Firestone Financial Celebrates 45 Years Helping Customers Prosper
he best measure of a company is not taken by looking at how they grow in boom times but instead by how they manage their business and treat customers during the confusion and uncertainty of contraction or transition. Firestone Financial, the Newton, Mass.,-based firm that specializes in providing equipment financing for amusement, vending and traveling carnival operators and distributors, is an excellent case in point. Located at the intersection where banking meets the needs of small business, Firestone has weathered the recession admirably by becoming a multifaceted resource for its customers. “We have become business advisors to many of our customers,” said David Cohen, CEO of Firestone. “We are helping people work through tough situations.” To illustrate, Cohen described a recent scenario in which an operator customer was looking for financing to acquire another route. Firestone looked closely at the deal and the customer’s balance sheet. In their estimate, the deal required the customer to take on too much debt by himself. Instead, they counseled him to seek out a partner to help share the burden, which he did. “We could have just said, ‘No,’” explained Cohen. “But our goal is to find a way to get to ‘Yes’ without making an unwise investment.” Scott Cooper, a 21-year Firestone veteran who serves as EVP and CFO, says
Firestone's Sales and Marketing team gather for a photo. In the simplest terms, Firestone’s success has been built by people helping people (and their businesses, naturally).
Celebrating 40 years in 2005, Firestone Financial CEO David Cohen (left) and Scott Cooper (exec VP-CFO) address customers and friends at their Wynn dinner party in Las Vegas. Three distributor customers (Rich Babich, Rick Kirby and Frank Gumma Sr.) stepped up to the same podium to pay tribute to the financial services powerhouse.
June 2010 • RePlay Magazine • Page 53
Happy 45 Anniversary to a first-class organization!
San Francisco, California www.ecastcentral.com
Firestone's 2009 Platinum Partner Distributors get honored.
the specialized lender is engaged at all levels with customers’ businesses, from meeting their financial needs to helping them stay current with debt service and even creating special workout scenarios when necessary. “I’ve been through business cycles before, but this one has been the most challenging,” said Cooper. “Fortunately, we haven’t changed in our ability to provide funding to the industry. This is where we really shine in comparison to a typical banking relationship. We really want our customers to succeed and grow.” Jim Hines, VP of sales at Firestone, says the company is working more closely with operators and distributors than ever before. “We put our inside sales team in place about five years ago specifically so we could be more service oriented,” he noted. “I
think our customers know us better today than they did then. We worked hard to develop strong relationships with many of them.” Firestone has also focused considerable resources of late in working with suppliers on special promotions designed to help get equipment in the field and spur earnings on location. “While we have been doing them for close to 20 years, starting with a Merit promotion way back in the early 90s, the last five years have seen a multitude of manufacturers embrace the value of providing subsidized programs,” said Hines. “It really is a significant part of our business.”
Managed Growth Five years ago, Firestone celebrated its 40th anniversary with a swanky party for its
Firestone honors its 2009 Platinum Partner Manufacturers. Page 54 • RePlay Magazine • June 2010
to the fine people at Firestone! Pleased to do business with you.
• OPERATORS DISTRIBUTING 5670 Old Thomasville Rd., Archdale, NC 27263
336/884-5714 • fax: 336-884-0864
At the Wynn Las Vegas resort for the financial services firm’s 40th birthday part are Sal Cifala (left) and Helen Mooney with Reno Game Sales’ Marty Shumsky.
customers and partners at the Wynn Hotel in Las Vegas. It was a memorable event both for the tone it set and the wide range of supporters it attracted. Two years later, Firestone hit a high water mark, booking over $100 million in new annual business. This year, the niche financial firm celebrates its 45th year in business. Yet the seeds of that growth were planted deep in the firm’s roots (see our sidebar for a brief history of Firestone), and they had already begun to bear fruit with a management buyout that took place approximately a decade ago. Joining Cohen, Cooper and Hines at the helm of Firestone are three additional senior executives: Larry Yaffe, Sr. VP of sales; Celine Perreault, Sr. VP of opera-
tions, and Robin Place, VP and controller. With a team that boasts more than a century of collective experience, Firestone positioned itself for growth by moving into much-needed additional office space and bringing on three key players: HR director Deb Wischner, I.T. director John Faverman and operations/asset management director Mike Smith. Those departments have in turn played a critical role in helping the company attract and service a much broader base of customers. The last five years have seen Firestone reach a number of impressive milestones, including nailing down a $125 million revolving line of credit with Bank of America and several other financial institu-
The Firestone team at the Wynn celebrating the firm’s 40th year in business. Said CEO Cohen at the affair: “This is also a celebration of our industry. We are proud to be a part of this wonderful business.” Page 56 • RePlay Magazine • June 2010
Thank you, David, and congratulations to
Firestone Financial on 45 years! from Steve and the folks at
Games People Play 4221 Brighton Blvd. • Denver, CO 80216
HAPPY 45, FIRESTONE! We enjoy our relationship… and dealing with a company that does it right!
