Called to Account

Avoiding Dark Alleys: Tom Ryan

• Company: ProBuild, Denver
• Tenure with company: One year
• 2007 gross sales: $5 billion

Tom Ryan may work in a lumberyard–albeit the nation’s largest pro dealer–but he spends much of his time communicating with bankers, not builders. His main task: “keeping them apprised of our commitments, and making them understand that ProBuild is not a problem for them. Things are very nervous out there.”
Ryan joined ProBuild in 2007 after spending 35 years in financial work, including stints as executive vice president and CFO at Allied Waste Industries and Federal-Mogul Corp. No stranger to the cyclicality of a commodities industry, he knows that what is down will eventually come back up. In the meantime, he says, “everyone is concerned about liquidity and supporting their capital business. So, now my job is focused around the balance sheet.”

Tom Ryan Ryan says that ProBuild is in a little different situation. “We are privately owned and funded [by Fidelity Capital, a fully owned subsidiary of Fidelity Investments] and it’s a distinct advantage,” he says. “As long as we have the support of our owners, we can go about our business and take advantage of the down cycle as other companies may not be able to.”

Recent acquisitions underscore his point. In February, ProBuild closed on Atlanta-based HD Supply Lumber and Building Materials, which owned several dozen yards serving the Atlanta and Florida markets. By press time, ProBuild had closed on two other acquisitions: Jasper Lumber Co. in Jasper, Ga., and Northeast Panel & Truss and Collins Truss Systems Inc. in Kingston, N.Y.

“Most other companies wouldn’t have been able to do that, but we [could] because of our management,” Ryan says.

Internal communications are also key for ProBuild, which has more than 550 locations in 41 states. “The hardest part of my job is just staying on top of the data flow,” says Ryan. “We are involved in a companywide system for IT, so not much of my job is spent on bookkeeping.

“It used to be the CFO would walk down the hall once a month and ask how the numbers are, then go back into his hole,” he says. “It’s a lot less about numbers now and more about strategic partnerships.”

If the housing market continues to decline, Ryan foresees credit issues swallowing an increasingly large portion of his time. “I don’t know whether a company in this environment, which is increasingly complex, could survive without a CFO,” he says. “You could end up running down a lot of dark alleys if functions like strategy–and the underpinnings of the financial health of the company as it relates to strategy– are not being done by someone in the company.”