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 quarterly period ended January 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)
(308) 235-4645
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of the Registrant's Common Stock outstanding, as of
March 17, 2008 was 5,327,581.
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 nine month period
ended January 31, 2008, are attached hereto.
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
January 31, April 30,
2008 2007
------------ ------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 4,640,000 $ 4,611,000
Marketable securities (Note 2) 17,465,000 16,738,000
Accounts receivable:
Trade, net of $50,000 doubtful
account allowance 1,430,000 1,925,000
Other 1,000 3,000
Note receivable, current 3,000 0
Income tax overpayment 287,000 137,000
Inventories (Note 3) 3,057,000 3,060,000
Prepaid expenses 72,000 125,000
Deferred income taxes 333,000 115,000
------------ ------------
Total Current Assets $27,288,000 $26,714,000
Property and Equipment, net at cost $ 870,000 $ 828,000
Other Assets
Investment in Land Limited Partnership,
at cost 200,000 200,000
Projects in process 44,000 75,000
Note receivable 73,000 60,000
Other 0 18,000
------------ ------------
Total Other Assets $ 317,000 $ 353,000
TOTAL ASSETS $28,475,000 $27,895,000
============ ============
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
January 31, April 30,
2008 2007
------------ ------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable, trade $ 75,000 $ 127,000
Dividends payable 239,000 161,000
Accrued expenses
Payroll and other expenses 267,000 337,000
Property taxes 2,000 0
------------ ------------
Total Current Liabilities $ 583,000 $ 625,000
Long-Term Liabilities
Notes payable 25,000 25,000
Deferred income taxes 49,000 74,000
------------ ------------
Total Long-Term Liabilities $ 74,000 $ 99,000
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 (154,000) 165,000
Retained earnings 27,428,000 26,430,000
Treasury stock, 3,171,104 shares,
at cost (2,141,000) (2,109,000)
------------ ------------
Total Stockholders' Equity $27,818,000 $27,171,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $28,475,000 $27,895,000
============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
Three months Nine months Three months Nine months
ended ended ended ended
January 31, January 31, January 31, January 31,
2008 2008 2007 2007
---------------------------------------------------
Net Sales $ 2,572,000 $ 8,818,000 $ 3,045,000 $10,087,000
Less: cost of goods sold (1,396,000) (4,410,000) (1,384,000) (4,793,000)
------------ ------------ ------------ ------------
Gross Profit $ 1,176,000 $ 4,408,000 $ 1,661,000 $ 5,294,000
Operating Expenses:
General and
administrative 188,000 549,000 180,000 517,000
Selling 500,000 1,520,000 613,000 1,865,000
Engineering 19,000 64,000 19,000 53,000
Rent paid to related
parties 12,000 40,000 12,000 40,000
------------ ------------ ------------ ------------
Total Operating Expenses $ 719,000 $ 2,173,000 $ 824,000 $ 2,475,000
Income From Operations 457,000 2,235,000 837,000 2,819,000
Other Income (Expense)
Other (2,000) 1,000 1,000 6,000
Dividend and interest
income 254,000 655,000 225,000 502,000
Gain (loss) on sale of
investments (112,000) 34,000 7,000 67,000
Gain (loss) on sale of
assets 0 15,000 0 0
------------ ------------ ------------ ------------
$ 140,000 $ 705,000 $ 233,000 $ 575,000
Income Before Provisions
for Income Tax 597,000 2,940,000 1,070,000 3,394,000
Provisions for Income Tax
Current Expense 324,000 1,048,000 448,000 1,418,000
Deferred tax expense
(benefit) (54,000) (13,000) 32,000 6,000
------------ ------------ ------------ ------------
Total Income Tax Expense 270,000 1,035,000 480,000 1,424,000
Net Income $ 327,000 $ 1,905,000 $ 590,000 $ 1,970,000
Retained Earnings,
beginning of period $27,101,000 $26,430,000 $24,829,000 $24,250,000
Less: Cash Dividends on
Common Stock
($0.17 per share) 0 (907,000) 0 0
($0.15 per share) 0 0 0 (801,000)
Retained Earnings,
end of period $27,428,000 $27,428,000 $25,419,000 $25,419,000
Income Per Share of Common
Stock (Note 5):
Basic and diluted $0.06 $0.36 $0.11 $0.37
Weighted Average Number of
Common Shares Outstanding
Basic 5,333,116 5,334,553 5,340,091 5,341,955
Diluted 5,353,616 5,355,053 5,360,591 5,362,455
GEORGE RISK INDUSTRIES, INC.
