Over the past 13 years, Motley Fool Hidden Gems recommendation Coinstar (NASDAQ:CSTR) has built a leading business out of its coin-counting business -- you've probably seen one of the company's machines in a supermarket or other retail outlet. Based on sophisticated and patented technologies, the machines are quick and efficient, and they allow retailers to generate additional revenues.

In addition to its large distribution network (for example, its machines are in more than 10,000 supermarkets), Coinstar has also been entering new lines of business, in large part through acquisitions. But the numbers in its quarterly report, released last week, suggest that the company is not yet realizing cost synergies from its acquisitions.

For its first quarter, Coinstar saw revenues increase from $43.1 million to $105.6 million over the same period last year. A big part of the growth was from acquisitions, including its purchase last year of American Coin Merchandising, which is involved in numerous areas of entertainment, such as skill crane machines, bulk vending, and kiddie rides.

But also during this time, net income increased from $4.61 million to $4.67 million ($0.21 per share). That figure is a bit troublesome in light of the surge in revenues.

In the first quarter of this fiscal year, Coinstar continued its acquisition spree. In March, the company purchased Mundo Communications Network, the operator of El Toro Prepaid. Mundo serves 2,300 retail accounts and offers a wide range of prepaid products and services, including credit and gift cards, wireless airtime, long distance, and loyalty programs.

Coinstar has also been aggressive in striking alliances. For example, the company has co-branded retail gift cards with firms like Starbucks (NASDAQ:SBUX), Hollywood Entertainment (NASDAQ:HLYW), Pier 1 (NYSE:PIR), and Linens 'n Things (NYSE:LIN).

In terms of expectations, Coinstar predicts second-quarter net income of $0.17 to $0.23 per share. Revenues are expected to come in at $109 million to $115 million.

But then there are the headwinds. With retail sales slowing, Coinstar saw weakness in its entertainment-services business. It essentially bought a cyclical business shortly before the industry started to go downward. In fairness, this segment relies on impulse sales from foot traffic, which is generally the result of other retail activity. The coin-counting business, in contrast, is built on more of a planned activity.

And, of course, assimilating various acquisitions takes time. But Coinstar realizes that it needs to expand out of the coin-counting business to grow the company for the long term. Despite the recent fall-off -- with results on the top line not showing similar growth on the bottom line -- the company is not veering from this plan.

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Fool contributor Tom Taulli does not own shares of companies mentioned in this article.