-----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, ACE8qxc6iNHq+bI84Mjt1P9Al0AfDGkLA/pKD/+rAYMcUlxRGK2+fUiZ2ObxoH9b nDcSDSxvz4aWFhhsgXgbkA== 0000084112-08-000017.txt : 20081215 0000084112-08-000017.hdr.sgml : 20081215 20081215162620 ACCESSION NUMBER: 0000084112-08-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20081031 FILED AS OF DATE: 20081215 DATE AS OF CHANGE: 20081215 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05378 FILM NUMBER: 081250086 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 10-Q 1 oct2007-10q.txt 10QSB FOR THE QUARTER ENDED OCTOBER 31, 2008 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [ X ] Quarterly report under Section 13 or 15(d) of the Securities Ex- change Act of 1934 For the quarter ended October 31, 2008 [ ] 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: 000-05378 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 December 15, 2008 was 5,175,831. 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 and six month period ended October 31, 2008, are attached hereto. GEORGE RISK INDUSTRIES, INC. BALANCE SHEETS
October 31, April 30, 2008 2008 ------------ ------------ (unaudited) ASSETS Current Assets Cash and cash equivalents $ 3,376,000 $ 4,072,000 Marketable securities (Note 2) 15,592,000 17,533,000 Accounts receivable: Trade, net of $50,000 doubtful account allowance for 2008 and 2007 1,449,000 1,509,000 Other 2,000 1,000 Note receivable, current 3,000 3,000 Income tax overpayment 719,000 471,000 Inventories 3,154,000 3,100,000 Prepaid expenses 94,000 103,000 Deferred income taxes 1,225,000 250,000 ------------ ------------ Total Current Assets $25,614,000 $27,042,000 Property and Equipment, net at cost $ 789,000 $ 831,000 Other Assets Investment in Land Limited Partnership, at cost 200,000 200,000 Projects in process 106,000 68,000 Long-term receivable 60,000 60,000 Note receivable 11,000 12,000 Other 0 1,000 ------------ ------------ Total Other Assets $ 377,000 $ 341,000 TOTAL ASSETS $26,780,000 $28,214,000 ============ ============
GEORGE RISK INDUSTRIES, INC. BALANCE SHEETS
October 31, April 30, 2008 2008 ------------ ------------ (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable, trade $ 98,000 $ 67,000 Dividends payable 317,000 239,000 Accrued expenses Payroll and other expenses 212,000 321,000 ------------ ------------ Total Current Liabilities $ 627,000 $ 627,000 Long-Term Liabilities Deferred income taxes 60,000 79,000 ------------ ------------ Total Long-Term Liabilities $ 60,000 $ 79,000 Stockholders' Equity Convertible preferred stock, 1,000,000 shares authorized, Series 1-noncumulative, $20 stated value, 25,000 shares authorized, 4,100 issued and outstanding 99,000 99,000 Common stock, Class A, $.10 par value, 10,000,000 shares authorized, 8,502,832 shares issued and outstanding 850,000 850,000 Additional paid-in capital 1,736,000 1,736,000 Accumulated other comprehensive income (1,340,000) (67,000) Retained earnings 27,647,000 27,788,000 Treasury stock, 3,327,001 and 3,326,551 shares, at cost (2,899,000) (2,898,000) ------------ ------------ Total Stockholders' Equity $26,093,000 $27,508,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $26,780,000 $28,214,000 ============ ============
GEORGE RISK INDUSTRIES, INC. INCOME STATEMENTS Three months Six months Three months Six months ended ended ended ended October 31, October 31, October 31, October 31, 2008 2008 2007 2007 --------------------------------------------------- Net Sales $ 2,470,000 $ 4,914,000 $ 3,007,000 $ 6,246,000 Less: cost of goods sold (1,175,000) (2,371,000) (1,483,000) (3,014,000) ------------ ------------ ------------ ------------ Gross Profit $ 1,295,000 $ 2,543,000 $ 1,524,000 $ 3,232,000 Operating Expenses: General and administrative 205,000 383,000 188,000 362,000 Selling 444,000 947,000 477,000 1,020,000 Engineering 21,000 38,000 24,000 44,000 Rent paid to related parties 12,000 28,000 12,000 28,000 ------------ ------------ ------------ ------------ Total Operating Expenses $ 682,000 $ 1,396,000 $ 701,000 $ 1,454,000 Income From Operations 613,000 1,147,000 823,000 1,778,000 Other Income (Expense) Other 1,000 3,000 1,000 2,000 Dividend and interest income 184,000 393,000 196,000 401,000 Gain (loss) on investments (394,000) (544,000) 50,000 146,000 Gain (loss) on sale of assets 0 0 15,000 15,000 ------------ ------------ ------------ ------------ $ (209,000) $ (148,000) $ 262,000 $ 564,000 Income Before Provisions for Income Tax 404,000 999,000 1,085,000 2,342,000 Provisions for Income Tax Current expense (114,000) (338,000) (325,000) (723,000) Deferred tax benefit (expense) 55,000 78,000 (5,000) (41,000) ------------ ------------ ------------ ------------ Total Income Tax Expense $ (59,000) $ (260,000) $ (330,000) $ (764,000) Net Income $ 345,000 $ 739,000 $ 755,000 $ 1,578,000 ============ ============ ============ ============ Cash Dividends Common Stock ($0.17 per share) $ (880,000) $ (880,000) $ (907,000) $ (907,000) Income Per Share of Common Stock: Basic $0.07 $0.14 $0.14 $0.30 Assuming Dilution $0.07 $0.14 $0.14 $0.29 Weighted Average Number of Common Shares Outstanding: Basic 5,175,998 5,176,098 5,334,878 5,335,272 Diluted 5,196,498 5,196,598 5,355,378 5,355,772
