Redbox 2004 Annual Report Download - page 56

COINSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS –(Continued)
YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002
52
NOTE 13: INCOME PER SHARE
Basic net income per share is computed by dividing the net income available to common stockholders for the period by
the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by
dividing the net income for the period by the weighted average number of common and potential common shares outstanding
(if dilutive) during the period. Potential common shares, composed of incremental common shares issuable upon the exercise
of stock options and warrants, are included in the calculation of diluted net income per share to the extent such shares are
dilutive.
The following table sets forth the computation of basic and diluted net income per share for the periods indicated:
Year ended December 31,
2004 2003 2002
(in thousands)
Numerator:
Net income ........................................................................................................... $ 20,368 $ 19,555 $ 58,513
Denominator:
Weighted average shares for basic calculation..................................................... 21,626 21,489 21,820
Warrants...................................................................................................... — 2 11
Incremental shares from employee stock options ....................................... 333 297 892
Weighted average shares for diluted calculation ........................................................... 21,959 21,788 22,723
For the years ended December 31, 2004, 2003 and 2002, options to acquire 1.3 million, 2.0 million and 0.1 million
shares of common stock, respectively, were excluded from the computation of net income per common share because their
impact would be antidilutive.
NOTE 14: RETIREMENT PLAN
In July 1995, we adopted a tax-qualified employee savings and retirement plan under Section 401(k) of the Internal
Revenue Code of 1986 for all employees who satisfy the age and service requirements under this plan. This plan is funded by
voluntary employee salary deferral of up to 60% of annual compensation (subject to the Federal limitation) and a safe harbor
employer match equaling 100% of the first 3% and 50% of the 4
th
and 5
th
percent. Additionally, all participating employees
are 100% vested for all Coinstar matched contributions. We contributed $787,000, $898,000 and $740,000 to the plan for the
years ended December 31, 2004, 2003 and 2002, respectively.
ACMI maintains a 401(k) profit sharing plan, which covers substantially all of its employees. Employees are permitted
to contribute up to 15% of their eligible compensation. ACMI makes contributions to the plan matching 50% of the
employees’ contribution up to 10% of their compensation. Matching contributions were $349,000 for the period July 7, 2004
(acquisition date) through December 31, 2004.
NOTE 15: TERMINATION OF SUPPLIER RELATIONSHIP
Through April 1999, Scan Coin AB of Malmo, Sweden, was our sole source provider of our coin-counting devices.
Coinstar and Scan Coin have been in a contract dispute since September 1998, at which time Scan Coin claimed that we had
breached the contract and made claims to certain of our intellectual property. On May 5, 1999, Scan Coin terminated its
agreement with us and reasserted the breach of contract claim and the claim to certain of our intellectual property. The parties
have been working to settle the dispute amicably since that time. There is no assurance, however, that the disagreement will
be settled amicably, and litigation may commence.
NOTE 16: BUSINESS SEGMENT INFORMATION
SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information, requires that companies report
separately in the financial statements certain financial and descriptive information about operating segments profit or loss,
certain specific revenue and expense items and segment assets. The method for determining what information is reported is
based on the way that management organizes the operating segments for making operational decisions and assessments of