Q- We’re a small-cap company with a broad shareholder base and we’re not pleased with the rising costs of mailing out our annual report. We give shareholders the option to get the annual report online, but we still mail out around 2,000 reports. Any advice on how we can cut down these costs?
A- While it is certainly true that we live in a digital era, some things never change – like producing and distributing printed copies of your annual report. Although electronic copies seem like a no-brainer to save on printing costs, industry sources claim only about 15 percent of the population opts for them. That number should increase gradually over time, however.
In the interests of stretching your annual report budget, perhaps you can save money in other ways – for example, streamlining the preparation process to avoid expensive editorial changes later in the production phase. Also, you might want to rethink the length, the use of graphics and the choice of paper stock.
Something else to consider is that the ‘summary annual report’ seems to be back in vogue. These annuals contain fewer pages than traditional reports, since many of the financial pages are left out.
Depending on the nature and size of your company, you might also think about a folder-style report in which one of the folder’s pockets holds the 10K. Lastly, you may want to investigate the cost of distributing your annual report on a CD, or perhaps making this option availabe to your shareholders.
Q- Is there a standard practice for the length of presentations in one-on-one meetings? Last time we were on the road, investors seemed to want more time for questions and less time spent on the formal presentation. I’ve cut down my CEO’s slides and suggested we provide an extra five minutes for questions, but I wonder if there is a standard length that most companies follow.
A- What you’re finding is generally correct. Investors prefer to spend time asking questions when face to face with management. The length of one-on-one meetings varies from 20 minutes for a deal roadshow to as long as an hour for a non-deal roadshow. But as a general rule of thumb, investors will allow for a longer meeting when they’re genuinely interested in getting a deeper understanding of your story or industry. I recommend determining the length of each meeting in advance of your visit, either by asking the investor or making an educated guess based on what you think they want out of the meeting.
Investors aren’t shy and will tell you if they are simply looking for an opportunity to ask questions or want to be educated through a lengthy presentation. It’s important to have a presentation that can easily be modified to suit every opportunity. It’s really as simple as having a core presentation to which you either add or subtract slides depending on the investor’s familiarity with your company.
