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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.


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Results for OUTR
AwesomeCalls
30 Sep 14 13:10:53
$OUTR Outerwall disclosed Universal is extending revenue sharing license agreement (56.10 +0.10)
NASDAQ
30 Sep 14 13:10:12
$OUTR - Current Report Filing (8-k) http://t.co/lxmaqQ6GXP
Instrumental Data
30 Sep 14 13:08:03
OUTERWALL INC $OUTR 8-K now available
OptionsQuest.com
29 Sep 14 11:49:46
RT @newamericano: $OUTR Outerwall it's the company that operates over 44,000 RedBox movie rentals all over the place.
Luis Gutierrez
29 Sep 14 08:24:13
$OUTR Outerwall it's the company that operates over 44,000 RedBox movie rentals all over the place.
Frederick Tremblay
27 Sep 14 08:28:05
Published $OUTR estimate on Estimize: +0.01 EPS and -0.63M Revs compared to Wall Street's consensus. http://t.co/qNv987Ycsh
Ophir Gottlieb
26 Sep 14 10:45:08
9-26-14: Daily Open Interest Report $OUTR $LGP $ENTA $THR $CLDT $BPX and more: http://t.co/H7tuN1QOhz
4-traders.com
25 Sep 14 16:55:02
Outerwall : to Report 2014 Third Quarter Financial Results on October 30, 2014 http://t.co/YFVjsws06k $OUTR
NASDAQ
25 Sep 14 16:08:02
$OUTR - Outerwall Inc. to Report 2014 Third Quarter Financial Results on October 30, 2014 http://t.co/mxfQVW01Mz
Sam Sa
25 Sep 14 12:13:55
$OUTR surprisingly green today. Yes, I'm still in this loser of a stock
Alexander Morris
25 Sep 14 06:58:24
$OUTR: Exc 1DyHIGH=56.13, hits:2, ch:+0.3%, tf:0111111, LowFlt[16.1M], HiPctSht[35%:8d], DyVol:35T:0.1x:0x, DyRng:1.2%:0.6x:0.5x
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24 Sep 14 22:30:03
Outerwall : Launches #KioskSelfie Sweepstakes in the Pacific Northwest http://t.co/FFyoOJ6mAv $OUTR
Dave Neville
23 Sep 14 08:47:36
Can the iPhone 6 Be the Boost Outerwall, Inc. Needs? ($AAPL, $OUTR): http://t.co/xY6j3TQJeG via @themotleyfool
Daniel Plata
22 Sep 14 20:57:12
RT @Variety: Studio Deal Renewals Could Hurt Redbox, Analyst Warns http://t.co/5RWmGBwJaY $OUTR
Dick Sowa
22 Sep 14 19:53:26
Variety: "Studio Renewals Could Hurt Redbox, says Analyst" ex Warner exec Mark Horak now at Redbox will help: http://t.co/rxsMvduAjS $OUTR
				
				
By  +Follow December 10, 2013 9:47AM
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