GEORGE RISK INDUSTRIES, INC. STATEMENTS OF COMPREHENSIVE INCOME
Three months Six months Three months Six months ended ended ended ended October 31, October 31, October 31, October 31, 2008 2008 2007 2007 ---------------------------------------------------- Net Income $ 345,000 $ 739,000 $ 755,000 $ 1,578,000 ------------ ------------ ------------ ------------ Other Comprehensive Income, net of tax Unrealized gain (loss) on securities: Unrealized holding gains (losses) arising during period (1,861,000) (2,581,000) 419,000 153,000 Reclassification adjustment for (gains) losses included in net income 258,000 393,000 (41,000) (126,000) Income tax expense related to other comprehensive income 670,000 915,000 (158,000) (11,000) ------------ ------------ ------------ ------------ Other Comprehensive Income $ (933,000) $(1,273,000) $ 220,000 $ 16,000 Comprehensive Income $ (588,000) $ (534,000) $ 975,000 $ 1,594,000 ============ ============ ============ ============
GEORGE RISK INDUSTRIES, INC. STATEMENTS OF CASH FLOWS
Six months Six months ended ended October 31, October 31, 2008 2007 --------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 739,000 $ 1,578,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 82,000 86,000 (Gain) loss on sale of investments 544,000 (146,000) (Gain) loss on sales of assets 0 (15,000) Deferred income taxes (78,000) 41,000 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable 59,000 194,000 Inventories (54,000) 48,000 Prepaid expenses 9,000 8,000 Other receivables (1,000) 0 Income tax overpayment (248,000) (240,000) Increase (decrease) in: Accounts payable 31,000 (29,000) Accrued expenses (109,000) 33,000 ------------ ------------ Net cash provided by (used in) operating activities $ 974,000 $ 1,558,000 CASH FLOWS FROM INVESTING ACTIVITIES: Other assets manufactured (38,000) 54,000 Proceeds from sale of assets 0 17,000 (Purchase) of property and equipment (39,000) (172,000) Proceeds from sale of marketable securities 1,000 1,163,000 (Purchase) of marketable securities (792,000) (2,078,000) (Loans) made to employees 0 (25,000) Collections of loans to employees 2,000 10,000 (Purchase) of treasury stock (2,000) (12,000) ------------ ------------ Net cash provided by (used in) investing activities $ (868,000) $(1,043,000) CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (802,000) (829,000) ------------ ------------ Net cash provided by (used in) financing activities $ (802,000) $ (829,000) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (696,000) $ (314,000) Cash and cash equivalents, beginning of period $ 4,072,000 $ 4,611,000 ------------ ------------ Cash and cash equivalents, end of period $ 4,376,000 $ 4,297,000 ============ ============ Supplemental Disclosure of Cash Flow Information Cash payments for: Income taxes $ 586,000 $ 902,000 Interest expense $ 0 $ 0 Cash receipts for: Income taxes $ 0 $ 0
GEORGE RISK INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2008 Note 1 Unaudited Interim Financial Statements The accompanying financial statements have been prepared in accordance with the instructions for Form 10Q and do not include all of the information and footnotes required by generally accepted accounting principals for com- plete financial statements. These financial statements should be read in conjunction with the financial statements and notes contained in the com- pany's annual report on Form 10KSB for the year ended April 30, 2008 with the SEC. In the opinion of management, all adjustments, consisting only of nor- mal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily in- dicative of the results for any other quarter or for the full year. Note 2 Marketable Securities The Company has investments in publicly traded equity securities as well as certain state and municipal debt securities. These securities are class- ified as available-for-sale securities, and are reported at fair value. Available -for-sale investments in debt securities mature between December 2008 and August 2031. The Company uses the average cost method to determine the cost of securities sold and the amount reclassified out of accumulated other comprehensive income into earnings. Unrealized gains and losses are excluded from earnings and reported separately as a component of stock- holder's equity. Dividend and interest income are accrued as earned. As of October 31, 2008, investments available-for-sale consisted of the following: Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value ------------ ------------ ------------ ------------ Municipal bonds $ 8,464,000 $ 11,000 $ (438,000) $ 8,037,000 Federal agency mortgage backed securities $ 375,000 $ 1,000 $ (1,000) $ 375,000 Corporate bonds $ 469,000 $ 0 $ (70,000) $ 399,000 Equity securities $ 6,998,000 $ 128,000 $(1,933,000) $ 5,193,000 Money markets/CDs $ 1,589,000 $ 0 $ (1,000) $ 1,588,000 ------------ ------------ ------------ ------------ Total $17,895,000 $ 140,000 $(2,443,000) $15,592,000
