Redbox 2000 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 2000 Redbox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 12

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12

4
superior maintenance by our world-class field service team. With these
unique assets, we have created considerable barriers to entry for potential
competitors. These same assets will allow us to offer an array of valuable
services to our customers.
GENERATING CASH FLOW
The U.S. core business is demonstrating excellent economies of scale
as it grows. As we drive top line revenue, we gain operating efficiencies
that make direct contribution grow faster than revenue and EBITDA grow
even faster than direct contribution.
An aggressive, integrated marketing campaign in the U.S. paid dividends
throughout 2000, driving top line growth. For the first time, we used a
mix of four nationally advertised promotions, and television, radio, and
print advertising in key local markets. Also, we converted our philanthropic effort, Coins That Countâ„¢,
into an expanded cause-marketing program. The key focus of these marketing programs was generating
trial usage, because we know, based on research, that 80 percent of people who try Coinstar once,
use our service again and again.
Driving revenue growth is only part of the story. We successfully managed direct operating expenses
and increased the U.S. core business direct contribution margin to 53.3%, up from 50.2% in 1999 and
44.3% in 1998. We are similarly aggressive about managing research and development and sales,
general and administrative expenses.
NEW OPPORTUNITIES
We have exciting growth opportunities overseas, with a promising expansion in the United Kingdom.
We have been running successful pilots with three of the four largest supermarket retailers in that
country. On May 1, 2001, we announced rollout agreements with ASDA Stores, a subsidiary of Wal-
Mart, and Sainsbury’s Supermarkets. These two chains combined account for 40% of U.K. grocery
sales. Based on the results achieved during our two-year pilot and the strong consumer response,
"It is change, continuing change,
inevitable change, that is the
dominant force in society today."
-Issac Asimov