Redbox 2011 Annual Report Download - page 42

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New Ventures
Dollars in thousands Year Ended December 31, 2011 vs. 2010 2010 vs. 2009
2011 2010 2009 $ % $ %
Revenue .......................... $ 1,392 $ 730 $ 677 $ 662 90.7% $ 53 7.8%
Expenses:
Direct operating ............... 3,349 1,493 1,343 1,856 124.3% 150 11.2%
Marketing .................... 771 505 63 266 52.7% 442 701.6%
Research and development ....... 4,623 1,037 — 3,586 345.8% 1,037 —
General and administrative ....... 10,464 5,918 1,352 4,546 76.8% 4,566 337.7%
Segment operating loss .............. (17,815) (8,223) (2,081) (9,592) (116.6)% (6,142) (295.1)%
Depreciation and amortization ........ (866) (3,826) (1,286) 2,960 (77.4)% (2,540) 197.5%
Operating loss ..................... $(18,681) $(12,049) $(3,367) $(6,632) (55.0)% $(8,682) (257.9)%
2011 Events
• We launched three new self-service concepts into test markets to validate the concepts; and
• We exited one of our self-service concept test programs.
Comparing 2011 to 2010
Revenue increased $0.7 million, or 90.7% primarily due to an increased number of kiosks for new and existing
self-service concepts.
Operating loss increased $6.6 million, or 55%, primarily due to the following:
• $4.5 million increase in general and administrative expenses due to increased headcount to support
growth of existing self-service concepts, as well as the start-up of new self-service concepts, higher
allocated costs from our shared service support functions and a $0.5 million charge associated with
exiting one of our self-service concept test programs during the second quarter of 2011;
• $3.6 million increase in research and development expenses associated with the design and build out of
new self-service concepts; and a
• $1.9 million increase in direct operating expenses due to a $0.7 million charge for purchases of
additional prototype kiosks, which we expense as acquired during the piloting phase, additional sales
volume from existing concepts, as well as the addition of self-service concepts to test markets; offset
by a
• $3.0 million decrease in depreciation and amortization expenses due to a $3.2 million charge during the
first quarter of 2010 related to the disposal of our first generation coffee kiosk, offset by a $0.6 million
charge for the early retirement of kiosks associated with exiting one of our self-service concept test
programs in the first quarter of 2011.
We expect to continue to invest in self-service concepts that meet our requirements and show the most promise
towards future success.
Comparing 2010 to 2009
Revenue increased $0.1 million, or 7.8%, primarily due to the addition of new self-service concepts.
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