In accordance with SFAS 115, the Company evaluates all marketable securities for other-than temporary declines in fair value, which are defined as when the cost basis exceeds the fair value for approximately one year. The Com- pany also evaluates the nature of the investment, cause of impairment and number of investments that are in an unrealized position. When an other- than-temporary decline is identified, the Company will decrease the cost of the marketable security to the new fair value and recognize a real loss. The investments are periodically evaluated to determine if impairment changes are required. As a result of this standard, management recorded impairment losses of $302,000 for the quarter ended October 31, 2008 and $405,000 for the six months ended October 31, 2008. As for the corresponding periods last year, $2,000 worth of impairment loss was recorded for the quarter, while $7,000 of loss was recorded for the six months ended October 31, 2008. The following table shows the investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a con- tinuous unrealized loss position, at October 31, 2008. Less than 12 months 12 months or greater Total ----------------------- --------------------- --------------------- Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss ........................................................................... Municipal bonds $2,764,000 $ (178,000) $3,894,000 $(176,000) $ 6,658,000 $ (354,000) Federal agency mortgage backed securities -- -- $ 199,000 $ (1,000) $ 199,000 $ (1,000) Corporate bonds $ 320,000 $ (59,000) $ 79,000 $ (11,000) $ 399,000 $ (70,000) Equity securities $3,194,000 $(1,399,000) $1,185,000 $(619,000) $ 4,379,000 $(2,018,000) ----------- ------------ ----------- ---------- ------------ ------------ Total $6,278,000 $(1,636,000) $5,357,000 $(807,000) $11,635,000 $(2,443,000)
Municipal Bonds The unrealized losses on the Company's investments in municipal bonds were caused by interest rate increases. The contractual terms of these invest- ments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company has the ability to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at October 31, 2008. Federal Agency Mortgage-Backed Securities The unrealized losses on the Company's investment in federal agency mortgage- backed securities were caused by interest rate increases. The Company pur- chased these investments at a discount relative to their face amount, and the contractual cash flows of these investments are guaranteed by an agency of the U.S. government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company's in- vestment. Because the decline in market value is attributable to changes in interest rates and not credit quality and because the Company has the ability to hold these investments until a recovery of fair value, which may be ma- turity, the Company does not consider these investments to be other-than- temporarily impaired at October 31, 2008. Corporate Bonds The Company's unrealized loss on investments in corporate bonds relates to several bonds. The contractual term of these investments do not permit the issuer to settle the security at a price less than the amortized cost of the investment. Because the Company has the ability to hold these investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at Oct- ober 31, 2008. Marketable Equity Securities The Company's investments in marketable equity securities consist of a wide variety of companies. Investments in these companies include growth, growth income, and foreign investment objectives. Management has evaluated the in- dividual holdings, and because of the recent decline in the stock market, does not consider these investments to be other-than-temporarily impaired at October 31, 2008. Note 3 Inventories At October 31, 2008, inventories consisted of the following: Raw Materials $ 2,014,000 Work in Process 832,000 Finished Goods 413,000 ------------ $ 3,259,000 Less: allowance for obsolete inventory (105,000) ------------ Net Inventories $ 3,154,000 ============
