Transcript of interview with AIMS Worldwide President and CEO Gerald Garcia Jr. April 5, 2004

Good day, this is Michael Wax with CEOcast. I’m here today with Gerald Garcia Jr. Gerald is president and chief executive officer of AIMS Worldwide, Inc., a company trading Over the Counter under the Bulletin Board symbol AMWW and one that is a vertically integrated marketing services, communication, and media company. Thanks for joining CEOcast today, Gerald.

Garcia: Good morning.

Wax: I thought perhaps you could begin with an overview of the company and then we’ll get into some of the opportunities in greater detail.

Garcia: Well AIMS Worldwide, as you mentioned, is a vertically integrated marketing company. The best way to describe our company is that we deliver the highest penetration message to the ideal customer or buyer on a one-to-one basis at the lowest possible cost. So in reality, we have positioned ourselves as a low-cost dealer in this space.

Wax: Let’s start with the strategy. How do you differentiate yourself from others?

Garcia: What we do is 180 percent different than what a traditional advertising company on Madison Avenue would do. I mean we’re taking a client’s product or service and identifying the ideal buyer or customer and then directly sending the message of the client to that ideal buyer or customer. So we’re doing it on a different basis than what the traditional mass marketer would do in hundreds of ads on television or lots of space in the newspaper or highly repetitious advertising on radio.

Wax: Who are your typical customers?

Garcia: Right now we have one client—a public policy entity called For Our Grandchildren. We are working with this nonprofit agency to identify and to promote and market Social Security reform, and what we have done is targeted seven primary states in the Democratic primary race and identified Social Security as a vital issue in the upcoming election. What we did: as a very low cost situation leader we’re able to provide lots of awareness in Iowa, New Hampshire, and other primary states. Through our research, we were able to determine that citizens of those states now understand that Social Security is a vital issue that has to be addressed next year by the next president of the United States—whether it happens to be George W. Bush in his second term or the Democratic candidate.

Wax: How do you charge for your services and what are some of the services you feature?

Garcia: We charge in the non-traditional manner. We charge a management fee rather than a placement fee. A placement fee as you understand is done by an advertising agency in which they place an ad and get a commission from it—normally at 17-and-a-half percent. What we do is we simply charge a management fee and say to our client, “we’re not going to charge you any more than what the management fee is,” so basically we’re on a retainer and a fee basis.

Wax: What about now the acquisition of Harrell Woodcock Linkletter? How does this fit into your strategy?

Garcia: The last name that you mentioned is Linkletter. It is Art Linkletter from ‘People Are Funny’ and the icon from early television. Mr. Linkletter and his partners decided the company, which is a private strategy, planning and marketing consulting group, fits perfectly into what AIMS That is what the firm of Harrell Woodcock Linkletter has been able to do over its past and so the synergies that we had were ideal for the merger that we have accomplished.

Wax: What about strategic partners? What role do they play?

Garcia: Well what’s going to happen with Harrell Woodcock Linkletter is that the clients that they have and the potential clients that they have—they will be bringing them to AIMS and AIMS will then be able to service those clients. We also have—on an alliance basis several—a PR firm in New York City, a public affairs firm in Washington, D.C., and an advertising agency in Pennsylvania that are helping us as strategic partners to become the low-cost leader in that particular space, delivering the message for our clients at the lowest possible cost.

Wax: As you look at other acquisitions, what are some of the other areas that would be strategic?

Garcia: Well, we think that private cable is a very strategic position for us. There are countless private cable companies throughout the United States—and what I’m talking about here, Michael, is in the area of new home developments outside of what traditional cable companies would do, or a gated community as we would know it, where cable is available. And not only would cable be available, but we also would have broadband and any other types of Internet access to that particular location. The important situation is that we would have as a captive audience, and we would know exactly the demographics of each one of the households and then we could target that demographic or household as an ideal buyer or customer to any one of our clients that we would have. So we are in the process of looking at that. There’s also an opportunity for us in the campus cable franchise business. Countless dormitories in universities and colleges across the country are using this type of technology to maintain and deliver cable services and broadband for their students, and also using it as a campus-wide distribution system of information. We like that particular space.

Wax: As you now look at the opportunities going forward, what about the recovery in the economy? What impact do you see that having on your business?

Garcia: Twofold, first and foremost if the recovery continues, and we hope that it does, the importance is that there will be additional clients and customers for us. On the flip side, because we happen to be the low-cost leader, the circumstances become that even if the economy doesn’t improve there are customers and clients out there who will turn to us because they don’t want to continue to spend the enormous amount of marketing dollars that they’re spending now and use us, and maybe keep us as the recovery continues or starts up again.

Wax: How are you using technology to enhance your offerings?

Garcia: The fact of the matter is that Internet is a very important aspect of what we’re doing and as I mentioned earlier, broadband is a very important aspect of what we’re doing. The cable delivery system is a very important aspect of what we’re trying to do. So technology is a very important aspect for us.

Wax: As you look at now the infrastructure that you have, what do you currently have and as the company grows, Gerald, what will you need to do?

Garcia: As you know, Michael, we’re a development company that is in the process of doing numerous acquisitions. The acquisitions that we have done so far have been simply on stock exchange. What we will be doing is when we start adding—as I mentioned earlier that we have a strategic alliance with a PR company in New York and we have a strategic alliance with a public affairs company in Washington, and the advertising agency in Pennsylvania—all of those are also like-minded individuals like us who are interested in selling their companies to us. All of these are ongoing entities that have been in business for an extended period of time, have continuous growth—top line and bottom line growth—and so we will be acquiring those companies in the near future. It looks very promising for us that our performance on P&L and what we will be able to deliver over the course of this coming year will be significantly higher than what we had in 2003.

Wax: Does the company need to raise capital to realize on this strategy?

Garcia: Yes, we’re in the process. We have engaged two firms to help us access financial markets and to help us raise and provide corporate financing to fund the acquisitions that we have in our pipeline. Those two groups are InCap Group from Baltimore and Waller Capital from New York City. We’re in the process of working with a third firm that we will be announcing sometime this week from Pasadena, California. All of those will be helping us with merger and acquisition phases that we have. And by the way, Michael, our financing needs are pretty small at the beginning, but as we continue to fill our space in delivering the highest penetration of message to the ideal customer on a one-to-one basis at the lowest possible cost, we will be filling some spaces in our strategy in which our capital appetite will be significant over the course of the next 12 to 24 months.

Wax: What should investors now look for in the coming quarters in terms of key milestones?

Garcia: The first key milestone is that we have announced recently that we acquired Harrell Woodcock Linkletter, which is a very prestigious firm—the name of Art Linkletter is very important for us; the fact that we have engaged two firms to help us access financial markets—and we’re adding a third; the fact that we have letters of intent to acquire the companies in New York, Washington, and Pennsylvania; and that we—in the cable area that I mentioned to you earlier—the dormitory space and the gated community space. We have one dormitory company that is available and we’re seeking to do some due diligence and see if it fits into our strategy, and approximately 10 to 15 of the private cable communities that are going to be available and we’re looking at acquiring them over the course of the next few quarters.

Wax: I’ve been speaking today with Gerald Garcia Jr. Gerald is president and chief executive officer of AIMS Worldwide, Inc., a company trading Over The Counter under the Bulletin Board symbol AMWW, and one that is a leader in developing one-to-one marketing solutions.