Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 30, 2015

OUTERWALL INC.

(Exact name of registrant as specified in its charter)

Delaware

000-22555

94-3156448

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

1800 – 114^th Avenue SE

BELLEVUE, WA 98004

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (425) 943-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02

Results of Operations and Financial Condition.

On July 30, 2015, Outerwall Inc. (the “Company”) issued an earnings release announcing its financial results for the quarter ended June 30, 2015, and separate prepared remarks from its Interim Chief Executive Officer and Chief Financial Officer. Copies of the earnings release and prepared remarks are attached hereto as Exhibits 99.1 and 99.2.

Item 8.01

Other Events.

On July 30, 2015, the Company issued a press release announcing a quarterly cash dividend. A copy of the press release is attached hereto as Exhibit 99.3 and incorporated by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.		Description

99.1		Earnings release for the quarter ended June 30, 2015.

99.2		Prepared remarks from the Interim Chief Executive Officer and Chief Financial Officer.

99.3		Press release dated July 30, 2015.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	OUTERWALL INC.

	By:	/s/ Galen C. Smith
Date: July 30, 2015		Galen C. Smith
		Chief Financial Officer

Exhibit 99.1

OUTERWALL INC. ANNOUNCES 2015 SECOND QUARTER RESULTS

Board Names Erik E. Prusch CEO;

Company Reports Solid Execution and Expense Management;

Redbox and Coinstar Deliver Strong Margins and Enhanced Profitability;

ecoATM Non-Cash Goodwill Impairment Charge Impacts GAAP Results

BELLEVUE, Wash. – July 30, 2015 – Outerwall Inc. (Nasdaq: OUTR) today reported financial results for the second quarter ended June 30, 2015.

“In the second quarter we continued to execute on our key strategies and delivered core results that were up significantly year-over-year across the board,” said Nora M. Denzel, Outerwall’s interim chief executive officer. “Although we recognized a goodwill impairment for ecoATM during the quarter, given its unique value proposition, we still expect ecoATM revenue growth and profitability over time as the business scales. Overall, our outlook for the second half of 2015 remains positive, with a strong box office expected in the fourth quarter.”

The company also separately announced today that its board of directors has appointed Erik E. Prusch as chief executive officer effective July 31, 2015. Prusch will succeed Denzel, who will remain on the board.

“Erik joins Outerwall with more than 25 years of successful leadership and operations experience in consumer, retail, and technology companies, and I look forward to working with him to ensure a smooth transition,” said Denzel.

During the three months ended June 30, 2015, the company recognized a non-cash, non-tax deductible charge for goodwill impairment of $85.9 million related to its ecoATM business segment. The impairment charge reflects the impact of competitive pressures on ecoATM and lowered expectations for future revenue growth. The charge resulted in a GAAP reported loss. Core results exclude the impact of the impairment charge as a non-core adjustment.


	2015			2014		Change
	Second Quarter			Second Quarter		%
GAAP Results
• Consolidated revenue	$	545.4 million		$	546.5 million		(0.2	)%
• Income (loss) from continuing operations	$	(47.4) million		$	23.8 million		(298.7	)%
• Net income (loss)	$	(45.6) million		$	21.8 million		(309.7	)%
• Diluted earnings (loss) from continuing operations per common share*	$	(2.66	)	$	1.15		(331.3	)%
• Net cash provided by operating activities	$	75.1 million		$	62.8 million		19.6	%

Core Results**
• Core adjusted EBITDA from continuing operations	$	121.8 million		$	111.7 million		9.1	%
• Core diluted EPS from continuing operations*	$	2.19		$	1.52		44.1	%
• Free cash flow	$	55.6 million		$	36.8 million		51.4	%

Beginning in the first quarter of 2015, the company applied the two-class method of calculating earnings per share for its GAAP results because the impact of unvested restricted shares as a percentage of total common shares outstanding became more dilutive given the level of stock repurchases over the prior year. Core diluted EPS from continuing operations continues to be reported under the treasury stock method.

**	Refer to Appendix A for a discussion of Use of Non-GAAP Financial Measures and Core and Non-Core Results.

Highlights from the second quarter 2015 include:

•

Delivered 9.1% growth in core adjusted EBITDA from continuing operations to $121.8 million on essentially flat revenue reflecting solid execution and continued expense management

•

Core diluted EPS from continuing operations grew 44.1% to $2.19 driven by higher profitability, a lower tax rate and lower share count

•

Twentieth Century Fox Home Entertainment signed a new two-year, 28-day delay agreement with Redbox and Sony Pictures Home Entertainment recently extended the existing day and date agreement through September 2016

•

Free cash flow grew 51.4% to $55.6 million bringing the year to date total to $141.0 million

•

Repurchased 284,537 shares of common stock for $22.0 million and paid another quarterly dividend of $0.30 per share

“In the second quarter, we delivered solid growth in core adjusted EBITDA, core diluted EPS from continuing operations and free cash flow through solid execution as we continue to align costs and capital expenditures with revenue and optimize the kiosk networks. Our performance allows us to raise expectations for core adjusted EBITDA and core diluted EPS from continuing operations and free cash flow for 2015,” said Galen C. Smith, Outerwall’s chief financial officer.

“We remain committed to our disciplined approach to capital allocation and returning 75-to-100 percent of annual free cash flow to shareholders,” continued Smith. “In addition to paying out the quarterly dividend, we repurchased another $22 million in common stock in the quarter.”

CONSOLIDATED RESULTS

GAAP Results

Consolidated revenue for the second quarter of 2015 was down slightly to $545.4 million, compared with $546.5 million in the second quarter of 2014, on lower revenue from Redbox nearly offset by higher revenue from ecoATM and Coinstar.

The loss from continuing operations for the second quarter of 2015 was $47.4 million, or $2.66 of diluted loss from continuing operations per common share, compared with income from continuing operations of $23.8 million, or $1.15 of diluted earnings from continuing operations per common share, in the second quarter of 2014, primarily due to the non-cash $85.9 million goodwill impairment charge recognized in the second quarter of 2015.

Net cash provided by operating activities increased 19.6% to $75.1 million in the second quarter of 2015, compared with $62.8 million in the second quarter of 2014. The increase was primarily due to higher Redbox segment operating income and a change in net non-cash income and expense included in net income and a decrease in net cash outflows from changes in working capital.

Cash capital expenditures for the second quarter of 2015 decreased 25.2% to $19.5 million, compared with $26.1 million in the second quarter of 2014, with the decrease primarily related to lower capital expenditures in the company’s Redbox and Coinstar segments.

Core Results

Core adjusted EBITDA from continuing operations for the second quarter of 2015 was $121.8 million, which excludes the $85.9 million non-cash goodwill impairment charge and other non-core adjustments, an increase of $10.2 million, or 9.1%, compared with $111.7 million for the second quarter of 2014. The year-over-year increase was primarily due to higher Redbox segment operating income in the second quarter of 2015.

Core diluted EPS from continuing operations for the second quarter of 2015 was $2.19, an increase of 44.1% compared with $1.52 per diluted share in the second quarter of 2014. The increase was primarily attributable to the results of operations described and a reduction in the number of weighted average shares used in the diluted per share calculation due to stock repurchases. Non-core adjustments in the second quarter of 2015 amounted to $4.82 compared with $0.34 in the second quarter of 2014.

Free cash flow for the second quarter of 2015 was $55.6 million, an increase of $18.9 million, or 51.4%, compared with $36.8 million in the second quarter of 2014, primarily driven by higher net operating cash flow and lower capital expenditures.

SEGMENT RESULTS

Redbox

Redbox segment revenue for the second quarter of 2015 was $439.0 million, compared with $442.8 million in the second quarter of 2014, a modest 0.9% year-over-year decline despite a 13.1% decrease in rentals, as the recent price increases largely offset the impact of lower rentals.

Redbox generated approximately 146.0 million rentals in the second quarter of 2015, down from approximately 168.1 million rentals in the second quarter of 2014, primarily driven by a decline in video game rentals from a consumer transition to new generation platforms, lower demand from price-sensitive customers following the price increases, the expected secular decline in the physical market, and the removal of underperforming kiosks. Movie rentals were further impacted by weaker content and the timing of the release slate, as well as an increase in competition for viewing time from several significant theatrical releases during the second quarter of 2015.

Net revenue per rental was $3.00 in the second quarter of 2015, an increase of $0.37, or 14.1%, from $2.63 in the second quarter of 2014. The increase in net revenue per rental was primarily the result of the price increases, partially offset by an expected increase in single night rental activity as a result of the price increases.

Redbox segment operating income in the second quarter of 2015 was $98.9 million, an increase of 14.7%, compared with $86.2 million in the second quarter of 2014. Segment operating margin increased 300 basis points to 22.5% in the second quarter of 2015, compared with segment operating margin of 19.5% in the second quarter of 2014, primarily attributable to a decrease in direct operating expenses, driven by gross margin improvement. Direct operating and marketing expense also improved as the company continued to drive operating efficiencies in the business to align the cost structure with an anticipated gradual decline in physical rental demand.