Note 4 Business Segments The following is financial information relating to industry segments:
For the quarter ended October 31, 2008 2007 --------------------------- Net revenue: Security alarm products 2,278,000 2,702,000 Other products 192,000 305,000 ------------ ------------ Total net revenue $ 2,470,000 $ 3,007,000 Income from operations: Security alarm products 565,000 740,000 Other products 48,000 83,000 ------------ ------------ Total income from operations $ 613,000 $ 823,000 Identifiable assets: Security alarm products 3,262,000 4,577,000 Other products 2,037,000 972,000 Corporate general 21,481,000 23,086,000 ------------ ------------ Total assets $26,780,000 $28,635,000 Depreciation and amortization: Security alarm products 7,000 9,000 Other products 26,000 29,000 Corporate general 8,000 7,000 ------------ ------------ Total depreciation and amortization $ 41,000 $ 45,000 Capital expenditures: Security alarm products 0 27,000 Other products 0 59,000 Corporate general 10,000 0 ------------ ------------ Total capital expenditures $ 10,000 $ 86,000
Note 5 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 October 31, 2008 ------------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- ----------- Net Income $ 345,000 =========== Basic EPS $ 345,000 5,175,998 $ 0.07 Effect of dilutive securities: Convertible preferred stock 0 20,500 ----------- ------------- ----------- Diluted EPS $ 345,000 5,196,498 $ 0.07 For the six months ended October 31, 2008 ------------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- ----------- Net Income $ 739,000 =========== Basic EPS $ 739,000 5,176,098 $ 0.14 Effect of dilutive securities: Convertible preferred stock 0 20,500 ----------- ------------- ----------- Diluted EPS $ 739,000 5,196,598 $ 0.14 For the three months ended October 31, 2007 ------------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- ----------- Net Income $ 755,000 =========== Basic EPS $ 755,000 5,334,878 $ 0.14 Effect of dilutive securities: Convertible preferred stock 0 20,500 ----------- ------------- ----------- Diluted EPS $ 755,000 5,355,378 $ 0.14 For the six months ended October 31, 2007 ------------------------------------------- Income Shares Per-share (Numerator) (Denominator) Amount ----------- ------------- ----------- Net Income $1,578,000 =========== Basic EPS $1,578,000 5,335,272 $ 0.30 Effect of dilutive securities: Convertible preferred stock 0 20,500 ----------- ------------- ----------- Diluted EPS $1,578,000 5,355,772 $ 0.29
Note 6 Retirement Benefit Plan On January 1, 1998, the Company adopted the George Risk Industries, Inc. Retirement Savings Plan (the "Plan"). The Plan is a defined contribution savings plan designed to provide retirement income to eligible employees of the corporation. The Plan is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. Matching contributions by the Company of approximately $4,000 and $3,000 were paid during each quarter ending October 31, 2008 and 2007, respectively. Likewise, the Company paid matching contributions of approximately $6,000 and $7,000 during each six- month period ending October 31, 2008 and 2007, respectively. There were no discretionary contributions paid during either the quarters or six-month periods ending October 31, 2008 and 2007, respectively. 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 condensed consolidated financial statements, and with the George Risk Industries' audited financial statements and discussion for the fiscal year ended April 30, 2008. Liquidity and capital resources ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Operating - --------- Net cash decreased $696,000 for the six months ended October 31, 2008, while, for the same period last year, net cash decreased $314,000. Accounts re- ceivable decreased $59,000 for the current six months and decreased $194,000 for the same period last year. At October 31, 2008, 80.25% of the receiv- ables were considered current (less than 45 days) and 1.65% of the total were over 90 days past due. Inventory decreased $54,000 for the current six months, while it decreased $48,000 for the same period last year. The main reasons for the increase in cash expenditures towards inventory is that the actual cost of raw materials is more than it was for the same period last year. The wire that we purchase for the leads on our security switches is made with copper. The raw plastic we purchase to make our molded casings has also risen substantially. Changes in prepaid expenses in regards to cash flow decreased by $9,000 and $8,000 for the six-month periods ending Oct- ober 31, 2008 and 2007, respectively. Cash towards income tax overpayment increased $248,000 for the six months ended October 31, 2008 and it increased $240,000 for the same period