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Executives

Dave Cole - CEO

Brian Turner - CFO

Richard Deck - CAO

Analysts

T.C. Robillard - Banc of America Securities

Simeon Gutman - Goldman Sachs

Alan Robinson - Royal Bank of Canada

Bruce Simpson - William Blair

Louis Corrigan - Kingsford Capital

Bob Evans - Craig-Hallum

Rob Amman - RK Capital

Eric Wold - Merriman Curhan Ford

Coinstar Inc. (CSTR) Q4 2007 Earnings Call February 7, 2008 5:00 PM ET

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Coinstar Incorporated fourth quarter 2007 Earnings Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, Thursday, February 7, 2008.

And now, I would like to turn the conference over to Mr. Dave Cole, CEO. Please go ahead, sir.

Dave Cole

Good afternoon and thank you for joining us. With me today is Brian Turner, our CFO.

Today we announced some great news with Wal-Mart and announced our results for the fourth quarter and the full year ended December 31, 2007. On today’s call, we are going to talk about those items plus our 4th Wall strategy. We will talk about the potential of our 4th Wall bundle of products and services for which I have never been more excited. Part of that excitement is today’s Wal-Mart announcement, which I believe is a direct result of the 4th Wall strategy we have been pursuing.

Part of the excitement is the growth in Coin, EPay, and Redbox businesses, the re-signing of two of our largest Coin customers to new multi-year contracts, and our 2007 cross-sale wins with retailers like Tesco, SUPERVALU, KMart, Walgreens, and other large retailers. They all demonstrate the power of our bundle and our ability to deliver value with that bundle in that model.

As most of you know, in 2004, we set out a plan to diversify Coinstar’s revenue and cash flow streams and to become the category captain for the 4th Wall by 2010. We also set the goal of 1 billion in revenues and 200 million in EBITDA by 2010, which looks very achievable to us at this point. And I believe that we achieved our results to-date by investing in a variety of 4th Wall businesses including Redbox and Entertainment.

So over the last four years, we have implemented our strategy and built our bundle block-by-block, and we are about to embark on an incredible three-year plan. While 2008 and especially the first quarter will see pressure on our EPS, by the end of this call, I think you will agree that 2009 and beyond have never looked better for our shareholders.

With that, let’s get this call started. Brian?

Brian Turner

I have to remind you that during the course of this call, various remarks we make about future expectations, plans and prospects for the company, constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Additionally, all financial information provided for Redbox is unaudited. Actual results may differ materially from expectations, plans and prospects, contemplated in these forward-looking statements as a result of various factors including those discussed in our previous 10-Qs and 10-Ks filed with the SEC.

I’d also like to point out that we will be discussing certain non-GAAP financial measures including, but not limited to, EBITDA, pro forma revenues and EBITDA and adjusted earnings per share on a historical and forward-looking basis during this call. These are non-GAAP financial measures under Regulation G.

Definitions of these non-GAAP financial measures, the importance of these measures to investors, and reconciliations of these measures to the most directly comparable GAAP measures can be found in today’s earnings release and related slides, which are posted in the About Us, Investor Relations section of Coinstar’s website at www.coinstar.com. A replay of this webcast will also be available on the About Us, Investor Relations section of our website.

Let me also note that we have posted a copy of today’s prepared remarks and a series of charts mentioned in today’s call to the About Us, Investor Relations section of our website. They are now up and available. We encourage you to go to our website and bring up these postings so that you may follow along with us.

Let me now turn the call back to Dave.

Dave Cole

Thanks Brian. Let me start by detailing the Wal-Mart announcement. We are very excited about today’s announced Coin and Redbox rollouts with Wal-Mart. These changes were born out of Wal-Mart’s decision to adapt their 4th Wall offerings and we were pleased to have played an important role in their plans.

On a net basis, today’s developments will significantly expand our relationship, and in our view, will serve as a key driver of our future revenue and EBITDA growth. Equally as important, we are pleased to have the opportunity to be a long term partner and help Wal-Mart achieve their goals.

Today’s announcement illustrates the power of bundling products and services. Three and half years ago when we entered the entertainment business, we believed we could create a better consumer 4th Wall experience through an integrated suite of products and in the process create more profit and traffic for our retailers. One of the stated objectives in that plan was to cross-sell other product lines to ACMI’s customers and particularly to their largest customer, Wal-Mart. Today we are announcing a major step forward in that strategy, one that Wal-Mart has embraced.

First, because we just completed a successful 800 store test, Wal-Mart has agreed to roll out Redbox kiosks to all their stores. This means that we will add up to 2,700 DVD kiosks on top of the 800 units we currently have with Wal-Mart, bringing the total number to approximately 3,500. We expect this rollout to begin shortly and will be completed in the next 12 to 18 months.

Second, because we also completed a successful 400 store coin kiosk test, Wal-Mart is planning a Coin rollout to appropriate stores in the chain. The exact scope of this rollout is still being discussed. But what we do know is that we will be surveying all Wal-Mart stores for coin units at the same time we survey for Redbox units. Wal-Mart has allowed us to disclose they are initially considering up to 2,000 incremental placements starting May 1st with units being installed over a 12 month period.

In conjunction with the installation of Coin and Redbox units, we will be removing or relocating approximately 50% of our Wal-Mart cranes, bulkheads and kiddie rides in the first two quarters of 2008. This comes as a result of Wal-Mart’s decision to change the look of many of their vestibules. When viewed collectively, we believe this mix shift will significantly enhance Wal-Mart’s consumer experience while producing more profit for them over the next three years.

For Coinstar, it will create a transition year in 2008 characterized by lower Entertainment revenue and increased Coin and Redbox investment. But beginning in 2009 and for the full year 2010, we will realize the full impact of the rollout on revenue, EBITDA and return on invested capital.

So as we look at the run rate starting in mid-2009, specifically as it relates to Wal-Mart, we project that the 3,500 Redbox units should contribute revenue of between $130 million and $150 million per year with EBITDA of between $26 million and $30 million. We project the expected 2,400 Coin units in the Wal-Mart system will add another $35 million to $45 million of revenue per year and $10 million to $15 million in EBITDA. This will be offset by a decrease in Entertainment accounts.

As such, we project our Entertainment revenues will contract by approximately $65 million to $75 million with a corresponding EBITDA drop of $15 million to $20 million. Therefore as a result of today’s Wal-Mart announcement, after all entertainment de-installs and Redbox and Coin installs, we expect to realize incremental revenue of between $100 million to $120 million per year with an extra $20 million to $25 million of EBITDA when all is said and done. And again, that excludes organic growth outside of Wal-Mart.

Let me shift gears now and talk about 2007 results. Turning to chart 1 on our website, let me review our expectations and guidance at the beginning of the year and how the results we achieved match these goals.

On February 8, 2007, we provided revenue guidance of $550 million to $580 million for fiscal 2007. We came within 1% of the range at $546.3 million. Our Coin, EPay and DVD businesses all met or significantly exceeded our revenue expectations. Although as we’ve mentioned throughout the year, our Entertainment business fell short.

Our EBITDA exceeded our estimates at $126.4 million, suggesting solid progress. Even backing out the Telco refund and like charges recorded in September, we generated $115.4 million in EBITDA, which implies a 21% margin. What is significant here is that our core growth businesses, which represent the future of Coinstar, all performed quite well despite significant pressure in entertainment. So, as CEO, I’m thrilled that our collection of growth businesses produced such solid revenue and EBITDA results in 2007.

In terms of Coin, we gave guidance of 7 to 8% revenue growth resulting from a combination of 800 to 1,000 net new Coin installs with 5 to 7% same-store sales. In reality, we posted 9% Coin revenue growth, 20% higher than expected and that was with all of the 2007 Coin installs still ramping.

The growth in the Coin business resulted primarily from installing over 1,900 net new Coin units, our largest installation year since 1999 and a phenomenal number. Even more positive is that in addition to the 340 Coin units installed at Wal-Mart, approximately 1,135 units were installed in grocery, 250 in the drug channel, 115 in banks, and 75 in diversified channels.

So for Coin, the bottom line is that the business greatly exceeded our guidance in 2007 and we are very optimistic about 2008 and beyond. In fact, we signed our two largest Coin retailers to two new multi-year contracts; Kroger which represents 20% of our Coin revenues signed a new multi-year contract effective October of 2007. SUPERVALU, which represents 7% of our Coin revenues, signed a new multi-year contract in January 2008. These two renewals combined with the amended Wal-Mart Coin contract will drive our Coin revenue for years to come.

In February 2007, we also gave guidance that entertainment would be down 10 to 15% during the year. The actual decline was 12.6%. Entertainment continues to face headwinds illustrated by retailers’ soft foot traffic, the China lead paint scare, and now the larger economic uncertainty.

Entertainment took another hit with the Wal-Mart news, although disappointing when looked at in isolation, Entertainment is part of our ongoing relationship with Wal-Mart, which is getting stronger and more diversified. We also gave guidance that we were going to increase the dollar value loaded on to stored value cards by over 20%. On a combined value basis for 2007, we achieved a 26% increase.

We loaded approximately $430 million on to telephony and gift cards versus $340 million in 2006 and just $188 million in 2005. That’s a compound annual growth rate of 50% over that time. And we said we were going to launch our stored value cards to the U.K. market and laid out an estimated range of 2,500 to 3,000 gift card mall locations by the end of 2007. This initiative has been very successful and we exited 2007 with more than 2,600 locations squarely within our guided range.

