<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): FEBRUARY 10, 2000
COINSTAR, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
DELAWARE 000-22555 91-3156448
(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
</TABLE>
COINSTAR, INC.
1800 - 114th Avenue SE
Bellevue, Washington 98004
(Address of principal executive offices) (Zip Code)
(425) 943-8000
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. SUBSIDIARY STOCK SALE, DEBT FINANCING AND MANAGEMENT CHANGE
On February 10, 2000, Coinstar, Inc. purchased, pursuant to the terms of
a Securities Purchase Agreement dated as of February 10, 2000, 10,000,000 shares
of Series A-1 Convertible Preferred Stock of Meals.com, Inc. (formerly a
wholly-owned subsidiary of Coinstar) for a purchase price of $10 million.
Simultaneous with the purchase by Coinstar, other investors purchased 5,500,000
shares of Series A Convertible Preferred Stock of Meals.com for an aggregate
purchase price of $5.5 million.
Each share of Series A-1 Stock has 10 votes and is convertible into
Common Stock of Meals.com. at a current conversion price of $1.00 per share. The
conversion price is subject to adjustment in the event of stock dividends, stock
subdivisions and combinations and extraordinary distributions, as well as the
issuance of additional shares of Common Stock, or securities convertible into or
exercisable for Common Stock, at a price less than the then effective conversion
price.
The shares of Series A-1 Stock held by Coinstar are subject to
certain transfer restrictions and co-sale rights.
In addition to the investment, Coinstar has provided an aggregate $15.6
million credit facility to Meals.com. To date, Coinstar has expended $5.6
million on behalf of Meals.com. These expenditures have been converted to debt,
bringing the credit facility's available balance to $10 million. The Note
accretes interest at the rate of interest announced from time to time by
Imperial Bank as its Prime Commercial Lending Rate, plus 3% per annum. Neither
interest nor principal is payable except under certain limited circumstances
described in the Note. Repayment of the Note is secured by a security interest
in the assets of Meals.com.
Jens H. Molbak resigned from his position as Chief Executive Officer of
Coinstar to serve as the full-time Chief Executive Officer of Meals.com. Daniel
A. Gerrity, Coinstar's President and Chief Operating Officer has assumed the
role of Chief Executive Officer of Coinstar. Mr. Molbak will remain as Chairman
of the Board of Directors of Coinstar.
The Senior Secured Note is filed as an exhibit to this report and is
incorporated into this report by reference. This summary of the provisions of
the note is not complete, and you should refer to the exhibit index for a copy
of the actual note.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
COINSTAR, INC.
By: /s/ Daniel A. Gerrity
-------------------------------------
Daniel A. Gerrity
President and Chief Executive Officer
Dated: February 18, 2000
-3-
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
4.1 Senior Secured Note, dated February 10, 2000, executed by Meals.com,
Inc. on behalf of Coinstar, Inc.
99.1 Press Release, dated February 10, 2000.
99.2 Press Release, dated February 10, 2000.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
SENIOR SECURED NOTE
$15,600,000 Seattle, Washington
February 10, 2000
For value received, MEALS.COM, INC., a Delaware corporation
("BORROWER"), unconditionally promises to pay to the order of COINSTAR, INC., a
Delaware corporation ("LENDER"), the principal sum of Fifteen Million Six
Hundred Thousand Dollars ($15,600,000), or so much thereof as Lender may
actually loan ("ADVANCE") to Borrower under this note (this "NOTE"), plus
interest on the outstanding advances from the date of each advance until repaid
at the rate of interest announced from time to time by Imperial Bank as its
Prime Commercial Lending Rate, plus 3% per annum, compounded annually, plus all
of Lender's reasonable attorneys' fees and costs, at the times and in the manner
provided for in this Note. In the event Imperial Bank ceases to announce or
publish its Prime Commercial Lending Rate, the Lender will set the interest rate
by using a comparable index or reference rate. This is a senior secured advance
note.