STATEMENTS OF COMPREHENSIVE INCOME
Three months Nine months Three months Nine months
ended ended ended ended
January 31, January 31, January 31, January 31,
2008 2008 2007 2007
----------------------------------------------------
Net Income $ 327,000 $ 1,905,000 $ 590,000 $ 1,970,000
------------ ------------ ------------ ------------
Other Comprehensive Income, net of tax
Unrealized gain (loss) on securities:
Unrealized holding
gains (losses) arising
during period (336,000) (320,000) 121,000 253,000
Reclassification adjustment
for (gains) losses included
in net income 112,000 (34,000) (7,000) (67,000)
Income tax expense related
to other comprehensive
income 94,000 148,000 (48,000) (78,000)
------------ ------------ ------------ ------------
Other Comprehensive
Income $ (130,000) $ (206,000) $ 66,000 $ 108,000
Comprehensive Income $ 197,000 $ 1,699,000 $ 656,000 $ 2,078,000
============ ============ ============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
Three months Nine months Three months Nine months
ended ended ended ended
January 31, Januryr 31, January 31, January 31,
2008 2008 2007 2007
----------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 327,000 $ 1,905,000 $ 590,000 $ 1,970,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 42,000 128,000 46,000 135,000
(Gain) loss on sale of
investments 112,000 (34,000) (7,000) (67,000)
(Gain) 1oss on sale of
assets 0 (15,000) 0 0
Deferred income taxes (295,000) (243,000) 84,000 96,000
Changes in assets and
liabilities:
(Increase) decrease in:
Accounts receivable 301,000 495,000 134,000 221,000
Inventories (45,000) 3,000 (372,000) (767,000)
Prepaid expenses 45,000 53,000 (50,000) (33,000)
Employee receivables 0 3,000 0 0
Notes receivable 1,000 1,000 0 0
Income tax overpayment 90,000 (150,000) 0 0
Increase (decrease) in:
Accounts payable (23,000) (52,000) 25,000 50,000
Accrued expenses (100,000) (68,000) (145,000) (134,000)
Income tax payable 0 0 43,000 473,000
------------ ------------ ------------ ------------
Net cash provided by (used in)
operating activities $ 455,000 $ 2,026,000 $ 348,000 $ 1,944,000
CASH FLOWS FROM INVESTING
ACTIVITIES:
Other assets
manufactured (5,000) 49,000 (22,000) (18,000)
(Purchase) of property
and equipment 0 (173,000) (23,000) (75,000)
Proceeds from sale of
marketable securities 1,659,000 3,772,000 1,557,000 4,618,000
(Purchase) of marketable
securities (1,746,000) (4,784,000) (2,060,000) (6,844,000)
(Purchase) of treasury
stock (20,000) (32,000) (19,000) (58,000)
------------ ------------ ------------ ------------
Net cash provided by (used in)
investing activities $ (112,000) $(1,168,000) $ (567,000) $(2,377,000)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal payments on
long-term debt 0 0 0 (8,000)
Dividends paid 0 (829,000) (2,000) (733,000)
------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities $ 0 $ (829,000) $ (2,000) $ (741,000)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 343,000 $ 29,000 $ (221,000) $(1,174,000)
Cash and cash equivalents,
beginning of period $ 4,297,000 $ 4,611,000 $ 4,542,000 $ 5,495,000
------------ ------------ ------------ ------------
Cash and cash equivalents,