Coinstar

Coinstar segment revenue was $80.3 million, an increase of $0.4 million, or 0.5%, compared with $79.9 million in the second quarter of 2014, primarily due to the growth in the number of Coinstar Exchange kiosks and transactions partially offset by decreased revenue for Coinstar in the U.S. due to a reduction in volume.

The U.K. business continued to benefit from the increased coin voucher product transaction fee implemented in August 2014, however the benefit was offset by the unfavorable exchange rate impact on U.K. revenue in the second quarter of 2015 due to the strengthening of the U.S. dollar versus the British pound as compared with the second quarter of 2014.

The average Coinstar transaction size increased on a year-over-year basis, while the number of transactions declined for the second quarter of 2015, reflecting larger pours and less frequent visits and a slight decrease in the U.S. kiosk base year-over-year as a result of continued optimization efforts.

Coinstar segment operating income was $31.9 million in the second quarter of 2015, an increase of $1.1 million, or 3.6%, compared with $30.8 million in the second quarter of 2014. Coinstar segment operating margin increased 120 basis points to 39.8% for the second quarter of 2015, compared with 38.6% in the second quarter of 2014, as the business continues to identify opportunities to reduce costs and actively manage expenses.

ecoATM

Revenue in the ecoATM segment was $26.1 million in the second quarter of 2015, an increase of $2.3 million, or 9.5%, compared with $23.8 million in the second quarter of 2014, primarily due to the increase in the number of ecoATM installed kiosks, offset by a lower average selling price on value devices due to a lower mix of higher value devices and lower collections per kiosk compared with the second quarter of 2014.

ecoATM installed approximately 120 net new kiosks in the quarter, primarily in the mass merchant channel, and ended the quarter with a total of 2,260 kiosks installed. During the quarter, ecoATM also redeployed approximately 70 underperforming kiosks from the grocery channel to the mall and mass merchant channels to optimize the profitability of the ecoATM kiosk network.

Collections of value devices on a per kiosk basis were lower in the second quarter of 2015 than in the second quarter of 2014 as a result of fewer transactions at the kiosks, primarily due to competition from carriers. Carrier marketing also impacted the number of higher value devices and the mix of overall value devices collected in the second quarter of 2015, which were the primary reasons for the decline in the average selling price of value devices compared with the second quarter of 2014. Compared with the first quarter of 2015, collections of higher value devices, collections per kiosk and the average selling price improved slightly in the second quarter of 2015 but were below our expectations and historical seasonal trends.

The segment operating loss increased $88.4 million in the second quarter of 2015 to $92.8 million, compared with $4.5 million in the second quarter of 2014, primarily due to the $85.9 million goodwill impairment charge recognized in the second quarter of 2015. Excluding the $85.9 million goodwill impairment charge, the segment operating loss increased $2.5 million, primarily due to an increase in direct operating expenses associated with the increase in the installed kiosk base. As the company continues to install additional ecoATM kiosks and existing kiosks continue to ramp, the company expects to leverage the fixed cost portions of direct operating expenses.

CAPITAL ALLOCATION

On July 28, 2015, the company’s board of directors declared a quarterly cash dividend of $0.30 per share expected to be paid on September 15, 2015, to all stockholders of record as of the close of business on August 28, 2015.

During the second quarter of 2015, the company repurchased 284,537 shares of common stock at an average price per share of $77.40 for $22.0 million. As of June 30, 2015, there was approximately $353.4 million remaining under the company’s stock repurchase authorization.

2015 ANNUAL GUIDANCE

The following table presents the company’s updated full-year 2015 guidance and reflects the company’s second quarter results and current outlook on the remainder of the year:


2015 FULL-YEAR GUIDANCE		As of
Dollars in millions, except per share data		July 30, 2015
Consolidated results
Revenue		$2,263 — $2,353
Core adjusted EBITDA from continuing operations⁽¹⁾		$481 — $515
Core diluted EPS from continuing operations⁽¹⁾⁽²⁾		$8.12 — $9.12
Free cash flow⁽¹⁾		$231 — $271
Weighted average diluted shares outstanding⁽²⁾		17.9 — 18.0
Core effective tax rate		35.5% — 37.5%
Segment revenue
Redbox		$1,850 — $1,925
Coinstar		$313 — $318
ecoATM		$100 — $110
Capital expenditures
Redbox		$15 — $20
Coinstar		$16 — $20
ecoATM		$25 — $34
Corporate		$26 — $33

Total CAPEX		$82 — $107

Net kiosk installations
Redbox		(1,000) — (1,900)
Coinstar		0 — (100)
ecoATM		400 — 500

(1)	Refer to Appendix A for a discussion of Use of Non-GAAP Financial Measures and Core and Non-Core Results

(2)	Excludes the impact of any potential share repurchases for the remainder of 2015

ADDITIONAL INFORMATION

Additional information regarding the company’s 2015 second quarter operating and financial results and guidance is included in the company’s prepared remarks, which, as well as this press release, are posted on the Investor Relations section of the corporate website at ir.outerwall.com.

CONFERENCE CALL

The company will host a conference call today at 2:30 p.m. PDT (5:30 p.m. EDT) to discuss second quarter 2015 earnings results and an update to 2015 guidance. The conference call will be webcast live and archived on the Investor Relations section of Outerwall’s website at ir.outerwall.com. A recording of the call will be available approximately two hours after the call ends through August 13, 2015, at 1-855-859-2056 or 1-404-537-3406, using conference ID 74496002.

ABOUT OUTERWALL INC.

Outerwall Inc. (Nasdaq: OUTR) has more than 20 years of experience creating some of the most profitable spaces for their retail partners. The company delivers breakthrough kiosk experiences that delight consumers and generate revenue for retailers. As the company that brought consumers Redbox^® entertainment, Coinstar^® money services, and ecoATM^® electronics recycling kiosks, Outerwall is leading the next generation of automated retail and paving the way for inventive, scalable businesses. Outerwall™ kiosks are in neighborhood grocery stores, drug stores, mass merchants, malls, and other retail locations in the United States, Canada, Puerto Rico, the United Kingdom, and Ireland. Learn more at www.outerwall.com.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “will,” “anticipate,” “goals,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding Outerwall Inc.’s anticipated growth and future operating results, including 2015 full year results. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Outerwall Inc. or its subsidiaries, as well as from risks and uncertainties beyond Outerwall Inc.’s control. Such risks and uncertainties include, but are not limited to,

•

competition from other entertainment providers,

•

the ability to achieve the strategic and financial objectives for our entry into new businesses, including ecoATM and SAMPLEit,

•

our ability to repurchase stock and the availability of an open trading window,

•

our declaration and payment of dividends, including our board’s discretion to change the dividend policy,

•

the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers and suppliers,

•

payment of increased fees to retailers, suppliers and other third-party providers, including financial service providers,

•

the timing of new DVD releases and the inability to receive delivery of DVDs on the date of their initial release to the general public, or shortly thereafter, or in sufficient quantity, for home entertainment viewing,

•

the effective management of our content library,

•

the timing of the release slate and the relative attractiveness of titles in a particular quarter or year,

•

the ability to attract new retailers, penetrate new markets and distribution channels and react to changing consumer demands,

•

loss of key personnel or the inability of replacements to quickly and successfully perform in those new roles,

•

the ability to generate sufficient cash flow to timely and fully service indebtedness and adhere to certain covenants and restrictions,

•

the ability to adequately protect our intellectual property, and

•

the application of substantial federal, state, local and foreign laws and regulations specific to our business.

The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review “Risk Factors” described in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These forward-looking statements reflect Outerwall Inc.’s expectations as of the date of this press release. Outerwall Inc. undertakes no obligation to update the information provided herein.

# # #

(Consolidated Financial Statements, Business Segment Information and Appendix A Follow)

Investor Contact:

Rosemary Moothart

Director of Investor Relations

425-943-8140

rosemary.moothart@outerwall.com

Media Contact:

Art Pettigrue

Senior Director, Communications

425-943-8576

art.pettigrue@outerwall.com

OUTERWALL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenue	$	545,369		$	546,527		$	1,154,005		$	1,144,289
Expenses:
Direct operating⁽¹⁾		369,619			381,734			774,803			801,376
Marketing		8,047			9,136			16,467			16,129
Research and development		2,039			3,412			4,123			6,886
General and administrative		48,783			48,596			97,339			101,204
Restructuring and lease termination costs		—			—			15,851			557
Goodwill impairment		85,890			—			85,890			—
Depreciation and other		45,174			47,812			87,860			95,754
Amortization of intangible assets		3,309			3,840			6,618			7,682

Total expenses		562,861			494,530			1,088,951			1,029,588

Operating income (loss)		(17,492	)		51,997			65,054			114,701
Other income (expense), net:
Loss from equity method investments, net		(133	)		(10,541	)		(265	)		(19,909	)
Interest expense, net		(12,183	)		(12,932	)		(24,254	)		(22,580	)
Other income (expense), net		642			1,614			(1,704	)		966

Total other income (expense), net		(11,674	)		(21,859	)		(26,223	)		(41,523	)

Income (loss) from continuing operations before income taxes		(29,166	)		30,138			38,831			73,178
Income tax expense		(18,185	)		(6,305	)		(44,027	)		(21,739	)