Our gift card mall has been adopted by Somerfield, WHSmith Stores, and Clinton Cards, all leading U.K. retailers. And the business achieved a six-fold increase over 2006 levels. We still see the entire category as a uniquely scalable opportunity and we have first mover advantage in the U.K..

Under the EPay umbrella is Coinstar Money Transfer. In 2007, the revenue on a pro forma basis grew 64% versus 2006 and all key metrics were directionally sound with average monthly transactions increasing by almost 80% over the course of the year.

We also officially added GroupEx to the mix on January 1, 2008. We are excited to have more depth internationally especially in the US to Latin American corridor and the opportunity to leverage our cost structure over a significantly higher revenue base.

Finally, we stated that Redbox and DVDXpress would install 3,000 to 4,000 units in 2007. We actually installed 4,800, 20% above the high-end of our expectation. For the year, DVD kiosks same-store sales increased 17%. As of December 31, 2007, our network grew to approximately 7,000 units. To put that in perspective, in just 24 months, our DVD business is almost half as large as our coin processing network, which took 14 years to build. So the DVD business achieved results far in excess of our expectations.

Turing to Chart 3, in terms of notable cross sells, in February 2007 we gave guidance that we were going to increase the number of locations with more than one of our products. And as part of that push, we wanted to sign Wal-Mart to both Redbox and Coin contracts. Fortunately, we achieved both of these goals and other notable sales in 2007 included Coin into Duane Reade, Morrisons, and Tesco, DVD into Wegmans, SUPERVALU, Save Mart, Walgreens, and Giant Eagle, Coin-to-card and e-certificates into CVS, Weis, Ahold, Ingles, Save Mart, and HEB.

Success here, in our view, is an emerging consensus among many retailers, they want to do business with fewer, more sophisticated partners, rather than scores of unrelated vendors.

In terms of CapEx, which is highlighted in Chart 4, we gave guidance of 50 to $55 million although we actually spent $84.3 million. This was due to the higher than expected Coin installs coupled with investments in Entertainment primarily for Wal-Mart. Specifically, we spent money on video and new crane machines for Wal-Mart at their request, and at the time, we believe that making those investments would be good for the long term partnership.

In our opinion these investments and our 4th Wall strategy were instrumental in cementing the relationship, which was underscored by the announcement today. By the way, CapEx related to entertainment for the fourth quarter totaled only $4.6 million, a significant reduction from previous quarters.

So when I sit back and look at 2007 I’m pleased. What we set out at the beginning of the year we in large part achieved. And yes, the entertainment business disappointed us; however, our growth businesses are hitting on all cylinders which bodes well for the next 3 years. I will specifically touch on a couple of them starting with Redbox.

On January 1, 2008 we exercised our option to purchase an additional 3.7% of Redbox for $5.1 million from our partner McDonald’s. This transaction closed on January 18, 2008 and under FASB Interpretation No. 46R, our investment will be accounted for under the equity method through January 18th and thereafter all results will be consolidated. This will include the backing out of the 49% interest on a single line item.

Why now? There are several reasons to exercise our option, the top one being that Redbox is becoming a very successful business and we see value there. In fact, the 3.7% of Redbox we purchased for $5.1 million values the company at just $138 million in our opinion it’s worth far more. The option allowed us to control 51% of the company and 3 of the 5 Board of Directors seats. This will allow us greater influence over Redbox to maximize returns over time. And finally, by exercising our option we will bring greater transparency with respect to Redbox for our shareholders because we’ll be consolidating Redbox’s results and issuing more specific guidance.

We have also been asked to provide more financial information about Redbox so let me address that. Looking at Chart 5, revenues in 2005, 2006, and 2007, were 12 million, $45 million and $133 million respectively. That adds up to a 233% top line CAGR over that period. And based on recent news of roll-outs or expansions with Wal-Mart, Walgreens and others, we believe Redbox will have revenues of between 250 to $270 million in 2008. As we sit here today, we see the financial leverage in the Redbox business.

Looking at Chart 7, during 2007 Redbox produced over $8 million in EBITDA and was net income positive for November and December. And for 2008 we believe that Redbox will achieve EBITDA of between 20 and $30 million implying an EBITDA margin of 10%, roughly 400 basis points above 2007.

Finally, as Redbox achieves route density and economics of scale beginning in the back half of 2009, we believe unit level EBITDA margins will climb to 20 plus percent. In addition, we believe that DVD rentals are counter cyclical. Our research indicates that as the economy worsens DVD rentals actually increased and with a $1 price point that’s a significant factor in our 2008 outlook.

I am excited about Redbox because of the value it’s creating for shareholders. Between 2005 and today, Coinstar has invested $37.1 million in equity for a 51% ownership, implying a valuation to our shareholders of slightly over $70 million. Based on recent estimates, we believe that Redbox’s current value is somewhere between 400 and $800 million, representing not only a 5 to 10 fold increase in our investment in just 24 months, but a significant percentage of Coinstar’s current market cap, if you choose to look at it that way.

I want to thank the management team of Redbox for the excellent job they have done in executing and managing the growth plan. I want to thank our partner in Redbox, McDonalds whom we have a strong relationship with and our sales force who have done a superb job cross selling Redbox machines to our customer base.

Now let’s move to Coinstar Money Transfer, CMT and GroupEx which is now part of CMT. On January 1, 2008, we completed our acquisition of GroupEx. We are excited for the acquisition for several reasons. First, the money transfer industry has been experiencing consistent growth worldwide; second, the shift from informal to formal networks is pronounced and will benefit CMT; third, money transfer is a top ten 4th Wall service for our retailers; fourth, expanded access to the U.S. to Latin American corridor; and fifth, operational synergies with CMT. And finally, sixth, I believe with scale this will deliver superior returns on invested capital.

These facts are illustrated in Charts 8 through 10. We have also included in the investors relations section of our website a PowerPoint deck on money transfer dynamics and Coinstar’s role in the industry. This will give you information about our views of the industry and the strategies we are pursuing.

Before I turn the call over to Brian, I want to confirm a product test that we’re doing in conjunction with Concordia and Seattle’s Best Coffee, a Starbucks brand. It’s a self service premium coffee kiosk offering Seattle’s Best Coffee that we had in 20 pilot locations as of December 31, 2007 It’s a small trial and one that we wanted to participate in given our successful and ongoing relationship with Starbucks.

A picture of the kiosk is contained in Chart 11. It is our desire to evaluate the pilot to examine unit economics, machine serviceability, machine format, etcetera. To date the machines are performing well and retailer interest has been high. Accordingly, we are going to expand our pilot to about a 100 units in 8 states by March 31, 2008. For now, however, this is just a test and the costs, as well as the results are not significant.

With that, I am going to turn the call back to Brian.

Brian Turner

Thanks, Dave. Now let’s turn to the financial results. For the year Coinstar generated $546.3 million in revenue. We generated EBITDA of $126.4 million. Our GAAP fully diluted, fully taxed loss per share was $0.80, with adjusted, fully taxed, fully diluted earnings per share of $1.38.

Turning to Chart 12, revenue for the year totaled $546.3 million. This was comprised of $250.9 million from Coin, $238.9 million from Entertainment, $47 million from EPay/Money Transfer, and $9.5 million from DVDXpress.

Please note that although Redbox’s revenues were not consolidated with Coinstar’s in 2007, the business generated $133 million in revenue, which if added to Coinstar’s revenues would have produced aggregate pro forma revenues of $679 million. EBITDA for the year totaled $126.4 million but today, we’re attempting to break that down by business line.

As you can imagine, there is a high percentage of direct and indirect costs shared amongst our categories, making exact EBITDA by product line only an estimate. That said, here is a good approximation of that breakdown.

Coin and Entertainment are combined due to the heavier interlocking of field operations, and EBITDA for those businesses was about $111.8 million in 2007. EPay EBITDA including Money Transfer was $14.6 million, and DVD EBITDA was neutral for the year. Please note that for 2007, Redbox’s EBITDA was not consolidated with Coinstar’s. They generated approximately $8 million during the year, which if added to ours would have produced an aggregate pro forma EBITDA of approximately $135 million.

Turning to Chart 13, we have included certain pro forma income statement information as if Redbox was consolidated with Coinstar in 2007.

Moving to the fourth quarter. Looking at Chart 14, Coinstar generated $133.3 million in revenue. We generated EBITDA of $33.4 million. Our GAAP fully diluted, fully taxed loss per share was $1.34, with adjusted fully taxed, fully diluted earnings per share of $0.29. Looking at the components, for the quarter, Coin revenue increased 9.2% to $66.3 million compared to $60.7 million in the prior year quarter. For the year, Coin revenue increased 9% to $250.9 million compared to $230.2 million in 2006. This increase was driven by new coin units and same store sales growth.

Getting more specific, our Coin business generated same store sales growth of 1.7% in the fourth quarter, with net installs of 900 units, which is more net installs in a single quarter than in each of the last two years. As we’ve stated previously, the unexpected high installation numbers caused same store sales results to be lower than average. This is the balloon effect illustrated in Chart 16. As Chart 16 indicates there is a discernable correlation between the previous 12 months units installed and same store sales growth.

A question has arisen as to Coin’s cyclicality with the economy. In analyzing that issue, we placed economic growth rates on a similar graph to Chart 16 and see a weak correlation. Based on this fact, we believe Coin is neither cyclical nor countercyclical to the economy. We attribute this fact to that most coin is accumulated based on small transactions such as buying candy, sodas or coffee instead of big ticket items such as homes, refrigerators and cars.