last year. Management paid income tax estimated based on prior year taxable income. For the six months ended October 31, 2008, accounts payable increased $31,000, and decreased $29,000 decrease for the same period ended Oct- ober 31, 2007. The current increase accounts for the increases in the cost of raw materials. Accrued expenses decreased $109,000 for the six months ended October 31, 2008, as it increased by $33,000 for the same period last year. This is due to reduced sales commissions and fewer employees. Investing - --------- As for our investment activities, $39,000 was spent during the current six- month period and $172,000 was spent during the six months ended October 31, 2007. Additionally, the Company continues to purchase marketable securities, which include municipal bonds and quality stocks. Cash spent on purchases of marketable securities for the six months ended October 31, 2008 was $792,000 and $2,078,000 was spent for the corresponding period last year. We use "money manager" accounts for most stock transactions. By doing this, the Company gives an independent third party firm, who are experts in this field, permission to buy and sell stocks at will. The Company pays a quarterly service fee based on the value of the investments. Furthermore, the Company continues to purchase back its common stock when the opportunity arises. For the six months ended October 31, 2008, the Company purchased $2,000 worth of treasury stock and $10,000 worth was bought back for the six months ended October 31, 2007. We have been actively searching for stockholders that have been "lost" over the years. The payment of dividends over the last five fiscal years has also prompted many stockholders and/or their relatives and descendants to sell back their stock to the Company. Financing - --------- Cash flows from financing activities decreased by $802,000 for the six months ending October 31, 2008. That figure consists of the payment of dividends during the second quarter. The company declared a dividend of $0.17 per share of common stock on September 30, 2008 and these dividends were paid by October 31, 2008. As for the prior year numbers, net cash used in financing activities was $829,000 for the six months ending October 31, 2007. A dividend of $0.17 per common share was also declared and paid during the second fiscal quarter last year. The following is a list of ratios to help analyze George Risk Industries' performance: For the quarter ended October 31, 2008 2007 --------------------------- Working capital $ 24,987,000 $ 26,703,000 Current ratio 40.852 38.823 Quick ratio 32.563 33.786
Results of Operations ~~~~~~~~~~~~~~~~~~~~~ Net sales were $2,470,000 for the quarter ended October 31, 2008, which is a 17.9% decrease from the corresponding quarter last year. Year-to-date net sales were $4,914,000 at October 31, 2008, which is a 21.3% decrease from the same period last year. The Company is tied to the housing industry and with that industry not performing well over the last year or so, we are seeing a decrease in our sales also. Cost of goods sold was 47.6% of net sales for the quarter ended October 31, 2008 and 49.3% for the same quarter last year. Year-to-date cost of goods sold percentages were 48.2% for the current six months and 48.3% for the corresponding six months last year. Having rel- atively the same percentage of cost of goods sold from period to period shows that we keep our costs in line. Our goal, as always, is to have a cost of goods sold percentage somewhere between 45% and 50%. As a whole, our cost of materials and direct labor fluctuate in proportion to how our sales vary. Operating expenses were 27.6% of net sales for the quarter ended October 31, 2008 as compared to 23.3 % for the corresponding quarter last year. Year-to- date operating expenses were 28.4% of net sales for the six months ended Oct- ober 31, 2008, while they were 23.3% for the same period last year. Keeping operating expenses under 30% of net sales, as the company has been able to achieve over the years, shows that management keeps a close eye on these ex- penses from year to year. Income from operations for the quarter ended Oct- ober 31, 2008 was at $613,000, which is a 25.5% decrease from the cor- responding quarter last year, which had income from operations of $823,000. Income from operations for the six months ended October 31, 2008 was at $1,147,000, which is a 35.5% decrease from the corresponding six months last year, which had income from operations of $1,778,000. Other income and expenses showed losses of $209,000 and $148,000 for the quarter and six months ended October 31, 2008, respectively. The other in- come and expense numbers for last year also showed gains of $262,000 for the