Income (loss) from continuing operations		(47,351	)		23,833			(5,196	)		51,439
Income (loss) from discontinued operations, net of tax		1,735			(2,080	)		(4,821	)		(6,511	)

Net income (loss)		(45,616	)		21,753			(10,017	)		44,928
Foreign currency translation adjustment⁽²⁾		473			(336	)		3,327			539

Comprehensive income (loss)	$	(45,143	)	$	21,417		$	(6,690	)	$	45,467

Income (loss) from continuing operations attributable to common shares:
Basic	$	(47,472	)	$	23,016		$	(5,465	)	$	49,880
Diluted	$	(47,472	)	$	23,036		$	(5,465	)	$	49,918

Basic earnings (loss) per common share:
Continuing operations	$	(2.66	)	$	1.18		$	(0.30	)	$	2.30
Discontinued operations		0.10			(0.11	)		(0.27	)		(0.30	)

Basic earnings (loss) per common share	$	(2.56	)	$	1.07		$	(0.57	)	$	2.00

Diluted earnings (loss) per common share:
Continuing operations	$	(2.66	)	$	1.15		$	(0.30	)	$	2.24
Discontinued operations		0.10			(0.10	)		(0.27	)		(0.29	)

Diluted earnings (loss) per common share	$	(2.56	)	$	1.05		$	(0.57	)	$	1.95

Weighted average common shares used in basic and diluted per share calculations:
Basic		17,848			19,541			18,057			21,730
Diluted		17,848			20,048			18,057			22,298
Dividends declared per common share	$	0.30			—		$	0.60			—

(1)	“Direct operating” excludes “Depreciation and other” of $29.6 million and $58.0 million for the three and six months ended June 30, 2015, respectively, and $31.4 million and $63.1 million for the three and six months ended June 30, 2014, respectively.

(2)	Foreign currency translation adjustment had no tax effect for the three and six months ended June 30, 2015 and 2014, respectively.

OUTERWALL INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)


	June 30, 2015			December 31, 2014
Assets
Current Assets:
Cash and cash equivalents	$	237,708		$	242,696
Accounts receivable, net of allowances of $979 and $2,223		33,432			48,590
Content library		146,556			180,121
Prepaid expenses and other current assets		60,064			39,837

Total current assets		477,760			511,244
Property and equipment, net		360,445			428,468
Deferred income taxes		2,480			11,378
Goodwill and other intangible assets, net		531,446			623,998
Other long-term assets		7,098			8,231

Total assets	$	1,379,229		$	1,583,319

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	147,209		$	168,633
Accrued payable to retailers		114,815			126,290
Other accrued liabilities		134,566			137,126
Current portion of long-term debt and other long-term liabilities		18,490			20,416
Deferred income taxes		25,676			21,432

Total current liabilities		440,756			473,897
Long-term debt and other long-term liabilities		892,075			973,669
Deferred income taxes		22,237			38,375

Total liabilities		1,355,068			1,485,941
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.001 par value - 5,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value - 60,000,000 authorized; 36,695,640 and 36,600,166 shares issued; 18,169,984 and 18,926,242 shares outstanding;		477,259			473,592
Treasury stock		(1,055,447	)		(996,293	)
Retained earnings		599,332			620,389
Accumulated other comprehensive income (loss)		3,017			(310	)

Total stockholders’ equity		24,161			97,378

Total liabilities and stockholders’ equity	$	1,379,229		$	1,583,319

OUTERWALL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Operating Activities:
Net income (loss)	$	(45,616	)	$	21,753		$	(10,017	)	$	44,928
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and other		45,174			49,154			93,718			98,258
Amortization of intangible assets		3,309			3,847			6,662			7,695
Share-based payments expense		3,289			3,079			7,192			6,844
Windfall excess tax benefits related to share-based payments		(160	)		(243	)		(686	)		(1,953	)
Deferred income taxes		(1,392	)		(5,440	)		(3,939	)		(15,004	)
Restructuring and lease termination costs⁽²⁾		—			—			1,680			—
Loss from equity method investments, net		133			10,541			265			19,909
Amortization of deferred financing fees and debt discount		692			1,216			1,385			2,522
Loss from early extinguishment of debt		—			1,963			—			1,963
Goodwill impairment		85,890			—			85,890			—
Other		383			(1,040	)		(816	)		(1,164	)
Cash flows from changes in operating assets and liabilities:
Accounts receivable, net		3,254			11,283			15,077			5,331
Content library		24,703			27,505			34,659			47,486
Prepaid expenses and other current assets		(18,976	)		(24,952	)		(22,082	)		22,003
Other assets		154			599			322			1,036
Accounts payable		(20,617	)		(43,605	)		(17,697	)		(70,995	)
Accrued payable to retailers		6,931			8,762			(11,510	)		(6,723	)
Other accrued liabilities		(12,008	)		(1,589	)		1,112			(4,716	)

Net cash flows from operating activities⁽¹⁾		75,143			62,833			181,215			157,420
Investing Activities:
Purchases of property and equipment		(19,508	)		(26,076	)		(40,217	)		(53,016	)
Proceeds from sale of property and equipment		2,817			962			2,940			1,793
Cash paid for equity investments		—			—			—			(10,500	)

Net cash flows used in investing activities⁽¹⁾		(16,691	)		(25,114	)		(37,277	)		(61,723	)
Financing Activities:
Proceeds from issuance of senior unsecured notes		—			295,500			—			295,500
Proceeds from new borrowing on Credit Facility		77,000			230,000			112,000			505,000
Principal payments on Credit Facility		(68,875	)		(505,000	)		(185,750	)		(534,375	)
Financing costs associated with Credit Facility and senior unsecured notes		—			(2,082	)		—			(2,082	)
Settlement and conversion of convertible debt		—			(17,720	)		—			(17,724	)
Repurchases of common stock		(22,023	)		(53,413	)		(62,731	)		(474,480	)
Dividends paid		(5,417	)		—			(11,019	)		—
Principal payments on capital lease obligations and other debt		(3,033	)		(3,384	)		(6,278	)		(7,081	)
Windfall excess tax benefits related to share-based payments		160			243			686			1,953
Withholding tax paid on vesting of restricted stock net of proceeds from exercise of stock options		1,887			563			(1,201	)		(1,025	)

Net cash flows used in financing activities⁽¹⁾		(20,301	)		(55,293	)		(154,293	)		(234,314	)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015		2014			2015			2014
Effect of exchange rate changes on cash		1,623		(746	)		5,367			406

Change in cash and cash equivalents		39,774		(18,320	)		(4,988	)		(138,211	)
Cash and cash equivalents:
Beginning of period		197,934		251,546			242,696			371,437

End of period	$	237,708	$	233,226		$	237,708		$	233,226

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	10,933	$	3,198		$	22,846		$	17,210
Cash paid during the period for income taxes, net	$	53,905	$	32,853		$	66,896		$	9,189
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment financed by capital lease obligations	$	257	$	2,467		$	977		$	5,513
Purchases of property and equipment included in ending accounts payable	$	2,411	$	1,724		$	4,436		$	1,724
Common stock issued on conversion of callable convertible debt	$	—	$	12,715		$	—		$	12,715
Non-cash debt issue costs	$	—	$	6,069		$	—		$	6,069

(1)

During the first quarter of 2015, we discontinued our Redbox operations in Canada. 2014 also includes the wind-down process of certain new ventures that were discontinued during 2013. Cash flows from these discontinued operations are not segregated from cash flows from continuing operations in all periods presented.

(2)	The non-cash restructuring and lease termination costs in the six months ended June 30, 2015 of $1.7 million is composed of $6.9 million in impairments of lease related assets partially offset by a $5.2 million benefit resulting from the lease termination.

OUTERWALL INC.

BUSINESS SEGMENT AND ENTERPRISEWIDE INFORMATION

(unaudited)

Changes in our Organizational Structure

During the first quarter of 2015, we added ecoATM, our electronic device recycling business, as a separate reportable segment. Previously, the results of ecoATM along with those of other self-service concepts were included in our New Ventures segment. The combined results of the other self-service concepts, which include product sampling kiosk concept SAMPLEit, are now included in the All Other reporting category in the reconciliation below as they do not meet quantitative thresholds to be reported as a separate segment. All goodwill previously allocated to the New Ventures segment has been allocated to the ecoATM segment.

Comparability of Segment Results

We have recast prior period results for the following:

•

Discontinued operations, consisting of our Redbox operations in Canada which we shut down during the first quarter of 2015; and

•

The addition of our ecoATM segment and an All Other reporting category, which we added during the first quarter of 2015.

Our analysis and reconciliation of our segment information to the consolidated financial statements that follows covers our results of operations, which consists of our Redbox, Coinstar and ecoATM segments, Corporate Unallocated expenses and All Other. All Other includes the results of other self-service concepts, which we regularly assess to determine whether continued funding or other alternatives are appropriate.

OUTERWALL INC.

