-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mm9bnwjbZcn/EyROqli3VUldal5n8ROCZ8r9RZbv+wbELdGWbMVDXteNaUe5zu9h XxIVDmmoFawC7ZBAGzBGHQ== 0000084112-02-000013.txt : 20020913 0000084112-02-000013.hdr.sgml : 20020913 20020913122514 ACCESSION NUMBER: 0000084112-02-000013 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020731 FILED AS OF DATE: 20020913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RISK GEORGE INDUSTRIES INC CENTRAL INDEX KEY: 0000084112 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 840524756 STATE OF INCORPORATION: CO FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05378 FILM NUMBER: 02763283 BUSINESS ADDRESS: STREET 1: 802 SOUTH ELM STREET 2: GRI PLAZA CITY: KIMBALL STATE: NE ZIP: 69145 BUSINESS PHONE: 3082354645 MAIL ADDRESS: STREET 1: 802 S ELM ST CITY: KIMBALL STATE: NE ZIP: 69145 10QSB 1 maindoc.txt 10QSB AT JULY 31, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) [ X ] Quarterly report under Section 13 or 15(d) of the Securities Ex- change Act of 1934 For the quarter ended July 31, 2002 [ ] Transition report under Section 13 or 15(d) of the Securities Ex- change Act of 1934 For the transition period from ________ to ___________ Commission File Number: 0-5378 GEORGE RISK INDUSTRIES, INC. (Exact name of small business issuer as specified in its charter) Colorado 84-0524756 (State of incorporation) (IRS Employers Identification No.) 802 South Elm St. Kimball, NE 69145 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (308) 235-4645 APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares of the Registrant's Common Stock outstanding, as of September 13, 2002 was 5,399,653. Transitional Small Business Disclosure Format: Yes [ X ] No [ ] GEORGE RISK INDUSTRIES, INC. PART I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited financial statements for the three month period ended July 31, 2002, are attached hereto. GEORGE RISK INDUSTRIES, INC. BALANCE SHEET JULY 31, 2002
ASSETS Current Assets Cash and cash equivalents $ 1,765,000 Marketable securities (Note 2) 8,914,000 Accounts receivable: Trade, net of $50,000 doubtful account allowance 1,504,000 Other 2,000 Notes receivable 2,000 Inventories (Note 3) 2,311,000 Prepaid expenses 75,000 Deferred income taxes 52,000 ------------ Total Current Assets $14,625,000 Property and Equipment, net at cost $ 1,023,000 Other Assets Projects in process 21,000 Other 2,000 ------------ Total Other Assets $ 23,000 TOTAL ASSETS $15,671,000 ============
GEORGE RISK INDUSTIES, INC. BALANCE SHEET JULY 31, 2002
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable, trade $ 106,000 Accrued expenses Payroll and related expenses 308,000 Property taxes 2,000 Notes payable, current 81,000 Income taxes payable 137,000 ------------ Total Current Liabilities $ 634,000 Long-Term Liabilities Notes payable 155,000 ------------ Total Long-Term Liabilities $ 155,000 Stockholders' Equity Convertible preferred stock, 1,000,000 shares authorized, Series 1-noncumulative, $20 stated value, 25,000 shares authorized, 5,350 issued and outstanding 107,000 Common stock, Class A, $.10 par value, 10,000,000 shares authorized, 8,502,832 shares issued and outstanding 850,000 Additional paid-in capital 1,736,000 Accumulated other comprehensive income (1,812,000) Retained earnings 15,764,000 Less: cost of treasury stock, 3,103,179 shares, at cost (1,763,000) ------------ Total Stockholders' Equity $14,882,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,671,000 ============
GEORGE RISK INDUSTRIES, INC. INCOME STATEMENT FOR THE THREE MONTHS ENDED
July 31, 2002 2001 ------------ ------------ Net Sales $ 3,021,000 $ 3,017,000 Less: cost of goods sold (1,676,000) (1,574,000) ------------ ------------ Gross Profit $ 1,345,000 $ 1,443,000 Operating Expenses: General and administrative 160,000 179,000 Selling 587,000 585,000 Engineering 17,000 13,000 Rent paid to related parties 15,000 15,000 ------------ ------------ Total Operating Expenses $ 779,000 $ 792,000 Income From Operations 566,000 651,000 Other Income (Expense) Other 0 (11,000) Dividend and interest income 83,000 73,000 Interest expense 0 0 Gain/(loss) on sale of investments 4,000 (117,000) ------------ ------------ $ 87,000 $ (55,000) Income Before Provisions for Income Tax 653,000 596,000 Provisions for Income Tax (272,000) (248,000) ------------ ------------ Net Income $ 381,000 $ 348,000 Retained Earnings, beginning of period $15,383,000 $13,526,000 Retained Earnings, end of period $15,764,000 $13,874,000 Income Per Share of Common Stock $ .07 $ .06 Weighted Average Number of Common Shares Outstanding 5,399,653 5,717,403
GEORGE RISK INDUSTRIES, INC. STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED
