Redbox 2005 Annual Report Download - page 5

PART I
Special Note Regarding Forward-Looking Statements
This annual report on Form 10-K contains forward-looking statements. These statements relate to future
events or our future financial performance. In some cases, you can identify forward-looking statements by
terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,”
“plan,” “potential,” “predict,” “should” or “will,” or the negative of such terms, or other comparable
terminology. These statements are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks outlined under Item 1A “Risk Factors” and elsewhere in this report, that may
cause our or our industry’s actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking statements. Particular
attention should also be paid to the cautionary language in those sections of this annual report captioned: Item 1:
Business; Item 3: Legal Proceedings; Item 7: Management’s Discussion and Analysis of Financial Condition and
Results of Operations; and Item 7A: Quantitative and Qualitative Disclosures About Market Risk. You should
not place undue reliance on these forward-looking statements. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or
achievements. We undertake no obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, unless required by law.
Item 1. Business.
The following discussion about our business includes forward-looking statements. Actual results could differ
from those projected in the forward-looking statements. Please refer to “Special Note Regarding Forward-
Looking Statements” above.
Summary
We are a multi-national company offering a range of products and services for the retailers’ storefront
consisting of self-service coin counting; electronic payment (“e-payment”) services such as stored value cards,
payroll cards, prepaid MasterCard®cards and prepaid wireless products; and entertainment services such as skill-
crane machines, bulk vending machines and kiddie rides. We call our focus on the retailers’ storefront the 4th
Wall™ solution. Providing a combination of 4th Wall products and services which are convenient, reliable, safe
and fun greatly expands our opportunity to cross-sell these products and services. We also offer a range of
point-of-sale terminals, stand-alone e-payment kiosks and e-payment enabled coin-counting machines in
drugstores, universities, shopping malls, supermarkets and convenience stores in the United States and the United
Kingdom. Due to our recent strategic investments with Video Vending New York, Inc. (d.b.a. “DVDXpress”)
and Redbox Automated Retail, LLC (“Redbox”), we are now able to offer self-service DVD kiosks where
consumers can rent or purchase movies.
Our 2004 acquisition of ACMI Holdings, Inc. and its subsidiaries (collectively referred to as “ACMI”), our
2005 acquisition of The Amusement Factory L.L.C. (“Amusement Factory”), our strategic investments with
DVDXpress and Redbox, as well as the continued growth of our e-payment services has significantly broadened
our base of existing and potential retail partners and the depth and reach of our sales and field service forces,
providing greater opportunity to cross-sell our coin, entertainment and e-payment services. We now have more
than 1,350 field service employees throughout the United States and internationally, who have broadened our
geographic reach to develop and maintain strong relationships with new and existing retail partners. With the
combination of coin, entertainment and e-payment services, we are positioned as a single-source supplier for
retailers to capitalize on the 4th Wall, an area between the cash registers and front door of retail locations that in
the past, has generally not been managed to optimize revenue per square foot.
We launched our business in North America with the installation of the first Coinstar®coin-counting
machine in the early 1990s, and in 2001 we began offering our coin services in the United Kingdom. Since
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