For the quarter, EPay revenue inclusive of CMT increased 51.6% to $14.4 million compared to $9.5 million in the prior year quarter. For the year, EPay revenue increased 78.8% to $47 million compared to $26.3 million in 2006. As reflected on Chart 17, this increase was driven by the growth in the face value of gift cards and telephony sold. For 2007, EPay inclusive of CMT generated $14.6 million in EBITDA. As of 12/31/07 we offered EPay functionality on over 17,500 POSA terminals and on more than 10,700 coin units.

Shifting to DVD, which includes Redbox and DVDXpress, fourth quarter pro forma revenues increased approximately 180% to $50.7 million. For the period, these results were driven by 4,800 net installations and same store sales growth of 17.3%. Using the equity method, our income from Redbox was $458,800 for the fourth quarter. Redbox was also net income positive in November and December and this was a pleasant surprise given the relatively immature age of the system at this point.

Turning to entertainment, revenues totaled $50.4 million for the fourth quarter, or 37.8% of our consolidated sales. This compares with $65.5 million or approximately 47.4% in the prior year’s quarter. Much like the second and third quarters of 2007, the macro-economic and other trends affected performance.

In the fourth quarter you will note that cranes, bulkheads and other equipment installed decreased from 301,000 units at the end of last year to 280,000 units at the end of this year. During 2007 we elected not to renew our agreements with several marginally profitable retailers, and in the fourth quarter this continued with the transitioning of certain retailers to 4th Wall Management, our wholly owned subsidiary that subcontracts this work to local amusement vendors. As stated, we believe this is in the best interests for our retail partners and our shareholders.

Continuing to refer to Chart 14, moving to expenses. As a percentage of revenues, direct operating expense for the fourth quarter decreased to 62.4% compared to the previous fourth quarter primarily due to the shift in the revenue mix from Entertainment to Coin and the acquisition of CMT in the second quarter of 2006.

General and administrative expenses increased as a percentage of revenue to 10.3% from 9.4% for the same prior year period primarily due to the acquisition of CMT in the second quarter of 2006, an increase in stock based compensation, and an increase in rent due to additional administrative office space. This was offset by administrative synergies achieved in integration. With respect to CMT, this line of business has higher G&A expenses as a percentage of revenue due to the anti money laundering and compliance costs and marketing expenses.

Moving to taxes, our effective rate in the fourth quarter was a tax benefit of 33.9% and for the full year it was 22.1% due to the impairment charge that resulted in a pre-tax net loss for the periods. Without the impairment charge we would have had a tax rate of close to 52% in the fourth quarter. This was higher than expected because we had two negative state tax rulings in which the states of Texas and Vermont changed their income tax laws resulting in a charge of $1 million.

At the net income line for the fourth quarter we reported a negative $37.2 million or a negative $1.34 GAAP earnings per fully-taxed, fully-diluted share. Excluding the non cash charges detailed in our earnings release, Coinstar reported adjusted fully taxed, fully diluted earnings per share of $0.29 or $8 million for the period. This is illustrated on Chart 18.

Chart 19 reflects the comparison to our fourth quarter guidance. As shown if you exclude the non-cash impairment, the non-cash write off of financing fees, and the higher than expected tax rate, we were solidly within our guidance. Share repurchases and share count. In the fourth quarter, we repurchased 238,142 shares for a total of $6.5 million and for all of 2007; we repurchased 358,942 shares for a total of $10 million. The average cost for the year was $27.93 per share. So as it stands today, of the $48.3 million authorized by the Board for share repurchases we still have approximately $15 million remaining.

Our stated goal for share repurchases is primarily to offset dilution from shares issued under equity plan. As reflected in Chart 20 for the past 5 years we have made significant strides to this goal, and especially in the last two years, that has been achieved.

At December 31, 2007, our fully diluted outstanding share count was 28.4 million shares and we estimate that our average fully diluted share count for 2008 will range between 28 and 29 million shares excluding any buy back activity. For the proxy to be mailed in April 2008 we will not be asking for an increase in the option pool.

Full year 2008 guidance. Before I turn the call back to Dave, I’d like to comment on guidance and we’re going to give a bit more detail than usual. Starting with revenue. Assuming that Redbox is consolidated from January 18th through December 31, 2008, we are estimating that Coinstar’s revenue will be between 800 to $875 million representing a 24% increase at the midpoint. This is reflected in Charts 21 and Chart 22.

This revenue range is based upon certain assumptions including that Coin revenues will grow 8 to 10% due to 1,250 to 1,750 net new coin units and a same store sales estimate of 0 to 3%. Therefore, we currently expect Coin revenues to be between 265 and $275 million for 2008 with EBITDA margins roughly up 30 plus percent.

Our entertainment revenue range is based upon certain assumptions including the paring down of lower performing accounts, along with today’s Wal-Mart news. In fact, after these changes are made we expect the ongoing Entertainment revenue to be 150 to $170 million in 2008 leveling off to a $150 million in 2009 and 2010. The de-installation we described, in an industry that’s generally contracting due to many of the trends we discussed on prior calls, will add to what we already believe to be a glut of equipment on the market. Accordingly, we recorded a $65.2 million impairment charge in the fourth quarter of 2007.

We would also expect a significant impact on our field service operations. Any restructuring in this area will depend on the interplay of entertainment machines coming out and coin machines going in, and how we will maintain the best service possible during this transition period. We estimate that this will result in a 1 to 3 million of additional expenses in Q1 2008.

Finally, one last point on entertainment, we still have a significant ongoing business with Wal-Mart and other retailers as our entertainment products continue to be a source of fun and entertainment. For those retailers listening to today’s call, we want to be clear that we’re 100% committed to making our Entertainment products and services the best for you and your customers. With that in mind, we are committed to evaluating all options with respect to operating and improving the Entertainment business.

Moving to EPay, we’re looking for revenue and EBITDA to continue to increase. For 2008, we expect revenues, inclusive of CMT and GroupEx, to be between 115 and $125 million which implies an organic growth rate of 20 to 30%. In addition we expect CMT and GroupEx combined to be EBITDA positive in ‘08. Overall, EPay EBITDA inclusive of CMT and GroupEx should be between 10 and $15 million.

Although not yet completed, the above projections are inclusive of our estimated purchase price accounting for GroupEx. Over the next two months we will finish the closing balance sheet, value the intangible assets, and complete purchase price accounting. As a result of that exercise it is our expectation that intangible assets will range in the value from 16 to $19 million and will be amortized over 5 to 10 years.

With respect to specifically to Redbox, we are looking for 3,500 to 4,500 installations in 2008. This would produce a revenue range of between $250 million to $270 million. We expect Redbox to produce EBITDA of between $20 million to $30 million this year. While we’re addressing Redbox’s growth prospects, let me take a minute to give you a bit more information on the business.

First, each Redbox unit costs approximately $15,000 to $25,000 to build and install, and based on units in the field, a Redbox kiosk that has been operating for at least one year generates revenues of approximately $40,000 to $45,000 per annum. Based on all these factors, we expect consolidated EBITDA for all of Coinstar to grow between 10% and 15% in 2008 or be between $135 million and $145 million. Not bad considering we’ll be in transition.

Finally with respect to CapEx for 2008, looking to Chart 24, we expect to spend in aggregate $70 million to $80 million down from $84 million in 2007. This includes $39 million to $42 million in new coin machines, $7 million to $8 million on new equipment for EPay including CMT, and $9 million to $10 million on new DVDXpress and coffee units. We expect to spend $7 million to $9 million upgrading and maintaining Coin units.

As you will note, as we redirect resources to the Coin and DVD product lines, Entertainment CapEx will drop off significantly with a current full year 2008 estimate of only $5 million to $8 million. In addition to these capital expenditures Redbox anticipates spending between $60 million to $80 million on new units. As has been the case historically, we look to Redbox to finance these expenditures on their own through operating cash flow, lease financing, commercial debt and equity before looking to Coinstar for further debt or equity infusions.

One final thought on our growth CapEx, based on these investments and where they are being directed in 2008 versus year’s past, we believe that our returns on capital will increase over 2007.

First quarter 2008 guidance. Based on current trends we expect first quarter sales inclusive of Redbox of roughly $175 million to $190 million with GAAP earnings per fully taxed, fully diluted share in the range of $0.01 to $0.08. In the first quarter several factors will affect GAAP EPS.

First we will likely incur approximately $1 million to $3 million, or $0.02 to $0.06 of GAAP EPS, in entertainment operations restructuring.

Second we will incur an additional $1 million in IT and field operations costs to get ready for the roll-out of Coin units for Wal-Mart.

Third, although we expect CMT to be EBITDA positive for all of 2008, we expect to lose 1 to $2 million in the first quarter as revenues ramp.

Fourth, although Redbox was net income positive in the fourth quarter, with the recent Wal-Mart and Walgreens news and the typical first quarter fall off in DVD rentals, we expect our share of Redbox losses in the first quarter to be 1 to $2 million.

Finally, as gift card sales are at their lowest point in the first quarter, we would expect our continued push into the U.K. with gift cards to lose 1 to $2 million in the first quarter.

Turning to guidance beyond 2008, assuming the economy stays about where it is today, and that Redbox remains consolidated at 51%. We’ll also assume that Wal-Mart run-rates that Dave discussed hold true, along with the guidance and comments I made just a few moments ago. If you missed any of these comments, you’ll see that we’ve already posted a copy of today’s remarks on the IR portion of our website.