July 31, 2002 2001 ------------ ------------ Net Income $ 381,000 $ 348,000 ------------ ------------ Other Comprehensive Income, net of tax Unrealized gain (loss) on securities: Unrealized holding gains (losses) arising during period (380,000) (158,000) Reclassification adjustment for (gains) losses included in net income (4,000) 117,000 ------------ ------------ Other Comprehensive Income $ (384,000) $ (41,000) Comprehensive Income (Loss) $ (3,000) $ 307,000 ============ ============
GEORGE RISK INDUSTRIES, INC. STATEMENT OF CASH FLOWS
For the three months ended July 31, 2002 2001 --------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 381,000 $ 348,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 64,000 61,000 Change in unrealized gain (loss) on investments (384,000) (41,000) Changes in assets and liabilities: (Increase) decrease in: Marketable securities (225,000) (2,412,000) Accounts receivable 385,000 71,000 Inventories 117,000 (106,000) Prepaid expenses 6,000 4,000 Other assets 7,000 (58,000) Receivables - officers and employees 0 1,000 Increase (decrease) in: Accounts payable 3,000 26,000 Accrued expenses 70,000 59,000 Income tax payable 272,000 316,000 ------------ ------------ Net cash provided by (used in) operating activities $ 696,000 $(1,731,000) CASH FLOWS FROM INVESTING ACTIVITIES: (Purchase) Sale of property and equipment (22,000) (17,000) (Purchase) of treasury stock 0 0 ------------ ------------ Net cash provided by (used in) investing activities $ (22,000) $ (17,000) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on long-term debt (3,000) (3,000) Treasury stock issued 0 0 ------------ ------------ Net cash provided by (used in) financing activities $ (3,000) $ (3,000) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 671,000 $(1,751,000) ============ ============ Cash and cash equivalents, beginning of period $ 1,094,000 $ 2,502,000 Cash and cash equivalents, end of period $ 1,765,000 $ 751,000
GEORGE RISK INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS JULY 31, 2002 Note 1 Unaudited Interim Financial Statements The accompanying financial statements have been prepared in accordance with the instructions for Form 10QSB and do not include all of the inform- ation and footnotes required by generally accepted accounting principals for complete financial statements. In the opinion of management, all adjust- ments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. Note 2 Marketable Securities Marketable equity securities are recorded at the lower of cost or market and are classified as available-for-sale securities. The cost of marketable securities sold is determined on the average cost method with realized gains or losses being reflected in the income statement and any unrealized gains or losses being reported as a separate component of stockholder's equity until realized. Dividend and interest income are accrued as earned. Marketable equity securities and unrealized gains and losses consist of the following as of July 31, 2002 and July 31, 2001: Cost Basis $10,726,000 $ 9,520,000 Market Value 8,914,000 8,629,000 ------------ ------------ Net Unrealized Gain (Loss) $(1,812,000) $ (891,000)
Note 3 Inventories At July 31, 2002 and July 31, 2001, respectively, inventories consisted of the following: Raw Materials $ 1,593,000 $ 2,160,000 Work in Process 442,000 399,000 Finished Goods 272,000 314,000 Warehouse in England 74,000 62,000 ------------ ------------ $ 2,381,000 $ 2,935,000 Less: allowance for obsolete inventory (70,000) (70,000) ------------ ------------ Net Inventories $ 2,311,000 $ 2,865,000 ============ ---=========
Note 4 Business Segments The following is financial information relating to industry segments:
For the quarter ended July 31, 2002 2001 --------------------------- Net revenue: Keyboard products $ 171,000 $ 284,000 Security alarm and other products 2,850,000 2,733,000 ------------ ------------ Total net revenue $ 3,021,000 $ 3,017,000 Income from operations: Keyboard products $ 34,000 $ 61,000 Security alarm and other products 532,000 590,000 ------------ ------------ Total income from operations $ 566,000 $ 651,000 Identifiable assets: Keyboard products $ 312,000 $ 360,000 Security alarm and other products 3,262,000 4,384,000 Corporate general 12,097,000 10,812,000 ------------ ------------ Total assets $15,671,000 $15,556,000 Depreciation and amortization: Keyboard products $ 2,000 $ 2,000 Security alarm and other products 39,000 35,000 Corporate general 23,000 24,000 ------------ ------------ Total depreciation and amortization $ 64,000 $ 61,000 Capital expenditures: Keyboard products $ 0 $ 0 Security alarm and other products 22,000 9,000 Corporate general 0 8,000 ------------ ------------ Total capital expenditures $ 22,000 $ 17,000
