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Featuring a special tribute to Firestone Financial on the occasion of their 45th year in business.
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T he best measure of a company isnot taken by looking at how theygrow in boom times but instead by
how they manage their business and treatcustomers during the confusion and uncer-tainty of contraction or transition.
Firestone Financial, the Newton,Mass.,-based firm that specializes in pro-viding equipment financing for amuse-ment, vending and traveling carnival oper-ators and distributors, is an excellent casein point. Located at the intersection wherebanking meets the needs of small business,Firestone has weathered the recessionadmirably by becoming a multifacetedresource for its customers.
“We have become business advisors tomany of our customers,” said DavidCohen, CEO of Firestone. “We are help-ing people work through tough situations.”
To illustrate, Cohen described a recentscenario in which an operator customerwas looking for financing to acquireanother route. Firestone looked closely atthe deal and the customer’s balance sheet.In their estimate, the deal required the cus-tomer to take on too much debt by him-self. Instead, they counseled him to seekout a partner to help share the burden,which he did.
“We could have just said, ‘No,’”explained Cohen. “But our goal is to find away to get to ‘Yes’ without making anunwise investment.”
Scott Cooper, a 21-year Firestone vet-eran who serves as EVP and CFO, says
Firestone Financial Celebrates 45 Years Helping Customers Prosper
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).
tributespecial
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 dis-tributor customers (Rich Babich, Rick Kirby and Frank Gumma Sr.) stepped up to the same podi-um to pay tribute to the financial services powerhouse.
June 2010 • RePlay Magazine • Page 53
the specialized lender isengaged at all levels with cus-tomers’ businesses, frommeeting their financial needsto helping them stay currentwith debt service and evencreating special workout sce-narios when necessary.
“I’ve been through busi-ness cycles before, but this onehas been the most challeng-ing,” said Cooper.“Fortunately, we haven’tchanged in our ability to pro-vide funding to the industry.This is where we really shinein comparison to a typicalbanking relationship. We real-ly want our customers to suc-ceed and grow.”
Jim Hines, VP of sales atFirestone, says the company isworking more closely withoperators and distributors thanever before. “We put ourinside sales team in placeabout five years ago specifi-cally so we could be more ser-vice oriented,” he noted. “I
think our customers know usbetter today than they did then.We worked hard to developstrong relationships with manyof them.”
Firestone has also focusedconsiderable resources of latein working with suppliers onspecial promotions designed tohelp get equipment in the fieldand spur earnings on location.
“While we have beendoing them for close to 20years, starting with a Meritpromotion way back in theearly 90s, the last five yearshave seen a multitude of man-ufacturers embrace the valueof providing subsidized pro-grams,” said Hines. “It reallyis a significant part of ourbusiness.”
ManagedGrowth
Five years ago, Firestonecelebrated its 40th anniversarywith a swanky party for its
Fire
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Firestone's 2009 Platinum Partner Distributors get honored.
Firestone honors its 2009 Platinum Partner Manufacturers.
Happy 45th
Anniversaryto a first-class
organization!
San Francisco, Californiawww.ecastcentral.com
Page 54 • RePlay Magazine • June 2010
customers and partners at theWynn Hotel in Las Vegas. Itwas a memorable event bothfor the tone it set and the widerange of supporters it attracted.Two years later, Firestone hit ahigh water mark, booking over$100 million in new annualbusiness. This year, the nichefinancial firm celebrates its45th year in business.
Yet the seeds of thatgrowth were planted deep inthe firm’s roots (see our side-bar for a brief history ofFirestone), and they hadalready begun to bear fruitwith a management buyoutthat took place approximatelya decade ago. Joining Cohen,Cooper and Hines at the helmof Firestone are three addition-al senior executives: LarryYaffe, Sr. VP of sales; CelinePerreault, Sr. VP of opera-
tions, and Robin Place, VPand controller.
With a team that boastsmore than a century of collec-tive experience, Firestonepositioned itself for growth bymoving into much-neededadditional office space andbringing on three key players:HR director Deb Wischner,I.T. director John Favermanand operations/asset manage-ment director Mike Smith.Those departments have inturn played a critical role inhelping the company attractand service a much broaderbase of customers.
The last five years haveseen Firestone reach a numberof impressive milestones,including nailing down a $125million revolving line of creditwith Bank of America andseveral other financial institu-
Fire
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At the Wynn Las Vegas resort for the financial services firm’s 40th birthdaypart are Sal Cifala (left) and Helen Mooney with Reno Game Sales’ Marty Shumsky.