Based on these assumptions, we reiterate our guidance of $1 billion in revenue by 2010 with EBITDA of 200 million. As a matter of fact, based on the actual roll-out of Coin and DVD kiosks we may be able to achieve these goals earlier than we previously thought. Ultimately, we’re pleased to have diversified our business over the past few years while continuing our growth. We’ve created multiple revenue and cash flow streams and that has allowed us to reach our financial goals.

I’ll now turn the call back to Dave for closing remarks.

Dave Cole

Thanks, Brian. In closing, I want to reiterate a few points. First, today we announced some great news with Wal-Mart. Second, I have never been more excited about the bundle of products and services we are bringing to market. I say that emphatically because we repeatedly hear from our retailers that they want to reduce the number of vendors they deal with and that our bundling of products and services satisfies a real management need in the marketplace.

Third, it’s not an accident that we installed 1900 net new coin units in 2007. It’s not an accident that Redbox is far exceeding all sales goals. And it’s no accident that stored value minutes continue to experience rapid growth. It’s due to our 4th Wall strategy and the leverage we are gaining from a bundled portfolio of products.

We set out a strategy in 2004 to our shareholders, and I believe that our retailers are validating that strategy daily. We are the category captain of the 4th Wall and our future has never looked brighter.

So, with that we will open up the line for questions. Nicole?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question comes from the line of T.C. Robillard with Banc of America Securities. Please go ahead. T.C. Robillard with Banc of America Securities, your line is open for questions.

T.C. Robillard - Banc of America Securities

I am sorry, can you hear me?

Brian Turner

Yes.

T.C. Robillard - Banc of America Securities

My apologies. Brian, just – first real quick on GroupEx, sorry, I probably missed this as you guys were giving us a lot of great detail there. What are we expecting from GroupEx in terms of revenues either in the first quarter or for all of ‘08, however you want to break it down?

Brian Turner

Sure, if you look to all of ‘08 GroupEx and CMT are fast integrated, so it will be very hard to distinguish between GroupEx and CMT. But if you put the two together, on one of our slides I believe our guidance for next year is 115 to $125 million, so those two combined will go there.

T.C. Robillard - Banc of America Securities

Do you have – can you give us what ‘07 was then broken down between GroupEx and just CMT?

Brian Turner

Well GroupEx, the closing financial statements are still being performed, let me give you CMT. Based upon the unaudited for GroupEx I believe it was approximately $50 million, and that was in our past conference call script. But let me give you CMT alone, give me just one sec. So, it’s $24.2 million for CMT alone, oh, sorry, 24.7.

T.C. Robillard - Banc of America Securities

Okay. And then I probably missed this as well, again my apologies, the – on stored value, did you give either the gross card load or the commissions for the fourth quarter?

Brian Turner

Yes. Well we actually gave both. So, for the gross card load it was – for just the fourth quarter?

Dave Cole

Fourth quarter.

Brian Turner

No, you’d have to subtract the fourth quarter from the third quarter. Let’s see the fourth quarter ended up at $430 million and I believe if we reference the conference script in the third quarter, it was 300 and roughly $14 million which would leave about 120 million for just the fourth quarter.

T.C. Robillard - Banc of America Securities

Okay. And then, just lastly, and I think you touched on some of this in breaking down the guidance, but I’m just tying to get a sense – I know historically 1500 coin ramps was kind of where you guys kind of hit your head on I am assuming just, and it was mostly, more of a personnel issue for what you had in-house, so are you going to be aggressively ramping up personnel to hit Wal-Mart’s target for the ramp of both coin and Redbox or do you get some benefit for some of the field sales people that are not going to be doing as much as you are taking out some of the Entertainment machine?

I’m just trying to get a sense as to how we are looking at the OpEx this year because obviously it is going to be inefficient which we will get the leverage on next year, but I just want to make sure we are looking at that properly?

Brian Turner

Yeah. No, it’s a good question. So, we installed 1900 units this year, 900 in the fourth quarter alone, which if you look at our fourth quarter this is just stunning, stunningly good. If you look at next year, it’s really a transition question in that, in addition to Wal-Mart we have other customers that were fully intent on installing with. You will see those other customers primarily in the first half of the year as the Wal-Mart news, as in our script, it really starts ramping starting in May of ‘08.

So, we will be looking to install with existing customers up to May, of course we will be installing with them throughout the full year, but make a push on that. Then as we go into that we will need to ramp up more installers as we go into the latter half of the year, you are absolutely correct. So, really what you get is a transition there sort of coming through the May, June, July timeframe.

And as you look at that we did say – if you look at Q1 specifically, we are going to have about $1 million extra in Q1 in OpEx, and that’s for two things. One is the planning around the rollout because we need a very tight planning process with Wal-Mart and we will work with them quite closely. And the second is for enhancements to the IT system as we have gotten closer to Wal-Mart as they’ve gone from just putting on a couple of hundred stores to announcing a full rollout. We are now going to make a big push to get our IT systems very, very tightly integrated. Those are both going to happen in Q1.

T.C. Robillard - Banc of America Securities

Okay. And then just lastly, the entertainment business for the remainder of it as we work through on the rest of this year and then on a go forward basis to the customers that you are going to be committed to, how should we be thinking about the price increases that you’ve – that we’ve been talking about for the last couple of quarters? I mean is that something that’s still on the same track? Has that been pushed out because of the economic situation, just any color you can give us there?

Dave Cole

T.C., I think we are – you know we have rolled out some price increases, what we’ve seen is they do okay in certain markets not very well in other markets, certainly given the squeeze on the consumer the price of gas and certainly their discretionary income you know we are offering three different price points in the stores on cranes and in particular the Wal-Mart stores. That seems to be a good mix and beyond that I think we are going to wait prior to expanding anymore price increases in the entertainment business.

Brian Turner

And to clarify further, we are seeing actually great same-store sales growth on these higher price points up through about the time that China paint scare came through. I think between – and we commented this last quarter – between what’s happening at China, what’s happening in the economy, now fear of recession, we just feel now is not the time to push your price increase, that does not say that we are not committed to it. So let these things work themselves out. Once they work themselves out we will re-examine and then push forward.

T.C. Robillard - Banc of America Securities

Okay. Makes sense. Great, thanks for all the color guys.

Brian Turner

Next question.

Operator

Thank you. Our next question comes from the line of Simeon Gutman from Goldman Sachs. Please go ahead.

Simeon Gutman - Goldman Sachs

Hey guys. First, Brian, if I am not mistaken and I may not have the right number. On a sequential basis, third quarter to fourth it looks like total Coin revenue went down or was flat?

Brian Turner

Yes, that’s probably true, that’s the normal seasonality within our business, Q3 for Coin is almost always our peak revenue period.

Simeon Gutman - Goldman Sachs

Okay, okay. Because, I guess I look back in years past and they were relatively consistent with each other?

Brian Turner

Yeah, I think we see Q1 being the weakest, Q2 being better, Q3 being the best and Q4, you would see it start to dip back there, what we attribute that to is vacations, we see a lot of people take vacations around Q3, kids turning their coin. Now, what you might be confusing that with is, if you look at our financial trends, we have coin in EPA revenue combined.

Simeon Gutman - Goldman Sachs

No, no, I am trying to strip it out.

Brian Turner

I know, I am just pointing out that you should see that normal seasonality of pattern.

Simeon Gutman - Goldman Sachs

Okay. And then, second, related to next year and the chart that you mentioned, if you extrapolate the 1250, I think the 1700 or roughly 1800 new Coin units, I guess and I am sure you are probably prepared for this, you would see a resulting benefit back on the same store sales line. So are you trying – are you being conservative or you are truly being cautious with regard to the same store sales?

Brian Turner

Well, I think same store sales, you have got to look at the last 12 months, so as we go into like the next quarter, right Q1, in the end of Q1. It’s going to be the four quarters that went before it; we had 900 go in Q4 those are going to start affecting same-store sales. You know, as you go to Q2, again you will see that 900 in that number.

As you go to Q3 we will start putting in the Wal-Mart’s right, and so it’s definitely going to have an effect on same-store sales, because of this balloon effect, you can look at the chart on Chart 16. For three or four quarters, and I think what’s more important is how much is the overall Coin going to grow and if you look at our projections, we are looking at coin growth for the next couple of years higher than the last several years overall coin growth. So we are very excited about that.

Simeon Gutman - Goldman Sachs

Okay. And on the entertainment side in the context of 50% of machines that Wal-Mart have place that arguably has pretty good foot traffic, if it’s not working there, what characterizes a successful place or home for an entertainment machine? Is it just the type of store? Is it geography meaning, I am trying to get a sense of what the long term diagnosis is?

Brian Turner

Sure, and I think you took a leap there that probably isn’t quite where we’d go. They were absolutely working at Wal-Mart and so we saw good trends there. We saw a good profit check going directly to Wal-Mart. Wal-Mart as we alluded to in our script is making certain moves about foot traffic flow through their vestibules and so not only us, but other people were affected by those changes that Wal-Mart’s making. I don’t think that’s so much an indictment that these machines weren’t working.

They are creating a different experience for their consumer, matter of fact, we very much endorsed this and through the planograming process it was one of the things that we noted. So, working with them, we still have a very big business with Wal-Mart in entertainment, it’s going to go more into the wings and vestibules or the alcoves that will improve their consumer experience and will improve their overall profitability at the same time by getting coin in the Redbox and it will improve the returns for our shareholders. Dave, do you want to add anything to that?

Dave Cole

Yeah, to me this is all about Wal-Mart’s interest in providing an uninterrupted traffic flow into the store after a lot of consumer marketing, market research, understanding the dynamics of the experience and Wal-Mart is actually putting a whole new store experience group into their organization to focus on improving the consumer experience, but retaining obviously their customers.

