Outerwalls Redbox Q1 Revenue Loss Is Offset By Coinstar And EcoATM Gains

BELLEVUE, WA -- Outerwall Inc. said declines in movie rentals from its Redbox vending machines in the first quarter of 2016 were offset by higher sales at its Coinstar coin-counting and ecoATM electronics recycling kiosks.

For the quarter ended March 31, Outerwall earned $38.5 million, or $2.29 a share, compared with $35.6 million, or $1.87 a share, a year earlier. Revenues of $536 million fell nearly 12% year over year.

Redbox revenue fell to $421.5 million from $519.5 million in the first quarter of 2015, resulting from an $87.8 million decrease in same-store sales and $10.2 million decline attributable to the company's removal and relocation of underperforming kiosks.

Redbox rentals declined to about 137.7 million in the first quarter from 173 million a year earlier. The drop in movie rentals was partially offset by a 16.4% higher total box office of movie titles released than the prior year, and an increase in videogame rentals. Holiday sales of new generation gaming platforms, which increased demand for new content released at the end of 2015, drove videogame rentals at Redbox machines.

In the ecoATM segment, the net operating loss decreased to $5.7 million in the first quarter of 2016, compared with $8.3 million in the first quarter of 2015. Revenue in the ecoATM segment almost doubled from $22.3 million to $42.1 million. At the end of the quarter, Outerwall had an installed base of 2,540 ecoATM kiosks, an increase of 400 over the comparable 2015 period.

Coinstar income climbed 9.3% to $24.6 million. Revenue was $72.4 million, up 4.4%, from $69.3 million year over year.

"During the quarter, we continued to reduce expenses, create efficiencies and optimize our kiosk networks to improve profitability," said Outerwall chief financial officer Galen C. Smith.