News Release

BELLEVUE, Wash.--(BUSINESS WIRE)--Feb. 12, 2009-- Coinstar, Inc. (NASDAQ: CSTR) today announced results for the three month and full-year periods ended December 31, 2008.

Despite unprecedented economic challenges, Coinstar's 4th Wall^® bundle of products and services continued to grow. Led by both organic and acquisition related growth of its DVD, Money Transfer, and Coin product lines, Coinstar saw consolidated revenue grow 67% from the prior year period. Based on the ongoing strength of its business, along with the growth attributed to Redbox Automated Retail, LLC, management is raising its formal 2009 guidance to a range of $1.2 billion to $1.3 billion in revenue with $185 million to $195 million in EBITDA. This accelerates prior guidance that targeted a 12 month run-rate of $1 billion in revenue and roughly $200 million in EBITDA beginning mid-year 2009.

Highlights for the three months ended December 31, 2008, were as follows:

Highlights for the full year 2008 were as follows:

“Coinstar continued to make progress with its 4^th Wall strategy in 2008, serving more than 90,000 points of presence with a broad and diverse product portfolio. The Company’s DVD kiosk and Coin processing product lines both had record years, while Money Transfer and Entertainment revenues were adversely affected by the slowing and unprecedented economic environment,” stated Dave Cole, Chief Executive Officer of Coinstar. “The strategic progress of our business, however, has allowed us to formally raise guidance and we are pleased to target over $1 billion in revenues and nearly $200 million in EBITDA in calendar year 2009. We credit the strength of our network and the ongoing value we bring to retailers and consumers, particularly in these times.”

Other Information

Cash paid for capital expenditures for the three months and full year ended December 31, 2008, was $36.8 million and $163.6 million, respectively.

At December 31, 2008, Coinstar had federal and state cumulative net operating loss carryforwards of approximately $73.8 million and $44.1 million, respectively. In addition, there were foreign net operating loss carryforwards of approximately $27.7 million. Although Coinstar recorded $16.2 million in tax expense for the year, cash paid for taxes during the year totaled $3.6 million.

First Quarter and Full Year 2009 Guidance

Management estimates that revenue for the first quarter of 2009 will range from $260 million to $270 million. In addition, management estimates GAAP earnings per fully taxed, fully diluted share will range from $0.04 to $0.10, assuming that Coinstar will complete the acquisition of the minority interests in Redbox on February 26, 2009.

Management also estimates that revenue for the full year 2009 will range from $1.2 to $1.3 billion with EBITDA of $185 - $195 million.

Conference Call

A conference call to discuss the fourth quarter and full year 2008 results will be broadcast live over the Internet today, Thursday, February 12, 2009, at 5:00 p.m. Eastern Time. The webcast will be hosted at the “About Us – Investor Relations” section of Coinstar’s Web site at www.coinstar.com, where you can also find certain accompanying information relating to our earnings call.

About Coinstar, Inc.

Coinstar, Inc. (NASDAQ:CSTR) is a multi-national company offering a range of 4th Wall^® solutions for the retailers' front of store consisting of self-service coin counting, DVD rental, money transfer, electronic payment solutions, and entertainment services. The Company's products and services can be found at more than 90,000 points of presence including supermarkets, drug stores, mass merchants, financial institutions, convenience stores and restaurants. For more information, visit www.coinstar.com.

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," "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 Coinstar, Inc.’s anticipated growth and future operating 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 Coinstar, Inc., as well as from risks and uncertainties beyond Coinstar, Inc.'s control. Such risks and uncertainties include, but are not limited to, the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers, payment of increased service fees to retailers, the ability to attract new retailers, penetrate new markets and distribution channels, cross-sell our products and services and react to changing consumer demands, the ability to achieve the strategic and financial objectives for our entry into or expansion of new businesses, 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. These forward-looking statements reflect Coinstar, Inc.'s expectations as of the date of this release. Coinstar, Inc. undertakes no obligation to update the information provided herein.

Appendix A

(in thousands unless otherwise noted)

Non GAAP measures

Non GAAP measures are provided as a complement to results provided in accordance with United States generally accepted accounting principles (“GAAP”). Non GAAP measures are not a substitute for measures computed in accordance with GAAP. Definitions of such non GAAP measurements are provided below. These definitions are provided to allow the reader to reconcile non GAAP data to that presented in accordance with GAAP. Our non GAAP measures may be different from the presentation of financial information by other companies.

EBITDA, as defined, represents earnings before net interest expense, income taxes, depreciation, amortization and certain other non-cash charges including stock based compensation expense and minority interest. We believe EBITDA is an important non GAAP measure as it provides useful information to investors regarding our ability to service, incur or pay down indebtedness. In addition, management uses such non GAAP measures internally to evaluate performance and manage operations. See below for reconciliation of most comparable GAAP measurements to EBITDA, which includes 100% EBITDA generated by Redbox.

Free cash flow, excluding Redbox: we believe free cash flow is an important non GAAP measure as it provides useful cash flow information regarding our ability to service, incur or pay down indebtedness and repurchase our common stock. We use free cash flow as a measure to reflect cash available to service our debt as well as to fund our expenditures. Free cash flow may be reconciled from net cash provided by operating activities, the most directly comparable GAAP measure. The table below reflects Coinstar’s free cash flow excluding any net cash flow from Redbox.

Source: Coinstar, Inc.

Coinstar, Inc.
Brian Turner
Chief Financial Officer
425-943-8000
or
Media Contact:
Marci Maule
Director Public Relations
425-943-8277