end of period $ 4,640,000 $ 4,640,000 $ 4,321,000 $ 4,321,000
============ ============ ============ ============
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Income taxes $ 232,000 $ 1,198,000 $ 405,000 $ 945,000
Interest expense $ 6,000 $ 6,000 $ 0 $ 0
Supplemental Disclosure of Noncash Investing and Financing Activities:
Note receivable issued
in exchange of property
and equipment $ 0 $ 17,500 $ 0 $ 0
GEORGE RISK INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008
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. 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, 2007 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 February
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 January 31, 2008, investments available-for-sale consisted of the
following:
Gross Gross
Cost Unrealized Unrealized Fair
Basis Gains Losses Value
------------ ------------ ------------ ------------
Municipal bonds $ 8,478,000 $ 93,000 $ (135,000) $ 8,436,000
Federal agency mortgage
backed securities $ 576,000 $ 5,000 $ (1,000) $ 580,000
Corporate bonds $ 504,000 $ 4,000 $ (23,000) $ 485,000
Equity securities $ 8,172,000 $ 534,000 $ (742,000) $ 7,964,000
------------ ------------ ------------ ------------
Total $17,730,000 $ 636,000 $ (901,000) $17,465,000
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 Company 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 $16,000 for the quarter ended January 31, 2008 and none for the
quarter ended January 31, 2007.
The following table shows the gross unrealized losses and fair value of
the Company's 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 continuous unrealized loss
position, at January 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
$ 604,000 $ (11,000) $2,631,000 $ (83,000) $3,235,000 $ (94,000)
Federal agency mortgage backed securities
-- -- $ 200,000 -- $ 200,000 --
Corporate bonds
-- -- $ 46,000 $ (4,000) $ 46,000 $ (4,000)
Equity securities
$2,768,000 $(504,000) $1,098,000 $ (299,000) $3,866,000 $(803,000)
----------- ---------- ----------- ----------- ----------- ----------
Total
$3,372,000 $(515,000) $3,975,000 $ (386,000) $7,347,000 $(901,000)
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 January 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 matur-
ity, the Company does not consider these investments to be other-than-tempor-
arily impaired at January 31, 2008.
Corporate Bonds
The Company's unrealized loss on investments in corporate bonds relates to
one bond. It is at 92.37% of the cost at January 31, 2008. The contractual
term of this investment does 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 this investment until a recovery of fair value, which
may be maturity, the Company does not consider this investment to be other-
than-temporarily impaired at January 31, 2008
Marketable Equity Securities
The Company's investments in marketable equity securities consist of a wide
variety of companies. These range from growth to growth and income to for-
eign interests. Management has evaluated the individual holdings, and be-
cause of the recent decline in the stock market, does not consider these in-
vestments to be other-than-temporarily impaired at January 31, 2008.