BUSINESS SEGMENT AND ENTERPRISEWIDE INFORMATION

(unaudited)


Dollars in thousands
Three Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	438,976		$	80,279		$	26,062		$	52		$	—		$	545,369
Expenses:
Direct operating		301,444			39,358			27,227			1,078			512			369,619
Marketing		4,266			1,232			2,149			258			142			8,047
Research and development		—			—			1,549			1			489			2,039
General and administrative		34,336			7,768			2,094			2,644			1,941			48,783
Goodwill impairment		—			—			85,890			—			—			85,890

Segment operating income (loss)		98,930			31,921			(92,847	)		(3,929	)		(3,084	)		30,991
Less: depreciation, amortization and other		(33,063	)		(8,437	)		(6,305	)		(678	)		—			(48,483	)

Operating income (loss)		65,867			23,484			(99,152	)		(4,607	)		(3,084	)		(17,492	)
Loss from equity method investments, net		—			—			—			—			(133	)		(133	)
Interest expense, net		—			—			—			—			(12,183	)		(12,183	)
Other, net		—			—			—			—			642			642

Income (loss) from continuing operations before income taxes	$	65,867		$	23,484		$	(99,152	)	$	(4,607	)	$	(14,758	)	$	(29,166	)


Dollars in thousands
Three Months Ended June 30, 2014	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	442,838		$	79,880		$	23,799		$	10		$	—		$	546,527
Expenses:
Direct operating		317,376			40,203			22,387			436			1,332			381,734
Marketing		5,533			1,557			927			220			899			9,136
Research and development		18			153			1,391			675			1,175			3,412
General and administrative		33,692			7,169			3,564			573			3,598			48,596

Segment operating income (loss)		86,219			30,798			(4,470	)		(1,894	)		(7,004	)		103,649
Less: depreciation, amortization and other		(38,783	)		(8,921	)		(3,812	)		(136	)		—			(51,652	)

Operating income (loss)		47,436			21,877			(8,282	)		(2,030	)		(7,004	)		51,997
Loss from equity method investments, net		—			—			—			—			(10,541	)		(10,541	)
Interest expense, net		—			—			—			—			(12,932	)		(12,932	)
Other, net		—			—			—			—			1,614			1,614

Income (loss) from continuing operations before income taxes	$	47,436		$	21,877		$	(8,282	)	$	(2,030	)	$	(28,863	)	$	30,138

OUTERWALL INC.

BUSINESS SEGMENT AND ENTERPRISEWIDE INFORMATION

(unaudited)

Dollars in thousands


Six Months Ended June 30, 2015	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	958,509		$	149,609		$	45,811		$	76		$	—		$	1,154,005
Expenses:
Direct operating		644,379			76,621			50,033			2,269			1,501			774,803
Marketing		9,091			2,410			3,879			578			509			16,467
Research and development		—			—			3,005			(84	)		1,202			4,123
General and administrative		68,071			15,563			4,062			5,151			4,492			97,339
Restructuring and lease termination costs		15,174			550			127			—			—			15,851
Goodwill impairment		—			—			85,890			—			—			85,890

Segment operating income (loss)		221,794			54,465			(101,185	)		(7,838	)		(7,704	)		159,532
Less: depreciation, amortization and other		(64,670	)		(16,255	)		(12,207	)		(1,346	)		—			(94,478	)

Operating income (loss)		157,124			38,210			(113,392	)		(9,184	)		(7,704	)		65,054
Loss from equity method investments, net		—			—			—			—			(265	)		(265	)
Interest expense, net		—			—			—			—			(24,254	)		(24,254	)
Other, net		—			—			—			—			(1,704	)		(1,704	)

Income (loss) from continuing operations before income taxes	$	157,124		$	38,210		$	(113,392	)	$	(9,184	)	$	(33,927	)	$	38,831


Dollars in thousands

Six Months Ended June 30, 2014	Redbox			Coinstar			ecoATM			All Other			Corporate Unallocated			Total
Revenue	$	955,887		$	148,633		$	39,745		$	24		$	—		$	1,144,289
Expenses:
Direct operating		680,977			77,926			38,318			844			3,311			801,376
Marketing		9,993			2,563			1,595			381			1,597			16,129
Research and development		26			422			3,175			1,307			1,956			6,886
General and administrative		72,393			14,166			6,443			1,494			6,708			101,204
Restructuring and lease termination costs		534			23			—			—			—			557

Segment operating income (loss)		191,964			53,533			(9,786	)		(4,002	)		(13,572	)		218,137
Less: depreciation, amortization and other		(78,187	)		(17,484	)		(7,524	)		(241	)		—			(103,436	)

Operating income (loss)		113,777			36,049			(17,310	)		(4,243	)		(13,572	)		114,701
Loss from equity method investments, net		—			—			—			—			(19,909	)		(19,909	)
Interest expense, net		—			—			—			—			(22,580	)		(22,580	)
Other, net		—			—			—			—			966			966

Income (loss) from continuing operations before income taxes	$	113,777		$	36,049		$	(17,310	)	$	(4,243	)	$	(55,095	)	$	73,178

APPENDIX A

Non-GAAP Financial Measures

Non-GAAP measures may be provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”).

We use the following non-GAAP financial measures to evaluate our financial results:

•

Core adjusted EBITDA from continuing operations;

•

Core diluted earnings per share (“EPS”) from continuing operations;

•

Free cash flow; and

•

Net debt and net leverage ratio.

These measures, the definitions of which are presented below, are non-GAAP because they exclude certain amounts which are included in the most directly comparable measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for our GAAP financial measures and may not be comparable with similarly titled measures of other companies.

Core and Non-Core Results

We distinguish our core activities, those associated with our primary operations which we directly control, from non-core activities. Non-core activities are primarily nonrecurring events or events we do not directly control. Our non-core adjustments for the periods presented include i) goodwill impairment, ii) restructuring costs (including severance and early lease termination costs and related impairment of assets) associated with actions to reduce costs in our continuing operations across the Company, iii) compensation expense for rights to receive cash issued in conjunction with our acquisition of ecoATM and attributable to post-combination services as they are fixed amount acquisition related awards and not indicative of the directly controllable future business results, iv) income or loss from equity method investments, which represents our share of income or loss from entities we do not consolidate or control, v) tax benefits related to a net operating loss adjustment, and vi) tax benefit related to worthless stock deduction (“Non-Core Adjustments”).

We believe investors should consider our core results because they are more indicative of our ongoing performance and trends, are more consistent with how management evaluates our operational results and trends, provide meaningful supplemental information to investors through the exclusion of certain expenses which are either nonrecurring or may not be indicative of our directly controllable business operating results, allow for greater transparency in assessing our performance, help investors better analyze the results of our business and assist in forecasting future periods.

Core Adjusted EBITDA from continuing operations

Our non-GAAP financial measure core adjusted EBITDA from continuing operations is defined as earnings from continuing operations before depreciation, amortization and other; interest expense, net; income taxes; share-based payments expense; and Non-Core Adjustments.

A reconciliation of core adjusted EBITDA from continuing operations to net income from continuing operations, the most comparable GAAP financial measure, is presented in the following table:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
Dollars in thousands	2015			2014		2015			2014
Net income (loss) from continuing operations	$	(47,351	)	$	23,833	$	(5,196	)	$	51,439
Depreciation, amortization and other		48,483			51,652		94,478			103,436
Interest expense, net		12,183			12,932		24,254			22,580
Income taxes		18,185			6,305		44,027			21,739
Share-based payments expense⁽¹⁾		3,320			3,079		7,261			6,844

Adjusted EBITDA from continuing operations		34,820			97,801		164,824			206,038
Non-Core Adjustments:
Goodwill impairment		85,890			—		85,890			—
Restructuring costs		—			—		15,851			469
Rights to receive cash issued in connection with the acquisition of ecoATM		1,005			3,338		2,925			6,759
Loss from equity method investments, net		133			10,541		265			19,909

Core adjusted EBITDA from continuing operations	$	121,848		$	111,680	$	269,755		$	233,175

(1)	Includes both non-cash share-based compensation for executives, non-employee directors and employees as well as share-based payments for content arrangements.

Core Diluted EPS from continuing operations

Our non-GAAP financial measure core diluted EPS from continuing operations is defined as diluted earnings per share from continuing operations utilizing the treasury stock method excluding non-core adjustments, net of applicable taxes.

A reconciliation of core diluted EPS from continuing operations to diluted EPS from continuing operations, the most comparable GAAP financial measure, is presented in the following table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Diluted EPS from continuing operations per common share (two-class method)	$	(2.66	)	$	1.15		$	(0.30	)	$	2.24
Adjustment from participating securities allocation and share differential to treasury stock method⁽¹⁾		0.03			0.03			0.01			0.05

Diluted EPS from continuing operations (treasury stock method)		(2.63	)		1.18			(0.29	)		2.29
Non-Core Adjustments, net of tax:⁽¹⁾
Goodwill impairment		4.77			—			4.71			—
Restructuring costs		—			—			0.53			0.01
Rights to receive cash issued in connection with the acquisition of ecoATM		0.04			0.13			0.11			0.23
Loss from equity method investments, net		0.01			0.32			0.01			0.53
Tax benefit from net operating loss adjustment		—			—			—			(0.04	)
Tax benefit of worthless stock deduction		—			(0.11	)		—			(0.10	)

Core diluted EPS from continuing operations	$	2.19		$	1.52		$	5.07		$	2.92

(1)	Non-Core Adjustments are presented after-tax using the applicable effective tax rate for the respective periods.

