FranklinCovey (NYSE: FC) markets products designed to increase productivity, sales and communications in the workplace. The company recently posted 4Q and FY 2007 numbers that would have been impressive were it not for a $20.3 million reversal of deferred income tax asset valuations allowances which dramatically skewed the results. Thus, 4Q 2007 net income was $600,000, or $0.03 diluted EPS compared to $15 million or $0.70 diluted EPS in 4Q 2006. Nonetheless, gross profit increased, driven primarily by a $4.9 million increase in training and consulting services to businesses. This increase helped offset a $2.4 million decrease in consumer sales due to weaker demand at the retail level.

FranklinCovey is shifting more resources into training and consulting sales which have a higher gross profit margin than product sales. Faced with an 11% decline in retail store sales, the company closed two stores and is trying to convince more customers to shop for its products on the company's improved website.

FranklinCovey has now repurchased the remaining $37 million worth of preferred stock, but had to borrow money to do so. As a result, interest as well as operating expenses increased. The company sells helpful tools to increase organizational efficiency and productivity. It needs to take page from its own book and devote its resources to where they will be the most productive -- in corporate and online sales. Buy your FranklinCovey 2008 day planner from one of the company's retail locations while you still can.