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Outerwall Cuts Staff, Nixes Three Ventures as Part of Restructuring

By  +Follow December 10, 2013 9:47AM
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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. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for OUTR
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2 Sep 15 03:07:06
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1 Sep 15 10:10:03
$OUTR: Outerwall Inc. (NASDAQ:OUTR) Expected to Report $1.65: http://t.co/zAgGxcwec6
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1 Sep 15 08:51:22
Outerwall Given Average Recommendation of “Hold” by Analysts $OUTR http://t.co/eG4bDSW09s
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1 Sep 15 08:42:10
Outerwall Given Average Recommendation of “Hold” by Analysts $OUTR http://t.co/Kvuvnaq1dd
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1 Sep 15 08:40:15
Outerwall Given Average Recommendation of “Hold” by Analysts $OUTR http://t.co/sDaOYxbHZR
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30 Aug 15 09:13:02
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30 Aug 15 05:42:33
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30 Aug 15 05:33:27
$OUTR - Outerwall Cut to Hold at TheStreet #OUTR http://t.co/uNKdk11PQm
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29 Aug 15 12:26:37
OUTR -0.56% Stock Charts $OUTR Outerwall Inc. (NASDAQ) Last Updated: 08/29/2015 14:26:42 OUTR Stock Chart - 1 http://t.co/IyP84Y7SDJ
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28 Aug 15 03:00:04
$OUTR: Outerwall Inc. (NASDAQ:OUTR) Price Target Update: http://t.co/SJC4beFhOU
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27 Aug 15 12:13:04
$OUTR: Will Outerwall Inc. (NASDAQ:OUTR) Surprise Analysts?: http://t.co/OYKNmro0Kb
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27 Aug 15 08:00:40
A bullish Big MAC (Bullish) has occurred at 10:00 AM Aug 27 at $62.05 on Outerwall Inc (OUTR) $OUTR
Alexander Morris
27 Aug 15 06:39:44
$OUTR: Exc 1DyHIGH=62.08, hits:1, ch:+1.9%, 0NearHi, 3:3Accel+, tf:0111111, FirmTrnd-:+75%, lowFlt:16M, HiPctSht[45%:9d], PrvClGap+[+1.7%]
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26 Aug 15 10:00:46
A bullish Big MAC (Bullish) has occurred at 12:15 PM Aug 26 at $62.06 on Outerwall Inc (OUTR) $OUTR
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26 Aug 15 09:00:59
A bullish Big MAC (Bullish) has occurred at 11:30 AM Aug 26 at $61.89 on Outerwall Inc (OUTR) $OUTR
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25 Aug 15 17:30:03
$OUTR hit a low of 58 yesterday. http://t.co/Z8o7KcIB1H
BreakingStocksNews
25 Aug 15 13:10:02
$OUTR: New SEC Filing for OUTR: Form S-3ASR (No. 0001193125-15-301612): http://t.co/i7Miwwmupn
Latest SEC Filings
25 Aug 15 13:09:19
NEW SEC Filing for $OUTR filed a moment ago: http://t.co/8VNbwidkaJ http://t.co/uHgkFj6cJz
				
				
By  +Follow December 10, 2013 9:47AM
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