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 (142)	2/26/1998 2:17:00 PM
From: Gerald Thomas	Read Replies (2) of 351

I believe contracts are done by the larger company's for a minimum period...Whether that is a year or whatever. The stores benefit from people choosing their store to use the service,bringing in new found money,and there is some debate as to the degree of fee...I have seen anywhere from zero-2.5 or 3 percent... eitherway CSTR's sales component becomes almost exponential with 2000 new machines per year so whether their take is 5% or 7.5% that is that percent of a huge exponentially growing number... Also part of that same equation is their per machine costs which are improving as densities get fuller...(more machines per tech or coin collector) So if machines margins (with or without network costs) go from 30% to this year above 40% that is part of the same equation as a fee... All pertaining to the NET they get from machines... Their breakeven could well be nearer to 2.5 years with this year's margins and the actual machine cost will probably benefit from to new sorting device (taht by the way can be used outside the U.S.) I have seen a report that states that the machines may well be used to absorb old currencies in parts of Europe when they go to one currency..The new machines can be callabrated to other foreign denominations.

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