Simeon Gutman - Goldman Sachs

Okay. And then just two last questions relating to the DVD business. I saw the footnote in the slide deck on the DVDXpress, but can you explain that a little bit more? And then second of all, with regard to Redbox and valuation. Now that it’s consolidated, I don’t know if you thought about it, but, if you don’t get the value that you think should be perceived in Redbox vis-à-vis your share price. How do you think about it over the next, let’s say 12 to 24 months?

Brian Turner

Sure. So let’s take those two, DVDXpress before we acquired them, what they were doing was they were selling off their previous viewed videos through alternative channels. So, if you sell that off, you recognize that through revenue, what we do or through Redbox and what DVDXpress is now started to do is buy them from one distributor and selling them right back to the same distributor.

So, the net effect goes through cost of goods sold. So as opposed to let’s say, you sell back a video for, I mean, I’ll make up a number of $10, that $10 would go through revenue. Now, it nets against cost of goods sold. At the bottom line, it makes absolutely no difference. So, as you look at our EBITDA it’s just where it’s classified those sales of previous viewed videos.

The second one you asked about, if we don’t get the valuation. I am not sure that that would change our thinking I mean, Redbox is performing very well. This whole DVD space is performing very well and I think we have to look at optimizing the value of Redbox for our shareholders. And that may lead to an event in ‘08, it might lead to an event in ‘09, it might lead to an event in ‘10. I don’t exactly know, but we are going to continue to drive that growth forward and drive their EBITDA with them and let’s face it, their management team, their management team is doing excellent job. Did I answer your question?

Simeon Gutman - Goldman Sachs

Yeah, thank you.

Operator

Thank you. Our next question comes from the line of Alan Robinson with Royal Bank of Canada. Please go ahead.

Alan Robinson - Royal Bank of Canada

Hi, good afternoon and thanks very much for all the additional detail that you have provided on the call today that’s very useful.

Brian Turner

Thanks.

Dave Cole

You’re welcome.

Alan Robinson - Royal Bank of Canada

Just in terms of the contract terms, if I could ask a question regarding the contract terms of the new rollout of coin-counting machines proposed to Wal-Mart, are they, in terms of the duration, how long will these machines be locked in for? Is it an at-will contract or are they over a period of years?

Dave Cole

In order to respect the retailer’s privacy, Alan, we don’t disclose contract terms. We feel very good about the relationship and the long-term nature of it with Wal-Mart.

Alan Robinson - Royal Bank of Canada

Are they generally similar to the contract terms you’ve been putting out elsewhere?

Brian Turner

So, and we’ve answered this one before. So, Wal-Mart received the exact same contract that any of our other big retailers do. They have the same grid that they can check-off in say duration of the contract, where the machines are placed, how we do co-op marketing, but Wal-Mart’s contract works off the same grid of options that all of our retailers do.

Alan Robinson - Royal Bank of Canada

Okay. And then in terms of the cannibalization, the potential cannibalization of coin machines now with this increased rollout here. How should we think about the relative profitability of Wal-Mart for installed machines compared to machines that have been installed elsewhere?

Brian Turner

Yes, and so that’s a great question, you actually have two questions there; one is cannibalization and then performance for Wal-Mart. So the cannibalization, we did analyze this, assuming that they rolled out the 2000, plus the machines that are already out there, get to about 2,500. Their machines, some of them are placed near our existing machines. But a lot of them are placed in near rural. So you don’t see the overlap, then let’s say we rolled out a chain in suburbia.

Looking at that, we estimate once these machines are all in, they will cannibalize the existing 15,400 network by approximately 2%. So it’s not a very big impact. As far as machine economics, it depends on what type of Wal-Mart they are in, so you have Supercenters, you have Neighborhood Markets, you have Division One and the correlation we have found is doorway to square feet.

So if you think of a typical grocer at let’s say 50 to 60,000 square feet and that relates to one doorway, if you have a Wal-Mart with 120,000, and you place the machine at both doorways, they will perform about the same. So for the square place for a grocery store, a Wal-Mart unit performs about the same with the same EBITDA characteristics as does a grocery store.

Alan Robinson - Royal Bank of Canada

Okay, that’s useful. And then finally, so obviously you are going to need a lot of cash to fund this investment here and I notice you mentioned you have a 400 million funding line I believe. Can you provide any further details on that in terms of the spread over LIBOR or the net interest costs that you will incur?

Brian Turner

Sure, well, actually you are an making assumption that will need more debt and that’s not necessarily the case. We actually don’t expect our debt to go up much if at all in ‘08. We can fund our CapEx for Coinstar, or all of our plan CapEx, off our operating cash flow. So, we are not necessarily looking to increase debt. Now, Redbox as we’ve said in the script, we look to Redbox to find their own financing.

As they grow more profitable and they are turning EBITDA positive, opening up to them is lease financing, commercial bank financing. They have other opportunities to find financing. So we look to them to go find their own financing before they come back to Coinstar or McDonald’s for another cash infusion. I think that opens up to them and if you look at the – just in our past what we were able to raise, let’s say four years ago, up similar EBITDA, they have the capability to go into the market now and get debt financing.

Alan Robinson - Royal Bank of Canada

Okay. Thank you. I’ll let someone else take a turn.

Operator

Thank you. Our next question comes from the line of Bruce Simpson with William Blair. Please go ahead.

Bruce Simpson - William Blair

Hi, guys. A series of questions about Redbox. Okay, Brian, just clarify if you would your expectations for EBITDA for Redbox in 2008?

Brian Turner

2008, 20 to 30 million.

Bruce Simpson - William Blair

Okay.

Brian Turner

That’s just Redbox, not DVDXpress.

Bruce Simpson - William Blair

And you also said near the end of your prepared remarks something about 125 to 135?

Brian Turner

That was CMT and GroupEx together.

Bruce Simpson - William Blair

Okay.

Brian Turner

Is that what you were thinking? Or is, let’s see is there another...?

Bruce Simpson - William Blair

Well, let’s see you said that the text of the remarks here is going to be on the website, right?

Brian Turner

Yes.

Bruce Simpson - William Blair

Okay.

Brian Turner

So, they are already posted, they are already up there.

Bruce Simpson - William Blair

Okay. Now you guys during the call, you obviously, the 135 million in implied value of Redbox just by the exercise doesn’t really capture the whole thing and then I think Dave in his remarks said something like 4 to 800?

Brian Turner

Yeah.

Bruce Simpson - William Blair

How do you get there?

Brian Turner

Sure, so, what we did is before we exercised that option, we said one of our determinants; and we’ve said this in past calls is, is it worth more than the 138 million? So, we tried to go out and triangulate based upon their growth, their EBITDA, what this would be worth, we consulted with some people, did we get formal valuations? No. These are estimates. Based upon what we have seen, we believe that Redbox at this point, and this is Coinstar’s belief, is worth somewhere between 400 and $800 million based upon its trajectory rate now. Now, as it grows we believe that number has the potential to go even higher.

Bruce Simpson - William Blair

Okay. So, that’s an enterprise value?

Brian Turner

Yes.

Bruce Simpson - William Blair

So if you can focus a little bit on the equity and debt structure of Redbox, now that you are consolidating it, it goes also on your balance sheet?

Brian Turner

That’s correct.

Bruce Simpson - William Blair

So, what’s the approximate debt and the approximate shareholders’ equity of Redbox?

Brian Turner

That’s a good question and Redbox has not finished their audit for December 31st ‘07 and they were reluctant for us to disclose balance sheet information on this call. So I apologize, Bruce, but you are going to have to wait till the end of Q1 for that.

Bruce Simpson - William Blair

Okay. Can you give us an approximate debt load that shows up on your balance sheet?

Brian Turner

That will show up on our balance sheet. Right now, none of it shows up our balance sheet.

Bruce Simpson - William Blair

That’s what I am asking. Is there an approximate dollar amount that hits your balance sheet as you consolidate this debt?

Brian Turner

Right and that’s what until they finish their audit they were reluctant for me to give that out.

Bruce Simpson - William Blair

Okay. So when you say you expect them to go out and get financing on their own rather than coming through you...

Brian Turner

Yes.

Bruce Simpson - William Blair

Whatever debt they incur goes on your balance sheet, right?

Brian Turner

It will go under our consolidated balance sheet, but it will be their debt. So we are not looking necessarily to guarantee it or any of that type of stuff.

Bruce Simpson - William Blair

Okay. But once you have majority ownership not only is it on your balance sheet, but aren’t you ultimately responsible for it?

Brian Turner

No.

Bruce Simpson - William Blair

As a wholly owned sub, that way if Redbox ever had a problem, it’s contained away from you?

Brian Turner

Well, they are not a wholly owned subsidiary. Remember they are a separate company, we own 51%, under GAAP we have to consolidate it, but they are not a wholly owned sub.

Bruce Simpson - William Blair

Okay. I am just kind of curious about thinking through the impact of the increased debt load of that company as they go to rollout additional machines...

Brian Turner

Right.

Bruce Simpson - William Blair

How that impacts your own ability to grow?

Brian Turner

Yeah, I don’t think it will impact our ability to borrow, if that’s what you are worried about.

Bruce Simpson - William Blair

Okay.

Brian Turner

No, I was thinking about the previous question, I was thinking about things that we have disclosed, we have disclosed that McDonald’s and us both loaned them $10 million, so that’s 20 million of debt right there. And we disclosed that they got a very small amount of lease financing. Past that they have no other debt or financing. At the current time. That I can answer.