Happy th 45 and congratulations to one of the finest companies in the coin-op world
Firestone Financial from all your friends at
C.A. Robinson & Co. 323-735-3001
visit our website: www.bradydist.com June 2010 • RePlay Magazine • Page 57
When the history of coin-op is written,
FIRESTONE FINANCIAL will be up there with the best of them! Happy Birthday! Jim Hines and Sal Cifala enjoy the festivities at the Firestone Financial employee anniversary party held in Chatham, Mass.
from all your friends at
10123 Main Street, Clarence, NY 14031
ds at n e i r f r u to o
E N O T FIRES L A I C FINAN
re e h t s y a You’re alwneed you! when we s, Inc. e m a G e th Power toLane, Bensalem, Penn. s 592 Wink
Page 58 • RePlay Magazine • June 2010
tions. Between 2005 and 2009, Firestone attracted 2,700 new customers and provided close to $450 million in financing to the industries it serves. In 2008, Firestone was named to the Inc. 5000 list of fastest growing private companies in the U.S. Firestone is engaged in loaning customers millions of dollars every month in all 50 U.S. states as well as Canada, and 75% of the company’s loans represent repeat business. Even last year, when uncertainty in the credit markets remained high, Firestone was able to approve 90% of the loan applications it received. Loans range from $5,000 for a jukebox to $750,000 for a carnival ride or even more than $1 million for an entire carnival. The company’s typical borrower has annual revenue under $1 million. “We have developed a philosophy that we are going to be a specialized lender,” said Cohen. “That requires us to be committed and connected to our industries. Our customers are hard working business people who do what they do, 24/7. What better culture would you want to lend money to?” To that end, Firestone
actively participates in events and organizations across all three trades it serves. At present, Cohen himself is serving as chairman of the American Amusement Machine Association (AAMA), and he has been instrumental in the merging of AAMA’s and AMOA’s respective tradeshows into one spring event. Cohen was also honored in 2008 as AMOA-New York’s Man of the Year.
A Changing Landscape Looking ahead, the finance pros at Firestone believe the availability of credit will play a crucial role in helping the industry recover and grow out of the current economic downturn. Sales topper Hines says that while some operators have been reticent to borrow during recession, others have used Firestone as a way to more effectively manage their company’s cash flow. Fortunately, Hines sees light at the end of the tunnel, and it’s not an oncoming train. “Our business is full of survivors,” said Hines. “Their routes, while off, are starting to bounce back. As one customer said to me, ‘It may be
CONGRATULATIONS! We have enjoyed sharing the journey with you and look forward to many more years of collaboration.
your friends at
LAI GAMES www.laigames.com
Jim Hines plays "Santa" at every Firestone holiday party. He's pictured here giving Spencer Norton his gift.
is a great company to work with.
MOSS DISTRIBUTING Des Moines
You folks make our industry better by your presence.
more than you expect and it may be less, but there is always something in the cashbox.’” EVP Cooper, who joined Firestone from one of the big eight accounting firms in the late ’80s, said the firm is well suited to helping customers manage a rapidly changing landscape. “Firestone has always had a culture dedicated to helping our customers do businesses in their unique industries,” he elaborated. “We bridge the gap between the black and white of traditional banks and the non-traditional cash busi-
nesses with whom we work closely. Many of our customers don’t have receivables, yet our loans still have to be functioning within certain parameters for our bank investors to be comfortable. It’s a real art, and there is a big human element to managing and accommodating these kinds of unique businesses. We live in a corporate world yet deal with many hand-tomouth customers.” Looking ahead, Firestone execs say recovery is on the horizon but getting there will require patience and resolve. Cooper said banking condi-
Thanks, Firestone, for your years supporting coin-op.