Note 3 Inventories
At January 31, 2008 and January 31, 2007, respectively, inventories con-
sisted of the following:
Raw Materials $ 1,796,000 $ 1,830,000
Work in Process 972,000 783,000
Finished Goods 394,000 427,000
Warehouse in England 0 67,000
------------- -------------
$ 3,162,000 $ 3,107,000
Less: allowance for obsolete
inventory (105,000) (70,000)
------------- -------------
Net Inventories $ 3,057,000 $ 3,037,000
============= =============
Note 4 Business Segments
The following is financial information relating to industry segments:
For the quarter ended
January 31,
2008 2007
----------------------------
Net revenue:
Pool alarm products $ 95,000 $ 156,000
Keyboard products 41,000 344,000
Security alarm and other products 2,436,000 2,545,000
------------- -------------
Total net revenue $ 2,572,000 $ 3,045,000
Income from operations:
Pool alarm products $ 17,000 $ 43,000
Keyboard products 7,000 94,000
Security alarm and other products 433,000 700,000
------------- -------------
Total income from operations $ 457,000 $ 837,000
Identifiable assets:
Pool alarm products $ 219,000 $ 238,000
Keyboard products 165,000 446,000
Security alarm and other products 4,764,000 4,980,000
Corporate general 23,327,000 21,333,000
------------- -------------
Total assets $ 28,475,000 $ 26,997,000
Depreciation and amortization:
Pool alarm products $ 3,000 $ 3,000
Keyboard products 0 0
Security alarm and other products 31,000 33,000
Corporate general 8,000 10,000
------------- -------------
Total depreciation and amortization $ 42,000 $ 46,000
Capital expenditures:
Pool alarm products $ 0 $ 0
Keyboard products 0 0
Security alarm and other products 0 23,000
Corporate general 0 0
------------- -------------
Total capital expenditures $ 0 $ 23,000
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 January 31, 2008
-------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $ 327,000
===========
Basic EPS $ 327,000 5,333,116 $ 0.06
Effect of dilutive securities:
Convertible preferred stock 0 20,500
----------- ------------- -----------
Diluted EPS $ 327,000 5,353,616 $ 0.06
For the nine months ended January 31, 2008
--------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $1,905,000
===========
Basic EPS $1,905,000 5,334,553 $ 0.36
Effect of dilutive securities:
Convertible preferred stock 0 20,500
----------- ------------- -----------
Diluted EPS $1,905,000 5,355,053 $ 0.36
For the three months ended January 31, 2007
-------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $ 590,000
===========
Basic EPS $ 590,000 5,340,091 $ 0.11
Effect of dilutive securities:
Convertible preferred stock 0 20,500
----------- ------------- -----------
Diluted EPS $ 590,000 5,360,591 $ 0.11
For the nine months ended January 31, 2007
--------------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
----------- ------------- -----------
Net Income $1,970,000
===========
Basic EPS $1,970,000 5,341,955 $ 0.37
Effect of dilutive securities:
Convertible preferred stock 0 20,500
----------- ------------- -----------
Diluted EPS $1,970,000 5,362,455 $ 0.37
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 were paid during each quarter ending
January 31, 2008 and 2007. Likewise, the Company paid matching contributions
of $10,000 during the nine-month period ending January 31, 2008 and $12,000
during the nine-month period ending January 31, 2007. There were no dis-
cretionary contributions paid during either the quarters or nine-month per-
iods ending January 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 In-
dustries' audited financial statements and discussion for the fiscal year
ended April 30, 2007.
Liquidity and capital resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Net cash increased $343,000 during the quarter ended January 31, 2008 as it
decreased $221,000 during the corresponding quarter last year. As for the
year-to-date numbers, net cash increased $29,000 for the nine months ended
January 31, 2008, while, for the same period last year, net cash decreased
$1,174,000. Accounts receivable decreased $301,000 during the current quar-
ter as compared to a $134,000 decrease for the corresponding quarter last
year. The year-to-date figures show a decrease of $495,000 for the current
nine months and a $221,000 decrease for the same period last year. The de-
creases in cash flow for accounts receivable is a reflection of the decreases
in sales. At January 31, 2008, 79.9% of the receivables were considered
current (less than 45 days) and 5.8% of the total were over 90 days past due.
For comparison, 75.2% of the receivables were current and 13.1% were past 90
days at January 31, 2007. Inventories increased $45,000 for the current
quarter as compared to a $372,000 increase for the same quarter last year.
The year-to-date numbers show a $3,000 decrease in inventory for the current
year, as there was a $767,000 increase for the same period last year. Man-
agement has gotten a foothold on decreasing its purchases of raw materials
during the current fiscal year to correspond to the decrease in sales. For
the quarter ended January 31, 2008, prepaid expenses decreased $45,000, while
there was increase of $50,000 for the corresponding quarter last year.
