Russ: This is the BusinessMakers Show heard here and online at thebusinessmakers.com. And now its time for the Aflac BusinessMakers Flashback, brought to you by Aflac, ask about it at work. And for this mornings Flashback we are just going to roll back to earlier this week when when I had repeat customers, Ken Dennard, co-founder and managing partner, and Stephen Gray, CEO of Dennard, Rupp, Gray & Easterly, also known as DRG&E. And these are the guys we like to visit with when there is an issue with corporate governance, like during the Enron days and Sarbanes Oxley also when there has been a major shift in the economy. But last week we just wanted to talk to them about DRG&E. So check this out. Guys, welcome back to the BusinessMakers Show.

Stephen: Thank you, Russ. Great to be here again.

Ken: Fabulous to be here.

Russ: Alright. Ken is cofounder and managing partner of DRG&E, and Stephen Gray is CEO of the firm. For those that have not heard the interviews previously, why don't one of you share with us a description of DRG&E.

Stephen: DRG&E is an investor relations firm. We're the largest investor relationship firm in the southwest part of the country. We currently represent approximately 35 public companies, with market caps anywhere from about $20 million up to about $5 billion in size. And our function is to help our companies represent them in the capital markets and make sure that with the management team so those company and the company themselves, we're helping them out with their credibility and transparency to Wall Street.

Russ: Okay. I always like our audience to hear this story because I think most of 'em, even though they might be small businesses, aspire to be public companies, and have no idea what they might getting themselves into. But you guys do a real good job of explaining that, and we appreciate you coming in and talking to us about it. So let's start with you, Ken. Tell us what's going on these days with DRG&E. If I recall correctly, last time you were in here was right after the economy meltdown.

Ken: Yeah. We were talking about what companies shouldn't do, and they shouldn't go quiet.

Russ: Right.

Ken: But inevitably, whenever there's a downturn, people get a little afraid to go out and talk about their business. So over the past year or so, we've introduced some new product lines, service concepts to help our clients be more proactive communicating with the street, and through video conferencing, which we may or may not have talked about last time.

Russ: No, we didn't.

Ken: But video conferencing, one-on-ones, that means the CEO and CFO can sit at their desk, have one-on-one meetings in high-definition with 720p with a megabyte of bandwidth and not have to fly to New York or Boston.

Russ: Okay.

Ken: We've had lot of success with those programs.

Russ: How many people are on the other end of that video conference?

Ken: Usually there's one or two or three people.

Russ: Okay.

Ken: It's like a normal one-on-one when you go to Fidelity and you sit down with several of their money managers and an analyst that does the hard number crunching and then – so they're usually in a room with their video conferencing system. DRG&E handles all the back office where we hook it up, get it going, and the client doesn't have to do that.

Russ: Okay. And this is obviously also a very economical way to do it.

Ken: It is. It's very economic.

Russ: Cool, cool. Okay. What else?

Ken: Well, recently – and Steve'll jump in here, too, this week we announced a new strategic partnership, a very innovative model that we have met some very, very exciting folks in New York that have a trading organization. And then, Steve, why don't you tell more about how we met and what that is.

Stephen: The company itself is WJB Capital. The whole idea behind it is they had a very interesting approach to developing their business by a program they call Corporate Access. And Corporate Access roughly equates to what we do for our clients in the world of marketing.

Russ: Okay.

Stephen: Where we take them on the road to meet with fund managers and these types of things. Hopefully, they want to take an investment position in the company. These folks do the same thing.

Russ: Okay.

Stephen: So the interesting aspect for us was that they have all these relationships with these funds managers and that. It's an extension of our organization that allows us to leverage their resources to increase our capacity and better serve our clients.

Russ: Okay.

Stephen: So it seemed like a natural relationship.

Russ: Okay. So put into layman's term, your clients now that are always trying to get in front of big-time investors have another better-improved vehicle through you guys to do precisely that.

Stephen: Correct.

Russ: Okay.

Ken: We've expanded our distribution new, if you wish.

Russ: Okay, okay. When you use the word "innovative," do most firms like yours have relationships like this, or is this unique in the industry?

Ken: No. This is the first we know of. You may see more. I mean, we were the first people to bring analysts inside to help our companies back in 2002.

Russ: Right.

