About three months after Intrinsyc Technologies Corp. recruited George Reznik as its CFO in 2008, the company fell into a spiral that nearly resulted in its demise.
Intrinsyc was “high-flying” that year, Reznik recalled.
The Vancouver-based firm – at the time, a maker of mobile phone operating systems – had big expectations and stable capital, and had been in heavy investment mode, spending about $5 million per quarter.
“But a couple things happened,” Reznik said. “The iPhone 3 had come out, which was very dynamic and did very well. … The other thing was Android came out from Google, which was free.”
Intrinsyc (TSX:ITC) had also purchased a navigation system around that time to fold into its services. “Then Google started giving that away for free, so all of a sudden, we were chased out,” Reznik said. “We were insolvent at the beginning of 2009.”
The company had about 400 staff in the U.S., Canada, Europe, China and Israel before it ran out of cash. Reznik said its share price fell from about $9 to $0.30 within six months.
“Things were really, really in the dumps,” he said. “Most people had written off the company to go into bankruptcy and to go away.”
But Reznik and Tracy Rees, the interim CEO, stayed on. The pair launched a restructuring strategy, cutting staff and costs. “We retrenched almost to 35 staff at one point.”
Then they refocused. Rees, now the president and CEO, secured a deal with Barnes & Noble (NYSE:BKS) to design and make a digital reading tablet called the Nook.
“We built them really the first computing tablet and it was powered by Android,” Reznik said. “We took our mobile operating system and made a tablet for them.”
That deal allowed Intrinsyc to deploy its engineers, boost its cash flow and stay afloat as it rebooted.
Reznik said the company was able to stop its cash burn, repair creditor issues and become cash-flow positive. “For a couple years, we were just in survival mode, restructure mode.”
Engaging personality
Reznik doesn’t fit the stereotypical CFO mould, Rees said.
“George is probably the most extroverted CFO that I know,” he said. “When I’m out in Vancouver with him and we’re in restaurants … or just walking down the street, it seems like every other person he knows from somewhere. I kind of call him the mayor of Vancouver when I’m there. He’s definitely a very outgoing and engaging personality.”
Reznik didn’t initially set out to target the technology industry, but that’s where his career has taken him, through positions with Deloitte, Pivotal Corp. and DDS Wireless International (TSX:DD) en route to Intrinsyc.
“It’s exciting in some ways because [technology] is so dynamic,” Reznik said. “You’re either investing in a product and trying to market and commercialize … or you’re selling a lot of your product and reaping a strong profit. There’s really not a steady state; even Microsoft goes through peaks and valleys.”
Sharpness is key. “We always say in technology, 90 days in this business, or one quarter, is like a year in any other business.”
By 2012, things took another positive turn at Intrinsyc, with the company deciding to focus its energies on one market segment. It pivoted to building, customizing and optimizing computer engines for clients producing gadgets connected to the Internet.
“We’re going to be the Detroit Diesel of technology,” Reznik said. “All they do is make diesel engines.”
He said most truck or machine makers prefer not to make their own engines, opting instead to focus on perfecting their designs and systems. The same is true in the computer business.
“We also design [engines] for 3D televisions, in-flight entertainment in … planes and cars, robots, drones, fit-ware – all sorts of applications,” Reznik said.
He said the shift allowed Intrinsyc to become a product-oriented company that could rapidly scale up in size.
During Reznik’s tenure, the company’s revenues have risen by over 300%, helping raise shareholder value for the Toronto Stock Exchange-traded company founded in 1996.
Reznik does all the things that CFOs typically do – look after corporate governance, finance and rules and regulations – but he has also helped with negotiations and expanding the business, Rees said.
“We’ve been through a lot together and he’s been a key driver to our turnaround, and the run that we’ve had as a company has been very significant over the last couple years, Rees said.
Reznik, who grew up in Winnipeg, said he aims to understand all elements of the business beyond just the finances.
“If you can’t really understand what your teammates and colleagues are doing around you, you can’t add value to support them,” he said. “Public-company CFOs have to be very communicative about their companies and where they’re going.”
Join us June 1 when Business in Vancouver celebrates the 2017 BC CFO Awards at the Fairmont Waterfront Hotel. For further information or to register for the event, visit the event's page at www.biv.com/cfo.