Changes in prepaid expenses in regards to cash flow decreased by $53,000 and
increased by $33,000 for the nine-month periods ending January 31, 2008 and
2007, respectively. For the current fiscal year, there have been income tax
overpayments. There is a $90,000 decrease in cash towards income tax over-
payment for the quarter ending January 31, 2008. And there is a $150,000
increase in cash towards income tax overpayment for the nine-months ending
January 31, 2008. Management paid income tax estimates based on prior year
taxable income.
For the quarter ended January 31, 2008, accounts payable decreased $23,000 as
compared to a $25,000 increase for the same quarter the year before. As for
the year-to-date numbers, there was a $52,000 decrease for the nine months
ended January 31, 2008, and a $50,000 increase for the same period ended
January 31, 2007. The decreases in the cash flow towards accounts receivable
go hand-in-hand with the decreases in cash flow towards inventory. Accrued
expenses decreased by $100,000 for the quarter ended January 31, 2008, and
these expenses also decreased $145,000 for the corresponding quarter the year
before. As for the nine-month period ended January 31, 2008, accrued ex-
penses decreased $68,000 and also decreased by $134,000 for the same period
last year.
As for the Company's investing activities, there have not been any purchases
or sales out of the ordinary during the current quarter or nine-month period.
The Company continues to purchase marketable debt and equity securities.
The following is a list of ratios to help analyze George Risk Industries'
performance:
For the quarter ended January 31,
2008 2007
---------------------------------
Working capital $ 26,705,000 $ 25,101,000
Current ratio 46.806 33.140
Quick ratio 40.369 28.814
Results of operations
~~~~~~~~~~~~~~~~~~~~~
Net sales were $2,572,000 for the quarter ended January 31, 2008, which is a
15.53% decrease from the corresponding quarter last year. Year-to-date net
sales at January 31, 2008 were $8,818,000, which is a 12.58% decrease from
the same period last year. The Company has seen decreases in sales as a re-
sult of the downturn in the housing market. Cost of goods sold was 54.28% of
net sales for the quarter ended January 31, 2008 and 45.45% for the same
quarter last year. Year-to-date cost of goods sold percentages were 50.01%
for the current nine months and 47.52% for the corresponding nine months last
year. Management has been wary of time-off / layoffs for employees in re-
gards to the slow down in sales. But during the last couple of weeks in the
quarter and continuing at this time, management has reduced labor hours and
head count to reduce labor costs.
Operating expenses were 27.95% of net sales for the quarter ended January 31,
2008 as compared to 27.06% for the corresponding quarter last year. Year-to-
date operating expenses were 24.64% of net sales for the nine months ended
January 31, 2008, while they were 24.54% for the same period last year.
Having relatively the same percentages for operating expenses shows that
management has a good grip on spending habits. Income from operations for
the quarter ended January 31, 2008 was at $457,000, which is a 45.4% decrease
from the corresponding quarter last year, which had income from operations of
$837,000. Income from operations for the nine months ended January 31, 2008
was at $2,235,000, which is a 20.7% decrease from the corresponding nine
months last year, which had income from operations of $2,819,000.
Other income and expenses showed a gain of $140,000 for the quarter and a
$705,000 gain for the nine months that ended January 31, 2008. The numbers
for the corresponding periods last year were gains of $233,000 for the quar-
ter and $575,000 for the nine-months ending January 31, 2007. Dividend and
interest income is up 12.89% for the quarter and is up 30.48% for the current
nine-month period when comparing to the same time periods last year. Man-
agement has taken an active roll in hiring money managers who manage the
Company's investments. Net income for the quarter ended January 31, 2008 was
at $327,000, a 44.6% decrease from the corresponding quarter last year, which
showed net income of $590,000. Net income for the nine months ended January
31, 2008 was $1,905,000, a 3.3% decrease from the same period last year. Net
income for the nine months ended January 31, 2007 was $1,970,000. Earnings
per common share for the quarter ended January 31, 2008 was $0.06 per share
and $0.36 per share for the year-to-date numbers. EPS for the quarter and
nine months ended January 31, 2007 was $0.11 per share and $0.37 per share,
respectively.