Celebrating their own anniversaries, Jim Hines, Larry Yaffe and Celine Perreault receive their 10-year service awards in 2004. Page 60 • RePlay Magazine • June 2010
Pioneer Sales & Service
You’ve earned a special place in the industry.
wishes everyone at Firestone Financial a
Happy 45 ! Joel and Jon Kleiman
Menomonee Falls, Wisc. • 262/781-1420
your friends at
Shaffer Distributing Columbus • Cleveland • Detroit Indianapolis • St. Louis
June 2010 • RePlay Magazine • Page 61
Firestone Financial At a Red Sox game in 2006, winners of Firestone's “Knock Your Sox Off” promotion smile for the camera, along with some distributors and manufacturers who joined Firestone's sales team at the home game.
HAPPY ANNIVERSARY to our friends at
FIRESTONE FINANCIAL! 17230 S. Main St. • Gardena, Calif. 90248
CONGRATULATIONS The folks at Franz are pleased to salute Firestone Financial! You play a vital role in today’s industry!
Page 62 • RePlay Magazine • June 2010
Honors: Firestone Financial’s David Cohen receives the AMOA of New York’s 2007 Man of the Year award.
tions are getting better, although credit is still tight at the institutional level. Prime rate is low, but availability is limited because competition for lending is scarce. “We are rounding two years into this recession, and it’s reached deep, even into companies that are well run and had plenty of cash reserves,” said Cooper. “Fortunately, we are able to help because we know what works from our experience with different customers across the country.” Firestone topper Cohen says that while recovery is happening at the highest altitudes of the economy, Main Street is still waiting for a reduction in the unemployment rate and some resolution to the housing crisis. The companies that make it will be ones that shrewdly assess the situation and position themselves properly, whether that means renegotiating relationships or even downsizing routes. “The recovery is going to be slow and methodical,” said Cohen. “Businesses will have to continue to re-invest but under the right economic terms. Bigger isn’t always better. FECs are also in a good position, but only if they continue to create value and keep
their customers coming back. The cost of creating new customers is much higher than retaining existing ones.” In terms of its own future, Firestone is continuing to seek out new markets, including the emerging video gaming industry in Illinois. “It’s a huge opportunity, and one that will require a great amount of attention from us,” said sales VP Hines. “If it is successful, we also anticipate working with other operators in other states with similar initiatives.” Cohen said he is confident in Firestone’s ability to navigate the uncertain waters ahead as they provide muchneeded value to their extensive network of operator and distributor customers. “We extend credit every day by looking at other businesses’ financial statements,” concluded Cohen. “When I look at Firestone’s balance sheet, there are two assets you don’t see. You don’t see the employees. We are very fortunate to have the staff and management team that we currently employ. I have total confidence in our team. “Our other asset is our customers,” he finished. “Without our customers, nothing happens.” (See the following story for more on Firestone’s history.)
To our friends at Firestone... We’re happy to join the happy birthday parade! Here’s to many, many more!
45 years and you’re still moving fast! CONGRATULATIONS!
High Five on Your 45th! Benchmark Games joins your other fans saluting
FIRESTONE FINANCIAL’S anniversary!
Al Kress, with his trusty dog Dozer, was one of Firestone Financial’s very first customers back when his hair was long –– and they’re still doing business together today!
Al Kress & Ron Haliburton and the whole Benchmark gang
June 2010 • RePlay Magazine • Page 63
n 1965, the year Mike Miller and his friend Bob Fanger first started the business, Miller was a lawyer, and Fanger was a food broker. They heard about Paul Firestone, a successful entrepreneur who had run a business loaning funds to equipment dealers for restaurants and beauty parlors. Firestone had recently died and his widow, unable to keep the business afloat, sold it to Lou Magerer and Bill Barkin. Barkin decided to sell his interest 30 days later. That’s when Miller and Fanger stepped in. The two partners saw huge upside potential in this under-served niche so they bought Barkin’s share. For the next several years, Miller and Fanger maintained a role as passive investors, along with Magerer, who died a few years later. The day-to-day running of the business was entrusted to the company’s first employee, Ed Yaffe, who had a background selling vending machines and had worked with Magerer in a prior venture. Ed Yaffe is current Firestone Sr. VP Larry Yaffe’s father. The father and son Editor’s Note: This story is an excerpt of our coverage of Firestone’s 40th anniversary five years ago, detailing the founding of the business and its growth into a nationwide source of financing for the amusement trade.
