Lessons from CFOs: How You Can Shine when Presenting Financials (Part 1 of 2)

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Editor’s Note: Presenting financials is nerve-wracking even for experienced executives, but there are ways one can prepare for those presentations. CFOs from various firms share how they do it step by step. Today, let’s focus on the “script writing” part, which is typically thought as the IR's responsibility but CFOs do have a role in that.


Like opening night in the theatre, the hours before the quarterly earnings results conference call for CFOs are fraught with jitters and last-minute adjustments—even when the financial results are positive.

In the spotlight being judged by investors and analysts, no CFO wants to deliver a lackluster performance.

Even seasoned CFOs who have been through dozens of earnings calls will attest that their heart still races just before show time. But once the conference commences, their meticulous preparations steady them. In good quarters or bad ones, they're ready to relay the results and elucidate the reasons and ramifications.

New CFOs and other financial professionals charged with making high-stakes presentations can learn from the steps taken to prepare for an earnings call.

I interviewed five CFOs to determine their best practices.

All follow a similar process — collecting information from across the enterprise to illuminate the factors behind the figures, writing the conference call script with the investor relations team, rehearsing the script, and participating in mock question-and-answer sessions to brace for forceful interrogation by investors and analysts in the real thing.

"Lucidity, these CFOs emphasized, is a hallmark of a successful earnings call"

While private company finance leaders do not typically have public earnings calls, many of these skills can also be valuable in meetings with their bankers, investors, or other critical stakeholders.

Our panel of finance leaders believes that quarterly results and their impact on long-term strategy should be absolutely transparent.

"As the CFO, I take my fiduciary and legal responsibilities very seriously," said Mark Partin, who leads the finance organization at Los Angeles-based BlackLine, a provider of finance and accounting automation software. "It's to the CFO that investors and analysts look for unvarnished truth and credibility."

Writing the script

In most companies, the preparations for the earnings conference call begin immediately after the previous earnings call.

As the quarter progresses, early versions of the script are drafted based on the emerging financial picture.

BlackLine sets aside a room with a whiteboard for this purpose. "We put up specific themes we feel are important to the quarter for our long-term [stock]holders," Partin said. "Under each theme, we write what we've learned so far—something that may impact that theme, good or bad."

These early drafts ultimately come together as scripted dialog, with parts provided by the conference call facilitator (usually the head of investor relations), chairman, CEO, and CFO.

Almost every script begins with, "Good day, ladies and gentlemen, and welcome to the [quarterly date and year] earnings conference call." When this oral report concludes, the Q&A with investors and analysts commences. These two halves of the call run for approximately 20 minutes each.

"While private firm finance leaders don't have public earnings calls, many of these skills can also be valuable in meetings with bankers, investors, or other critical stakeholders"

Typically, the head of investor relations or an outside IR firm is charged with writing the final script, which should not be a rehash of the earnings press release, since analysts and investors already have the release in hand. Instead, the script should elaborate on the quarter's key themes, aiming for simplicity, clarity, and briskness.

"We try to provide highlights and meaningful color, most importantly a view of top-level metrics and then specific examples of topics of interest,” said Ken Stillwell, CPA, the CFO of Pegasystems, a Cambridge, Massachusetts-based provider of customer engagement software.

For the stakeholders on the call, the health of certain geographies, strength of certain vertical markets, and a sense of the economic landscape are all helpful to understanding and context, he added.

 "I try to connect the dots instead of reading a laundry list,” Stillwell noted.

Many companies use the earnings call as an opportunity to appraise the organization's progress towards achieving long-term strategy. For instance, while Tom Liguori was CFO at Advanced Energy, based in Fort Collins, Colorado, the company issued an annual statement at the beginning of each year in which it established its aspirational revenue and cash flow goals for the next three years.

"We want investors and analysts to assess the current quarter against these goals," Liguori said. "If we just had a blowout quarter or a horrible quarter, I don't want the audience assuming this is our future."

Liguori left the company, which develops power and control technologies for the semiconductor manufacturing industry, at the end of 2017 and is now CFO of global technology provider Avnet.

 "Try to connect the dots instead of reading a laundry list” 

Lucidity, these CFOs emphasized, is a hallmark of a successful earnings call.

"It goes right to the heart of a CFO's credibility with the Street," said Mary A. Winston, former CFO of discount retailer Family Dollar Stores, and before that the CFO of Giant Eagle Inc. and Scholastic Corp.

"The CFO is all about the numbers and the facts," she said. "There can be no dodging or obfuscation. We direct good news or bad news or in-between news, but in all cases we must be clear why this is the case and what we're doing about it." Winston today is the CEO of financial and board advisory consultancy WinsCo Enterprises Inc.

Partin shares this view: "The earnings call is for the benefit of investors and analysts. This is their opportunity to learn all they can, and it's our responsibility to give it to them."

The play’s the thing

Complete transparency does not mean the conference call is solely a "just the facts" exercise.

Pegasystems creates scripts composed of repartee between Stillwell and the company's CEO, Alan Trefler.

"The things the CEO says should tee up the things the CFO says," Stillwell said. "When Alan infers something in his remarks, it's my task to corroborate what he has said with factual information. If he says we're really excited about an opportunity in a new market segment, I then point out the financial reasons why this is the case."

"The CFO follows up with a deeper layer of details based on the CEO's forward-looking statements — the numerical outcome of these strategic directions"

Steven Horowitz, CPA, CGMA, the CFO of Hartford, Connecticut-based health care services provider CareCentrix, likewise said that the CEO and CFO should convey a contrast in approach.

"Analysts don't want the CFO to be a 'Type A' cheerleader personality talking about the long-term vision; that's the CEO's job," Horowitz said. "CEOs have more flexibility to freewheel it a bit, putting their personality fingerprint on the company. But investors need to trust the numbers are right and there won't be a restatement. They depend on the CFO for this assurance. Our role is to be that rock."

While the CEO and CFO have to be "connected and consistent" in their remarks to the audience, each has a slightly different purpose, as well as tone, in their scripted comments, Winston said.

"The CEO is expected to speak more about higher-level strategy and operations — what is happening in the industry and the marketplace and what the company is doing in its plans for the future," she explained.

"The CFO follows up with a deeper layer of details based on the CEO's forward-looking statements — the numerical outcome of these strategic directions. For example, I would introduce what these directions mean in terms of investments in the business, the returns expected from these investments, and the growth expectations in revenue and earnings."

To check out the part 2 of this story, click here.

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About the Author

Russ Banham is a freelance writer based in the US.This article first appeared in FM Financial Management, which is published by the Association of International Certified Professional Accountants. The AICPA combines the strengths of the American Institute of CPAs (AICPA) and the Chartered Institute of Management Accountants (CIMA).