The Firestone team at the Wynn celebrating the firm’s 40th year inbusiness. Said CEO Cohen at the affair: “This is also a celebration of ourindustry. We are proud to be a part of this wonderful business.”
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
Page 56 • RePlay Magazine • June 2010
Thank you,David,
and congratulations to
FirestoneFinancial
on 45 years!from Steve and the folks at
Games People Play4221 Brighton Blvd. • Denver, CO 80216
303/288-3080
Charlotte704/357-6284
Memphis901/345-7811
Miami954/874-1100
Orlando407/872-1666
visit our website: www.bradydist.com
from all your friends at
Happy45th
and
congratulations
to one of the
finest companies
in the coin-op world
FirestoneFinancial
HAPPY 45,FIRESTONE!
We enjoy ourrelationship…
and dealing with a company
that does it right!
HAPPY 45,FIRESTONE!
C.A. Robinson & Co.C.A. Robinson & Co.323-735-3001
Southern California650-871-4280
Northern California
June 2010 • RePlay Magazine • Page 57
tions. Between 2005 and 2009,Firestone attracted 2,700 newcustomers and provided closeto $450 million in financing tothe industries it serves. In2008, Firestone was named tothe Inc. 5000 list of fastestgrowing private companies inthe U.S.
Firestone is engaged inloaning customers millions ofdollars every month in all 50U.S. states as well as Canada,and 75% of the company’sloans represent repeat busi-ness. Even last year, whenuncertainty in the credit mar-kets remained high, Firestonewas able to approve 90% ofthe loan applications itreceived. Loans range from$5,000 for a jukebox to$750,000 for a carnival ride oreven more than $1 million foran entire carnival. The compa-ny’s typical borrower hasannual revenue under $1 mil-lion.
“We have developed a phi-losophy that we are going tobe a specialized lender,” saidCohen. “That requires us to becommitted and connected toour industries. Our customersare hard working businesspeople who do what they do,24/7. What better culturewould you want to lendmoney to?”
To that end, Firestone
actively participates in eventsand organizations across allthree trades it serves. At pre-sent, Cohen himself is servingas chairman of the AmericanAmusement MachineAssociation (AAMA), and hehas been instrumental in themerging of AAMA’s andAMOA’s respectivetradeshows into one springevent. Cohen was also hon-ored in 2008 as AMOA-NewYork’s Man of the Year.
A ChangingLandscape
Looking ahead, the financepros at Firestone believe theavailability of credit will playa crucial role in helping theindustry recover and grow outof the current economic down-turn.
Sales topper Hines saysthat while some operatorshave been reticent to borrowduring recession, others haveused Firestone as a way tomore effectively manage theircompany’s cash flow.Fortunately, Hines sees light atthe end of the tunnel, and it’snot an oncoming train.
“Our business is full of sur-vivors,” said Hines. “Theirroutes, while off, are startingto bounce back. As one cus-tomer said to me, ‘It may be
Happy Birthday! Jim Hines and Sal Cifala enjoy the festivities at theFirestone Financial employee anniversary party held in Chatham, Mass.
Fire
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Finan
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When the historyof coin-op is written,
FIRESTONEFINANCIAL
will be up therewith the best of them!
from all your friends at
10123 Main Street, Clarence, NY 14031
www.icegame.com
Page 58 • RePlay Magazine • June 2010
Congratulations
to our friends at
FIRESTONE
FINANCIAL
You’re always there
when we need you!
Power to the Games, Inc.
592 Winks Lane, Bensalem, Penn.
H
H
more than you expect and itmay be less, but there isalways something in the cash-box.’”
EVP Cooper, who joinedFirestone from one of the bigeight accounting firms in thelate ’80s, said the firm is wellsuited to helping customersmanage a rapidly changinglandscape.
“Firestone has always hada culture dedicated to helpingour customers do businesses intheir unique industries,” heelaborated. “We bridge thegap between the black andwhite of traditional banks andthe non-traditional cash busi-
nesses with whom we workclosely. Many of our cus-tomers don’t have receivables,yet our loans still have to befunctioning within certainparameters for our bankinvestors to be comfortable.It’s a real art, and there is a bighuman element to managingand accommodating thesekinds of unique businesses.We live in a corporate worldyet deal with many hand-to-mouth customers.”
Looking ahead, Firestoneexecs say recovery is on thehorizon but getting there willrequire patience and resolve.Cooper said banking condi-
Jim Hines plays "Santa" at every Firestone holiday party. He's picturedhere giving Spencer Norton his gift.
Celebrating their own anniversaries, Jim Hines, Larry Yaffe andCeline Perreault receive their 10-year service awards in 2004.
You folks make our industry better
by your presence.