Ken: But this is, we think, the first deal that's out there, 'cause WJBK Capital, they have no banking, and they have no research, so they have no agenda. This is a business they've developed over the last few years. It's been very, very successful for them, and they've done it with many of our clients in the past.

Russ: Okay.

Ken: That's how we got to know them. So their job is to get companies to their buy-side clients, which is "corporate access," with the little quotes around it. And then they can buy the stock through WJB. We're not broker/dealers.

Russ: Right.

Ken: This is a registered broker/dealer. They have all kinds of products and services, but they're not conflicted to where they have a buy or a sell or a hold. They're not out making opinion.

Russ: Right.

Ken: They're just facilitating the buy side's desire and thirst for meeting directly with management, which is what we do, too. But we do a whole lot more.

Russ: Okay.

Ken: So we're really being them volume for their system, and they're referring us clients as well.

Russ: Right. And so when you talk about them not having any banking or research and not being conflicted, there's almost no agenda. There's no conflict of interest, and, therefore, there's no rules or even questionable practices that take place.

Stephen: No. That's correct. That's right. That's right.

Russ: Yeah. Because I know so many of these firms were always seeming to play both sides of the fence, and in this case that's just not happening.

Stephen: No. they only have one side that they're on. As I stated earlier, what they do is very synergistic to what we do. And as Ken said, we bring capacity or we bring volume to them with our clients, and we're serving our clients with the vital function of marketing them to these buy-side firms out there, or funds that want to meet these management teams so they can, in person, get a feel for whether or not they want to invest with the company or not.

Ken: And really just to add one more thing, the real benefit us as DRG&E, not just our clients, takes a lotta time to set up the two or three-day road show. Here they do it, they've got 10-15 people in their group doing that every day all day, where we can still write press releases, give council, work on slide show – a whole litany of other services that we do, we can do more of those for more clients.

Russ: Okay. Are you already getting feedback from your clients?

Ken: We have.

Russ: Yeah? And they – are they –?

Ken: They're very good, very excited. And some of the smaller clients even more so because they have no coverage.

Russ: Right.

Ken: And so this way they'll facilitate meetings in a way that some of our bigger clients, the sell-side analysts will have their institutional sales group do the exact same thing, and the analysts will take them out on the road.

Russ: Okay. That's cool. But now before we wrap this up, I gotta get your perspective, kinda rolling back to the last visit on the economy and the market itself. Where do you guys feel like we're headed right now?

Stephen: Well, I think that a lotta people are still in the wait-and-see mode. We had a lotta IPOs happen earlier in the year and people rushing out to the market. We're starting to see that quiet down a little bit right now. But I think with what the feds said, they're gonna keep interest rates low. The economy's growing. The people are starting to be a little bit more optimistic in sticking heads above ground right now than what they were maybe a year or so ago.

Ken: We're still not far enough away from bubble mentality to where there's nothing wrong with getting slapped back down a little bit as far as went from $7,000.00 to $10,000.00 –

Russ: Right.

Ken: – in a pretty short order.

Russ: Yeah. I'd say so.

Ken: So there's nothing wrong with getting slapped back down. Hey, this isn't that time – of the period of time where things are just gonna keep going up.

Russ: Okay.

Ken: But the thing that we see and we're hearing from our clients things are getting better. The last quarter may have been a bottom in several sectors, and that's what you look for. You need a place to start growing again.

Russ: Okay, cool. Well, I really appreciate it when you guys come in. If I think back, you always come in when we have these controversies. Sarbanes–Oxley we met on that. We met on Enron in depth. And then in the economic meltdown. So you're our go-to guys on these kinda issues. You probably wanna cause a few more so you can get back in here.

Ken: Oh, no. we just like being near you, Russ. [Laughter]

Russ: Alright. Well, guys, I really appreciate you coming in, and keep us apprised of what's new at DRG&E.

Stephen: Thank you, Russ. Thanks for having us.

Russ: And that concludes my discussion with Ken Dennard and Stephen Gray of DRG&E. And that wraps up this mornings Aflac BusinessMakers Flashback, brought to you by Aflac, ask about it at work. Stay tuned in for our featured guest segment where we visit with numerous participants in the Houston Fast Tech 50. You're listening to the BusinessMakers Show heard here and online at thebusinessmakers.com.