we plan for success, our 2003 guidance reflects expenses of an estimated $4 to $5 million, associated with several pilots and an active business development effort. However, we will not include any revenues from new products in our forecasts until we have a proven business model."

For North America, the company expects net installations of approximately 800 machines in 2003, and believes that the viable universe of high-traffic supermarkets in the United States is 13,000 to 15,000 locations.

The company anticipates North American capital expenditures of approximately $24 million in 2003, which include spending for new machines, the retrofitting of existing machines to the backlit design with touch screen monitors, hardware and software for new product pilots, and infrastructure items such as network upgrades, computer equipment, software, and fleet vehicles.

Machine refurbishment costs--which are included in direct operating expenses--are expected to double to approximately $2 million in 2003. "While the additional refurbishment costs will reduce direct contribution, this translates to capital expenditure savings," said Diane Renihan, chief financial officer of Coinstar.

"We anticipate continued expansion of our free cash flow, which gives us tremendous flexibility," added Renihan. "We will use our capital in the manner that provides the best value to our shareholders; over time, this may include supporting new product rollouts, additional geographic expansion, or returning the cash to investors in the form of a dividend or a stock buyback."

As previously announced, for its North American core business, Coinstar expects 2002 revenues of $148.5 to $150.0 million, direct contribution of $84.0 to $85.5 million, EBITDA of $50.0 to $51.5 million, and net income from continuing operations of $21.5 to $23 million, or approximately $0.95 to $1.00 per share.

The preliminary forecast for Coinstar's North American core business for 2004 includes revenues of $183 to $193 million and EBITDA of $64 to $74 million, excluding any contribution from new products and services. "Given the preliminary nature of our forecasts for 2004, we do not plan to update them until we complete the 2004 budget process in late November 2003," added Renihan.

United Kingdom

For 2003, the company has provided the following guidance for its U.K. operations:

         Revenues                                 $9 to $11 million

         Direct contribution                      $3 to $5 million

         EBITDA                                   $0.5 to $2 million

As previously announced, the company expects 2002 revenues of $5.4 to $6.0 million and EBITDA of negative $100,000 to positive $300,000 for operations in the United Kingdom.

Coinstar's rollout in the United Kingdom is progressing, with approximately 500 installed machines anticipated by year-end 2002. Approximately 200 machine installations are planned in 2003. For 2003, U.K. capital expenditures are expected to be about $3 million, including spending for new machines, the retrofitting of existing machines to the backlit design, hardware and software for new product pilots, and infrastructure items. Depreciation is expected to be approximately $2 million in 2003.

Pro Forma Results

Pro forma results are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States ("GAAP"). Management uses such pro forma measures internally to evaluate the company's performance and manage its operations. Definitions of such pro forma measurements are provided below. These definitions are provided to allow the reader to reconcile pro forma data and GAAP.

Direct contribution is defined as revenue less direct operating expenses. We use direct contribution as a measure of operating performance to assist in understanding our machine operating results.

EBITDA represents earnings before net interest expense, income taxes, depreciation, amortization, non-cash compensation expense, and other income/expense. We believe EBITDA provides useful information regarding our ability to service and/or incur indebtedness.

Free cash flow is defined as EBITDA less capital expenditures less net interest expense.

Non-cash stock-based compensation represents charges associated with certain option grants to employees and/or non-employee directors.

About Coinstar Inc.

Coinstar Inc. owns and operates the only network of supermarket-based machines that offer coin counting and other electronic services. The company has more than 10,000 machines linked by a sophisticated interactive network throughout the United States, as well as in Canada and the United Kingdom.

This press release contains forward-looking statements relating to Coinstar'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 provisions under the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Forward-looking statements in this press release include statements relating to Coinstar's financial performance for 2002, 2003, and 2004. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause or contribute to such varying results include, but are not limited to, 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 in North America and the United Kingdom, the successful deployment and operation of our coin processing network, customer utilization of our service, and additional potential competitors. These and other risks 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 undertakes no duty or obligation to update the information provided herein. These forward-looking statements reflect Coinstar's expectations as of November 20, 2002.