Franklin Covey 2000 Annual Report 12 Form 10-K PART I Item 1. Business GENERAL Franklin Covey Co. (the “Company” or “Franklin Covey”) is an international learning and performance solutions company dedicated to helping individuals and organizations to become measurably more effective. To achieve that goal, the Company provides training and education programs, consulting services, educational materials, publications, assessment and measurement tools, implementation processes, application tools and products designed to help individuals and organizations to be measurably more effective. Franklin Covey focuses its efforts on providing solutions in five main areas: Productivity, Leadership, Communications, Education and Sales. The Company provides training and education, consulting services and products designed to improve organizational effectiveness, leadership skills, written and oral business communication skills, sales skills, student achievement and performance skills. The Company also measures the impact of training investments. Effectiveness solutions are delivered through Company owned retail stores, its own catalog operations, training seminars, computer-based training and planning services, its own Internet sites, clients’ and partners’ Intranet sites, sales to educational institutions and through consulting services. To facilitate implementation of the principles it teaches, the Company produces and/or markets a number of tools and curricula such as the Franklin Planner®, PALM® and other handheld electronic organizers, Agendas, What Matters Most and 7 Habits of Highly Effective People training seminars, CD ROM’s, Personal Coaching and custom projects. One of the mainstay staple tools that assists clients in implementing effectiveness training is the Franklin Planning System. The original Franklin Planner consists of a paper-based, two-page per day Franklin Covey planning system combined with a seven-ring binder, a variety of planning aids, weekly, monthly and annual calendars and personal management sections. The Franklin Planner can also be purchased in one-page per day or two-page per week versions. The Company offers various forms and accessories that allow users to expand and customize their Franklin Planner. Franklin Covey markets the Franklin Planner and accessory products directly to organizations, through its catalog, its retail stores, its  e-commerce Internet site at www.franklincovey.com and through third party channels. A significant percentage of the users of the original Franklin Planner continue to purchase a renewal planner each year, creating substan- tial recurring sales. The Company has also made the Franklin Planning System available in desktop software and as an add-on to handheld organizers, such as the popular PALM® Computing organizer and Compaq’s iPAQ™ Pocket PC®. The Company also provides an extension to Microsoft Outlook® that incorporates Franklin Planning productivity principles into the Outlook calendar system. An on-line version of the Franklin Planner has recently been introduced at www.franklincoveyplanner.com that synchronizes voicemail, email, note-taking and calendaring into both the paper-based system and the electronic handheld and desktop versions of the system.  The principles taught in the Company’s curriculum have also been published, in many cases, in book and audio tape form. Books sold by the Company include  The 7 Habits of Highly Effective People, Principle-Centered Leadership, First Things First, The 7 Habits of Highly Effective Families, Nature of Leadership and  Living the  7 Habits, all by Stephen R. Covey,  The 10 Natural Laws of Time and Life Management and  What Matters Most by Hyrum W. Smith,  The Power Principle by Blaine Lee and  The 7 Habits of Highly Effective Teens, by Sean Covey. These books, as well as audio tape versions of many of these products, are sold through general retail channels, as well as through the Company’s own catalog, its e-commerce web site www.franklincovey.com and its retail stores.  Domestic consumer product sales, consisting primarily of products relating to the Franklin Planning Systems accounted for 52 percent of the Company’s sales during the year ended August 31, 2000. Franklin Covey provides its effectiveness solutions to business, industry, educational institutions, government entities, communities and individuals. The Company sells its services to the organizational market through its own direct sales force. The Company delivers its training services to organizations in one of four ways:  1. Franklin Covey consultants provide on-site consulting or training classes for organizations. In these situations, the Franklin Covey consultant can tailor the curricu- lum to the client’s specific business and objectives. 2. The Company also conducts public seminars in more than 200 cities throughout the United States, where organizations can send their employees in smaller