Outerwall Inc. -- Moody's says Outerwall Inc.'s (Ba2 CFR) lowered guidance will not impact credit ratings

New York, September 18, 2013 -- Moody's Investors Service said that Outerwall Inc.'s (Ba2 CFR) announcement that it updated its guidance for the third quarter and the year 2013, including reducing its estimates for revenues, EBITDA and free cash flow, as well as increasing its share repurchases by $100 million, will not impact the company's credit ratings. Moody's believes that the new guidance is much lower than the previous public guidance but still consistent with or better than Moody's expectations back when the company's credit ratings were assigned earlier this year. In addition, Moody's believes that the issues that contributed to the shortfall will be swiftly remediated, capex will be reduced, and leverage is still expected to decline to a level comfortably under 2.0x within the next six to twelve months. This would leave the company with strong financial flexibility within its rating, particularly when the company turns around the promotion related issues that plagued the company's Redbox division in recent quarters. Moody's believes that the higher share repurchases will slow, but not halt the company's debt reduction capabilities, and the company's liquidity will remain solid.

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