A dividend of $0.17 per common share was declared and stockholders of record
as of September 30, 2007 received the dividend. The payment date was October
31, 2007. This is the fourth consecutive year that the Company has declared
a dividend and will hopefully continue this trend in the future. The div-
idends payable on the books as of January 31, 2008 is a result of incomplete
or outdated stockholder information. A dividend check is sent out once the
Company receives all the correct information. The continued declaration of
dividends makes finding stockholders with outdated information easier.
George Risk Industries has 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 these segments.
New product information
~~~~~~~~~~~~~~~~~~~~~~~
Engineering continues to work on the wireless pool alarm and environmental
sensors. The goal is to have the wireless pool alarm ready to be shown at
the ISC West Security Show in Las Vegas in April 2008. Also, a design for a
new track mount overhead door contact is currently in development.
Management has seen increases in security sales over the last couple of
months and hopes to see this continue through the spring building season.
Growth has largely been in the areas of industrial/commercial switches and
security OEM. With the residential market still in a slump management plans
to focus research and development on industrial and commercial products,
along with medical and elderly care. These are all markets that continue to
show growth.
Recently issued accounting pronouncements
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements,"
which is effective for fiscal years beginning after November 15, 2007. SFAS
No. 157 establishes a single definition of fair value and a framework for
measuring fair value, sets out a fair value hierarchy to be used to classify
the source of information used in fair value measurements and requires new
disclosures about fair value measurements for future transactions. In
February 2008, the FASB issued Staff Positions No. 157-1 and No. 157-2, which
partially defer the effective date of SFAS No. 157 for one-year for certain
nonfinancial assets and liabilities and remove certain leasing transactions
from its scope. The Company is currently evaluating the impact of the
adoption of SFAS No. 157 on our financial position and results of operations.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities." Under SFAS No. 159, entities
may irrevocably elect fair value for the initial and subsequent measurement
of certain financial instruments and certain other items. Subsequent mea-
surements for the financial instruments and certain other items that an en-
tity elects to record at fair value will be recognized in earnings. SFAS No.
159 also establishes additional disclosure requirements. SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007. At the effect-
ive date, an entity may elect the fair value option for eligible items that
exist at that date. The entity shall report the effect of the first re-
measurement to fair value as a cumulative-effect adjustment to the opening
balance of retained earnings. The Company is currently determining whether
fair value accounting is appropriate for any of its eligible items and cannot
estimate the impact, if any, which SFAS No. 159 will have on its consolidated
results of operations and financial condition.
In December 2007, the FASB issued FASB Statement No. 141R, Business Com-
binations (Statement 141R) and FASB Statement No. 160, Noncontrolling
Interests in Consolidated Financial Statements an amendment to ARB No. 51
(Statement 160). Statements 141R and 160 require most identifiable assets,
liabilities, noncontrolling interests, and goodwill acquired in a business
combination to be recorded at "full fair value" and require noncontrolling
interests (previously referred to as minority interests) to be reported as a
component of equity, which changes the accounting for transactions with non-
controlling interest holders. Both Statements are effective for periods
beginning on or after December 15, 2008, and earlier adoption is prohibited.
Statement 141R will be applied to business combinations occurring after the
effective date. Statement 160 will be applied prospectively to all non-
controlling interests, including any that arose before the effective date.
The Company is currently evaluating the impact of adopting Statement 141R
and Statement 160 on its results of operations and financial position.
Management is always open to the possibility to acquire a business that would
complement our existing operations. This would probably not require any
outside financing. The intent is to utilize the equipment, marketing tech-
niques 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 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 January 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 03-17-2008 By: /s/ Kenneth R. Risk
Kenneth R. Risk
President and Chairman of the Board
Date 03-17-2008 By: /s/ Stephanie M. Risk
Stephanie M. Risk
Chief Financial Officer and Controller