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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
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
16 Oct 14 08:35:42
RT @StockSignaling: Top Stocks (By Trading Liquidity): $CIEN $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR ht…
Stock Signaling
16 Oct 14 07:01:39
Top Stocks (By Trading Liquidity): $CIEN $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR http://t.co/Vtx6dLy0Nw
16 Oct 14 01:34:45
RT @StockSignaling: Top Stocks (By Trading Liquidity): $CIEN $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR ht…
15 Oct 14 16:57:09
$NFLX Growth stagnated. Perhaps always will lead & kills Rivals ($VZ $OUTR) international is where they need focus. Saturated in N. America.
Stock Signaling
15 Oct 14 16:31:19
Top Stocks (By Trading Liquidity): $CIEN $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR http://t.co/Vtx6dLy0Nw
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15 Oct 14 15:06:36
Secret That Has Made GREG, And 22 of his friends and family members MILLIONAIRES! FIND HERE http://t.co/SVqoMkrw2z .. $FAST $OUTR $EROC
15 Oct 14 14:40:30
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Leilani Pips
15 Oct 14 14:28:00
RT @paully_steaks: @PipsToDollars $OUTR outerwall formerly COINSTAR
15 Oct 14 14:25:57
@PipsToDollars $OUTR outerwall formerly COINSTAR
15 Oct 14 13:57:30
RT @StockSignaling: Top Stocks (By Trading Liquidity): $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR $SLCA ht…
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15 Oct 14 13:31:11
Top Stocks (By Trading Liquidity): $CMCM $RBCN $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR $SLCA http://t.co/Vtx6dLy0Nw
Strubel Invst. Mgmt.
15 Oct 14 13:17:54
$NFLX well on it's way to destroying $OUTR ...or not
Stock Signaling
15 Oct 14 09:31:02
Visual Stock Comparison Tool: http://t.co/Vtx6dLy0Nw : $JBLU $MU $CLF $AMBA $GDP $BBG $AREX $SN $OUTR $APT $AUXL $ARWR $SCTY $GLUU $AKS #spy
15 Oct 14 07:55:07
Outerwall : Good-bye E-waste, Hello Green Cash http://t.co/MfUEzUxewc $OUTR
Sam Sa
15 Oct 14 07:54:05
$OUTR solidly green today...
15 Oct 14 07:46:45
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15 Oct 14 07:31:42
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15 Oct 14 07:01:16
Top Stocks (By Trading Liquidity): $SUNE $LIVE $BBG $CPE $AREX $GST $SN $SALE $RH $YOD $ECYT $OUTR $SLCA $YELP $CRK http://t.co/Vtx6dLy0Nw
By  +Follow December 10, 2013 9:47AM



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