Bruce Simpson - William Blair

Okay.

Brian Turner

I was thinking of past publicly disclosed comments.

Bruce Simpson - William Blair

Okay. And then, so in terms of margins in that particular business, I think you said that on a kiosk level EBITDA margin, do you think that can get to 20%?

Brian Turner

20 plus. So, right now as a total entity they’re 10, but if I look at their unit economics per machines that have been in place more than one year, they are very quickly advancing to 20 plus percent.

Bruce Simpson - William Blair

Okay. So, is that when you say 20% is that unit level or is that the whole segment including whatever SG&A goes along with Redbox?

Brian Turner

Right now, I am going to give unit level, we have already said at the end of the day we believe the whole entity will be 20% plus. But, what I can see right now, as I look at the units that have been in for year or 18 months, it’s clear to me they are going to get to that. Then let’s see how they mature over this next year and then I will refine that guidance.

Bruce Simpson - William Blair

Okay. So, realistically with the current growth rate when do you think you ever get to 20%?

Brian Turner

Oh, I think within the next couple of years.

Bruce Simpson - William Blair

Okay.

Brian Turner

I think they’re well on their path, I mean they were 6% last year roughly, they are 10% this year as an entity. I mean they are advancing right up there quickly.

Bruce Simpson - William Blair

Are those ‘06 and ‘07 or ‘07 and ‘08 numbers you just gave?

Brian Turner

That’s ‘06 and ‘07.

Bruce Simpson - William Blair

Okay. And I imagine that there is kind of a trade off between new unit installations such that the more new ones you put in, it depresses the acceleration towards higher level right?

Brian Turner

Absolutely.

Bruce Simpson - William Blair

Okay. So, this year it sounds like maybe the total segment level EBITDA margins are contained a little bit because you got rapid installations?

Brian Turner

Right. And what you see is it’s roughly 10% again for ‘08. And you are precisely right, we have rapid installations.

Bruce Simpson - William Blair

Okay. Any thoughts as to kind of what the end game in total number of units, you can get to there, originally you had said 10,000 by 2010, it sounds like you are way ahead of that. I mean is this the kind of – can you get to 20,000 installations across the country?

Brian Turner

Yeah, it’s a great question and originally we said that the total universe was 60,000 units and we expected to get maybe 20, 25% of that which got to that 10,000 level. As we look at the marketplace right now and we analyze where all the DVD kiosks are in the country we believe right now that Redbox and DVDXpress together are more than 60% market share. If we continue to keep 60% market share, yeah, we are going to go blowing past that 10,000 units, matter of fact with the guidance we gave today we will be past that by the end of ‘08 potentially. Can it get to 20,000? I think it’s too early that to give that guidance. Don’t pin me down quite that close quite yet.

Bruce Simpson - William Blair

Okay.

Brian Turner

But there is a lot of upside to this.

Bruce Simpson - William Blair

Okay. Let me shift gears and talk about entertainment services a little bit?

Brian Turner

Yes.

Bruce Simpson - William Blair

Give us some background if you would on the nature of the contract losses, how much of the fall off in revenue is from already existing de-installations at Wal-Mart versus fewer dollars flowing through existing machines versus what machines actually got de-installed here in the fourth quarter?

Brian Turner

Sure. So, we actually annualized that. What we are seeing through the first three quarters was actually increasing crane machine averages. So, what we see as we analyzed how much is related to machines being pulled out and how much is related to machine averages. So through the first three quarters it was related to machines being pulled out. In the fourth quarter, we did start to pull units in various locations, both non-Wal-Mart as well as Wal-Mart units. That did cause further pressure on the revenue. However, also in the fourth quarter for the first time we saw machine averages dip down.

That’s an interesting one and what we were watching closely is what happens in January, February, because the biggest part of that machine average dip down was in December. And as you saw from news releases, the retailers were not exactly doing great with the exception of Best Buys and those flat screen TVs, which seemed to be flying off the shelf. But this also may relate to the shifting gift cards. And so what we are seeing is this January come right back up.

Because if January comes right back up it may have as much to do with the shifting of purchases related to gift cards as it does to be actual unit. And I don’t know the answer to that yet. January numbers are still coming in. The retailers are actually seeing some positive results off the gift cards. So, I think we have to wait and see that but through the first three quarters it was very evident it was the machines that we were being pulled out, as we model next year it’s primarily the machines being pulled out. But we are going to look to see, if these machine averages rebound or they stay down, we think they will rebound.

Bruce Simpson - William Blair

Okay. So...

Brian Turner

And by the way that’s crane. Bulk averages, on the other hand, were actually up in the fourth quarter, which was an interesting phenomenon.

Bruce Simpson - William Blair

Have you pulled out machines outside of Wal-Mart then in full?

Brian Turner

Well, absolutely. If you remember the third quarter conference call, we mentioned that we had exited a couple of accounts...

Bruce Simpson - William Blair

Yeah.

Brian Turner

And so, we were pulling those machines in the fourth quarter, throughout the fourth quarter, absolutely yes.

Bruce Simpson - William Blair

And so, are the contract terminations that you have initiated by Coinstar or by the client or by both?

Brian Turner

For us we are looking at marginally profitable ones to us. And whether they hold cross-sales for us in the future. Where we don’t see those dynamics, we are working with the retailers to transition them through our 4th Wall Management subsidiary to local players. And so, we are not leaving these retailers quickly. We are working with the retailer. We are finding an alternative people to service their machines. We are transitioning them gently. But through all of this Coinstar apply their selves and service with the retailers and treating the retailers well. So, we are not abruptly exciting. So, we are working with them. I would say our characterize it as a joint plan with them.

Bruce Simpson - William Blair

Okay. And, did you give a – you said a number Brian, about EBITDA for 2007 x the telco refund, can you just repeat that please?

Brian Turner

Sure. If you take our EBITDA and now, I am factoring in two parts the EBITDA that accrued to Coinstar and then the EBITDA that accrued to Omega, our joint venture which we pick up 49%, so factoring out both, we get to 115 point something, it’s in the script.

Bruce Simpson - William Blair

Last thing and I’ll...

Brian Turner

Yeah, by the way before you go past that, we actually did receive the money for that in Q1, so we have received the cash for that telco refund and that is the closed matter at this point.

Bruce Simpson - William Blair

Okay. Last thing, can you repeat what you said about what your revenue expectations are beyond 2008 for entertainment services?

Brian Turner

Yeah.

Bruce Simpson - William Blair

50 million?

Brian Turner

150 million.

Bruce Simpson - William Blair

150 million on an annual basis?

Brian Turner

On an annual basis.

Bruce Simpson - William Blair

Okay. Thanks for all the help.

Brian Turner

No problem. Next question?

Operator

Are there any further questions or comments from Bruce Simpson?

Bruce Simpson - William Blair

No, ma’am.

Operator

Thank you. Our next question comes from the line of Eric Wold of Merriman Curhan Ford. Please go ahead.

Brian Turner

Hi, Eric. Well, Operator, I think we lost Eric.

Operator

Okay.

Brian Turner

Let’s go to next one.

Operator

Okay. Our next question comes from the line of Louis Corrigan with Kingsford Capital. Please go ahead.

Louis Corrigan - Kingsford Capital

Hi. I had a question about expense reduction in the fourth quarter, it looks like that was down quite a bit, I am just curious, did you – it looks like you reduced your marketing quite a bit and I am just wondering what else went into it, was it cuts in the entertainment business or what?

Brian Turner

I think there is multiple things there. So first for marketing, as we stated earlier in the year, marketing is primarily aimed at coin. And we moved around our marketing, each year, we try different things each year. Marketing this year was more aimed at Q3 than Q4. So that was a planned change and that was planned for, I mean most of the year. So that’s one.

Now in Q4, we actually had a little more marketing related to gift cards. So that’s a much smaller component of our overall marketing, but as gift card increased, we are marketing more to gift cards. And then, as you look to next year, we are going to have marketing for money transfer. And so, marketing, you will have not only your coin seasonal marketing, you have your gift cards later in the year and then you’ll have your money transfer around, it’s too big time with your Mothers Day and Christmas.

So we will look for that in marketing. As for other expenses, we try to modulate our expense structure with the revenues of that LoB or line of business. So every quarter, we modulate expenses. But was there a huge modulation in Q4 related to entertainment? No. Was there cost modulation? Yes.

Louis Corrigan - Kingsford Capital

Okay. And looking at the balance sheet, it looks like that the prepaid expenses were up quite a bit in the quarter. What was behind that?

Brian Turner

Let me check here. Okay, get my balance sheet out. Well, I am just turning to my notes. Partly this is due to the acquisition of CMT, so we see part of that, we’ve got more prepaid expenses there. So again, money transfer peaks in the fourth quarter, so we have prepaid expenses there. I’m going to look at other things. Nothing really pops out of me, but I’ll tell you what. If you send me an e-mail, I will look into that further.

Louis Corrigan - Kingsford Capital

Okay. And one further question. Should we expect the entertainment business to generate profits in 2008?

Brian Turner

So we expect entertainment to generate an EBITDA positive. As far as profit, this goes to how you allocate our G&A, corporate G&A, field service, and to be honest we do not track by minute what our field service people are doing. So as an estimate, it is definitely our goal and we have said this before to make it breakeven or positive.

Louis Corrigan - Kingsford Capital

Okay. Thank you.

Operator

Thank you. Our next question comes from line of the Bob Evans with Craig-Hallum Capital. Please go ahead.