1. AUTHORIZED INDIVIDUALS; AUTHORIZED DOCUMENTS; BORROWER REPRESENTATION
REGARDING EACH ADVANCE
Borrower has authorized its Chief Executive Officer or its Chief
Financial Officer each acting alone, to request advances on behalf of Borrower.
Copies, certified as true and in effect by the Board of Directors of Borrower,
of resolutions of the Board of Directors of Borrower authorizing those
individuals to obtain advances from Lender and obligating Borrower to repay
those advances with interest, fees and costs, will be provided to Lender at the
time this Note is executed (i.e., signed and delivered to Lender by a duly
authorized representative of Borrower). Borrower will bear all risk of loss
resulting from an unauthorized advance and from misappropriation of funds
disbursed pursuant to an authorized advance. Lender shall have no duty of
inquiry as to authorization for any advance or for use of advance proceeds
following disbursement into Borrower's account. In connection with each advance,
Borrower shall be deemed to have made each of the representations and warranties
set forth in Section 10 herein as of the date of the requested advance.
2. ADVANCES
All advances outstanding as of the date hereof shall be deemed advances
under this Note. As of the date hereof, $5,600,000 has been advanced by Lender
to
PAGE 1
<PAGE> 2
Borrower and is deemed to be outstanding under this Note. Lender will keep
records as to each advance, which will be conclusive evidence of all advances
absent manifest error.
3. PAYMENT
Borrower shall pay all outstanding principal plus all accrued interest
on demand; provided, however, that demand may not be made before the earlier of
(i) the date when Borrower has raised in the aggregate at least $100,000,000 in
additional capital, (ii) the closing of a transaction in which the holders of
the Company's Preferred Stock and Warrants outstanding on the date of this Note
receive cash or registered securities in an amount equal to the then fair market
value for their shares and warrants, (iii) the closing of the Company's initial
public offering, as long as the underwriters for that offering have agreed to
such demand and (iv) such date, if any, as may be consented to by Borrower in
connection with the incurrance of additional debt as contemplated by Section
11(c). Demand may be made before such time upon the occurrence of an Event of
Default (as defined in Section 13 herein). Unless otherwise agreed or required
by applicable law, interest will accrue on the outstanding principal at the
rates set forth herein and as long as Lender has not made demand for payment
and/or no Event of Default exists, all accrued interest on the advances
hereunder shall be added to and become a part of the principal outstanding under
this Note on an annual basis on each anniversary of the date hereof.
4. PREPAYMENT
Borrower shall have the right at any time and from time to time to
prepay the principal hereof in whole or in part without premium or penalty.
5. DEFAULT RATE
Following demand for payment under this Note or acceleration of this
Note by reason of Borrower's default, interest will be payable at a default rate
equal to five percent (5%) in excess of the rate that would otherwise be
applicable.
6. OUT-OF-POCKET COSTS REIMBURSEMENT
Borrower will pay on demand all reasonable costs incurred by Lender in
enforcing the obligations evidenced by this Note or any of the other documents
related to the advance evidenced by this Note (collectively, the "Related
Documents"), including reasonable attorneys' fees and the costs of foreclosure
against any collateral security, whether or not a civil action or similar
proceeding (including claims and adversary proceedings in the bankruptcy court)
is commenced or pursued to judgment
PAGE 2
<PAGE> 3
or an appeal thereof is filed or pursued to completion. Interest will accrue on
the unpaid balance of such costs at the default rate from the tenth (10th)
business day following the demand until such costs are paid.
7. USE OF PROCEEDS
Borrower represents and covenants that the proceeds of the loan made to
Borrower and evidenced by this Note will be used by Borrower only for working
capital purposes. Borrower represents and warrants that the proceeds of the loan
under this Note will be used only for commercial or business purposes, and will
not be used to acquire any "margin stock" as that term is used in Regulation U
of the Federal Reserve Board or to redeem outstanding securities, unless
consented to by Lender.
