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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
Stock Signaling
27 Nov 14 19:31:03
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Stefano
27 Nov 14 15:22:52
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Ticker Report
27 Nov 14 08:33:28
B. Riley Raises Outerwall Price Target to $62.00 $OUTR http://t.co/sbJrOEkrhY
HotKeyTrading
27 Nov 14 00:30:14
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26 Nov 14 19:31:02
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TipRanks
26 Nov 14 12:23:45
3-star analyst Michael Pachter from Wedbush reiterated a BUY on $OUTR. http://t.co/mQ0DKBmnND #NASDAQ #stocks #OUTR
Jason
26 Nov 14 12:06:07
u know its a bull market when even $OUTR is back near all time highs
Stock Signaling
26 Nov 14 11:31:23
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26 Nov 14 10:01:05
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Stock Signaling
26 Nov 14 09:31:06
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danrocks
26 Nov 14 08:58:59
Right now OUTR is number 84 for the largest percentage gain out of 250 stocks. $OUTR OUTR is up +12.69% in the http://t.co/VdmZXsAPrU
danrocks
26 Nov 14 08:58:36
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dough
26 Nov 14 07:33:15
down some on $OUTR idea. in small currently will wait for afternoon to see where it firms up before playing some MFK with it.
dough
26 Nov 14 07:05:34
working into some $OUTR swing long 6960
InterCooler
26 Nov 14 06:55:04
Outerwall Raised to “Outperform” at Northland Securities $OUTR http://t.co/6QIsKfk9oE
RickLejeune
26 Nov 14 05:05:22
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Kurt Grela
26 Nov 14 04:33:26
RT @jannarone: This may be the last thing saving DVDs from Apple - my story on the fate of the Redbox kiosk http://t.co/7ZIS4Un1od $OUTR $A…
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26 Nov 14 00:59:57
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HotKeyTrading
25 Nov 14 18:30:04
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FlashRatingsHOT
25 Nov 14 16:40:50
$OUTR has 3 analyst ratings in the last 7 days and 66% are positive. Median target: $82 (15% upside). https://t.co/6Ea2Zkpf8Y #OUTR
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25 Nov 14 16:30:03
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25 Nov 14 14:52:39
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25 Nov 14 14:08:17
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25 Nov 14 13:02:47
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Stock Signaling
25 Nov 14 12:31:44
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retardedbear
25 Nov 14 11:45:37
long and flip, holding long, short and cover - all 3 strategies have made ppl $ in $outr- the only 1 that didn't work so far - holding short
John Jannarone
25 Nov 14 11:23:11
This may be the last thing saving DVDs from Apple - my story on the fate of the Redbox kiosk http://t.co/7ZIS4Un1od $OUTR $AAPL $AMZN $NFLX
NewsTalk
25 Nov 14 10:18:00
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Stock Signaling
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Ticker Report
25 Nov 14 09:14:31
Outerwall Upgraded by Northland Securities to “Outperform” $OUTR http://t.co/IMMWwEMyFl
Sleek Money
25 Nov 14 09:07:34
Outerwall Price Target Raised to $62.00 $OUTR http://t.co/MkRzriU9co
Livevol Community
25 Nov 14 09:00:06
HIGH PUT VOLU $AUQ 15263% $CEO 5059% $RNA 1641% $TIBX 1366% $DSW 775% $OUTR 758% $THC 687% $TSEM 614% http://t.co/gwzPxhFaBv
Media Sentiment
25 Nov 14 08:59:40
$OUTR received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 263
OTPicks.com
25 Nov 14 08:57:18
http://t.co/WZ6FGvJQNb maytepper: $OUTR Wedbush Reiterates Outperform On Outerwall Follo... http://t.co/57AE3SfcZZ http://t.co/WZ6FGvJQNb
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25 Nov 14 08:57:16
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O T P i c k s . com
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danrocks
25 Nov 14 08:56:03
Right now OUTR is number 91 for the largest percentage gain out of 250 stocks. $OUTR OUTR is up +12.82% in the http://t.co/aPT5YSXFjK
danrocks
25 Nov 14 08:55:42
$OUTR OUTR Stock is number 91 for the largest percentage gain out of 250 stocks. $OUTR OUTR is up +12.82% in the las http://t.co/JCOCtNmRvY
Smarter Analyst
25 Nov 14 08:05:08
$OUTR Wedbush Reiterates Outperform On Outerwall Following Broad Prices Increases http://t.co/Wguf1Rg6Ez
				
				
By  +Follow December 10, 2013 9:47AM
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