Redbox 2010 Annual Report Download - page 11

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and 20th Century Fox provide that DVD titles will be available 28 days after the DVD becomes available for
purchase at retail outlets. These delayed rental windows have resulted in the shifting of the availability of certain
titles relative to historic patterns, most notably certain titles have shifted from the fourth quarter holiday season
into the first quarter of the following year. However, despite this shift, for 2011 we continue to expect our lowest
quarterly revenue and earnings in the first quarter and our highest quarterly revenue and earnings in the second
and third quarters. Our Coin Services segment generally experiences its highest revenue in the second half of the
year due to increased retailer foot traffic and holiday shopping in the fourth quarter and an increase in
consumers’ desire for disposable income in the summer months.
Employees
As of December 31, 2010, we had approximately 2,585 employees. Included in this total were more than 1,718
field service employees throughout the U.S. and internationally who have broadened our geographic reach to
develop and maintain strong relationships with retailers.
Additional Business Information
See Note 15: Business Segment and Enterprise-Wide Information in our Notes to Consolidated Financial
Statements as well as Item 1A. Risk Factors for additional information related to our segments, intellectual
property, competition, limited or sole source suppliers, and geographic and significant customer relationship
information.
Where You Can Get More Information
We meet information-reporting requirements of the Securities and Exchange Act of 1934 by filing, and
furnishing to the Securities and Exchange Commission (“SEC”), reports including annual reports on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, as well as amendments thereto. These reports
and related materials are available at the SEC website, www.sec.gov and the SEC’s Public Reference Room at
100 F Street, NE., Washington, DC 20549. Information on the operation of the SEC’s Public Reference Room
may be obtained by calling the SEC at 1-800-SEC-0330. We make these reports and related materials available,
as soon as reasonably practicable after we electronically deliver such materials to the SEC, free of charge on the
Investor Relations section of our website, www.coinstarinc.com.
Item 1A. Risk Factors
You should carefully consider the following risk factors that may affect our business, including our financial
condition and results of operations. The risks and uncertainties described below are not the only risks we face.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may
impair our business. If any of the following risks actually occur, our business could be harmed, the trading price
of our common stock could decline and you could lose all or part of your investment in us.
The termination, non-renewal or renegotiation on materially adverse terms of our contracts with one or more
of our significant retailers could seriously harm our business, financial condition and results of operations.
The success of our business depends in large part on our ability to maintain contractual relationships with our
retailers in profitable locations. A typical DVD or Coin retail contract ranges from three to five years and
automatically renews until we or the retailer gives notice of termination. Certain contract provisions with our
retailers vary, including product and service offerings, the service fees we are committed to pay each retailer,
frequency of service, and the ability to cancel the contract upon notice after a certain period of time. We strive to
provide direct and indirect benefits to our retailers that are superior to, or competitive with, other providers or
systems or alternative uses of the floor space that our machines occupy. If we are unable to provide our retailers
with adequate benefits, we may be unable to maintain or renew our contractual relationships on acceptable terms,
causing our business, financial condition and results of operations to suffer.
We do a substantial amount of our business with certain retailers. For example, we have significant relationships
with Wal-Mart Stores, Inc., Walgreen Co., and The Kroger Company, which accounted for approximately
3