8. BORROWER'S WAIVERS
Borrower waives notice of acceptance, notice, presentment, demand,
protest, dishonor, and notice of dishonor.
9. LENDER'S PREROGATIVES
Lender may forbear and/or extend the maturity date or renew this Note
one or more times on such terms as Lender may specify. Lender's forbearance or
other failure to exercise any right or remedy upon Borrower's default shall not
constitute a waiver or grounds for the claim of estoppel with respect to the
default or the term involved while such default continues or in connection with
any future default.
10. BORROWER'S REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
(a) Borrower has been duly formed as a corporation under Delaware law
and has filed all assumed business names and other certificates required by law
in connection with the formation and business operation of Borrower.
(b) Borrower has been duly authorized, in accordance with the terms of
its certificate of incorporation, to execute, deliver and perform Borrower's
obligations under this Note and the Related Documents.
(c) This Note and each of the Related Documents have been executed by
duly authorized representatives of Borrower, and have been delivered to Lender
by a representative of Borrower who has been duly authorized to perform such
act.
PAGE 3
<PAGE> 4
(d) This Note and each of the Related Documents are the legally valid
and binding obligations of Borrower, enforceable against Borrower and third
persons in accordance with their terms except as such enforcement may be delayed
or restricted under insolvency laws and principles of equity affecting the
rights and remedies of creditors generally.
(e) The execution and delivery of this Note and each of the Related
Documents and the performance of the obligations evidenced by this Note and each
of the Related Documents will not violate any law applicable to Borrower or
constitute a default or breach of any contract to which Borrower is a party or
by which its properties are bound.
(f) There is no litigation, prosecution, investigation or other
proceeding of any nature whatsoever, to the knowledge of Borrower, now pending
or threatened, involving Borrower or its properties which would have a material
adverse impact on the ability of Borrower to perform the obligations evidenced
by this Note.
(g) The financial information provided by Borrower to Lender is true and
correct in all material respects and accurately presents the financial condition
of Borrower as of the date of such information.
(h) Borrower is not in default in the performance of any material
obligation to any third person except for those obligations which are being
contested in good faith by appropriate means and with an adequate reserve
maintained for payment in the event of an adverse outcome.
(i) Borrower is in compliance with all applicable laws, regulations and
orders of governmental subdivisions and agencies, the noncompliance of which
would be material to Borrower's financial condition, business or properties.
(j) Borrower has filed all tax returns required by law to be filed and
has paid all taxes and similar government impositions when due except for those
taxes and impositions being contested by Borrower in good faith by appropriate
means and with an adequate reserve maintained for payment in the event of an
adverse outcome.
(k) Borrower is not insolvent and is not the subject of any insolvency
proceedings as those terms are defined in RCW 62A.1-201(22) and (23). There has
been no material adverse change in Borrower's business, financial condition, and
properties since the date of the last financial statements provided to Lender.
(l) There has been no material adverse change in the financial
condition, results of operation, prospects or otherwise of the Borrower since
the date of this Note or of an advance, whichever is later.
PAGE 4
<PAGE> 5
11. BORROWER'S COVENANTS
Unless Borrower shall have obtained the prior written consent of Lender,
Borrower covenants and agrees that until all amounts, including principal,
interest and other amounts due under this Note, are paid in full:
(a) Borrower will at all times preserve and keep in full force and
effect its existence as a corporation.
(b) Borrower will not create or suffer to exist any liens upon or with
respect to any of its properties, whether now owned or hereinafter acquired,
other than such liens as will not have a material adverse effect on the
business, operations, properties, assets or condition (financial or otherwise)
of the Borrower.
(c) Borrower will not create or suffer to exist any debt other than the
debt evidenced by this Note that is payable before repayment of this Note.
(d) Borrower will promptly and fully comply with all laws, regulations
and orders, the noncompliance with which would have a material adverse impact on
Borrower's financial condition, business or property.
(e) Borrower will file all tax returns required by law to be filed and
will pay all taxes and similar government impositions being contested by
Borrower in good faith by appropriate means and with an adequate reserve
maintained for payment in the event of an adverse outcome.