A reconciliation of amounts used in calculating core diluted EPS from continuing operations in the table above is presented in the following table:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
In thousands	2015			2014		2015			2014
Income (loss) from continuing operations attributable to common shares	$	(47,472	)	$	23,036	$	(5,465	)	$	49,918
Add: income from continuing operations allocated to participating securities		121			797		269			1,521

Income (loss) from continuing operations	$	(47,351	)	$	23,833	$	(5,196	)	$	51,439

Weighted average diluted common shares		17,848			20,048		18,057			22,298
Add: diluted common equivalent shares of participating securities		127			133		181			190
Add: dilutive securities under treasury stock method		14			—		16			—

Weighted average diluted shares (treasury stock method)		17,989			20,181		18,254			22,488

Free Cash Flow

Our non-GAAP financial measure free cash flow is defined as net cash provided by operating activities after capital expenditures. We believe free cash flow is an important non-GAAP measure as it provides additional information to users of the financial statements regarding our ability to service, incur or pay down indebtedness and repurchase our securities. A reconciliation of free cash flow to net cash provided by operating activities, the most comparable GAAP financial measure, is presented in the following table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
Dollars in thousands	2015			2014			2015			2014
Net cash provided by operating activities	$	75,143		$	62,833		$	181,215		$	157,420
Purchase of property and equipment		(19,508	)		(26,076	)		(40,217	)		(53,016	)

Free cash flow	$	55,635		$	36,757		$	140,998		$	104,404

Net Debt and Net Leverage Ratio

Our non-GAAP financial measure net debt is defined as the total face value of outstanding debt, including capital leases, less cash and cash equivalents held in financial institutions domestically. Our non-GAAP financial measure net leverage ratio is defined as net debt divided by core adjusted EBITDA from continuing operations for the last twelve months (LTM). We believe net debt and net leverage ratio are important non-GAAP measures because they:

•

are used to assess the degree of leverage by management;

•

provide additional information to users of the financial statements regarding our ability to service, incur or pay down indebtedness and repurchase our securities as well as additional information about our capital structure; and

•

are reported quarterly to support covenant compliance under our credit agreement.

A reconciliation of net debt to total outstanding debt including capital leases, the most comparable GAAP financial measure, is presented in the following table:


	June 30,			December 31,
Dollars in thousands	2015			2014
Senior unsecured notes	$	650,000		$	650,000
Term loans		142,500			146,250
Revolving line of credit		90,000			160,000
Capital leases		9,876			15,391

Total principal value of outstanding debt including capital leases		892,376			971,641
Less domestic cash and cash equivalents held in financial institutions		(62,609	)		(66,546	)

Net debt		829,767			905,095
LTM Core adjusted EBITDA from continuing operations⁽¹⁾	$	533,400		$	496,820

Net leverage ratio		1.56			1.82

(1)	LTM Core Adjusted EBITDA from continuing operations for the twelve months ended June 30, 2015 and December 31, 2014 was determined as follows:


Dollars in thousands
Core adjusted EBITDA from continuing operations for the six months ended June 30, 2015	$	269,755
Add: Core adjusted EBITDA from continuing operations for the twelve months ended December 31, 2014 ⁽¹⁾		496,820
Less: Core adjusted EBITDA from continuing operations for the six months ended June 30, 2014		(233,175	)

LTM Core adjusted EBITDA from continuing operations for the twelve months ended June 30, 2015	$	533,400

(1)

Core adjusted EBITDA from continuing operations for the twelve months ended December 31, 2014 is obtained from our Form 8-K filed on May 8, 2015 for the period ended December 31, 2014, where it is reconciled to net income from continuing operations, the most comparable GAAP financial measure, and represents the LTM core adjusted EBITDA from continuing operations we use in our calculation of net leverage ratio as of December 31, 2014.


		Exhibit 99.2

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Today, July 30, 2015, Outerwall Inc. issued a press release announcing financial results for the 2015 second quarter. The following prepared remarks provide additional information related to the company’s operating and financial performance and 2015 full year guidance.

The company will host a conference call today at 2:30 p.m. PDT to discuss 2015 second quarter results and 2015 full year guidance.

The earnings press release, prepared remarks and conference call webcast are available on the Investor Relations section of Outerwall’s website at ir.outerwall.com.

Safe Harbor for Forward-Looking Statements

Certain statements in these prepared remarks are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “will,” “anticipate,” “goals,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in these prepared remarks include statements regarding Outerwall Inc.’s anticipated growth and future operating results, including 2015 full year results. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Outerwall Inc. or its subsidiaries, as well as from risks and uncertainties beyond Outerwall Inc.’s control. Such risks and uncertainties include, but are not limited to,

•

competition from other entertainment providers,

•

the ability to achieve the strategic and financial objectives for our entry into new businesses, including ecoATM and SAMPLEit,

•

our ability to repurchase stock and the availability of an open trading window,

•

our declaration and payment of dividends, including our board’s discretion to change the dividend policy,

•

the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers and suppliers,

•

payment of increased fees to retailers, suppliers and other third-party providers, including financial service providers,

•

the effective management of our content library,

•

the timing of the release slate and the relative attractiveness of titles in a particular quarter or year,

•

the ability to attract new retailers, penetrate new markets and distribution channels and react to changing consumer demands,

•

loss of key personnel or the inability of replacements to quickly and successfully perform in those new roles,

•

the ability to generate sufficient cash flow to timely and fully service indebtedness and adhere to certain covenants and restrictions,

•

the ability to adequately protect our intellectual property, and

•

the application of substantial federal, state, local and foreign laws and regulations specific to our business.

The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review “Risk Factors” described in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These forward-looking statements reflect Outerwall Inc.’s expectations as of the date of these prepared remarks. Outerwall Inc. undertakes no obligation to update the information provided herein.

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Non-GAAP Financial Measures

Non-GAAP measures may be provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”).

We use the following non-GAAP financial measures to evaluate our financial results:

•

Core adjusted EBITDA from continuing operations;

•

Core diluted earnings per share (“EPS”) from continuing operations;

•

Free cash flow; and

•

Net debt and net leverage ratio.

These measures, the definitions of which are presented in Appendix A, are non-GAAP because they exclude certain amounts which are included in the most directly comparable measure calculated and presented in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for our GAAP financial measures and may not be comparable with similarly titled measures of other companies.

Core and Non-Core Results

Page 2

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Overview

Today we announced that following an extensive search the board has named Erik Prusch as our new chief executive officer. Erik joins our company with invaluable experience in the consumer, retail and technology industries and we look forward to working with him as we move forward.

Our second quarter performance reflects continued success in our efforts to drive enhanced profitability and free cash flow. While our Q2 GAAP results include a non-cash, non-tax deductible goodwill impairment charge of $85.9 million related to our ecoATM segment, our core results continued to be strong, with sizable growth in core adjusted EBITDA and core diluted EPS from continuing operations. At the same time, we continue to return capital to shareholders through a quarterly dividend and share repurchases.

Q2 Consolidated Results

The year-over-year comparisons we make in these prepared remarks will be Q2 2015 compared with Q2 2014 unless otherwise noted.


	Three Months Ended June 30,					Change
(In millions, except per share data)	2015			2014		%
GAAP Results
Consolidated revenue	$	545.4		$	546.5		(0.2	)%
Income (loss) from continuing operations	$	(47.4	)	$	23.8		(298.7	)%
Net income (loss)	$	(45.6	)	$	21.8		(309.7	)%
Diluted earnings (loss) from continuing operations per common share*	$	(2.66	)	$	1.15		(331.3	)%
Net cash provided by operating activities	$	75.1		$	62.8		19.6	%

Core Results**
Core adjusted EBITDA from continuing operations	$	121.8		$	111.7		9.1	%
Core diluted EPS from continuing operations*	$	2.19		$	1.52		44.1	%
Free cash flow	$	55.6		$	36.8		51.4	%

Beginning in Q1 2015, we applied the two-class method of calculating earnings per share for our GAAP results because the impact of unvested restricted shares as a percentage of total common shares outstanding became more dilutive given the level of stock repurchases over the past year. Core diluted EPS from continuing operations continues to be reported under the treasury stock method

**	Refer to Appendix A for a discussion of the Use of Non-GAAP Financial Measures and Core and Non-Core Results

Our Q2 highlights include:

•

We delivered 9.1% growth in core adjusted EBITDA from continuing operations to $121.8 million on essentially flat revenue reflecting solid execution and continued expense management

•

Core diluted EPS from continuing operations grew 44.1% to $2.19 driven by higher profitability, a lower tax rate and lower share count

•

Twentieth Century Fox Home Entertainment (Fox) signed a new two-year, 28-day delay agreement with Redbox and Sony Pictures Home Entertainment (Sony) recently extended our existing day and date agreement through September 2016

•

Free cash flow (FCF) grew 51.4% to $55.6 million bringing the year to date total to $141.0 million

Page 3

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

•

We repurchased 284,537 shares of common stock for $22.0 million and paid another quarterly dividend of $0.30 per share

Capital Allocation

Q2 actions reflect our focus on disciplined investment in our business and our continued commitment to return 75% to 100% of annual free cash flow to shareholders.

