Outerwall Needs To Shut Down EcoATM And Needs Balanced Capital Allocation
Adib Motiwala • 39 Comments
Adib Motiwala • 39 Comments
Outerwall: EcoATM Segment Faces Severe Headwinds
John Zhang • 10 Comments
John Zhang • 10 Comments
Yesterday, 1:56 PM
- Outerwall (NASDAQ:OUTR) announces the deal to be acquired by affiliates of Apollo Global Management (APO +0.2%) for $52.00 per share has been completed.
- The company's segments will be managed and operated as three distinct businesses. Galen Smith was named CEO of Redbox, while James Gaherity and David Maquera will run the Coinstar and ecoATM businesses, respectively. Current Outerwall CEO Erik Prusch will step away.
- Source: Press Release
Yesterday, 1:08 PM
- With payment made, Apollo Global Management (NYSE:APO) has wrapped its purchase of kiosk operator Outerwall (NASDAQ:OUTR).
- Apollo paid $52/share (total enterprise value of $1.6B, including debt). On Sept. 23, about 69.3% of the outstanding shares of Outerwall were tendered and accepted.
- The firm said Outerwall's segments will be operated as three distinct businesses: Galen Smith will run Redbox as its CEO, James Gaherity will serve as CEO of Coinstar, and David Maquera will act as CEO of ecoATM.
- Outerwall CEO Erik Prusch is leaving the company.
Fri, Sep. 23, 7:20 AM
Sat, Aug. 27, 11:34 AM
- Many retailers are tightening up this year by reducing their store count or converting more locations to e-commerce fulfillment centers. Analysts note that although the strategy will lower revenue, over time the group should see improved bottom lines as underperforming stores are cut back and online efficiency improves. Amid the skittish trading with chain store stocks there could be some value deals.
- Store chains that currently trade with a PE ratio below 15 and offer a dividend yield of at least 2% include: TLRD, BKE, SMRT, GPS, AEO, CHS, CATO, TGT, KSS, M, HVT, WSM, PIR, BKS, OUTR, ODP, SPLS.
- ETFs: XLY, XRT, VCR, RTH, RETL, FXD, IYC, FDIS, SCC, RCD, UCC, PMR, JHMC, CNDF.
Thu, Jul. 28, 6:10 PM
- Hovering around a $52 deal price amid a takeover effort by Apollo Global Management, Outerwall (OUTR, -0.3% after hours) beat on top and bottom lines in its Q2 earnings report.
- The company swung to a profit of $40.5M from a year-ago loss of $45.6M. Core adjusted EBITDA from continuing operations was $115.9M (down 4.9%, pimarily due to lower operating income at Redbox).
- Revenue breakout: Redbox, $389.1M (down 11.4%); Coinstar, $84.2M (up 4.8%); ecoATM, $44.8M (up 71.9%).
- Free cash flow rose 8% to $60.1M.
- The company's suspended calls and guidance due to the pending merger.
- Press release
Thu, Jul. 28, 4:10 PM
Wed, Jul. 27, 5:35 PM
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Mon, Jul. 25, 9:17 AM
Mon, Jul. 25, 8:36 AM
- Outerwall (NASDAQ:OUTR) announces it will be acquired by affiliates of Apollo Global Management (NYSE:APO) for $52 per share in a deal that will see the company go private.
- The total enterprise value of the deal is $1.6B, including debt. The transaction is expected to close in Q3.
- OUTR closed at $46.91 on Friday. Shares are currently under a Nasdaq trading halt.
Thu, Jul. 21, 4:58 PM
- Entertainment-kiosk firm Redbox (OUTR +1.1%) is moving forward with a return to the streaming world after backing out earlier due to low demand.
- It's testing its new service Redbox Digital with some customers, Variety reports, with the focus on "transactional digital VOD and EST offering," and has published an iPad app for the new service.
- Unlike subscription offerings (Netflix), which it targeted with the shuttered Redbox Instant joint venture with Verizon, the new service will be in the line of iTunes, Google Play and Vudu, with the opportunity to rent or own individual titles (likely at a higher price than what its customers pay at the kiosk, typically $1.50).
- Early looks at the app show a Cast button that suggests it might work with Google's Chromecast, and Variety says Redbox plans to bring it to Roku devices.
Fri, Jun. 3, 5:36 PM
Thu, Apr. 28, 5:22 PM
- Outerwall (OUTR -5%) came out of a halt jumping 8.5% after hours, following an easy beat in Q1 earnings and a substantial hike in full-year guidance.
- For 2016, the company now expects EPS of $5.35-$6.55 (up from $5.00-$6.30, and vs. $5.45 consensus). And it forecasts EBITDA from continuing operations of $340M-$380M (vs. expected $349M).
- Revenues of $536M fell nearly 12% but beat expectations by more than 5%. And net income rose 8% to $38.5M.
- Sales by segment: Redbox, $421.49M (down 18.9%); Coinstar, $72.38M (up 4.4%); ecoATM, $42.1M (up 113.1%).
- Of Redbox's $98M revenue decline, $87.8M was in same-store sales and a $10.2M drop came from removed/relocated kiosks. The unit generated 137.7M rentals, down from a year-ago 173M rentals, amid an 18% decline in total disc rentals at same-store kiosks.
- Net revenue per rental was $3.06, up from a year-ago $3.00.
- Regarding its recent efforts to explore strategic and financial alternatives, that "is well under way. The Board is involved in a comprehensive process and is committed to acting in the best interest of all shareholders."
- Conference call to come at 5:30 p.m. ET.
- Press Release
Thu, Apr. 28, 4:12 PM
Wed, Apr. 27, 5:35 PM
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Mon, Apr. 18, 7:43 AM
- Piper Jaffray recently completed its semi-annual teen survey. The firm asked high school students how they currently rent movies and how they expect to rent movies in the future.
- Key takeaways: 1. 61% indicated they use download/streaming to rent movies today. 2. Netflix (NASDAQ:NFLX) was the most popular service for renting movies currently, with 64%, well ahead of competing services from Amazon (NASDAQ:AMZN) and Hulu (Comcast, Fox, Disney) at 4% and 3%, respectively. 3. Netflix topped the list of movie services that teens expect to use the most over the next five years. Its biggest streaming competitors Amazon and Hulu garnered 6% and 5% respectively, with Redbox (NASDAQ:OUTR) slipping to 8% from 10% for fall-15.
- "We are confident in continued domestic growth for Netflix given popularity in the teen demographic. Maintain Overweight and $122 price target." Implied upside 9%.
- Netflix reports today after the close.
- Now read Netflix's Pie In The Sky Valuation »
Tue, Apr. 12, 10:26 AM
- Kiosk company Outerwall (NASDAQ:OUTR) is up 1.7% after a deal with activists at Engaged Capital has it adding three directors to its board.
- Jeffrey Brown, chief of Brown Equity Partners, is joining the board immediately. Outerwall will also add two new independent directors nominated by Engaged Capital to the board likely before Aug. 1.
- Those moves will bring the board to a maximum of nine directors. Engaged Capital -- Outerwall's second-largest shareholder, beneficially owning about 14.6% -- agrees to vote its shares in favor of the company's nominees and agrees to standstill provisions.
- The moves bring some peace to what was sharp criticism from Engaged over governance at the company and a call for a bigger dividend.
- Now read Outerwall Still Has Room To Run »