Outerwall to shutdown businesses, eliminate jobs

Outerwall to shutdown new businesses, eliminate jobs as part of plan to cut costs

Associated Press

BELLEVUE, Wash. (AP) -- Outerwall will shut down three of its new businesses and eliminate about 8.5 percent of its workforce as part of a cost-cutting plan.

Outerwall will discontinue the RubiT coffee kiosk and two other concepts at its New Ventures business. It will continue to invest in the rollout of its ecoATM electronics recycling kiosks and make a limited investment in its SAMPLEitT concept.

The company expects to take a one-time, pretax, fourth-quarter charge of $26 million to $29 million related to the moves.

The shutdown of one of the businesses also is expected to result in a fourth-quarter tax benefit of 56 to 59 cents per share. The company also expects a related cash tax savings of $14.6 million to $15.3 million in the first quarter of 2014.

Outerwall plans to make other cost cuts, mainly through job reductions, that are expected to result in annual savings of $22 million starting in 2014. Those measures are expected to result in a $5 million charge in the fourth quarter.

Between the shutdown of the new business concepts and the other cuts, the company said it has reduced its workforce by about 251 positions, or about 8.5 percent.

As a result of the shutdown of the New Ventures businesses, Outerwall said it expects to post adjusted fourth-quarter net income of $1.18 to $1.33 per share on $583 million to $608 million in revenue. Analysts polled by FactSet expect a profit of $1.16 per share on $597.7 million in revenue.

For the full year, the company expects an adjusted profit of between $5.44 and $5.59 per share on $2.3 billion to $2.32 billion in revenue. Analysts expect earnings of $4.95 per share on $2.31 billion in revenue.

The Bellevue, Wash., company also said Tuesday that Anne Saunders, president of its Redbox business, has left the company. The business will be led on an interim basis by existing members of the Redbox executive team.

Shares of Outerwall Inc. rose $2.07, or 3.2 percent, to $67 in morning trading.

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