During Q2, we repurchased 284,537 shares of our common stock at an average price of $77.40 per share for $22.0 million through open market purchases and a 10b5-1 plan. As of June 30, 2015, there was approximately $353.4 million in authority remaining under our current stock repurchase program.

Capital Expenditures

In Q2 our total investment in CAPEX on an accrual basis was $21.9 million, primarily reflecting investment in ecoATM kiosks to scale the business, maintenance to support the Redbox and Coinstar kiosk networks, and corporate investments in technology, equipment and facilities. The following is a breakdown of CAPEX by category for Q2:


Q2 2015 CAPEX *(Accrual Basis)*
(In millions)	New		Maintenance		Other		TOTAL
Redbox	$	0.1	$	2.1	$	0.7	$	2.9
Coinstar		0.7		2.5		—		3.2
ecoATM		11.0		—		—		11.0
Corporate		—		—		4.8		4.8

TOTAL	$	11.8	$	4.6	$	5.5	$	21.9

Additional Q2 Consolidated Metrics


Metric	Amount			Comment
Total net interest expense	$	12.2	MM
Core effective tax rate		32.0	%
Cash and cash equivalents	$	237.7	MM	Includes $81.2MM payable to retailer partners; additionally, $62.6MM of total cash was held in financial institutions domestically
Total principal value of outstanding debt, including capital leases	$	892.4	MM
Net leverage ratio*		1.56	x

*	Refer to Appendix A for a discussion of Use of Non-GAAP Financial Measures and Core and Non-Core Results

Non-Core Results

In Q2 2015, total pretax non-core expenses were $87.0 million primarily driven by the $85.9 million non-cash goodwill impairment charge taken for ecoATM and $1.0 million in expense in rights to receive cash issued in connection with the acquisition of ecoATM.

Page 4

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

During the second quarter of 2015, it became evident that revenue and profitability trends at ecoATM were not being achieved as expected; for example, collection rates, revenue and profitability on a per kiosk basis declined compared with prior periods and expected seasonal trends. As a result, we lowered our internal expectations for future revenue growth and profitability. This was primarily driven by certain challenges in an increasingly competitive industry that impact per kiosk device collections, revenue and profitability expectations and the timing and installation of kiosks. Further, while these competitive challenges grew more acute during the second quarter, we also experienced the loss of a key executive at ecoATM.

Q2 Segment Operating Results – Redbox

Key Metrics


Category	Q2 2015			Q2 2014
Revenue	$	439.0	MM	$	442.8	MM
Rentals		146.0	MM		168.1	MM
Net revenue per rental	$	3.00		$	2.63
Same store sales growth (decline)		(0.6	)%		(7.8	)%
Gross margin		57.5	%		56.7	%
Segment operating income	$	98.9	MM	$	86.2	MM
Segment operating margin		22.5	%		19.5	%
Unique credit cards renting in quarter		35.1	MM		38.5	MM
Total kiosks (at quarter end)		41,340			42,550
Total locations (at quarter end)		33,840			34,950
Blu-ray
Blu-ray as percentage of rentals		14.1	%		14.0	%
Blu-ray as percentage of Redbox revenue		18.1	%		16.7	%

In Q2, Redbox revenue was essentially flat year-over-year at $439.0 million, reflecting the price increase taken in December 2014 that helped sustain revenue despite a decline in rentals, which was driven by several factors, including:

•

consumer transition to new generation platforms and content in our video games rental business;

•

lower demand from price-sensitive customers following the price increases, particularly in a time of weak seasonality;

•

record-breaking performance from mega box office releases during the quarter, such as Jurassic World and Avengers: Age of Ultron;

•

the ongoing secular decline in the physical market; and

•

the removal of underperforming kiosks.

Movie rentals were also impacted by the relative strength of content and the timing of the release slate. While box office for Redbox releases was up 53.9% year-over-year, the majority of the increase was driven by American Sniper (with a $350.1 million box office) and 3 titles released on the last day of the quarter. Due to more titles being released in mid-to-late June, the full rental and revenue benefit is not included in the quarter and will flow into Q3. Additionally, the release of Jurassic World in June created competition for viewing time during a period when a significant portion of our box office was released. Further, the box office dollars driven by delay titles were 80.5% higher than Q2 2014 and typically delay titles do not generate the rentals

Page 5

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

and revenue of day-and-date titles. Q2 2014 had a much higher box office mix of comedies than Q2 2015, which tend to perform well for Redbox. The mixed improvement in box office dollars along with the factors mentioned resulted in a 13.1% decrease in rentals to 146.0 million compared with 168.1 million in Q2 2014.

Customer engagement remains strong as we continue to build personalized relationships with our consumers via web, email and mobile marketing tools. By the end of Q2, enrollment in Redbox Play Pass, our loyalty program, increased 23.7% sequentially from Q1 to 2.3 million members. During Q2, members who participated in Redbox Play Pass rented nearly twice as frequently as non-members. In addition, we continue to expand the Redbox digital network of consumer touch points with substantial year-over-year growth across all categories, including 40.0 million email subscribers, 14.2% growth; 6.8 million text club members, 36.1% growth; and 30.0 million apps downloaded, 14.9% growth. Redbox is committed to growing customer engagement through investments in technology and capabilities to provide an easy and rewarding experience.

We expect the impact of the price increase to vary as demand changes during periods of strong and weak release schedules, promotional activity, seasonality, and competing options such as theatrical releases. Our more price sensitive customers may change their rental habits over time in response to the new prices, which would impact total rentals or nights out.

Q2 average check increased 14.1% year-over-year to $3.00, driven primarily by the price increase for movies and video games. The higher price points offset the expected increase in single-night rentals, which represented 58.9% of total rentals, an increase of 250 basis points year-over-year. We continued to invest in customer-specific promotional offerings to lessen the impact of the demand decline from the price increase and increased competition. Our promotional spending has shifted toward more market-wide activities such as CPG (consumer packaged goods) and Retail programs that reinforce brand awareness and value proposition and attract new users.

Blu-ray represented 18.1% of revenue and 14.1% of rentals in Q2 2015 compared with 16.7% of revenue and 14.0% of rentals in Q2 2014. The higher price point for Blu-ray helped increase the mix of revenue generated by Blu-ray rentals in the quarter. With a similar number of Blu-ray titles as Q2 2014, Blu-ray revenue was 7.8% higher and drove higher profit per rental while delivering a higher quality movie experience at a great value to our customers.

Unique credit cards renting in Q2 2015 were 35.1 million, a decrease of 8.8% year-over-year. The Target credit card security breach that occurred in late 2013 resulted in a significant number of new credit cards issued to consumers that we believe increased the number of our new unique credit cards last year. Sequentially, unique credit cards renting decreased 5.7% from Q1 2015 in line with the lower rental demand driven by weaker sequential content, the price increase and increased competition. High frequency renters (HFR), customers that rent four or more titles per quarter, represented 48.0% of revenue in Q2 2015, a decline from 51.9% last year and 54.3% sequentially.

While year-over-year revenue was flat and rentals declined in Q2 2015, Redbox segment operating income increased $12.7 million or 14.7% to $98.9 million. Segment operating margin increased 300 basis points to 22.5% reflecting a decrease in direct operating expenses, driven by gross margin improvement, which

Page 6

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

increased 80 basis points year-over-year to 57.5%. The improvement in gross margin reflects higher revenue per DVD, primarily driven by the price increase. In addition to gross margin benefits, we saw improvements in both direct operating and marketing expense as we continued to drive operating efficiencies in the business to align our cost structure with an anticipated gradual decline in physical rental demand.

Video Games Rentals and Revenue


Video Games Performance	Q2 2015			Q2 2014
Percentage of rentals		0.9	%		1.8	%
Percentage of Redbox revenue		2.4	%		3.9	%

Video games rentals and revenue declined year-over-year compared with Q2 2014 as the revenue benefit from the price increase was offset by consumer transition to new generation platforms and the decline in the Wii platform. The number of unique titles released at Redbox in Q2 2015 was down 27.3% compared with last year. In Q2, Redbox announced our commitment to be America’s destination for new generation game rentals and our plans to expand new generation content across the network by the end of the year. Redbox can play a critical role in increasing mainstream consumer adoption of the new formats, providing value to both our industry partners and customers. Offering game rentals for $3 a night versus a $60 purchase price gives Redbox users the same low cost access to new releases that we offer in movies.

As new video game titles become available, we plan to continue to grow the mix of new generation titles as we move through 2015. New generation titles made up 27.0% of our games rentals, up from 12.6% in Q1 2015, with interest in new generation rentals growing throughout the quarter.

Studio Agreements

We are pleased to have signed an agreement with Fox maintaining a 28-day window on Blu-ray Disc^® and DVD titles through June 30, 2017. Earlier this month Sony extended our existing day and date agreement through September 30, 2016. We look forward to working with Fox and Sony to utilize our digital marketing network and national kiosk footprint to help them monetize their feature film properties in the high value transactional window.

