Outerwall, the company behind all of those Redbox DVD kiosks and a failed subscription OTT venture with Verizon Communications, announced Tuesday that CEO J. Scott Di Valerio has stepped down and resigned from the board.
Di Valerio (pictured), who was elevated to CEO from CTO of Outerall in April 2013 and is late of Lenovo and Microsoft, was replaced on an interim basis by Nora M. Denzel, a member of the Outerwall board since 2013. Denzel's also a former exec of Hewlett-Packard, Legato Systems and IBM.
Shares in Outerwall were down $7.45 (9.58%) to $70.32 each in early trading Tuesday.
Outerwall, which has started a search for a permanent replacement, did not announce a reason for Di Valerio’s departure, but Outerwall chairman Nelson Chan noted in a statement that thanked him for contributions, noting that “the company is well-positioned due to its strong operating and financial foundation and a deep and talented team of employees.”
“Outerwall continues to capitalize on its market-leading brands to drive profitability and deliver value for shareholders, partners and customers. To accelerate the progress we are making, the Board believes that now is the right time for a leadership change, “ Chan added.
Among recent action, Redbox announced a pricing increase that took effect Dec. 2, 2014. The price for DVDs rose 30 cents to $1.50 per day, while Blu-ray discs increased 50 cents, to $2 per day. On Jan. 6, 2015, the price for video game rentals rose $1 to $3.
Redbox Instant by Verizon, the Netflix-like subscription multiscreen video service, shut down on Oct. 7, 2014, noting at the time that the offering “was not as successful as we hoped it would be.” The venture, launched in March 2013, offered a streaming library plus the option to obtain credits toward DVD/Blu-ray discs, and to buy and rent video titles electronically.
Looking ahead, the company said it expects consolidated revenue for the fourth quarter of 2014 to be in the range of $598 million to $602 million, with core diluted earnings per share from continuing operations to be $2.40 to $2.52. The company had already forecast earnings of $1.85 to $2.15 per share on revenues of $575 million to $605 million.
Outerwall said it will provide 2015 annual guidance on its fourth quarter earnings call, scheduled for February 5.
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