•
Thanks, Firestone, for your years
supporting coin-op.
CONGRATULATIONS!
We have enjoyed sharing the journey
with you and look forward to many
more years of collaboration.
your friends at
LAI GAMESwww.laigames.com
Fire
stone
Finan
cial
Page 60 • RePlay Magazine • June 2010
Firestone is a great
Financial company to work with.
Best wishes!
MOSS DISTRIBUTINGDes Moines • Bloomington • Kansas City
PioneerSales & Service
wishes everyone atFirestone Financial a
Happy 45th!Joel and Jon Kleiman
Menomonee Falls, Wisc. • 262/781-1420
June 2010 • RePlay Magazine • Page 61
Congratulations,Firestone!
You’ve earned a special place
in the industry.
your friends at
Shaffer DistributingColumbus • Cleveland • Detroit
Indianapolis • St. Louis
SINCE 1929
Fire
stone
Finan
cial
tions are getting better,although credit is still tight atthe institutional level. Primerate is low, but availability islimited because competitionfor lending is scarce.
“We are rounding twoyears into this recession, andit’s reached deep, even intocompanies that are well runand had plenty of cashreserves,” said Cooper.“Fortunately, we are able tohelp because we know whatworks from our experiencewith different customersacross the country.”
Firestone topper Cohensays that while recovery ishappening at the highest alti-tudes of the economy, MainStreet is still waiting for areduction in the unemploy-ment rate and some resolutionto the housing crisis. The com-panies that make it will beones that shrewdly assess thesituation and position them-selves properly, whether thatmeans renegotiating relation-ships or even downsizingroutes.
“The recovery is going tobe slow and methodical,” saidCohen. “Businesses will haveto continue to re-invest butunder the right economicterms. Bigger isn’t always bet-ter. FECs are also in a goodposition, but only if they con-tinue to create value and keep
their customers coming back.The cost of creating new cus-tomers is much higher thanretaining existing ones.”
In terms of its own future,Firestone is continuing to seekout new markets, including theemerging video gaming indus-try in Illinois. “It’s a hugeopportunity, and one that willrequire a great amount ofattention from us,” said salesVP Hines. “If it is successful,we also anticipate workingwith other operators in otherstates with similar initiatives.”
Cohen said he is confidentin Firestone’s ability to navi-gate the uncertain watersahead as they provide much-needed value to their extensivenetwork of operator and dis-tributor customers.
“We extend credit everyday by looking at other busi-nesses’ financial statements,”concluded Cohen. “When Ilook at Firestone’s balancesheet, there are two assets youdon’t see. You don’t see theemployees. We are very fortu-nate to have the staff and man-agement team that we current-ly employ. I have total confi-dence in our team.
“Our other asset is our cus-tomers,” he finished. “Withoutour customers, nothing hap-pens.”
(See the following story formore on Firestone’s history.)
Honors: Firestone Financial’s David Cohen receives the AMOA of NewYork’s 2007 Man of the Year award.
At a Red Sox game in 2006, winners of Firestone's “Knock YourSox Off” promotion smile for the camera, along with some distributorsand manufacturers who joined Firestone's sales team at the home game.
CONGRATULATIONSThe folks at Franz
are pleased to saluteFirestone Financial!
You play a vital role intoday’s industry!
17230 S. Main St. • Gardena, Calif. 90248
www.andamiro.com
HAPPY ANNIVERSARYto our friends at
FIRESTONE FINANCIAL!
Page 62 • RePlay Magazine • June 2010
High Five on Your 45th!Benchmark Games
joins your otherfans saluting
FIRESTONEFINANCIAL’S
anniversary! Al Kress, with his trusty dog Dozer, was one of Firestone Financial’s very first customers back when his hairwas long –– and they’re still doing business together today!
Al Kress & Ron Haliburtonand the whole Benchmark gang
45
YE
AR
S! To our friends
at Firestone...
We’re happy tojoin the happybirthday parade!Here’s to many,many more!
www.coin-op.org
45 years and you’re still moving fast!
CONGRATULATIONS!
June 2010 • RePlay Magazine • Page 63
team worked together at Firestone foralmost 15 years from 1986, when Larryjoined as an intern, until 2000 when Edretired. Shortly after Ed Yaffe joinedFirestone, Sam Rizzari was hired as thecompany’s second employee to help con-tinue developing the business.
By 1969, Miller and Fanger decided toleave their prior careers behind and
assume an active role in growing theFirestone business. The core team of four,Miller, Fanger, Yaffe and Rizzari, set outto take Paul Firestone’s concept to the nextlevel. For about 20 years, Firestone wasrun by this team.