Q2 Segment Operating Results – Coinstar

Key Metrics


Category	Q2 2015			Q2 2014
Revenue	$	80.3	MM	$	79.9	MM
Average transaction	$	43.03		$	41.32
Transactions		18.2	MM		18.9	MM
Same store sales (SSS) growth		1.9	%		6.7	%
Segment operating income	$	31.9	MM	$	30.8	MM
Segment operating margin		39.8	%		38.6	%
Kiosks (at quarter end)		21,140			21,200
Locations (at quarter end)		19,950			20,300

Page 7

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Coinstar segment revenue increased $0.4 million, or 0.5%, compared with Q2 2014 primarily due to growth in the number of Coinstar Exchange kiosks and transactions partially offset by lower Coinstar U.S. volume. The U.K. business continued to benefit from the increased coin voucher product transaction fee implemented in the U.K. in August 2014, but was offset in Q2 by the unfavorable exchange rate impact from the strengthening of the U.S. dollar versus the British pound as compared with the prior year. These factors contributed to same store sales growth of 1.9%.

Average transaction size continued to increase while the number of transactions declined, primarily reflecting the larger pours and less frequent visits that we have seen over the past several quarters.

Coinstar segment operating income increased $1.1 million, or 3.6%, year-over-year and segment operating margin increased 120 basis points to 39.8%, the second highest margin in the company’s history, as the business continues to identify opportunities to reduce costs and actively manage expenses.

Q2 Segment Operating Results – ecoATM

Key Metrics


Category	Q2 2015			Q2 2014
Revenue	$	26.1	MM	$	23.8	MM
Segment operating loss	$	(92.8	) MM	$	(4.5	) MM
ASP of value devices sold	$	61.72		$	91.55
Number of value devices sold		409,331			249,969
Number of overall devices sold		704,450			325,321
Kiosks (at quarter end)		2,260			980
Locations (at quarter end)		2,020			750

As discussed in the non-core expense section above, during the second quarter of 2015, we recognized a non-cash goodwill impairment charge of $85.9 million related to ecoATM that is included in the Q2 segment operating loss. Excluding the charge, the segment operating loss increased $2.5 million, primarily due to an increase in direct operating expenses associated with the increase in the installed kiosk base.

During Q2 we installed 120 net new ecoATM kiosks, primarily in the Mass channel where kiosks have performed well and similar to those in the Mall channel. As these kiosks ramp, we expect collections per kiosk to increase. Net new kiosks also included the removal of approximately 70 underperforming kiosks in the Grocery channel, a new channel in 2014 that has not yet met our expectations for traffic and collections.

While Q2 segment revenue increased approximately 9.5% compared with Q2 2014, collections of value devices on a per kiosk basis were down compared with the prior year as a result of lower transactions at our kiosks, primarily due to sustained marketing of alternative recycling options from carriers. Carrier marketing also impacted the number of higher value devices that we collected impacting the mix of overall value devices and was the primary reason for the decline in our average selling price (ASP) of value devices compared with Q2 2014.

Page 8

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

While the reduced collections per kiosk we experienced during Q1 improved slightly, it was below our expectations based on historical patterns and we are still climbing back from 2014 levels. We expect to increase our per kiosk collections through targeted digital marketing to drive awareness, improving the customer experience with a new kiosk user interface and running co-marketed initiatives with certain retailers.

We expect our value device mix to improve further as we move into Q3. Historically we have seen increases in collections of certain higher value devices as we approach the release of the latest iPhone product, which various sources expect in the fall. At the same time, we expect our value ASP to decline during the second half of 2015 as devices continue to age and the expected next generation iPhone is launched. We continually evaluate our customer offering to drive increased collections of higher value devices.

Direct operating costs during Q2 increased as a percentage of revenue due to the lower collections of value devices that impacted revenue and our ability to leverage certain fixed kiosk servicing costs. In total, marketing, research and development, and G&A decreased as a percentage of revenue in Q2, primarily due to a reduction in headcount and temporary staffing as well as lower data facilities costs, offset in part by higher marketing costs to raise awareness. As we continue to optimize our network, we expect to increase our collections of value devices per kiosk, which will enable us to better leverage our fixed kiosk servicing costs.

We are focused on profitably growing the ecoATM business and continually evaluate kiosk performance in order to optimize our network. During the second half of 2015, we will continue redeploying underperforming kiosks into retailer locations that meet our thresholds, primarily in the Mall and Mass channels.

We continued the marketing programs—targeted in-store and point of sale advertising as well as digital ad placement—that we launched earlier in the year to help build brand awareness and increase kiosk utilization. We evaluate the programs on an ongoing basis and will shift resources to the tactics that drive the most awareness and actual trial at the kiosk. We are working with our retail partners to leverage their resources to further drive awareness and usage. We will also be launching a new GUI (graphical user interface) in the second half of 2015 that we expect will improve the user experience and increase collections.

Guidance

We are updating our 2015 annual guidance to reflect changes in our expectations based on Q2 results and our outlook for the remainder of the year. (Exhibit 1) The changes for the full year include adjusting for our latest outlook for the ecoATM business and lowering the top end of the Redbox revenue guidance range. In addition, we are raising our expectations for both core adjusted EBITDA from continuing operations and core diluted EPS from continuing operations. Guidance has also been updated to reflect shares repurchased in Q2.

For the full-year 2015, we expect:

•

consolidated revenue in the range of $2.263 billion to $2.353 billion;

•

core adjusted EBITDA from continuing operations between $481 million and $515 million; and

Page 9

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

•

core diluted EPS from continuing operations between $8.12 and $9.12, which does not reflect any additional share repurchases we may complete during the year.

We expect Redbox revenue in the range of $1.850 billion to $1.925 billion. In 2015, we continue to expect the price increase and benefits resulting from investments in customer experience and marketing programs to help offset the secular decline in the physical rental market and the underlying risk in the content slate. Our guidance also incorporates anticipated lower rental demand and shorter average rental duration as a result of the price increase that partially offsets the increase in the per night rental price.

Based on our current view of the upcoming box office releases at Redbox, we expect content strength to worsen in Q3 2015, sequentially and versus prior year. The Q3 box office is expected to be 46.2% below Q3 2014 with 8 fewer theatrical titles releasing during the quarter. (Exhibit 2) Sequentially, Q3 box office is down approximately 36.5%. July is expected to have 1 less title than 2014 but 55.5% lower box office due to the Lego Movie releasing at Redbox mid-month last year. August is expected to have 4 fewer titles and 42.9% lower box office, and September 3 fewer titles and 37.1% lower box office. August and September are expected to be a very light release period for Redbox with only 7 titles in each month. While Q3 seasonality tends to be slightly higher than Q2, we expect this trend to be offset in 2015 by softness in movie and games content that we expect will rebound in Q4. Theatrical releases, as well as the release schedule for Redbox titles, will evolve throughout the remainder of the year and the performance of titles in theaters remains difficult to predict.

Since we provided 2015 guidance in May, estimated 2015 box office has increased slightly due to Jurassic World and certain titles have shifted from Q3 to Q4. By quarter, Q3 declined 27.0% and Q4 increased 20.5%. We continue to expect Q4 will be the strongest box office quarter for the year followed by Q1, Q2, and Q3.

We expect ecoATM revenue in the range of $100 million to $110 million reflecting Q2 results, revised expectations for the rest of the year related to installations and ramping, and a reduced number of expected installs for the year. While it is still our intent to invest and grow the business and we continue to believe ecoATM provides a unique customer value proposition, we believe it will take longer to profitably scale the business than our original assumptions.

We expect FCF between $231 million and $271 million as a result of an increase in expected core adjusted EBITDA from continuing operations and a reduction in capital expenditures.

Summary

In Q2 we continued to execute on our key strategies and delivered results that reflect our focus on operational excellence and expense management. Our Redbox and Coinstar businesses generated strong margins and we produced significant growth in free cash flow, core adjusted EBITDA from continuing operations and core diluted EPS. While we recognized a non-cash goodwill impairment related to ecoATM, we continue to expect strong revenue and profitability growth in that business, although over a longer timeframe. We look forward to welcoming Erik to the CEO role beginning tomorrow and continuing to create value for our shareholders through solid execution across the business.

Page 10

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Appendix A

Non-GAAP Financial Measures

Non-GAAP measures may be provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”).

We use the following non-GAAP financial measures to evaluate our financial results:

•

Core adjusted EBITDA from continuing operations;

•

Core diluted earnings per share (“EPS”) from continuing operations;

•

Free cash flow; and

•

Net debt and net leverage ratio.

