rss icon

cfo

 

Sunday, 25 May 2014 22:00

Pettinga’s fiscal discipline paved way for theater, operational modernization

Written by 
Rate this item
(1 Vote)
Ross Pettinga, CFO, Goodrich Quality Theaters Inc. Ross Pettinga, CFO, Goodrich Quality Theaters Inc. COURTESY PHOTO

The movie theater business over the last couple of decades has had more plots twists than an M. Night Shyamalan film.  

When Ross Pettinga joined Goodrich Quality Theaters Inc. as CFO in 1991, the company operated in a rather analog fashion. Movies were still on film. Employees entered data by hand into spreadsheets.

But since then, the industry has been modernized with many technological innovations — all of which came with a hefty price tag. While the consumer-facing side of the business was being upgraded from film to all-digital platforms, the company also invested in the back-end operations such as operating systems that would provide it real-time information on ticket trends.

Faced with back-to-back modernization efforts, Pettinga set out to position Goodrich Quality Theaters to make ongoing capital improvements without having to rely on extended lines of credit. In essence, the company needed to be more nimble to react with improvements that were tied to industry trends, said Pettinga, who was selected as a finalist in the MiBiz CFO of the Year Award in the middle market category.

“It comes down to having the budgeted capacity, watching the trends in the industry and making the changes when you need to,” he said. “We used to rely on lines of credit, but I’ve been working on appropriating cash resources of our own or the dry powder we need to attack a new opportunity. It’s just discipline.

“(W)hen I got here, I realized we had a significant cash problem and I spent the better portion of my life with the company getting cash receipts and outflows synchronized with each other.”  

As Pettinga managed the transition of the company to an integrated and automated environment, the business started becoming less reactionary. From ticket sale reports to managing each individual theater’s needs, Goodrich’s operations started working in real-time, thus improving efficiency and data gathering, he said.

“The whole conversion to digital was a huge financial undertaking that took about $18 million of new investment,” Pettinga said. “Pulling together that financing, getting some support from Hollywood and working with studios through the entire process was probably the biggest and most important move we’ve had to make over the years.”

While the industry paradigm was shifting to an all-digital future, Goodrich Quality Theaters took roughly four years to upgrade its facilities. At the same time, Pettinga had to seek out the funds the company needed to pay down its senior debt. Fortunately, Goodrich Quality Theaters had good metrics to shop around and eventually raised the needed funds, he said.

“In 2008/2009 when the bubble burst and bank credit became very tight, that made a dent in everybody, and we weren’t spared from that,” Pettinga said. “Finding yourself in an environment where banks wanted less leverage-raised money from secondary markets to pay down debt was difficult.”

Thanks to some of the changes Pettinga helped usher in, Goodrich Quality Theaters has been able to grow from 18 locations and 100 screens when he joined the company to 30 locations and 207 screens today.  

“We have a really active owner who is always looking to do new things, so it’s been my job to make sure there is money available to support those endeavors,” Pettinga said.

Over the years, Pettinga’s job has moved away from the work of a traditional CFO, said Jeff Van Winkle, an attorney with Clark Hill PLC who has worked with Pettinga for more than 15 years.

“He’s involved in finding (new) locations and … is an integral part of the team as they develop and redevelop locations. He’s been a great value add for them,” Van Winkle said. “He’s very interested in being a leader that works with employees like district managers, which I think is both intentional and also just the type of person he is.” 

 

Ross Pettinga

  • Organization: Goodrich Quality Theaters
  • Annual sales: $94 million for the 2013 fiscal year that ended in September
  • Transformational moment: Pettinga was in his early 30s and working as a controller for former women’s retailer Gantos when he was faced with a transformative work/life decision. After the CFO and another controller left the public company and he was the point person to complete a secondary offering, he needed to balance the needs of work with having a newborn son at home. “I always valued working hard, but that was a moment where I had to reassess life,” he said. In the end, he decided that the work would always be there and his children, of course, are only born once. The experience served as a guide for him ever since, he said.
  • Mission critical: Weekly forecasting of future revenues helps Goodrich Quality Theaters better plan and address issues coming down the road. The company doesn’t make the movies, so all company leaders can do is react to what’s happening in the market, Pettinga said. “If Hollywood has a bad period, we’ll have a bad period, so we do all we can to know what’s coming down the line,” Pettinga said. “There are always lots of films and even more expectations, so information gathering as it relates to planning for both capital expenditures and controlling costs is ongoing.”
  • Academic degree: Bachelor of Science in accounting, Calvin College; CPA license from Deloitte
  • Community involvement: Elder at Calvary Church, former board member of Pregnancy Resource Center and NorthPointe Christian Schools
  • Company advisers: Plante Moran for accounting, Clark Hill for legal services, The Private Bank - Chicago for banking
Read 8573 times Last modified on Tuesday, 10 June 2014 07:46

Breaking News

September 2018
S M T W T F S
26 27 28 29 30 31 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 1 2 3 4 5 6

Follow MiBiz