Note 5 Revenue Recognition George Risk Industries recognizes its revenues when goods are shipped and billed to its customers. There is a $50,000 allowance that was established to account for any uncollectable accounts. Note 6 Earnings per Share Basic and diluted earning per share, assuming convertible preferred stock was converted for each period presented, are:
For the three months ended July 31, 2002 ---------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- --------- Net Income $ 381,000 ============ Basic EPS $ 381,000 5,399,653 $ 0.07 Effect of dilutive securities: Convertible preferred stock 0 26,750 ------------ ------------ --------- Diluted EPS $ 381,000 5,426,403 $ 0.07 For the three months ended July 31, 2001 ---------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- --------- Net Income $ 348,000 ============ Basic EPS $ 348,000 5,717,403 $ 0.06 Effect of dilutive securities: Convertible preferred stock 0 26,750 ------------ ------------ --------- Diluted EPS $ 348,000 5,744,153 $ 0.06
GEORGE RISK INDUSTRIES, INC. PART I. FINANCIAL INFORMATION Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the attached con- densed consolidated financial statements, and with the GRI's audited financial statements and discussion for the fiscal year ended April 30, 2002. Net cash increased $671,000 during the quarter ended July 31, 2002 as compared to a decrease of $1,751,000 during the corresponding quarter last year. Last year, the main reason for the big decrease in that quarter was that we trans- ferred $2,500,000 into an annuity on the marketable securities section. Otherwise, it was pretty much business as usual for the current quarter. Marketable securities increased $225,000 for the quarter as compared to a $2,412,000 increase for the corresponding quarter last year. Except for the annuity, we have not been putting much additional cash into the marketable securities, but instead we are using the money already in the investment accounts and hopefully are making smart investment choices. For the quarter ended July 31, 2002, the stock market performed worse than it did for the three months ended July 31, 2001. And GRI has some stock holdings from a few of the bad performers. Therefore, there was a bigger unrealized loss for the current period. Inventories decreased $117,000 during the current quarter as compared to a $106,000 increase last year. We have fewer raw materials on hand than the same period last year. This is due to some big purchases that we made in 2001 when we anticipated our sales to be higher. Accounts re- ceivable decreased $385,000 for the quarter ending July 31, 2002, as compared to a $71,000 decrease for the same quarter last year. We have done a better job at collecting money due to us with and A/R turnover at 27 days for the current quarter as compared to 31 days for the quarter last year. At the quarter ended July 31, 2002, 84.2% of the receivables are considered current (less than 45 days) and 2.5% of the total are over 90 days past due. At the quarter ended July 31, 2002 there was a $7,000 decrease in other assets while at July 31, 2001, there was a $58,000 increase. The reason for the decrease in other assets is that we completed our remodeling project in our main building in January 2002 and we have not started anything else as big at this time. At the quarter ended July 31, 2002, accounts payable shows an increase of $3,000 as compared to an increase of $26,000 for the same quarter the year before. As usual, we continue to strive to pay all of our payables within terms and take all purchase discounts that are available. Notes payable decreased by $3,000 for both the current and previous quarter. No new notes have been needed to conduct our day to day business. We have just been pay- ing on the notes that are already on the books. Income tax payable increased $272,000 for the quarter ended July 31, 2002. This compares to an increase of $316,000 for the quarter ended July 31, 2001. The difference of $44,000 accounts for the fact that we have a good size refund coming our way. The following is a list of ratios to help analyze George Risk Industries' performance:
Qtr ended Qtr ended July 31, 2002 July 31, 2001 ------------------------------ Working capital $13,991,000 $13,498,000 Current ratio 23.068 16.587 Quick ratio 19.216 13.135 Cash per share (including marketable securities) $1.98 $ 1.64 Equity per share $2.76 $ 2.56