Core and Non-Core Results

Page 11

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

Core Adjusted EBITDA from continuing operations

A reconciliation of core adjusted EBITDA from continuing operations to net income from continuing operations, the most comparable GAAP financial measure, is presented in the following table:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
Dollars in thousands	2015			2014		2015			2014
Net income (loss) from continuing operations	$	(47,351	)	$	23,833	$	(5,196	)	$	51,439
Depreciation, amortization and other		48,483			51,652		94,478			103,436
Interest expense, net		12,183			12,932		24,254			22,580
Income taxes		18,185			6,305		44,027			21,739
Share-based payments expense⁽¹⁾		3,320			3,079		7,261			6,844

Adjusted EBITDA from continuing operations		34,820			97,801		164,824			206,038
Non-Core Adjustments:
Goodwill impairment		85,890			—		85,890			—
Restructuring costs		—			—		15,851			469
Rights to receive cash issued in connection with the acquisition of ecoATM		1,005			3,338		2,925			6,759
Loss from equity method investments, net		133			10,541		265			19,909

Core adjusted EBITDA from continuing operations	$	121,848		$	111,680	$	269,755		$	233,175

(1)	Includes both non-cash share-based compensation for executives, non-employee directors and employees as well as share-based payments for content arrangements.

Core Diluted EPS from continuing operations

A reconciliation of core diluted EPS from continuing operations to diluted EPS from continuing operations, the most comparable GAAP financial measure, is presented in the following table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Diluted EPS from continuing operations per common share (two-class method)	$	(2.66	)	$	1.15		$	(0.30	)	$	2.24
Adjustment from participating securities allocation and share differential to treasury stock method⁽¹⁾		0.03			0.03			0.01			0.05

Diluted EPS from continuing operations (treasury stock method)		(2.63	)		1.18			(0.29	)		2.29
Non-Core Adjustments, net of tax:⁽¹⁾
Goodwill impairment		4.77			—			4.71			—
Restructuring costs		—			—			0.53			0.01
Rights to receive cash issued in connection with the acquisition of ecoATM		0.04			0.13			0.11			0.23
Loss from equity method investments, net		0.01			0.32			0.01			0.53
Tax benefit from net operating loss adjustment		—			—			—			(0.04	)
Tax benefit of worthless stock deduction		—			(0.11	)		—			(0.10	)

Core diluted EPS from continuing operations	$	2.19		$	1.52		$	5.07		$	2.92

(1)	Non-Core Adjustments are presented after-tax using the applicable effective tax rate for the respective periods.

Page 12

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

A reconciliation of amounts used in calculating core diluted EPS from continuing operations in the table above is presented in the following table:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
In thousands	2015			2014		2015			2014
Income (loss) from continuing operations attributable to common shares	$	(47,472	)	$	23,036	$	(5,465	)	$	49,918
Add: income from continuing operations allocated to participating securities		121			797		269			1,521

Income (loss) from continuing operations	$	(47,351	)	$	23,833	$	(5,196	)	$	51,439

Weighted average diluted common shares		17,848			20,048		18,057			22,298
Add: diluted common equivalent shares of participating securities		127			133		181			190
Add: dilutive securities under treasury stock method		14			—		16			—

Weighted average diluted shares (treasury stock method)		17,989			20,181		18,254			22,488

Free Cash Flow


	Three Months Ended						Six Months Ended
	June 30,						June 30,
Dollars in thousands	2015			2014			2015			2014
Net cash provided by operating activities	$	75,143		$	62,833		$	181,215		$	157,420
Purchase of property and equipment		(19,508	)		(26,076	)		(40,217	)		(53,016	)

Free cash flow	$	55,635		$	36,757		$	140,998		$	104,404

Net Debt and Net Leverage Ratio

•

are used to assess the degree of leverage by management;

•

are reported quarterly to support covenant compliance under our credit agreement.

Page 13

Outerwall Inc. 2015 Second Quarter Earnings

Prepared Remarks

July 30, 2015

A reconciliation of net debt to total outstanding debt including capital leases, the most comparable GAAP financial measure, is presented in the following table:


Dollars in thousands	June 30, 2015			December 31, 2014
Senior unsecured notes	$	650,000		$	650,000
Term loans		142,500			146,250
Revolving line of credit		90,000			160,000
Capital leases		9,876			15,391

Total principal value of outstanding debt including capital leases		892,376			971,641
Less domestic cash and cash equivalents held in financial institutions		(62,609	)		(66,546	)

Net debt		829,767			905,095
LTM Core adjusted EBITDA from continuing operations⁽¹⁾	$	533,400		$	496,820

Net leverage ratio		1.56			1.82

(1)	LTM Core Adjusted EBITDA from continuing operations for the twelve months ended June 30, 2015 and December 31, 2014 was determined as follows:


Dollars in thousands
Core adjusted EBITDA from continuing operations for the six months ended June 30, 2015	$	269,755
Add: Core adjusted EBITDA from continuing operations for the twelve months ended December 31, 2014 ⁽¹⁾		496,820
Less: Core adjusted EBITDA from continuing operations for the six months ended June 30, 2014		(233,175	)

LTM Core adjusted EBITDA from continuing operations for the twelve months ended June 30, 2015	$	533,400

(1)

Page 14

NASDAQ:OUTR

Exhibits

2015 Q2 Prepared Remarks

July 30, 2015

Exhibit 1: 2015 Full-Year Guidance

As of July 30, 2015

Revenue by Segment

($MM)

Redbox

$1,850

–

$1,925

Coinstar

$313

–

$318

ecoATM

$100

–

$110

TOTAL

$2,263

–

$2,353

Consolidated –

Other

Core adjusted EBITDA from

continuing operations

($MM)

$481

–

$515

Core diluted EPS from

continuing operations

1,2

$8.12

–

$9.12

Average diluted shares

outstanding

(MM)

17.9

–

18.0

Estimated effective tax rate

35.5% –

37.5%

Free cash flow

($MM)

$231

–

$271

Capital Expenditures

($MM)

Redbox

$15

–

$20

Coinstar

$16

–

$20

ecoATM

$25

–

$34

Corporate

$26

–

$33

TOTAL

$82

–

$107

Net Kiosk Installations by Segment

Redbox (U.S.)

(1,000) –

(1,900)

Coinstar

–

(100)

ecoATM

400

–

500

See Appendix A for a discussion of Non-GAAP Financial Measures and Core and Non-Core Results

Excludes the impact of potential share repurchases for the remainder of 2015

Does not include kiosks removed as a result of the shutdown of Redbox Canada operations

Box Office

(MM)

Exhibit 2: 2015 Q3 Redbox Release Schedule

1 Q3 2015 data estimated

Includes titles with total North American box office greater than $5MM

Q3 2015

Q3 2014

Box Office

Titles

Box Office

Titles

Total

$1.33Bn

$2.48Bn

July

$438.3MM

$984.9MM

August

$442.3MM

$774.6MM

September

$452.7MM

$720.2MM

As of July 30, 2015

# of new releases =

$50

$100

$150

$200

$250

7/7

7/14

7/21

7/28

8/4

8/11

8/18

8/25

9/1

9/8

9/15

9/22

9/29

Exhibit 99.3

LOGO

OUTERWALL INC. DECLARES QUARTERLY DIVIDEND

BELLEVUE, Wash. – July 30, 2015 – Outerwall Inc. (Nasdaq: OUTR) today announced that on July 28, 2015, its board of directors declared a quarterly dividend of $0.30 per share of common stock. The dividend is expected to be paid on September 15, 2015, to stockholders of record at the close of business on August 28, 2015. The declaration and payment of future dividends will be subject to the board’s approval.

ABOUT OUTERWALL INC.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “estimate,” “expect,” “intend,” “will,” “anticipate,” “goals,” variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding future dividends. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Outerwall Inc. or its subsidiaries, as well as from risks and uncertainties beyond Outerwall Inc.’s control. Such risks and uncertainties include, but are not limited to,

•

competition from other entertainment providers,

•

the ability to achieve the strategic and financial objectives for our entry into new businesses, including ecoATM and SAMPLEit,

•

our ability to repurchase stock and the availability of an open trading window,

•

our declaration and payment of dividends, including our board’s discretion to change the dividend policy,

•

the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers and suppliers,

•

payment of increased fees to retailers, suppliers and other third-party providers, including financial service providers,

•

the effective management of our content library,

•

the timing of the release slate and the relative attractiveness of titles in a particular quarter or year,

•

the ability to attract new retailers, penetrate new markets and distribution channels and react to changing consumer demands,

•

loss of key personnel or the inability of replacements to quickly and successfully perform in those new roles,

•

the ability to generate sufficient cash flow to timely and fully service indebtedness and adhere to certain covenants and restrictions,

•

the ability to adequately protect our intellectual property, and

•

the application of substantial federal, state, local and foreign laws and regulations specific to our business.

# # #

Investor Contact:

Rosemary Moothart

Director of Investor Relations

425-943-8140

rosemary.moothart@outerwall.com

Outerwall Inc. (NASDAQ:OUTR)
Historical Stock Chart
From Mar 2024 to Apr 2024

Click Here for more Outerwall Inc. Charts.

Outerwall Inc. (NASDAQ:OUTR)
Historical Stock Chart
From Apr 2023 to Apr 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

OUTR Outerwall Inc. (MM)

Latest OUTR Messages

Loading Messages....

Outerwall Inc News

Loading Messages....

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

OUTR Outerwall Inc. (MM)

Latest OUTR Messages

Loading Messages....

Outerwall Inc News

Loading Messages....

Your Recent History

Company

Business

Popular

Get The App