kab60 Posted May 8, 2015 Share Posted May 8, 2015 Not sure hos I missed this from the earnings release, I only noticed while reading the transcript, but they did update guidance a bit. Nothing major but they expect 215-255m FCF - up 10m - even though guidance for revenue was lowered to 2314-2464m. Capex was reduced a bit (less ecoATMs). Link to comment Share on other sites More sharing options...
kab60 Posted May 8, 2015 Share Posted May 8, 2015 They payed down 82m of debt. I didn't expect that but I like it. But not a lot of shares purchased. Might be difficult with high short %? They are forecasting about $235mm of FCF for 2015 and have indicated returning 75-100% of that to investors via repurchases and dividends. So if you figure they return 80% of $235mm and then pay $1.20 per share in dividends annually on 18mm-odd shares, you end up with around $40mm per quarter for share repurchases. I thought it sounded low too, but it's right in line with guidance given their FCF forecast. You're right, thanks. Reading the transcript I don't like their excuses for ecoATM but finding an internal president for that job and reducing capex sounds good. They also talked about dialogue with carriers - not sure what to make of that but it would be a pleasant surprise if somebody bought it . :) Link to comment Share on other sites More sharing options...
yadayada Posted May 8, 2015 Share Posted May 8, 2015 Here is why their guidance don't make sense. They have guidance of 2.3-2.4bn$ in revenue. Ecoatm guidance is 130-145m$. So Coinstar is predictable at about 315m$. Ecoatm at 130m$ then (94m$ last year), that is 445m$ for the year for these two. And so far for Redbox 520m$, 965m$ total. So that means only 1335m$ for redbox on the low end and 1435m$ on the high end. But usually Q1 and Q4 are similar, so let's assume 520m$ for Q4 as well, that is 1485m$. That would mean that Q2 and Q3 will do only about 408m$ in the low end guidance. Or 458m$ on the high end. Which seems low. They did 438m$ in Q3 last year with lower prices. And they are If you assume they do only 480m$ on average, then revenue should be 3x 480 + 520 + 315 + 130 = 2.4bn$ Since Ecoatm will increase by 1k kiosks, or about 50%, that 130m$ number is believable. Also they forecast that Ecoatm will be profitable, but how is that possible with only 130m$ in revenue? I hope an activist gets in there to shake things up a bit. Also don't understand how ebitda can be between 472 and 515 if Ecoatm becomes profitable. We have 193m$ in ebitda so far in 1 quarter. If Ecoatm would only lose another 10m$ or so, that would mean only 320m$ in ebitda for coinstar and redbox for the rest of the year. This would assume a massive volume drop basically for the rest of the year. Link to comment Share on other sites More sharing options...
kab60 Posted May 8, 2015 Share Posted May 8, 2015 Also they forecast that Ecoatm will be profitable, but how is that possible with only 130m$ in revenue? I hope an activist gets in there to shake things up a bit. They said on the conference call that they expect it to breakeven in 2015. Before they said it would breakeven in H1 2015. I don't believe any of it anyway and I figure the president leaving is a good indication that it isn't working out as planned. It seems like they're already feeling the pressure from shareholders, so I'm not sure why they haven't dumped it already - they already reduced the forecasted capex for 2015. Is it possible that it could be somewhat valuable to anybody else? Link to comment Share on other sites More sharing options...
yadayada Posted May 8, 2015 Share Posted May 8, 2015 Also they forecast that Ecoatm will be profitable, but how is that possible with only 130m$ in revenue? I hope an activist gets in there to shake things up a bit. They said on the conference call that they expect it to breakeven in 2015. Before they said it would breakeven in H1 2015. I don't believe any of it anyway and I figure the president leaving is a good indication that it isn't working out as planned. It seems like they're already feeling the pressure from shareholders, so I'm not sure why they haven't dumped it already - they already reduced the forecasted capex for 2015. Is it possible that it could be somewhat valuable to anybody else? It would be a nice result if they dumped it for at least like 50m-100m$ or so? Still a write off, but FCF would be boosted by 50-100m$ for the disposition and another 50-60m$ in losses it wouldn't have to take for the year. Seems like 22k$ per machine would be lower then what they paid for it so far. So they should at least get 50m$. Link to comment Share on other sites More sharing options...
Travis Wiedower Posted May 8, 2015 Share Posted May 8, 2015 Surprised no one has mentioned the decreasing nights/rental--it went down way more than I expected. In 2014 their average DVD rental was roughly 2.12 nights and Blu-ray was 2.05 nights--in 1Q15 these dropped to 2.09 and 1.20, respectively. Link to comment Share on other sites More sharing options...
rsmehta Posted May 8, 2015 Share Posted May 8, 2015 Surprised no one has mentioned the decreasing nights/rental--it went down way more than I expected. In 2014 their average DVD rental was roughly 2.12 nights and Blu-ray was 2.05 nights--in 1Q15 these dropped to 2.09 and 1.20, respectively. Interesting how the biggest decrease is on blue ray. But this has got to be a net positive. Shows how price sensitive redbox consumers actually are, which always bodes well for the lowest-cost option. Link to comment Share on other sites More sharing options...
Travis Wiedower Posted May 8, 2015 Share Posted May 8, 2015 Net positive in that their overall net revenue/rental increased? Yes, but that was going to happen no matter what with the price increase. Blu-ray (their highest margin product) nights/rental dropping over 40% is a big negative. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted May 8, 2015 Share Posted May 8, 2015 Net positive in that their overall net revenue/rental increased? Yes, but that was going to happen no matter what with the price increase. Blu-ray (their highest margin product) nights/rental dropping over 40% is a big negative. I think his point is that it's a net positive because if people are that price sensitive to a nightly rental increase (and are willing to return it earlier) it's a net positive to redbox because it means that they won't be jumping ship for a more expensive alternative any time soon. Also, it could mean that redbox needs to spend less on inventory if the same copy of a blu-ray can be turned over more times due to the quicker return. I don't know what the net benefit is here thought. Link to comment Share on other sites More sharing options...
Txvestor Posted May 8, 2015 Share Posted May 8, 2015 Net positive in that their overall net revenue/rental increased? Yes, but that was going to happen no matter what with the price increase. Blu-ray (their highest margin product) nights/rental dropping over 40% is a big negative. Yes but another way to look at that is that the price increase did not have nearly the same impact on number of rentals per kiosk as the gross revenues(accounting for price increase) suggest. It just means that folks were much more timely in returning their rentals. Generally speaking, i suspect once folks acclimatize to the price increase they will revert to their old habits :D I would be more concerned with a heavier decrease in customer rentals as those customers tend not to return. Atleast thats my take on it. Link to comment Share on other sites More sharing options...
ritrading Posted May 20, 2015 Share Posted May 20, 2015 Not sure if this has been asked before, but is there any way the Subject can be changed to OUTR to reflect the newer name? Link to comment Share on other sites More sharing options...
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