“We were probably the first who reallydevoted all our energy and expertise tofinancing the coin-op industry,” said
Firestone’s founders: Bob Fanger (left), Mike Miller (center) and Ed Yaffe. Fanger and Millerhad bought the firm as an investment, but left other pursuits to join Firstone full time, hiring EdYaffe as their first staffer. The chairs were presented to the founders in honor of their many con-tribututions to the firm at the company’s 30th anniversary celebration in Martha’s Vineyard in 1995.
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I n 1965, the year Mike Miller and hisfriend Bob Fanger first started thebusiness, Miller was a lawyer, and
Fanger was a food broker. They heardabout Paul Firestone, a successful entre-preneur who had run a business loaningfunds to equipment dealers for restaurantsand beauty parlors. Firestone had recentlydied and his widow, unable to keep thebusiness afloat, sold it to Lou Magerer andBill Barkin. Barkin decided to sell hisinterest 30 days later. That’s when Millerand Fanger stepped in.
The two partners saw huge upsidepotential in this under-served niche so theybought Barkin’s share. For the next severalyears, Miller and Fanger maintained a roleas passive investors, along with Magerer,who died a few years later. The day-to-dayrunning of the business was entrusted tothe company’s first employee, Ed Yaffe,who had a background selling vendingmachines and had worked with Magerer ina prior venture.
Ed Yaffe is current Firestone Sr. VPLarry Yaffe’s father. The father and son
Editor’s Note: This story is anexcerpt of our coverage of Firestone’s40th anniversary five years ago, detail-ing the founding of the business and itsgrowth into a nationwide source offinancing for the amusement trade.
Page 64 • RePlay Magazine • June 2010
Miller. “We did not finance individualoperators (like the company does today);we financed dealers who were selling tooperators.”
The team of four worked tirelessly toidentify good business opportunities andbuild relationships, which they intuitivelyknew would be the key to sustaining thebusiness. In the 1970s, Ed Yaffe attendeda restaurant equipment show that wouldput Firestone on a steep growth curve. He
learned from a col-league at BallyNortheast (which wasacquired by Betson)that the company wasnot happy with theFirst National Bank ofBoston (the bank hasbeen reincarnatedmany times over theyears and is today theBank of America).His Bally contact waslooking to unloadtheir loans.
In fact, as EdYaffe was soon tolearn, banks every-where were electing
to exit the coin-op industry. “I was lucky to be in the right place at
the right time,” said Yaffe. “It was thebeginning of doing business on a nation-wide basis.”
While the Firestone team was expand-ing nationally and building relationshipsthat persist to this day, the national arcadevideo boom was getting underway. True toform, Firestone had already started doingbusiness with videogame distributors. So
when the videogame explosion began,Firestone was ready to serve one of themost significant growth spurts in coin-ophistory.
“We had a nucleus of distributors andmany around the country wanted to sellpaper to us,” recalled Yaffe.
As the Firestone team persisted inbuilding the business, its understandingand commitment to the industry continuedto deepen. Miller recalled a tense period inthe early 1980s that would test that com-mitment. The prime rate had exceeded20%, and everyone was nervous about thefuture. Firestone stepped in with an emer-gency measure. The management teammade a crucial decision to offer loans at areduced rate, which in turn lowered theirmargins to almost nothing. It was a timewhen Firestone had a hand in keeping theindustry together.
Other key moments in Firestone histo-ry include the strategic changes in owner-ship. In 1973, Depositor’s Corp. of Mainebought the company. For the next 30years, the company’s ownership wouldshift between banks and the managementteam.
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Customers and friends: From left to right, Rubin Franco, EdYaffe, Jeannette Galante, Phyllis O’Reilly and Gerald O’Reilly atFirestone’s 30th birthday party in Nevis.
RecentMilestones
• From 2005-2009, Firestone provided nearly$450 million in equipment financing to the indus-tries they serve.
• Firestone has done business with over 2,700new customers from 2005-2009.
• In 2006, Firestone ran their first promotionalgiveaway for the coin-op amusement industry:a weekend trip to Boston with tickets to a Red Sox game in a Fenway Park lux-ury suite.
• In 2007, Firestone peaked at booking $101 million in new business.
• In August of 2007, Firestone entered into an agreement with Bank ofAmerica 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 2007Man 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 the5,000 fastest-growing private companies in the U.S.
• In 2009, David Cohen was elected chairman of the American AmusementMachine Association.
u
Page 66 • RePlay Magazine • June 2010
Happy Anniversaryto my good friends at
FirestoneFinancial
We’ve been togethera long time and Ihope we’re still
together for a longtime yet to come!
Dave Myers