(f) Borrower will provide to Lender such information as may be required
to keep Lender currently and completely informed as to all material matters
involving the business, financial condition and property of Borrower, including
pending and threatened litigation and other governmental proceedings.
(g) Borrower will promptly and in no case later than two (2) business
days after Borrower has knowledge of the occurrence of an Event of Default (as
defined in Section 13 hereof) or an event, act or condition that, with notice or
lapse of time or both, would constitute an Event of Default, provide Lender with
a certificate of the chief executive officer of Borrower specifying the nature
thereof and Borrower's proposed response thereto.
(h) Borrower will promptly notify Lender in writing of any loss, damage,
investigation, action, suit, proceeding or claim relating to a material portion
of the assets and properties of Borrower that may result in any material adverse
change in Borrower's business, operations, properties, assets or condition
(financial or otherwise).
PAGE 5
<PAGE> 6
(i) Borrower will keep its books of accounting in accordance with
generally accepted accounting principles, consistently applied, and furnish to
Lender:
(i) All such financial information as may reasonably be
requested by Lender;
(ii) Promptly upon filing its federal income tax return, a copy
of Borrower's federal income tax return, together with all schedules
thereto; and
(iii) As soon as practicable and in any event within thirty (30)
days after the close of each fiscal quarter of Borrower, projections of
Borrower's sources and uses of funds for the immediately following nine
(9) months (broken down on a month-by-month basis), in form and
substance satisfactory to Lender.
12. SECURITY FOR LOANS
As security for the payment and performance of its obligations
hereunder, the Borrower hereby grants the Lender a security interest in all of
the Borrower's right, title and interest in and to the collateral described in
the Security Agreement and Intellectual Property Security Agreement executed by
the Borrower in favor of the Lender.
13. EVENTS OF DEFAULT
Lender acknowledges that the only basis for demand to be made on this
Note prior to the occurrence of any of the events described in clauses (i), (ii)
or (iii) of Section 3 shall be the following "EVENTS OF DEFAULT":
(a) Failure of Borrower to pay any principal under this Note when due or
failure to pay any interest or other amount due under this Note within five (5)
business days after the date due; or
(b) Breach of either of the covenants set forth in Section 11 (b) or
(c); or
(c) The liquidation of the Borrower; or
(d) A court having proper jurisdiction shall enter a decree or order for
relief in respect to Borrower in an involuntary case under Title 11 of the
United States Code entitled "BANKRUPTCY" (as now and hereinafter in effect, or
any successor thereto, the "BANKRUPTCY CODE") or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order is not stayed or any other similar relief shall be granted under any
applicable federal or state law; or
PAGE 6
<PAGE> 7
(e) An involuntary case shall be commenced against Borrower under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Borrower or all or a substantial part
of its property shall have been entered, or the involuntary appointment of an
interim receiver, trustee or other custodian of Borrower for all or a
substantial part of its property shall have occurred, or a warrant of
attachment, execution or similar process shall have been issued against any
substantial part of the property of Borrower; or
(f) An order for relief shall be entered with respect to Borrower, or
Borrower shall commence a voluntary case under the Bankruptcy Code or any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case or to the conversion of an involuntary case to a voluntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property, or Borrower shall make an assignment for the benefit of creditors, or
Borrower shall be unable or fail or shall admit in writing its inability to pay
its debts as such debts become due, or any member of Borrower shall authorize
action to approve any of the foregoing.
14. REMEDIES
After the occurrence and during the continuation of any Event of
Default, Lender may, but shall not be obligated to, immediately demand payment
of this Note without prior notice and may immediately proceed to exercise all
rights and remedies that Lender may have against Borrower and any collateral of
Borrower. All rights and remedies of Lender are cumulative and not exclusive and
the commencement or partial exercise of any such right or remedy shall not
preclude Lender from the exercise of any other right or remedy until the debts
evidenced by this Note are paid in full. Lender's rights specifically include
the right of setoff against any obligations owed by Lender to Borrower against
Borrower's obligations to Lender as evidenced by this Note.