quarter and $564,000 for the six months ending October 31, 2007. Dividend and interest income was down 6.1% for the current quarter and was down 2% for the current six-month period when compared to the same time periods last year. Gain and loss on investments is where the biggest loss is in this category. Management wrote down $302,000 for impaired investments for the current quarter. This is compared to writes down of $2,000 for the same quarter last year. For the year-to-date ended October 31, 2008, management wrote down $405,000 for impaired investments and $7,000 was wrote down for the same period last year. Net income for the quarter ended October 31, 2008 was at $345,000, a 54.3% decrease from the corresponding quarter last year, which showed net income of $755,000. Net income for the six months ended October 31, 2008 was $739,000, a 53.2% decrease from the same period last year. Net income for the six months ended October 31, 2007 was $1,578,000. Earnings per common share for the quarter ended October 31, 2008 were $0.07 per share and $0.14 per share for the year-to-date numbers. EPS for the quarter and six months ended Oct- ober 31, 2007 were $0.14 per share and $0.30 per share, respectively. New Product Development ~~~~~~~~~~~~~~~~~~~~~~~ Sales have been strong and continue to increase on our HVAC Kits designed to protect air conditioning coils. One of our large distributors is doing a large customer promotion pairing the HVAC Kit with a complimentary product from another manufacturer. Our industrial track mount overhead switch is now in production, and all seems to be going well with this new product. We expect sales to increase considerably once the spring construction season starts. Engineering continues to develop our wireless line. This includes pool alarms, security sensors, and environmental sensors. A new, lower cost hold-up switch and basement window bar is now being developed. Discontinued components are the reason for having to develop alternatives to these two products. We are also expanding our line of water sensors, including the Pump Gard and several custom products. While our competition continues to only carry the standard types of security switches, we are increasingly seeing order for custom-built products. Our competitors are discontinuing specialty products or are placing ordering stipulations that distributors are not willing to meet. This is keeping the GRI name on the forefront of our customer's minds and increases the calls coming into our factory. Recently Issued Accounting Pronouncements ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting prin- ciples (GAAP) in the United States (the GAAP hierarchy). The statement will become effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. Other Information ~~~~~~~~~~~~~~~~~ There are no known seasonal trends with any of our products, since we sell to distributors and OEM manufacturers. The products are tied to the housing industry and will fluctuate with building trends. GEORGE RISK INDUSTRIES, INC. PART I. FINANCIAL INFORMATION Item 3. Controls and Procedures (a) Information required by Item 307 Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded that our disclosure controls and procedures are effective based on their evaluation of these controls and procedures required by para- graph (b) of Exchange Act Rules 13a-15 or 15d-15. (b) Information required by Item 308 This disclosure is not yet required. Item 3A(T). Controls and Procedures Evaluation of disclosure controls and procedures: - ------------------------------------------------- Based on their evaluation of our disclosure controls and procedures (as de- fined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of Oct- ober 31, 2008, our president and chief executive officer and our chief financial officer have concluded that our disclosure controls and procedures are effective such that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and (ii) accumulated and communi- cated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding dis- closure. A control system cannot provide absolute assurance, however, that the objectives of the control systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Changes in internal controls over financial reporting: - ------------------------------------------------------ There was no change in our internal controls over financial reporting that occurred during the period covered by this report, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. Management's Annual Report on Internal Control over Financial Reporting: - ------------------------------------------------------------------------ Our management is responsible for establishing and maintaining adequate in- ternal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of fi- nancial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Be- cause of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide no reasonable assurance of achieving their control objectives. