UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
(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, 2004
--------------------------------------
[ ] 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
December 15, 2004 was 5,401,803.
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, 2004, are attached hereto.
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEET
OCTOBER 31, 2004
ASSETS
Current Assets
Cash and cash equivalents $ 4,691,000
Marketable securities (Note 2) 11,207,000
Accounts receivable:
Trade, net of $50,000 doubtful account allowance 2,027,000
Other 5,000
Inventories (Note 3) 2,172,000
Prepaid expenses 100,000
Deferred income taxes 94,000
------------
Total Current Assets $20,296,000
Property and Equipment, net at cost $ 825,000
Other Assets
Investment in Land Limited Partnership, at cost 200,000
Projects in process 26,000
Other 29,000
------------
Total Other Assets $ 255,000
TOTAL ASSETS $21,376,000
============
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEET
OCTOBER 31, 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable, trade $ 64,000
Dividends payable 74,000
Accrued expenses
Payroll and related expenses 336,000
Property taxes (4,000)
Income tax payable 169,000
------------
Total Current Liabilities $ 639,000
Long-Term Liabilities
Deferred income taxes 27,000
------------
Total Long-Term Liabilities $ 27,000
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 (879,000)
Retained earnings 20,659,000
Less: cost of treasury stock, 3,100,304 shares,
at cost (1,763,000)
------------
Total Stockholders' Equity $20,710,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $21,376,000
============
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
Three months Six months Three months Six months
ended ended ended ended
October 31, October 31, October 31, October 31,
2004 2004 2003 2003
----------------------------------------------------
Net Sales $ 3,277,000 $ 6,373,000 $ 3,406,000 $ 6,428,000
Less: cost of goods sold (1,501,000) (2,998,000) (1,748,000) (3,160,000)
------------ ------------ ------------ ------------
Gross Profit $ 1,776,000 $ 3,375,000 $ 1,658,000 $ 3,268,000
Operating Expenses:
General and
administrative 169,000 339,000 174,000 343,000
Selling 590,000 1,210,000 578,000 1,125,000
Engineering 23,000 37,000 19,000 36,000
Rent paid to related
parties 11,000 26,000 11,000 26,000
------------ ------------ ------------ ------------
Total Operating Expenses $ 793,000 $ 1,612,000 $ 782,000 $ 1,530,000
Income From Operations 983,000 1,763,000 876,000 1,738,000
Other Income (Expense)
Other (1,000) (1,000) 0 (4,000)
Dividend and interest
income 69,000 151,000 72,000 159,000
Gain (loss) on sale of
investments 27,000 10,000 7,000 28,000
Gain (loss) on sale of
assets 0 0 4,000 4,000
------------ ------------ ------------ ------------
$ 95,000 $ 160,000 $ 83,000 $ 187,000
Income Before Provisions
for Income Tax 1,078,000 1,923,000 959,000 1,925,000
Provisions for Income Tax (451,000) (803,000) (401,000) (803,000)
------------ ------------ ------------ ------------
Net Income $ 627,000 $ 1,120,000 $ 558,000 $ 1,122,000
Retained Earnings,
beginning of period $20,572,000 $20,079,000 $18,232,000 $17,668,000
Less: Cash Dividends
Common Stock ($0.10 per
share) (540,000) (540,000) 0 0
Retained Earnings,
end of period $20,659,000 $20,659,000 $18,790,000 $18,790,000
============ ============ ============ ============
Income Per Share of Common
Stock: (Note 6)
Basic $ .12 $ .21 $ .10 $ .21
Assuming Dilution $ .12 $ .21 $ .10 $ .21
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF COMPREHENSIVE INCOME
Three months Six months Three months Six months
ended ended ended ended
October 31, October 31, October 31, October 31,
2004 2004 2003 2003
-----------------------------------------------------
Net Income $ 627,000 $ 1,120,000 $ 558,000 $ 1,122,000
------------ ------------ ------------ ------------
Other Comprehensive Income, net of tax
Unrealized gain (loss) on securities:
Unrealized holding
gains (losses) arising
during period 92,000 33,000 211,000 442,000
Reclassification adjustment
