Coinstar Reports $2 Billion Annual Revenue In 2012

Coinstar, Inc. recently announced financial results for the fourth quarter and full year ended Dec. 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., in a prepared statement. "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."

"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 results

Revenue for the fourth quarter of 2012 increased 8.4 percent to $564.1 million compared with the fourth quarter of 2011, driven primarily by Redbox revenue growth of 9.6 percent 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 percent, compared with operating income of $54.7 million and an operating margin of 10.5 percent 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 percent 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 percent compared with 2011. Operating income for 2012 was $262.8 million, which resulted in an operating margin of 11.9 percent, compared with operating income of $209.9 million and an operating margin of 11.4 percent 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 percent. 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 Dec. 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 Dec. 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.

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