Bob Evans - Craig-Hallum

Good afternoon. And thanks for all the detail. Sorry, I may have missed a couple of things because we had some phone issues so I had to dial back in. First, could you comment in terms of – I believe you said the Redbox machines would do 40- to 45,000 after the first year.

Brian Turner

Yes.

Bob Evans - Craig-Hallum

At that point or can you give us a sense of when are they EBITDA positive?

Brian Turner

They are EBITDA positive before 12 months at this point.

Bob Evans - Craig-Hallum

Before 12 months. Can you say how much before 12 months?

Brian Turner

No, because it’s changing month-by-month.

Bob Evans - Craig-Hallum

Okay.

Brian Turner

And so what we see as we get more units out or as Redbox because they are a separate entity. As Redbox gets more unit out, they’re getting more route density and they’re getting efficiencies of scale. So what used to be 12 months, has been moving down steadily. I think that it’s hopefully before 12 months at this point. I would have to go back to Redbox before I disclose more on that.

Bob Evans - Craig-Hallum

Is there a certain volume level at which it does so?

Brian Turner

It’s not so much volume per individual unit, it’s volume for clusters of units and it’s very much like Coinstar. We achieve EBITDA quicker where you have clusters of coin units together and you can cluster your field service. So it’s not so much that any individual unit, it’s how many do we have in that city or how many do we have on the upper north neighborhoods or whatever.

Bob Evans - Craig-Hallum

Okay.

Brian Turner

Does that make sense?

Bob Evans - Craig-Hallum

Sure, sure. And as it relates to EBITDA margins and potential there, I think we’ve maybe had this conversation in the past but my understanding was that the Redbox machines might be able to have EBITDA margins that are as good or better than the coin counting machines?

Brian Turner

I think...

Bob Evans - Craig-Hallum

Is that still the same?

Brian Turner

We said over a lot of time, you’ve got route efficiencies. What we said today on the call is we believe they can get to 20% plus.

Bob Evans - Craig-Hallum

Okay.

Brian Turner

And then we’ll go from there.

Bob Evans - Craig-Hallum

Okay.

Brian Turner

Take it in steps.

Bob Evans - Craig-Hallum

No, I know. I am just wondering ultimately if you still feel that it can be as good as the other business?

Brian Turner

Yeah, ultimately I do.

Bob Evans - Craig-Hallum

Okay. Okay, fair enough. And the timing of taking off the entertainment machines, I think I missed your comment there. But with the Wal-Mart machines, when do you expect that all to be done by?

Dave Cole

We actually expect, Bob, to begin right in a few weeks, actually almost immediately and finish it up by the end of the first half.

Bob Evans - Craig-Hallum

End of first half? Okay.

Dave Cole

Yeah.

Bob Evans - Craig-Hallum

And again, I apologize I think you had referenced the 400- to 800 million of potential value that you saw for Redbox, again a quick synopsis on how you got there?

Brian Turner

We looked at their revenue trajectory. We looked at their EBITDA trajectory. We consulted a couple of people. Again, we did not go out for formal valuations and this is just Coinstar’s estimate of where we think the value is at this point and hopefully you guys agree with us, but let’s see what you say in tomorrow’s notes.

Bob Evans - Craig-Hallum

You know what I have said for a long time.

Brian Turner

Yeah.

Bob Evans - Craig-Hallum

And then the EBITDA for EM – for E-Pay and Money Transfer, I believe you’ve got lumped together and I think that guidance for ‘08 was 10- to 15 million?

Brian Turner

I have to look in the notes, but yes, sounds right.

Bob Evans - Craig-Hallum

And I think that the EBITDA for those entities was similar to that in ‘07? Again I don’t have everything at my fingertips, wouldn’t there be more growth there given that GroupEx would allow that, the Money Transfer business to be EBITDA positive?

Brian Turner

Yeah. So you caught me being conservative?

Bob Evans - Craig-Hallum

Okay.

Brian Turner

I get it. I am being conservative. Any time you make an acquisition, we definitely have a budget for them and a plan for them. The management team is totally committed to that. But I am going to be conservative for at least one year until I see them perform.

Bob Evans - Craig-Hallum

Sure, sure. And could you give us any sense of how much the Money Transfer business might have on a P&L impact, obviously you said EBITDA positive, but we don’t know the – it’s below the line?

Brian Turner

No, absolutely. So, if you look at it, if you say, for EBITDA, we think it would be somewhere around breakeven, maybe plus 1 or 2 million, I think that’s possible, and that’s both GroupEx and CMT together. As you look at the bottom-line, this is really going to come down to intangibles. And so, we put some guidance in there as to what we think the valuation of intangibles are going to be, but we haven’t received that valuation yet, we will complete that over the next two months. So, I expected to lose money on our P&L basis because of the amortization of intangibles.

Bob Evans - Craig-Hallum

Okay, okay. And that’s the primary difference. So, from a cash EPS standpoint, you would be breakeven to positive.

Brian Turner

Yeah.

Bob Evans - Craig-Hallum

Okay. And, the revenue I think combined you said, was 115 to 125 in ‘08 and if we use the pro formas of ‘07 that was around 75?

Brian Turner

I believe that’s correct.

Bob Evans - Craig-Hallum

Okay. So, you are looking for significant growth?

Brian Turner

Yes.

Bob Evans - Craig-Hallum

And where does that come from or what drives that such a high level growth?

Brian Turner

Sure, it’s the transaction volume. So, what we are seeing is two things. One, we had transactional volume increase this year of 80% and that was for CMT. In our GroupEx call, if you recall back a couple of months, we said they were growing about 20% to 30% overall. So, you combine those two together, you get the growth rates that we are looking at.

The second one though is transaction rate is not the same as revenue increase, so revenue increase we saw at 62% this year and that depends on what corridor the money is moving through. And so, depending on whether you are going from Paris to Ukraine, or Rome to Cameroon, or the United States to Mexico, you have different fee structures. So, when we look at all together, we factor that all and that’s what led us going from, as you point out, mid 70s up to the 115 to 125 and we think that’s very achievable.

Bob Evans - Craig-Hallum

Okay, okay. Great. Thanks. Thanks for the detail even though you’ve just blown up model, I’ve got to start again. Thanks.

Brian Turner

Sorry.

Operator

Thank you. Our next question comes from the line of Rob Amman with RK Capital. Please go ahead.

Rob Amman - RK Capital

Yeah, question relates to the consolidated EBITDA guidance for ‘08 of 135 million to 145 million. Does that represent the consolidated EBITDA or to get your share of that 51% of Redbox. We will be backing out half the 20 million to 30 million or 10 million to $15 million lower for your share?

Brian Turner

And that’s a great question. Redbox is a 100% consolidated down to the net income line or almost, right above taxes. So minority interest comes out after EBITDA.

Rob Amman - RK Capital

Okay. So, we should be looking at your share of EBITDA at 120 million to 130 million then.

Brian Turner

No, what I am saying there is the one – it’s the EBITDA guidance we gave includes the 100% of the EBITDA from Redbox.

Rob Amman - RK Capital

Right. So, if I...

Brian Turner

Now, and then you go minority interest and below there. By the time we get to net income we will only have our 51% of their net income.

Rob Amman - RK Capital

Okay.

Brian Turner

Do you follow me?

Rob Amman - RK Capital

Yeah. I...

Brian Turner

And for EPS, we will only have our 51% of their net income.

Rob Amman - RK Capital

Understood, but...

Brian Turner

Okay.

Rob Amman - RK Capital

If we were to apply the same share of the EBITDA percentage, because even though we are talking about net income if we were to just take your share of EBITDA...

Brian Turner

Well, you could do that, absolutely.

Rob Amman - RK Capital

Okay.

Brian Turner

Sorry, I can’t endorse that because it’s not GAAP, but...

Rob Amman - RK Capital

Not GAAP...

Brian Turner

You know, you can absolutely do that, yes.

Rob Amman - RK Capital

Probably that’s a great way to think about it at least.

Brian Turner

Yeah.

Rob Amman - RK Capital

And then, with respect to the guidance of the $1 billion in revenue and 200 million in EBITDA in 2010 that also assumes 51% correct? So, similar logic there as well, right?

Brian Turner

Correct.

Rob Amman - RK Capital

Okay. And then if I think about the $1 billion in revenue guidance, if you exit this ‘08 at the midpoint of the 800 to 875 million and by that time entertainment is down to maybe $150 million run rate, so it’s less than 20% of your revenues and not growing. The CAGR to get from 837 million to 1 billion is only 11% or so. On a 20% flat that only implies about a 9% CAGR on the rest of the business. So, it seems significantly conservative given the pace of growth of Redbox or CMT, you know the steady, but solid growth in coin, the 1 billion just seems like an enormously conservative number.

Brian Turner

Hence, why we said might get there early.

Rob Amman - RK Capital

Okay, thank you.

Brian Turner

Yes.

Operator

Thank you. (Operator Instructions). Our next question comes from the line of Eric Wold of Merriman Curhan Ford. Please go ahead.

Eric Wold - Merriman Curhan Ford

Hey, I made it back down with the mute button. To follow-up on the entertainment side, I know on the scripts you are – you said that you will be taking out the 50% of the machines at Wal-Mart, the crane and the bulk, have you said how many machines that will replace to?

Brian Turner

No, because that’s still being figured out exactly. This news is very recent. We are working very closely with Wal-Mart. We have planograms for that that we’ve been working with. They have so many different types of stores that we have to go now store by store survey it you know we’ve got general approximation which we gave you today. It is our best estimate, so I think the actual machine count will change plus or minus going into the coming months.

