With a name like that, you know The Aristotle Corporation (NASDAQ: ARTL) must be involved in education. It is. Aristotle Corporation makes a vast array of educational materials and supplies for K-12. The company also makes various health care and medical teaching materials and supplies, as well as food industry items. The problem is that Aristotle Corporation is dependent upon state departments of education for much of its sales. Those budgets are not expanding. Thus, the company saw moderate net sales increases 5% in 4Q2007 and 4.2% in FY2007, but EPS decreased slightly in both periods.

Aristotle Corporation is in the process of revamping its higher-margin proprietary educational products in order to improve gross margins in 2008. The company managed to reduce its long-term debt by $42 million and does not forecast any significant capital expenditures in 2008. The stock is currently trading at under $10 per share, and pays a semi-annual dividend of $0.33 per share. Aristotle Corporation offers high-quality educational products, but needs to broaden its customer base beyond fixed-budget, slow contract approving school districts.