Page 64 • RePlay Magazine • June 2010
Firestone’s founders: Bob Fanger (left), Mike Miller (center) and Ed Yaffe. Fanger and Miller had bought the firm as an investment, but left other pursuits to join Firstone full time, hiring Ed Yaffe as their first staffer. The chairs were presented to the founders in honor of their many contribututions to the firm at the company’s 30th anniversary celebration in Martha’s Vineyard in 1995.
team worked together at Firestone for almost 15 years from 1986, when Larry joined as an intern, until 2000 when Ed retired. Shortly after Ed Yaffe joined Firestone, Sam Rizzari was hired as the company’s second employee to help continue developing the business. By 1969, Miller and Fanger decided to leave their prior careers behind and
assume an active role in growing the Firestone business. The core team of four, Miller, Fanger, Yaffe and Rizzari, set out to take Paul Firestone’s concept to the next level. For about 20 years, Firestone was run by this team. “We were probably the first who really devoted all our energy and expertise to financing the coin-op industry,” said
learned from a colleague at Bally Northeast (which was acquired by Betson) that the company was not happy with the First National Bank of Boston (the bank has been reincarnated many times over the years and is today the Bank of America). His Bally contact was looking to unload their loans. Customers and friends: From left to right, Rubin Franco, Ed In fact, as Ed Yaffe, Jeannette Galante, Phyllis O’Reilly and Gerald O’Reilly at Yaffe was soon to Firestone’s 30th birthday party in Nevis. learn, banks everywhere were electing Miller. “We did not finance individual to exit the coin-op industry. operators (like the company does today); “I was lucky to be in the right place at we financed dealers who were selling to the right time,” said Yaffe. “It was the operators.” beginning of doing business on a nationThe team of four worked tirelessly to wide basis.” identify good business opportunities and While the Firestone team was expandbuild relationships, which they intuitively ing nationally and building relationships knew would be the key to sustaining the that persist to this day, the national arcade business. In the 1970s, Ed Yaffe attended video boom was getting underway. True to a restaurant equipment show that would form, Firestone had already started doing put Firestone on a steep growth curve. He business with videogame distributors. So
Happy Anniversary to my good friends at
Firestone Financial We’ve been together a long time and I hope we’re still together for a long time yet to come!
when the videogame explosion began, Firestone was ready to serve one of the most significant growth spurts in coin-op history. “We had a nucleus of distributors and many around the country wanted to sell paper to us,” recalled Yaffe. As the Firestone team persisted in building the business, its understanding and commitment to the industry continued to deepen. Miller recalled a tense period in the early 1980s that would test that commitment. The prime rate had exceeded 20%, and everyone was nervous about the future. Firestone stepped in with an emergency measure. The management team made a crucial decision to offer loans at a reduced rate, which in turn lowered their margins to almost nothing. It was a time when Firestone had a hand in keeping the industry together. Other key moments in Firestone history include the strategic changes in ownership. In 1973, Depositor’s Corp. of Maine bought the company. For the next 30 years, the company’s ownership would shift between banks and the management team. ◆
Recent Milestones • From 2005-2009, Firestone provided nearly $450 million in equipment financing to the industries they serve. • Firestone has done business with over 2,700 new customers from 2005-2009. • In 2006, Firestone ran their first promotional giveaway for the coin-op amusement industry: a weekend trip to Boston with tickets to a Red Sox game in a Fenway Park luxury suite. • In 2007, Firestone peaked at booking $101 million in new business. • In August of 2007, Firestone entered into an agreement with Bank of America for a $125 million line of credit. (See plaque at top.) • In 2009, Firestone peaked at 51 full-time employees. • In 2008, president and CEO of Firestone, David Cohen, was named 2007 Man of the Year by the Amusement Music Owners Association of New York. • Also in 2008, Firestone was named on the Inc. 5000 list, which ranks the 5,000 fastest-growing private companies in the U.S.
Dave Myers Page 66 • RePlay Magazine • June 2010
• In 2009, David Cohen was elected chairman of the American Amusement Machine Association.