Outerwall Reports Steady Q4 And FY Sales Redbox Slides And Pulls Out Of Canada

BELLEVUE, WA -- Outerwall Inc., the self-service retailer best known for its Redbox DVD rental and Coinstar coin-counting machines, reported fourth-quarter sales of $600.6 million and earnings per share of $2.35 for its continuing operations, up from $593.7 million and $1.55 in the year-ago quarter.

The company's Redbox segment logged $494 million in sales in the fourth quarter, down slightly from $496.4 million a year ago, despite raising DVD rental rates in December.

Outerwall has shut down its Redbox operations in Canada; business there "is not meeting the company's performance expectations," Outerwall said in its fourth-quarter earnings report, released in early February. The last day for DVD rentals in Canada was Feb. 13, and most of the 1,400 kiosks and their contents will have been sent to the U.S. by the end of March, according The Globe and Mail, a Toronto-based newspaper.

Outerwall said it will take a $1.5 million charge in the fourth quarter related to the closure, and an additional write-off in the first quarter as its business in Canada winds down.

The Coinstar segment had revenue of $81.9 million, compared with $80.7 million in the fourth quarter of 2013. The 1.5% increase was due to growth in the installed base of Coinstar Exchange kiosks and a price increase in the UK. Same store sales grew 3.3% in the fourth quarter. Segment operating income was $33.6 million, an increase of 8.9% compared with the fourth quarter of 2013.

In the New Ventures segment, mainly consisting of ecoATM, revenue was $24.7 million compared with $16.6 million in the fourth quarter of 2013. Beginning in the first quarter of 2015, Outerwall expects to report ecoATM results as a separate segment. The ecoATM is an automated trade-in and recycling station for cellphones, tablets and MP3 players.

For the year, the company logged sales of $2.30 billion and earnings per share of $5.19, down from $2.31 billion and $7.33 a year ago. Outerwall made its latest financial report available in early February.

The company also said it would be paying its first-ever quarterly dividend: 30¢ a share on Mar. 18. Its board also approved an additional share-repurchase authorization of up to $250 million.

Click here to Outerwall's complete fourth-quarter and full-year report.

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