Coinstar to Acquire American Coin Merchandising

ACMI, operating as SugarLoaf Creations, is a leading owner and operator of coin-operated amusement vending equipment in the United States, with more than 167,000 machines in over 18,000 locations. ACMI is one of the largest vendors of plush toys in the United States with a product line consisting of skill crane machines, bulk vending, kiddie rides and video games. The company distributes its equipment to mass merchants, supermarkets, warehouse clubs, restaurants, entertainment centers, truck stops, and other distribution channels. Combined, Coinstar and ACMI will have over 40,000 distribution points. As reported in ACMIs Form 10-K and Form 10-Qs filed with the SEC, ACMIs revenue for the last twelve months ended March 31, 2004, was approximately $220 million. As of March 31, 2004, ACMI employed approximately 1,150 people. The combination of ACMI and Coinstar will add new classes of trade, broaden its customer base, diversify products and services, expand the reach of field service, and create a platform for growth across all businesses, including coin counting, e-payments, and amusement vending. Broadens Customer Base ACMI has a strong national presence including retail accounts with leading mass merchants, supermarkets, warehouse clubs, restaurants, entertainment centers, truck stops and other distribution channels, which represent over 18,000 locations across the United States. Coinstars existing customer base represents approximately 11,000 supermarkets and 13,000 chain drug store locations. Combined, the two companies will have over 40,000 retail locations with a broad geographic reach extending to multiple classes of trade. Diversifies Products and Services ACMI is a leading provider in each of its three primary product areas: skill cranes, bulk vending machines, and kiddie rides. These offerings complement Coinstars leading coin-counting and emerging e-payment businesses, and will provide retailers with a single-source supplier for a range of their front-end service needs. In addition, opportunities exist for both organizations to cross-sell a broad product portfolio to a diverse set of customers. Extends Field Service Reach The reach of the combined Coinstar and ACMI field staff creates an extensive national team with more than 1,250 field employees located throughout the United States. The expanded field presence will create greater route density, and the potential to economically service both urban and rural areas. Expands E-Payment Opportunities Coinstar Inc. offers a range of e-payment solutions including prepaid MasterCard(R) cards, prepaid wireless airtime, prepaid long distance, and electronic payroll services. The ACMI acquisition provides new sales opportunities in certain retail locations that are suited to host Coinstars e-payment products through either a stand-alone device or the Companys in-lane point-of-sale solution. Business Outlook The Company expects this transaction to be accretive within the first twelve months, excluding the effects of the amortization of intangible assets. The Company will obtain an independent valuation of certain of ACMIs tangible and intangible assets which will enable the Company to determine purchase price allocations including amounts assigned to intangible assets and goodwill. As a result, reported GAAP earnings per share will be impacted by the non-cash accounting charges related to such amortization of intangible assets. The Company will give guidance regarding GAAP EPS for the combined companies on the first conference call after the independent valuation of intangible assets is complete. The transaction is expected to close in the third quarter of this year. As such, guidance for the second quarter for Coinstar Inc. will remain unchanged. Coinstar Inc. will update full-year guidance upon the co