15. PARTICIPATIONS; NO BORROWER ASSIGNMENT; SUCCESSORS AND ASSIGNS
Lender shall have the unconditional right to sell participation
interests in this Note, the Related Documents and the collateral of Borrower.
Borrower shall not have the right to assign its rights or obligations under this
Note and any attempted assignment also shall be a default by Borrower under this
Note. Subject to the foregoing restrictions on Borrower assignment, this Note
and the Related Documents
PAGE 7
<PAGE> 8
shall bind and inure to the benefit of the respective successors and assigns of
Borrower and Lender.
16. INTEGRATION; SUPPLEMENTING DOCUMENTS
This Note and the Related Documents are the final and complete
expression of the agreement of the parties hereto and are intended to supersede
any prior or contemporaneous oral or written understandings and agreements
relating to this Note and the collateral security between the parties hereto.
This Note and the Related Documents are intended to complement and supplement
one another. However, in the event of a direct conflict in terms or conditions,
the terms and conditions of this Note shall govern those contained in any of the
Related Documents.
17. CHOICE OF LAW
Borrower and Lender have selected Washington law, except for any of its
choice of law provisions that would make the law of another jurisdiction
applicable to this Note, to govern the construction and enforcement of this
Note. In construing this Note and the Related Documents, resort first shall be
had to the definitions and substantive terms of the Uniform Commercial Code and
the Bankruptcy Code before any other source.
18. JURISDICTIONAL CONSENT
Borrower hereby submits to the jurisdiction of any state or federal
court sitting in Seattle, Washington, in any action or proceeding relating to
this Note and hereby waives any claim that such a forum is inconvenient or that
there is a more convenient forum.
19. SAVINGS CLAUSE
If any term of this Note is hereafter determined to be illegal or
unenforceable, that term will be deemed deleted without invalidating the
remaining terms and, to the fullest extent permitted by law, Borrower hereby
waives any provision of law which renders any term illegal or unenforceable. In
the event that (a) the amount of interest and fees payable by Borrower under
this Note is later determined to be usurious and (b) Borrower is not prohibited
from pleading the defense of usury or maintaining any action thereon or
therefor, any such interest in excess of the maximum allowable rate
automatically shall be deemed to have been applied to principal.
PAGE 8
<PAGE> 9
20. STATUTORY DISCLAIMER
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT, OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
MEALS.COM, INC., a Delaware corporation
By: /s/ Jens A. Molbak
--------------------------------------
Title: Chief Executive Officer
-----------------------------------
PAGE 9
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Coinstar Inc.
Michelle Avila Cathy Corley
Public Relations Investor Relations
(425) 943-8253 (425) 943-8242
[email protected] [email protected]
INTERNET/TELECOMMUNICATIONS INVESTOR GROUP BUYS 11% STAKE IN MEALS.COM,
COINSTAR'S E-SERVICES SUBSIDIARY
BELLEVUE, WASH.--FEB. 10, 2000--Coinstar Inc. (NASDAQ: CSTR) today announced it
has sold an 11% interest in its Meals.com e-services subsidiary to an investor
group that includes Naveen Jain, CEO and founder of InfoSpace.com (NASDAQ:
INSP); Steve Hooper, former president and CEO of AT&T Wireless; Wayne Perry,
current vice-chairman and former CEO of Nextlink (NASDAQ: NXLK); John
Cunningham, a director of Infospace.com; and Rufus Lumry, also a director of
InfoSpace.com and a strategic investor in ImageX.com (NASDAQ: IMGX). The $5.5
million investment results in an approximately $50 million post financing
valuation for Meals.com.
"Meals.com is rapidly becoming the pre-eminent leader of on-line recipes and
meal planning," said John Cunningham, spokesman for the investor group. "Its
innovative Web technology, coupled with Coinstar's strong relationships with
retailers who operate more than 10,000 supermarkets, puts Meals.com in a unique
position to provide the supermarket industry with dynamic `bricks and clicks'
tools.
