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Outerwall Cuts Staff, Nixes Three Ventures as Part of Restructuring

By  +Follow December 10, 2013 9:47AM
Tickers Mentioned:

Outwall Inc. ($OUTR), the company formerly known as CoinStar, on Tuesday elaborated on previously announced restructuring initiatives, saying that it is expanding its credit facility, firing employees, shuttering certain new ventures and making a change in Redbox management.  Outerwall has been under pressure to make moves since activist investor Barry Rosenstein’s Jana Partners disclosed in October that it has taken a 13.5-percent stake in the company.  Rosenstein said at that time that everything was on the table at Outerwall, including a possible sale of the company.

Out With the New

Outerwall said that it is discontinuing venture concepts Rubi (a coffee kiosk), Crisp Market (a kiosk selling prepared foods) and Star Studio (a photo booth).  The unwinding of the three programs is expected to be substantially completed by the end of Q1 2014 and result in a one-time charge of $26 million to $29 million in the fourth quarter.  The abandoned ventures are being put on the shelf with Orango, an automated retail concept that provides consumers deals on electronics through kiosks that was discontinued earlier this year.

The company will continue to invest in ecoATM, a kiosk that gives users cash for electronics like cell phones and tablets, as well as SAMPLEit, a kiosk that lets people sample a brand before buying the full-size product.  With SAMPLEit, consumers pay $1 to try versions of skincare products, snacks, cosmetics and other items and receive a coupon towards the purchase of a full-size version of the product.

Out With the Old

With the latest moves, Redbox president Anne Saunders has stepped down after just over a year at the position.   No reason was given for Saunders exit.  Outerwall CEO J. Scott Di Valerio will oversee the existing management team filling the void in duties left by Saunders until a permanent replace can be found.

Leaving with Saunders were 251 employees, or 8.5% of Outwall’s staff, as part of the venture closures and addition expense reductions.

In With the New

Outerwall increased its existing senior secured credit facility to provide an additional $350 million of debt to meet its target net leverage range of 1.75x to 2.25x net debt to care adjusted EBITDA in Q1 2014.

Jana has been pushing Outerwall to return a portion of its cash horde to shareholders and is making an impact with its wishes.  Outerwall said it plans to repurchase $195 million of its stock this year, exceeding its target by returning more than 100 percent of its free cash flow in 2013.  $50 million more in repurchases is expected by the end of January 2014.

The company also provided new guidance, raising its full-year adjusted earnings outlook to a range of $5.44 - $5.59 per share from a previously guided range of $4.89 - $5.04 per share.  The new forecast sailed past analyst expectations of $4.85 per share.

Shares of Outerwall have opened the day trading higher by more than 2 percent at $66.33.  Through Monday’s close, shares of OUTR were up about 25 percent this year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

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Results for OUTR
vanja hadzic
25 Oct 14 04:52:02
RT @valuewalk: Sahm Adrangi Of Kerrisdale Is Bullish On SSNC And CTSH http://t.co/MB5JP3s32E $SSNC $CTSH $OUTR $HD $NFLX
24 Oct 14 11:46:15
Sahm Adrangi Of Kerrisdale Is Bullish On SSNC And CTSH http://t.co/MB5JP3s32E $SSNC $CTSH $OUTR $HD $NFLX
24 Oct 14 10:28:21
Charter Bridges Brian Zied likes Outerwall $OUTR, at the Ira Sohn Canada conference #stocks
24 Oct 14 08:14:58
Outerwall Inc (OUTR) 56.66 $OUTR Latin Business Association Honors ecoATM; Presented 2014 Green Business of th http://t.co/Ilov8r7Tgf
24 Oct 14 06:05:08
Outerwall : Latin Business Association Honors ecoATM; Presented 2014 Green Business of the Year Award at 38... http://t.co/aLEiJauBZb $OUTR
24 Oct 14 06:03:07
$OUTR - Latin Business Association Honors ecoATM; Presented 2014 Green Business of the Year Award at 38th http://t.co/gwQfq8strq
24 Oct 14 05:50:05
Outerwall : Redbox Play Pass Gives Customers a New Way to Earn Free Movie Nights http://t.co/3YopvB7mLh $OUTR
Sam Sa
23 Oct 14 14:57:03
$AMZN video slowdown a positive for $OUTR? #graspingatstraws #stillunderwater
23 Oct 14 13:35:06
Outerwall : Redbox : Launches Its First National Loyalty Program http://t.co/jQ8yKADzQl $OUTR
Penny Stock Secret
23 Oct 14 13:13:36
The Hottest Way to Make Millions From Stock Market.Click HERE http://t.co/AJZWTGD3tb .. $FAST $OUTR $EROC
John Morgan
23 Oct 14 10:14:23
Here's my new Street Authority piece on Redbox owner Outerwall $OUTR -- an unloved low-tech #stock with potential. http://t.co/k5sHPYknlY
22 Oct 14 13:10:55
OUTERWALL : Termination of a Material Definitive Agreement (form 8-K) http://t.co/xhCDZiFCj7 $OUTR
22 Oct 14 13:10:26
$OUTR - Current Report Filing (8-k) http://t.co/yT7YD7QmbM
Instrumental Data
22 Oct 14 13:08:21
OUTERWALL INC $OUTR 8-K now available
Victor E Villagomez
21 Oct 14 12:17:39
$OUTR The naysayers may be very wrong
21 Oct 14 12:16:25
$OUTR - Statement of Changes in Beneficial Ownership (4) http://t.co/3Gj0GpAak5
20 Oct 14 06:18:47
Bearish looks... $JCOM $CRI $PLCE $MDT $OMI $PCG $AGU $CBOE $FOSL $OUTR Many more... will list more as day goes on
By  +Follow December 10, 2013 9:47AM



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