Redbox 2015 Annual Report Download - page 36

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Comparing 2014 to 2013
Revenue decreased $8.2 million, or 0.4%, primarily due to:
• $86.0 million decrease from our Redbox segment primarily due to
4.9% decrease in same store sales primarily due to the relative attractiveness and timing of title releases -
while total box office for content released during 2014 increased 8.1%, significantly lower box office during
certain periods of 2014, in particular content released in the second and third quarters, led to a lack of strong
content throughout the year and contributed to a 7.2% decrease in rentals in 2014; and
$17.1 million decrease in video game rentals primarily due to a lighter release slate during the first and
second quarters because of the game industry’s shift to next generation platforms; partially offset by
• $62.4 million increase from our ecoATM segment primarily due to the inclusion of a full year of results subsequent to
our acquisition of ecoATM on July 23, 2013 and an increase of 1,010 ecoATM kiosks during the year; and
• $15.4 million increase from our Coinstar segment, primarily due to growth in U.S. same store sales driven by a price
increase effective October 1, 2013, higher volume in the U.K. due to an increased kiosk base, growth in U.K. same
store sales driven by a price increase effective August 1, 2014 and growth in the number of Coinstar Exchange kiosks.
Operating income decreased $10.5 million, or 3.8%, primarily due to:
• $23.9 million increase in operating loss within our ecoATM segment, primarily from costs associated with scaling the
ecoATM business and the inclusion of a full year of results in 2014, partially offset by transaction expenses recognized
in 2013 related to the ecoATM acquisition;
• $4.6 million increase in share based expense, which is not allocated to our segments, primarily as a result of rights to
receive cash we issued as replacement awards for unvested restricted stock as part of our acquisition of ecoATM in the
third quarter of 2013; and
• $0.2 million decrease in operating income within our Redbox segment primarily due to the following items which
partially offset the decrease in revenue discussed above:
$46.9 million decrease in direct operating expenses which stayed in line with revenue at 70.1% of revenue in
2014 as compared to 69.4% in 2013;
$25.3 million decrease in general and administrative expenses primarily as a result of ongoing cost reduction
initiatives;
$10.6 million decrease in depreciation and amortization expenses primarily due to certain of our kiosk assets
becoming fully depreciated; partially offset by
• $16.5 million increase in operating income within our Coinstar segment primarily due to revenue growth.
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