The following is a summary of information presented on the income statements of Haley Publications and Johnston Publications for December 31, 2007.
Haley Publications Johnston Publications
Account 2007 % 2007 %
Net sales revenue $487,000 100.00% $500,000 100.00%
Cost of goods sold 400,000 82.14% 395,000 79.00%
Gross profit 87,000 17.86% 105,000 21.00%
Selling and general expenses 30,000 6.16% 50,000 10.00%
Income from operations 57,000 11.70% 55,000 11.00%
Income tax expense 17,100 3.51% 16,500 3.30%
Net income $39,900 8.19% $38,500 7.70%
Based on the information presented, what steps should Johnston take to improve its performance to match or exceed Haley's performance?