"We believe Meals.com will be able to rapidly extend its reach with private
label distribution through its supermarket partners," Cunningham continued. "The
first private label Web site went live last month at www.ukrops.com. We are
impressed by how rapidly Coinstar created a completely new industry for coin
recycling and look forward to actively assisting Meals.com in its vision of
bringing the power of the Internet to more than 100 million supermarket
customers."
Jens Molbak, Coinstar founder and chairman said, "We are pleased that these
leaders, who have created billions of dollars in value in the Internet and
Telecommunications/Wireless arenas, recognize the unique opportunity that exists
for Meals.com. In helping to build companies such as AT&T Wireless, Nextlink,
ImageX.com, and InfoSpace.com, our new outside investors have demonstrated a
proven ability to create category leaders in their respective industries. The
group's expertise will be invaluable to us."
<PAGE> 2
In addition to the outside investment, Coinstar will invest $10 million of cash
as equity and provide a $15.6 million credit facility. To date, Coinstar has
expended $5.6 million on behalf of Meals.com. These expenditures have been
converted to debt, bringing the credit facility's available balance to $10
million.
To take advantage of the continued growth of its core business and the
accelerated potential of its Meals.com subsidiary, Coinstar also announced two
executive promotions in a separate release. Coinstar founder and chairman, Jens
Molbak, has assumed the newly created role of CEO of Meals.com and Dan Gerrity,
president and chief operating officer, was promoted to president and CEO of
Coinstar Inc.
"The capital infusion, subsidiary carve-out, and executive promotions are
designed to drive the growth of these two significant business opportunities,"
said Coinstar chairman and new Meals.com CEO, Jens Molbak. "Coinstar's core
business is continuing to experience tremendous growth and unprecedented
retailer demand. Currently 125 million Americans live within two miles of a
Coinstar machine, but only a fraction of those people have ever used Coinstar.
Beyond realizing the substantial revenue potential in the coin counting
business, the vision for the core business includes leveraging the Coinstar
network and the Internet to deliver value to consumers and retailers.
"Meanwhile, the new Meals.com e-services subsidiary will focus on delivering
`bricks and clicks' opportunities to the supermarket industry. Our Meals.com
strategy captures the powerful synergies in combining a huge retail customer
base with robust Internet capabilities. The recent Microsoft/Radio Shack,
Yahoo/Kmart and AOL/Wal-Mart alliances are examples of this trend. Our
supermarket partners are eager to become more relevant and competitive on-line,"
added Molbak.
The mission of Meals.com is threefold: for consumers, Meals.com offers a
user-friendly site with powerful tools that make getting great meals on the
dinner table faster, easier, and less expensive. For packaged goods
manufacturers, Meals.com offers targeted advertising and promotion
opportunities. For supermarket retailers, Meals.com enables them to build
customer loyalty by making grocery shopping easier and more convenient. As such,
Meals.com is Coinstar's latest effort to provide value to consumers and to the
supermarket industry.
Meals.com's core technology is a "smart" Web site with a robust back-end
database structure and sophisticated targeting capabilities. Visitors to
Meals.com can search a 12,000 recipe database. Registered users can employ
personalized tools such as "My Cookbook" and "My Shopping List"
<PAGE> 3
to save favorite recipes and automatically generate convenient shopping lists.
With each use, Meals.com learns consumer preferences and then makes intelligent
meal recommendations -- similar to the way Amazon.com makes book and music
recommendations.
Coinstar is deploying Meals.com in two channels. One is through its branded
Meals.com Web site (www.meals.com). Another is via private-label versions
created specifically for retail partners, the first of which is with Ukrop's
Super Markets Inc. (www.ukrops.com).
The benefit of working with supermarkets is that Meals.com can integrate data
from frequent shopper cards to personalize the services delivered by Meals.com.
