News Release

BELLEVUE, Wash.--(BUSINESS WIRE)--May. 7, 2009-- Coinstar, Inc. (NASDAQ:CSTR) today announced results for the three month period ended March 31, 2009. Led by growth, Coinstar saw consolidated revenue increase to $271.2 million or a 42.3% increase from the prior year period.

Highlights for the three months ended March 31, 2009, were as follows:

Results for the three months ended March 31, 2009, reflect certain non-recurring charges including the following: 1) employee transition costs relating to our former CEO, net of tax, of $0.7 million or $0.02 per diluted share; 2) expenses resulting from implementing new standards, FAS 141(R) and FAS 160; specifically the deal costs and other charges relating to the purchase of the noncontrolling interest in Redbox, net of tax, of $0.9 million, or $0.03 per diluted share; and 3) the write-off of acquisition costs in implementing new standard FAS 141(R), net of tax, of $0.6 million or $0.02 per diluted share.

Earnings per share excluding these non-recurring charges for the quarter ended March 31, 2009 was $0.14.

“We’re pleased with our first quarter performance and a solid start to 2009, especially in an economic environment that remains challenging,” said Paul Davis, chief executive officer of Coinstar, Inc. “The Company’s DVD kiosk and Coin processing product lines continue to post strong results, underscoring the value proposition and resiliency of these businesses. In addition, our portfolio approach and ability to drive foot traffic continues to resonate with retailers, and based upon the first quarter performance we reiterate our 2009 guidance of more than $1.2 billion in revenues and nearly $200 million in EBITDA.”

Other Information

Cash paid for capital expenditures for the three months ended March 31, 2009 was $37.3 million.

At March 31, 2009, 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 $1.9 million in tax expense for the quarter, cash paid for taxes during the quarter totaled $0.4 million.

Second Quarter 2009 Guidance

Management estimates that revenue for the second quarter of 2009 will range from $300 million to $310 million. In addition, management estimates GAAP earnings per fully taxed, fully diluted share will range from $0.14 to $0.20.

Management also reiterates its previous estimates that revenue for the full year 2009 will range from $1.2 billion to $1.3 billion with EBITDA between $185 million and $195 million.

Conference Call

A conference call to discuss the first quarter 2009 results will be broadcast live over the Internet today, Thursday, May 7, 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, restaurants and money transfer agent locations. 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 non-controlling interests. 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.

Free cash flow: 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.

Source: Coinstar, Inc.

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