Eric Wold - Merriman Curhan Ford

Then can you give us the – and what there is now, how many cranes and bulk there are actually is at Wal-Mart now?

Brian Turner

Sure, if you took our general number you know you took how many cranes and how many bulk heads, probably 50% of the total are Wal-Mart.

Eric Wold - Merriman Curhan Ford

Okay.

Brian Turner

And then take 50% of that for what’s coming out.

Eric Wold - Merriman Curhan Ford

Okay. And then, what – you know kind of the plan between you and them that kind of go in there, you know, make better uses of space and replace machines and all that, any other retailers looking to do the same things where you could kind of get a kind of a similar move of replacing you know the lower margin entertainment with a higher margin Redbox or coin with existing entertainment customers?

Dave Cole

Well, Eric, we already have a pretty strategic relationship with Albertsons and we have done a lot of that work with them and that has significantly improved their bottom line. And obviously we are talking to a lot of others customers about urban renewal and maximizing the returns per square foot and improving their traffic and their consumer experience. And we are doing learning labs where we take a number of stores, reset them to what we think will be a better consumer experience and more revenue and profit and that’s really ongoing with a number of retailers.

Brian Turner

And having said that, we don’t know or we haven’t seen anyone with plans like this.

Eric Wold - Merriman Curhan Ford

Okay, fair enough. And then two more questions. Previously in the Q&A you talked about how a Wal-Mart coin-counting machine relative to a non-Wal-Mart coin-counting machine is about the same in terms of sales per square foot at the door. Obviously, Wal-Mart is much bigger – can you give a sense of – these Wal-Mart machines are obviously so early in their growth. Give a sense of what they are doing relative to a non Wal-Mart has done the same kind of month kind of age if you will.

Brian Turner

Great, I think that you know and that’s a great question. And we’ve certainly answered this before, but you guys think of some of these bigger format Wal-Marts and they have multiple doorways. Does it make sense to have multiple machines per Wal-Mart which then we get let’s say you get three for a 180,000 you get back to the same one per 60,000. You know it may and I think that we are just going to have to experiment with that.

I think Redbox has seen a very similar thing you know Redbox the question was instead of having a 500-unit machine should you have a 1000-unit machine and Redbox actually tested some of that theory and what they found is the lines get too long. It’s better to have two 500-unit machines than one 1000. And I think we are going to have to see as we go forward with these coin units what a Wal-Mart makes sense, does it makes sense to have one per entrance?

Does it make sense to have only one for the whole store? Does it make sense to have two side-by-side? I think there is lots of options on that and I think as we got to the full rollout, we are just going to have to keep exploring that with our partner, Wal-Mart.

Eric Wold - Merriman Curhan Ford

Okay. And lastly, I knew you kind of talked about this on past calls, but as you get more and more of this cross-selling between Redbox machine and the Coin and what not at different locations, would it ever make sense to have the field service between two divisions work together where Coin field service is helping the Redbox’s team and vice versa if the two companies are not – if you don’t actually acquire Redbox and is a standalone company, whatever makes sense that kind of an agreement to enter to where you kind of share field service?

Dave Cole

Well, we certainly – we function as Redbox’s sales force with all of our traditional channels and classes of trade, so we work together there very well. And it’s not with – it’s very possible that that could happen, but certainly not in our current plans.

Eric Wold - Merriman Curhan Ford

Okay, perfect. Thanks guys.

Operator

Thank you. Our next question comes from the line of Bruce Simpson with William Blair. Please go ahead.

Bruce Simpson - William Blair

Hey Brian, after you take this big charge to write-down the impaired value of the entertainment stuff, what would be carrying value of all assets for entertainment service?

Brian Turner

Sure. So, the charge – part of it will go through inventory. So you can take roughly $4 million off of inventory. Part of it will go to intangibles; that’s roughly $7 million, and the rest will go against fixed assets.

Bruce Simpson - William Blair

Okay. So...

Brian Turner

So if you take the net fixed assets that we’ve got recorded just reduce those by I believe we get roughly $45 million.

Bruce Simpson - William Blair

Right. What I am asking is I can’t tell how much of those assets are coin and how much are entertainment. So how much value will still be on the balance sheet for your existing portfolio of entertainment machines after you take this charge?

Brian Turner

I’m sure.

Bruce Simpson - William Blair

In other words, how proportional is 65 million to the whole?

Brian Turner

Yeah, let me look at my notes here. Sorry, I am looking at my Chief Accounting Officer as we are talking here, so let me ask him on the open mic. So Rich, 85 is your carrying value or your net book value?

Richard Deck

Net book value.

Brian Turner

Net book value after...

Richard Deck

After the write-down.

Brian Turner

Okay. So my Chief Accounting Officer here tells me 85 after the write-down.

Bruce Simpson - William Blair

Okay. So you are writing down almost half, not quite to the value of the business?

Brian Turner

No, 45 on the we are just talking. Yeah – sorry, that was fixed assets. Is that the total, Rich?

Richard Deck

Yeah, that’s the total.

Brian Turner

Yes. You are correct.

Bruce Simpson - William Blair

Okay. In other words, it sounds like it’s going from about 150 to about 85?

Brian Turner

Yes, that’s correct.

Bruce Simpson - William Blair

Okay.

Brian Turner

Now remember – in this we are not writing down any of the goodwill, so we see significant value still, goodwill as evidenced by the other announcements with Wal-Mart today.

Bruce Simpson - William Blair

Okay. So was there a risk of a future charge against goodwill coming out of the entertainment services segment?

Brian Turner

Anything is possible, but I don’t think that’s likely.

Bruce Simpson - William Blair

Because you think the goodwill is – you think the total value of the segment is now appropriately valued after the write-down?

Brian Turner

Well, goodwill is reapportioned every year.

Bruce Simpson - William Blair

Yeah.

Brian Turner

When you look at it as reapportion based upon what is producing the EBITDA.

Bruce Simpson - William Blair

Yeah.

Brian Turner

As we said originally, a large part of why to buy in the entertainment space originally was get cross-sell. And one of the charts shows all the things that we cross-sold to the entertainment clients after we purchased them. That indicates that the original theory works. And so, if you look at Chart 3, there is actually two charts there. The first one is all the entertainment clients and then what we cross-sell to them.

And then if you look to the chart at the right there, stuff that was already preexisting as well in those ones. Those charts indicate two things as far as goodwill, our bundling approach is absolutely working, right, and our strategy. So as the auditors look at goodwill, they apportion or I guess we look at it may agree to it, I should rephrase that because auditors hate when I say that. But we apportion a lot of that goodwill related to the bundle because it’s paid off.

Bruce Simpson - William Blair

Okay. Last thing is clarify a little bit the subsidiary that you talked about that actually does the outsourcing or through which you have been kind of handing off the maintenance to the field service work and entertainment services?

Brian Turner

Sure. It’s called 4th Wall Management Services. It’s based up in Minneapolis. They came to us in – it must be November of ‘05 in connection with the Amusement Factory acquisition. They were a part of that overall acquisition strategy. They are a small group. They represent approximately 70 vendors and approximately 35 product lines, anything from air to water, to feminine hygiene, things like that that go into retailers.

We receive a sales commission on that and that helps us do quite a bit of this planograming work and the structuring of the 4th Wall because not only are we selling our own products in, but we are seeing are we selling in these other products. Now for that we just look for that entity to breakeven. So we are not trying to make a lot of money out of this. This is a service for our customers, but it gives us an opportunity.

So one of the things that we – that they had when we purchased them is they worked with a lot of other amusement vendors and we’ve made sure that they continue to do that and that where appropriate that as we win contracts those may go to a local participant. Now, we do that with the retailers’ knowledge. So the retailer is completely a partner in this process. So as we look to transition and we can push them back through this 4th Wall Management Service Group and push them back into those local amusement partners along with our retailers.

Bruce Simpson - William Blair

So then you would continue to own the hard asset, but someone else would actually be doing the servicing?

Brian Turner

Not necessarily. Most of the times someone else owns the hard asset, but we continue to have a sales relationship with the retailer at the top level and these other 70 vendors benefit from that because they get access to our sales resources. And as we are going to make a sale, if it makes sense, if the retailer goes, “Hey, can you help me get air and water into my parking lot.” We’ll say, “Sure. We know those vendors. Let us help you connect those up.” And so that helps us be the total category captain for that front wall.

Bruce Simpson - William Blair

So just kind of in terms of thinking about how that changes as you go to push some of these non-performing entertainment services assets through that vehicle, then how does that change either the revenue or the carrying value on the balance sheet?

Brian Turner

It changes both. And so what it does is reduce down the revenue for us and of course it is up to them, and again we may get sales commission for this, all right. And at certain points, we are selling the assets to those local retailers or local – sorry, not retailers, local vendors. So it affects both.

Bruce Simpson - William Blair

Okay. All right, thanks Brain.

Brian Turner

Nicole, is there more?

Operator

No, that is our last question. I’d like to turn it back over to you for closing remarks.

Dave Cole

Just to reiterate we are very excited about what we just announced with Wal-Mart and the prospects for the future of the business, and thank you all for calling in and giving us your time and attention today.

Operator

Thank you. Ladies and gentlemen, that does conclude our conference for today. If you would like to listen to a replay of this conference, you may dial 303-590-3030 and enter the pass code number 3829213 or you can dial 1-800-406-7325. Those numbers again are 303-590-3030 and 1-800-406-7325 and enter the pass code number 3829213. Thank you for your participation and you may now disconnect.

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Source: Coinstar, Inc. Q4 2007 Earnings Call Transcript
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