for (gains) losses included
in net income (28,000) (9,000) (8,000) (28,000)
Income tax expense related
to other comprehensive
income 27,000 10,000 85,000 173,000
------------ ------------ ------------ ------------
Other Comprehensive
Income $ 91,000 $ 34,000 $ 288,000 $ 587,000
Comprehensive Income $ 769,000 $ 1,564,000 $ 846,000 $ 1,709,000
============ ============ ============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
Three months Six months Three months Six months
ended ended ended ended
October 31, October 31, October 31, October 31,
2004 2004 2003 2003
-----------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 627,000 $ 1,120,000 $ 558,000 $ 1,122,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 51,000 100,000 57,000 114,000
(Gain) 1oss on sale of
investments (28,000) (9,000) (8,000) (28,000)
(Gain) loss on assets 0 0 (4,000) (4,000)
Change in unrealized gain/
(loss) on investments 92,000 33,000 211,000 42,000
Changes in assets and liabilities:
(Increase) decrease in:
Investments/securities (273,000) (441,000) (319,000) (707,000)
Accounts receivable (189,000) (292,000) (303,000) (444,000)
Inventories 210,000 207,000 248,000 174,000
Prepaid expenses 0 (40,000) (5,000) 33,000
Receivables-officers
and employees (1,000) 1,000 0 1,000
Increase (decrease) in:
Accounts payable (44,000) (27,000) (65,000) (36,000)
Dividends payable 73,000 73,000 0 0
Accrued expenses 89,000 18,000 107,000 57,000
Income tax payable (54,000) 298,000 (333,000) 69,000
------------ ------------ ------------ ------------
Net cash provided by (used in)
operating activities $ 553,000 $ 1,041,000 $ 144,000 $ 791,000
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from sale of
assets 0 0 (4,000) (4,000)
Other assets (42,000) (9,000) 32,000 64,000
(Purchase) of property
and equipment (26,000) (90,000) (70,000) (134,000)
Proceeds from sale of
marketable securities 168,000 232,000 433,000 793,000
(Purchase) of marketable
securities (140,000) (224,000) (429,000) (769,000)
------------ ------------ ------------ ------------
Net cash provided by (used in)
investing activities $ (40,000) $ (91,000) $ (30,000) $ (42,000)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on
long-term debt 0 0 0 (40,000)
Proceeds from sale of
property and equipment 0 0 4,000 4,000
Dividends issued (540,000) (540,000) 0 0
------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities $ (540,000) $ (540,000) $ 4,000 $ (36,000)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (27,000) $ 410,000 $ 118,000 $ 713,000
============ ============ ============ ============
Cash and cash equivalents,
beginning of period $ 4,717,000 $ 4,280,000 $ 3,294,000 $ 2,699,000
Cash and cash equivalents,
end of period $ 4,690,000 $ 4,690,000 $ 3,412,000 $ 3,412,000
GEORGE RISK INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2004
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 debt and equity securities and government and municipal bonds
are stated at fair market value, are recorded at average cost, and are class-
ified 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 real-
ized. Dividend and interest income are accrued as earned.
Marketable securities and unrealized gains and losses consist of the
following as of October 31, 2004 and October 31, 2003:
Cost Basis $ 12,086,000 $ 11,341,000
Market Value 11,207,000 10,388,000
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Net Unrealized Gain (Loss) $ (879,000) $ (953,000)
============= =============
Gross unrealized gain $ 492,000 $ 450,000
============= =============
Gross unrealized loss $ (1,370,000) $ (1,403,000)
============= =============
Additionally, in accordance with SFAS 115, if we determine that a
marketable security has an other than temporary decline in fair value,
generally defined as when our cost basis exceeds the fair value for approxi-
mately one year. When this happens we will decrease the cost of the market-
able security to the new fair value and recognize the loss as real. We
periodically evaluate our investments to determine if impairment changes are
required.