Net sales were $3,021,000 for the quarter ended July 31, 2002, which is a 1% increase from the corresponding quarter last year. Cost of goods sold was 55.5% of net sales for the quarter ended July 31, 2002 and the cost of goods sold percentage to net sales was 52.2% for the quarter ended July 31, 2001. Having relatively the same percentage of cost of goods sold from period to period shows that we keep our costs in line. We have increased our cost of materials and direct labor in proportion to how our sales have increased. Operating expenses were 25.8% of net sales for the quarter ended July 31, 2002 as compared to 26.3% for the corresponding quarter last year. Having relatively the same percentages for both periods shows that management keeps a close eye on our operating expenses to keep them in line from year to year. We anticipated our sales to be more than they were last year, so management had increased wages and staff a bit more than we should have last year. But we made the correct adjustments throughout the previous year in order to bring the operating expenses back down a bit. Income from operations for the quarter ended July 31, 2002 was at $566,000, which is a 13.1% decrease from the corresponding quarter last year, which had income from operations of $651,000. Other income and expenses showed a $87,000 gain for the quarter ended July 31, 2002 as compared to having a $55,000 loss for the quarter ended July 31, 2001. The main reason for the loss in the quarter ending July 31, 2001, was that we were urged to sell one of our stock holdings for a loss of $117,000 during that quarter. This particular corporate bond had been de- creasing in value for some time. In turn, net income for the quarter ended July 31, 2002 was at $381,000, a 9.56% increase from the corresponding quarter last year, which showed a net income of $348,000. Earnings per share for the quarter ended July 31, 2002 was $0.07 per share and $0.06 per share for the quarter ended July 31, 2001. George Risk Industries does have two distinct business segments, security alarm products and keyboard products that are subject to disclosure under SFAS No. 131. See the notes to the financial statements in order to examine the two segments. New products that the security division has introduced into the marketplace recently include a five, twelve and twenty-four volt DC water sensor, based on our original water sensor. The new product line of water sensors has grown over the past year as attempts are being made to enter new markets, such as home automation and HVAC. The Thermstat 3 and 4 versions are near production stage, which will assist our efforts to move into new markets. The pool alarm product sales continue to increase mainly due to new legislation and building code enforcement in the state of Florida. This trend is expected to expand into other states as well, primarily California, Arizona, and Texas. We have applied for ETL certification on the 189/289 series pool alarms to meet these new codes in Florida. A power transfer device, the PTD-1, along with a terminal block series, the 6600 and 6601, are new products that we introduced at the International Security Conference (ISC) in August 2002. We also showed a modified single gang junction box for the E-Z Duct raceway line. A double gang box is in the design mode. The E-Z Duct product has shown great growth since its intro- duction into the market a year ago. Research and development projects include a glass break sensor in the test- ing stage. Engineering continues to research products using GRI's C(2)T technology. Also, we have added two new options for the CT300 series of touch sensors. Management is always open to the possibility to acquire a business that would complement our existing operations. This would require no outside financing. The intent is to utilize the equipment, marketing techniques and established customers to increase sales and profits. There are no known seasonal trends with any of GRI's products, since we sell to distributors and OEM manufacturers. Our products are tied to the housing industry and will fluctuate with building trends. GEORGE RISK INDUSTRIES, INC. Part II. OTHER INFORMATION Item 1. Legal Proceedings Not applicable Item 2. Changes in Securities Not applicable. Item 3. Defaults upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Securities Not applicable Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K A. Reports on Form 8-K No 8-K reports were filed during the quarter ended July 31, 2002. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. George Risk Industries, Inc. (Registrant) Date 09-13-2002 By: /s/ Kenneth R. Risk Kenneth R. Risk, President and Chairman of the Board Date 09-13-2002 By: /s/ Stephanie M. Risk Stephanie M. Risk, Chief Financial Officer and Controller -----END PRIVACY-ENHANCED MESSAGE-----