Outerwall (OUTR), formerly Coinstar (CSTR) Message Board

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Non-Tech : Outerwall (OUTR), formerly Coinstar (CSTR)

OUTR 52.00

0.0%

Sep 28 5:00 PM EST

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To: Andrew Abrams who wrote (137)	2/25/1998 8:16:00 PM
From: Ember	Read Replies (1) of 351

I met w/the company two weeks ago (my fourth visit) and have followed it since last June. The analysts have factored in the expense of the network. The 12.000 per installed machine includes the NW setup costs and the ongoing NW and telcommunications costs are covered in operating expenses. That being said, the analysts have done a shitty job. Smith Narney is a joke and just took the money and ran like a normal whore investment banker. The H&Q analyst is better, but the company is really a technology company, not a consumer goods. Therefore, very few institutional players following consumer stocks know what to do with Coinstar. The leverage (35% contribution margin) comes from a number of factors: As density in a geographic area increases, the costs of picking up the coins and normal maint. by field engineers are leveraged. If you do the math, at 55% contribution margin, the cashflow becomes huge ($1.3 per share in '99). That is why you will see the company focusing on putting more machines in current markets rather than expanding into new ones. This will be supplemented w/more intensive advertising now that they know it works. I have spoken w/several stores and the managers like it. Suggestion - Anyone with negative feedback from a store should post the name and number. I will do the same w/positive stores and we can deal with facts. Not speculation by shorts. Coinstar does not pay a slotting fee. The store gets a % of the 7.5% that CSTR collects based on the total volume. For competitive and customer reasons, CSTR is unlikely to give out real numbers. Does Cisco publish its discount/fees by customer? Food for thought - deal with facts and numbers.

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