Note 3 Inventories
At October 31, 2004 and October 31, 2003, respectively, inventories con-
sisted of the following:
Raw Materials $ 1,528,000 $ 1,547,000
Work in Process 458,000 464,000
Finished Goods 188,000 236,000
Warehouse in England 68,000 80,000
------------- -------------
$ 2,242,000 $ 2,326,000
Less: allowance for obsolete
inventory (70,000) (70,000)
------------- -------------
Net Inventories $ 2,172,000 $ 2,256,000
============= =============
Note 4 Business Segments
The following is financial information relating to industry segments:
For the quarter ended
October 31,
2004 2003
-----------------------------
Net revenue:
Pool alarm products $ 298,000 $ 282,000
Keyboard products 137,000 111,000
Security alarm and other products 2,842,000 3,013,000
------------- -------------
Total net revenue $ 3,277,000 $ 3,406,000
Income from operations:
Pool alarm products $ 90,000 $ 72,000
Keyboard products 41,000 29,000
Security alarm and other products 852,000 775,000
------------- -------------
Total income from operations $ 983,000 $ 876,000
Identifiable assets:
Pool alarm products $ 284,000 $ 273,000
Keyboard products 252,000 194,000
Security alarm and other products 4,135,000 4,301,000
Corporate general 16,705,000 14,626,000
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Total assets $ 21,376,000 $ 19,394,000
Depreciation and amortization:
Pool alarm products $ 2,000 $ 2,000
Keyboard products 0 1,000
Security alarm and other products 30,000 35,000
Corporate general 19,000 19,000
------------- -------------
Total depreciation and amortization $ 51,000 $ 57,000
Capital expenditures:
Pool alarm products $ 0 $ 0
Keyboard products 0 0
Security alarm and other products 4,000 51,000
Corporate general 22,000 19,000
------------- -------------
Total capital expenditures $ 26,000 $ 70,000
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 October 31, 2004
-------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $ 627,000
===========
Basic EPS $ 627,000 5,402,528 $ 0.12
Effect of dilutive securities:
Convertible preferred stock 0 26,750
----------- ------------- -----------
Diluted EPS $ 627,000 5,429,278 $ 0.12
For the six months ended October 31, 2004
------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $1,120,000
===========
Basic EPS $1,120,000 5,402,528 $ 0.21
Effect of dilutive securities:
Convertible preferred stock 0 26,750
------------ ------------- ------------
Diluted EPS $1,120,000 5,429,278 $ 0.21
For the three months ended October 31, 2003
--------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $ 558,000
===========
Basic EPS $ 558,000 5,402,528 $ 0.10
Effect of dilutive securities:
Convertible preferred stock 0 26,750
----------- ------------- ------------
Diluted EPS $ 558,000 5,429,278 $ 0.10
For the six months ended October 31, 2003
------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $1,122,000
===========
Basic EPS $1,122,000 5,402,528 $ 0.21
Effect of dilutive securities:
Convertible preferred stock 0 26,750
----------- ------------- ------------
Diluted EPS $1,122,000 5,429,278 $ 0.21
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 financial statements, and with the George Risk Industries' audited
financial statements and discussion for the fiscal year ended April 30, 2004.
Net cash decreased $27,000 during the quarter ended October 31, 2004 as com
pared to an increase of $118,000 during the corresponding quarter last year.
As for the year-to-date numbers, net cash increased $410,000 for the six
months ended October 31, 2004, while, for the same period last year, net cash
increased $713,000. Investments and marketable securities increased $273,000
for the quarter while it increased $441,000 for the year-to-date data. The
reason for the increases in the investment accounts is that we have started
to put some excess cash into the marketable securities, but not at the rapid
pace that we were doing a few years ago. Inventories decreased $210,000
during the current quarter as compared to a $248,000 decrease last year. The
year-to-date numbers show the inventory decreased $207,000 for the current
year, while it decreased $174,000 for the same period last year. The con-
tinued decreases in inventory go hand in hand with the slight decreases in
sales that we are showing. Accounts receivable increased $189,000 during the
current quarter as compared to a $303,000 increase for the corresponding
quarter last year. The year-to-date figures show an increase of $292,000 for
the current six months and a $444,000 increase for the same period last year.
At October 31, 2004, 73.64% of the receivables were considered current (less
than 45 days) and 3.02% of the total were over 90 days past due.
At the quarter ended October 31, 2004, accounts payable decreased $44,000 as
compared to a $65,000 decrease for the same quarter the year before. As for
year-to-date numbers, there was a $27,000 decrease for the six months ended
October 31, 2004, and a $36,000 increase for the same period ended Oct-
ober 31, 2003. Dividends payable increased $73.000 for the three and six
months ending October, 31, 2004. In comparison there was no cash flow for
dividends payable for the three and six months ending October 31, 2003 since
this is the first year that the company has declared a dividend. Income tax
payable decreased $54,000 for the quarter ended October 31, 2003, while it
decreased $333,000 for the quarter ended October 31, 2003. For the six
months ended October 31, 2004, income tax payable increased $298,000, as it
increased $69,000 for the corresponding period a year ago.
