Shares of loose-change consolidator Coinstar
The company yesterday said Q3 revenue rose to $48.7 million from $43.9 million a year ago. Earnings before interest, taxes, depreciation, and amortization improved 15% year-over-year as EBITDA margins widened on the strength of cost controls and scale effects. Net income rose. Approximately 60% of the machines formerly in Safeway stores have found new homes, and are being refurbished.
More good news came in the form of an announcement that Coinstar will expand its relationship with the U.S. division of Dutch supermarket giant Koninklijke Ahold
There are still questions on the horizon. While the company sees room for growth, especially in rural markets, the competitive issues raised by the Safeway move still linger. So, too, are concerns about Coinstar's exposure to key customer Kroger
Coinstar is looking at new business ventures, notably the TOP-UP transaction terminals aimed at convenience stores, but past efforts to broaden the product portfolio have met with mixed success. (Remember Meals.com?) And while Q4 revenues are expected to climb from last year's levels, net income may fall.
Coinstar, for its part, is optimistic. The company repurchased some 340,000 shares in Q3 at an average price of just below $15 each -- about where they closed on Thursday.
Dave Marino-Nachison can be reached at email@example.com.