This will make the site even smarter, enabling Meals.com to provide more helpful
tools to consumers and retailers and permitting consumer packaged goods
manufacturers to reach true one-to-one advertising on the Web. In the future,
the Meals.com site will be tied into the supermarkets' grocery ordering and
delivery systems.
A second component of Coinstar's e-services business is the on-line Shopper
terminal. The first units are being piloted next to Coinstar's original
coins-to-cash machines. Not only will this side-by-side location benefit
Coinstar's core business, but with a full-time Internet connection, the on-line
Shopper gives retailers new ways to communicate with customers before they begin
shopping. With the swipe of their store frequent shopper card, consumers can
receive personalized marketing messages and relevant discount offers. They can
also print out the shopping list they created at their grocer's Web site,
conveniently organized by store department. Many other services related to the
frequency card are planned.
"Meals.com gives us a tremendous opportunity to offer the supermarket industry
the integrated on-line and in-store tools it needs to become more competitive in
the face of growing Web-based competition," said Coinstar's Molbak. "We are
pursuing the Meals.com e-services initiatives to take advantage of the synergies
between Coinstar's existing supermarket network and where the supermarket
industry is moving in the Internet world. I am excited by the opportunity to
help build this business and by the support of our new investor group."
About Meals.com
Meals.com, which generates revenue through advertising, sponsorships and
e-commerce agreements with product manufacturers and retailers, uses the latest
Internet technology to save consumers time and money when planning meals and
shopping for groceries. Using Meals.com (http://www.meals.com), consumers can
quickly browse through more than 12,000 recipes with
<PAGE> 4
the click of a mouse. Extensive search, dietary preference and scaling features,
helpful commentary and useful cooking tips enable anyone to come up with great
ideas for their next meal. Consumers can plan entire meals days and even weeks
in advance. Manufacturers and retailers, on the other hand, receive unparalleled
opportunities to build their business in a targeted fashion through site
advertising and sponsorship of recipes, which highlight their products.
About Coinstar Inc.
Recently ranked the country's 18th fastest growing technology company in the
1999 Deloitte and Touche Technology Fast 500, Coinstar Inc. is a coin counting
and e-commerce company whose mission is to deliver technology-driven services to
consumers in their local supermarkets that save them time and money. Coinstar
currently has more than 7,000 of its self-service coin counting machines in
leading supermarkets throughout the United States, and worldwide in the United
Kingdom and Canada. Consumers can call 1-800-928-CASH or visit
www.findcoinstar.com to find the most convenient store location. The company's
new Meals.com e-services subsidiary is designed to bridge the gap between the
Internet and the store.
###
This press release contains forward-looking statements relating to new products
and service enhancements. These statements involve a number of risks and
uncertainties and the actual results could differ materially from the results
identified or implied in any forward-looking statement discussed herein. Factors
that could cause or contribute to such differences include, but are not limited
to, the risks that are more fully described under the caption "Risk Factors"
included in the most recent reports filed with the Securities and Exchange
Commission by Coinstar Inc.
<PAGE> 1
EXHIBIT 99.2
FOR IMMEDIATE RELEASE CONTACT: Coinstar Inc.
Michelle Avila Cathy Corley
Public Relations Investor Relations
(425) 943-8253 (425) 943-8242
[email protected] [email protected]
COINSTAR INC. ANNOUNCES EXECUTIVE PROMOTIONS
BELLEVUE, WASH.--FEB. 10, 2000--Coinstar Inc. (NASDAQ: CSTR) today announced two
executive promotions in response to the continued growth of its core business
and the accelerated potential of its Meals.com subsidiary. Coinstar founder and
chairman, Jens Molbak, has assumed the newly created role of CEO of Meals.com
while Dan Gerrity, president and chief operating officer, has been promoted to
president and CEO of Coinstar Inc.