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be- come inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management, including our principal executive officer and principal accounting officer, conducted an evaluation of the effectiveness of our in- ternal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its evaluation, our man- agement concluded that as of October 31, 2008 our internal control over financial reporting is effective. This quarterly report does not include an attestation report of the Corpor- ation's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Corporation's registered public accounting firm pursuant to temporary rules of the SEC that permit the Corporation to provide only the management's report in this quarterly report. 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. Exhibits 31. Certifications pursuant to Rule 13a-14(a) 31.1 Certification of the Chief Executive Officer 31.2 Certification of the Chief Financial Officer 32. Certifications pursuant to 18 U.S.C. 1350 32.1 Certification of the Chief Executive Officer 32.2 Certification of the Chief Financial Officer B. Reports on Form 8-K No 8-K reports were filed during the quarter ended October 31, 2008. 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 12-15-2008 By: /s/ Kenneth R. Risk Kenneth R. Risk President and Chairman of the Board Date 12-15-2008 By: /s/ Stephanie M. Risk Stephanie M. Risk Chief Financial Officer and Controller EX-31 2 ex31-1oct2008.txt CERTIFICATION PURSUANT TO RULE 13A-14(A) OF CEO Exhibit 31.1 CERTIFICATION OF KENNETH R. RISK, CHIEF EXECUTIVE OFFICER, PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Kenneth R. Risk, certify that: (1) I have reviewed this quarterly report on Form 10Q of George Risk Industries, Inc; (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; (4) The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's dis- closure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter that has mater- ially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and (5) The small business issuer's other certifying officer and I have dis- closed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report finan- cial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: December 15, 2008 By: /s/ Kenneth R. Risk Kenneth R. Risk Chief Executive Officer EX-31 3 ex31-2oct2008.txt CERTIFICATION PURSUANT TO RULE 13A-14(A) OF CFO Exhibit 31.2 CERTIFICATION OF STEPHANIE M. RISK, CHIEF FINANCIAL OFFICER, PURSUANT TO RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Stephanie M. Risk, certify that: (1) I have reviewed this quarterly report on Form 10Q of George Risk Industries, Inc; (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; (3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; (4) The small business issuer's other certifying officer and I are re- sponsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our super- vision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's dis- closure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter that has mater- ially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and (5) The small business issuer's other certifying officer and I have dis- closed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report finan- cial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: December 15, 2008 By: /s/ Stephanie M. Risk Stephanie M. Risk Chief Financial Officer EX-32 4 ex32-1oct2008.txt CERTIFICATION PURSUANT TO 18 U.S.C. 1350 OF CEO Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Kenneth R. Risk, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of George Risk Industries, Inc. on Form 10Q dated October 31, 2008 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10QSB fairly presents in all material respects the financial condition and results of operations of George Risk Industries, Inc. Date: December 15, 2008 By: /s/ Kenneth R. Risk Kenneth R. Risk President and Chief Executive Officer EX-32 5 ex32-2oct2008.txt CERTIFICATION PURSUANT TO 18 U.S.C. 1350 OF CFO Exhibit 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Stephanie M. Risk, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of George Risk Industries, Inc. on Form 10Q dated October 31, 2008 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10QSB fairly presents in all material respects the financial condition and results of operations of George Risk Industries, Inc. Date: December 15, 2008 By: /s/ Stephanie M. Risk Stephanie M. Risk Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----