The following is a list of ratios to help analyze George Risk Industries'
performance:
For the quarter ended October 31,
2004 2003
----------------------------------
Working capital $19,657,000 $17,644,000
Current ratio 31.762 29.140
Quick ratio 28.052 25.195
Net sales were $3,277,000 for the quarter ended October 31, 2004, which is a
3.8% decrease from the corresponding quarter last year. Year-to-date net
sales were $6,373,000 at October 31, 2004, which is a 0.9% decrease from the
same period last year. Cost of goods sold was 45.8% of net sales for the
quarter ended October 31, 2004 and 51.3% for the same quarter last year.
Year-to-date cost of goods sold percentages were 47.0% for the current six
months and 49.2% 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 24.2% of net sales for the quarter ended October 31,
2004 as compared to 23.0% for the corresponding quarter last year. Year-to-
date operating expenses were 25.3% of net sales for the six months ended Oct-
ober 31, 2004, while they were 23.7% for the same period last year. Income
from operations for the quarter ended October 31, 2004 was at $983,000, which
is a 12.2% increase from the corresponding quarter last year, which had
income from operations of $876,000. Income from operations for the six
months ended October 31, 2004 was at $1,763,000, which is a 1.44% increase
from the corresponding six months last year, which had income from operations
of $1,738,000.
Other income and expenses showed gains of $95,000 and $160,000 for the
quarter and six months ended October 31, 2004, respectively. The other in-
come and expense numbers for last year also showed gains of $83,000 for the
quarter and $187,000 for the six months ending October 31, 2003. Our divid-
end and interest income is down slightly, but we have not had any big losses
on the sale of our investments. We have reorganized the way and what we are
investing in by using money manager accounts. This has seemed to make a
positive difference in not accumulating big losses like we have let happen in
the past. Net income for the quarter ended October 31, 2004 was at
$627,000, a 12.4% increase from the corresponding quarter last year, which
showed net income of $558,000. Net income for the six months ended Oct-
ober 31, 2004 was $1,120,000, a 0.2% decrease from the same period last year.
Net income for the six months ended October 31, 2003 was $1,122,000. Earn-
ings per common share for the quarter ended October 31, 2004 was $0.12 per
share and $0.21 per share for the year-to-date numbers. EPS for the quarter
and six moths ended October 31, 2003 was $0.10 per share and $0.21 per share,
respectively.
A dividend of $0.10 per common share was declared during this current quarter
of discussion. The dividend was paid to common stockholders of record as of
September 30, 2004 and the payment date was October 31, 2004. The reason
that there is still a dividend payable on the books as of October 31, 2004 is
that we did not have all the information that was needed in order to process
checks to some stockholders. Once this information is obtained, a dividend
check is sent out if they were a stockholder as of the date of record.
George Risk Industries does have three distinct business segments, security
alarm products (and other items), keyboard products, and pool alarm products
that are subject to disclosure under SFAS No. 131. See the notes to the
financial statements in order to examine the segments.
New products ready for production include the NC-20 nurse call, the S-40
spacer for the 4460, rare earth inserts for the 100 series switches, and the
D.P.A.R.M.hardwired DPA-10.
Research and development projects in process are the 12-key keypad, a sash
magnet, a single gang raceway box, small raceway, a closed loop glass break
switch, and updating the double gang raceway box for the smaller raceway.
They continue to work on the wireless pool alarm and contacts. SLA parts
will be ordered for the pool alarm inserts. And work has progressed on the
dome and roller ball molds.
Engineering is proceeding with the paperwork that is necessary for submitting
the high security switch to Underwriter's Laboratories (U.L.).
Tool and die's projects include the sash magnet, CT collar, a surface mount
pre-wire, a smoke box, a cover for the small raceway, and end caps.
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 our products, since we sell to
distributors and OEM manufacturers. The products are tied to the housing
industry and will fluctuate with building trends.
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.
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 Offer
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, 2004
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 12-15-2004 By: /s/ Kenneth R. Risk
Kenneth R. Risk
President and Chairman of the Board
Date 12-15-2004 By: /s/ Stephanie M. Risk
Stephanie M. Risk
Chief Financial Officer and Controller