"Coinstar is fortunate it has the depth in its existing management team to
pursue both of these opportunities. Since Dan joined Coinstar in 1993, our
network has grown from zero machines to more than 7,000," said Jens Molbak,
Coinstar chairman and CEO of the Meals.com subsidiary. "Last year, under Dan's
leadership, Coinstar installed a record 2,139 coin-counting machines. Dan
intimately knows and understands the needs of this company and has built a
strong management team as president and COO. I am confident in his continued
leadership of the core business as I assume the new role of CEO of Meals.com."
Mr. Gerrity served as Coinstar vice-president and chief technical officer from
1993 until the spring of 1997, when he was promoted to president and COO of
Coinstar. Prior to joining Coinstar, Mr. Gerrity was an early member of the
marketing, and later engineering, team at Slate Corporation, a Silicon Valley
start-up.
"I'm thrilled to be leading this enterprise. I expect this to be an exciting
year for Coinstar and its core business," said new Coinstar president and CEO,
Dan Gerrity. "Coinstar's rapid growth has been achieved despite relatively low
consumer awareness. We have recently achieved the coast-to-coast network that
will allow us to engage in national brand-building activities. More than 90
million people a week walk by a Coinstar machine. In addition, the Coinstar
network serves as a backbone for Meals.com and its in-store delivery systems."
Separately, Coinstar announced today that an investor group purchased an 11%
interest in Coinstar's Meals.com subsidiary. That group includes Naveen Jain,
CEO and founder of InfoSpace.com (NASDAQ: INSP); Steve Hooper, former president
and CEO of AT&T Wireless; Wayne Perry, current vice-chairman and former CEO of
Nextlink (NASDAQ: NXLK); John Cunningham, a director of InfoSpace.com; and Rufus
Lumry, also a director of InfoSpace.com and strategic investor in ImageX.com
(NASDAQ: IMGX).
<PAGE> 2
Said Mr. Molbak, "Meals.com gives us a tremendous `bricks and clicks'
opportunity to offer the supermarket industry the integrated on-line and
in-store tools it needs to become more competitive in the face of growing
Web-based competition. We are pursuing the Meals.com e-services initiatives to
take advantage of the synergies between Coinstar's existing supermarket network
and where the supermarket industry is moving in the Internet world. I am excited
by this opportunity to help build this business and by the support of our new
investor group."
ABOUT MEALS.COM
Meals.com, which generates revenue through advertising, sponsorships, and
e-commerce agreements with product manufacturers and retailers, uses the latest
Internet technology to save consumers time and money when planning meals and
shopping for groceries. Using Meals.com (http://www.meals.com), consumers can
quickly browse through more than 12,000 recipes with the click of a mouse.
Extensive search, dietary preference and scaling features, helpful commentary
and useful cooking tips enable users to come up with great ideas for their next
meal. Consumers can plan entire meals days and even weeks in advance.
Manufacturers and retailers, on the other hand, receive unparalleled
opportunities to build their business in a targeted fashion through site
advertising and sponsorship of recipes, which highlight their products.
ABOUT COINSTAR INC.
Recently ranked the country's 18th fastest growing technology company in the
1999 Deloitte and Touche Technology Fast 500, Coinstar Inc. is a coin counting
and e-commerce company whose mission is to deliver technology-driven services to
consumers in their local supermarkets that save them time and money. Coinstar
currently has more than 7,000 of its self-service coin counting machines in
leading supermarkets throughout the United States, and worldwide in the United
Kingdom and Canada. Consumers can call 1-800-928-CASH or visit
www.findcoinstar.com to find the most convenient store location. The company's
new Meals.com e-services subsidiary is designed to bridge the gap between the
Internet and the store.
###
This press release contains forward-looking statements relating to new products
and service enhancements. These statements involve a number of risks and
uncertainties and the actual results could differ materially from the results
identified or implied in any forward-looking statement discussed herein. Factors
that could cause or contribute to such differences include, but are not limited
to, the risks that are more fully described under the caption "Risk Factors"
included in the most recent reports filed with the Securities and Exchange
Commission by Coinstar Inc.
