UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities Ex-
change Act of 1934
For the quarter ended July 31, 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
September 15, 2008 was 5,176,131.
Transitional Small Business Disclosure Format: Yes [ X ] No [ ]
GEORGE RISK INDUSTRIES, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited financial statements for the three-month period ended
July 31, 2008, are attached hereto.
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2008 2008
------------ ------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 4,410,000 $ 4,072,000
Investments and securities 17,242,000 17,533,000
Accounts receivable:
Trade, net of $50,000 doubtful account
allowance for 2008 and 2007 1,392,000 1,509,000
Other 3,000 1,000
Note receivable, current 3,000 3,000
Income tax overpayment 246,000 471,000
Inventories 3,143,000 3,100,000
Prepaid expenses 93,000 103,000
Deferred current income taxes 509,000 250,000
------------ ------------
Total Current Assets $27,041,000 $27,042,000
Property and Equipment, net, at cost 820,000 831,000
Other Assets
Investment in Limited Land Partnership,
at cost 200,000 200,000
Projects in process 66,000 68,000
Long-term receivable 60,000 60,000
Note receivable 12,000 12,000
Other 0 1,000
------------ ------------
Total Other Assets $ 338,000 $ 341,000
TOTAL ASSETS $28,199,000 $28,214,000
============ ============
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2008 2008
------------ ------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable, trade $ 69,000 $ 67,000
Dividends payable 238,000 239,000
Accrued expenses:
Payroll and related expenses 259,000 321,000
Property taxes 2,000 0
------------ ------------
Total Current Liabilities $ 568,000 $ 627,000
Long-Term Liabilities
Deferred income taxes 69,000 79,000
------------ ------------
Total Long-Term Liabilities $ 69,000 $ 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 (407,000) (67,000)
Retained earnings 28,182,000 27,788,000
Treasury stock, 3,326,701 and 3,326,551
shares, at cost (2,898,000) (2,898,000)
------------ ------------
Total Stockholders' Equity $27,562,000 $27,508,000
TOTAL LIABILITES AND STOCKHOLDERS' EQUITY $28,199,000 $28,214,000
============ ============
GEORGE RISK INDUSTRIES, INC.
INCOME STATEMENTS
FOR THE THREE MONTHS ENDED JULY 31, 2008 AND 2007
July 31,
2008 2007
------------ ------------
Net Sales $ 2,445,000 $ 3,239,000
Less: Cost of Goods Sold (1,197,000) (1,530,000)
------------ ------------
Gross Profit $ 1,248,000 $ 1,709,000
Operating Expenses:
General and Administrative 179,000 174,000
Sales 502,000 543,000
Engineering 18,000 21,000
Rent Paid to Related Parties 16,000 16,000
------------ ------------
Total Operating Expenses $ 715,000 $ 754,000
Income From Operations 533,000 955,000
Other Income (Expense)
Other Income 2,000 1,000
Dividend and Interest Income 209,000 205,000
Gain (Loss) on Sale of Investments (150,000) 96,000
------------ ------------
$ 61,000 $ 302,000
Income Before Provisions for Income Taxes 594,000 1,257,000
Provisions for Income Taxes
Current Expense 224,000 398,000
Deferred tax expense (24,000) 36,000
------------ ------------
Total Income Tax Expense $ 200,000 $ 434,000
Net Income $ 394,000 $ 823,000
Basic and Diluted Earnings Per Share of
Common Stock $ 0.08 $ 0.15
Weighted Average Number of Common Shares
Outstanding 5,176,197 5,335,666
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
July 31,
2008 2007
---------------------------
Net Income $ 394,000 $ 823,000
------------ ------------
Other Comprehensive Income, net of tax
Unrealized gain (loss) on securities:
Unrealized holding gains (losses)
arising during period (340,000) (203,000)
Reclassification adjustment for (gains)
losses included in net income 150,000 (96,000)
Income tax expense related to other
comprehensive income (79,000) (125,000)
------------ ------------
Other Comprehensive Income (Loss) $ (269,000) $ (424,000)
Comprehensive Income (Loss) $ 125,000 $ 399,000
============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
For the three months
ended July 31,
2008 2007
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 394,000 $ 823,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 41,000 41,000
(Gain) loss on sale of investments 150,000 (96,000)
Deferred income taxes (24,000) 36,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 116,000 104,000
Inventories (43,000) 129,000
Prepaid expenses 10,000 18,000
Other receivables (2,000) 0
Income tax overpayment 224,000 0
Increase (decrease) in:
Accounts payable 2,000 (76,000)
Accrued expenses (60,000) (69,000)
Income tax payable 0 398,000
------------ ------------
Net cash provided by (used in) operating
activities $ 808,000 $ 1,308,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Other assets manufactured 2,000 23,000
(Purchase) of property and equipment (29,000) (87,000)
Proceeds from sale of marketable securities 609,000 1,443,000
(Purchase) of marketable securities (1,052,000) (2,052,000)
Proceeds from note receivable 1,000 0
(Purchase) of treasury stock (1,000) (10,000)
------------ ------------
Net cash provided by (used in) investing
activities $ (470,000) $ (683,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by (used in) financing
activities $ 0 $ 0
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ 338,000 $ 625,000
Cash and cash equivalents, beginning of
period $ 4,072,000 $ 4,611,000
------------ ------------
Cash and cash equivalents, end of period $ 4,410,000 $ 5,236,000
============ ============
Supplemental Disclosure of Cash Flow
Information
Cash payments for:
Income taxes $0 $0
Interest expense $0 $0
Cash receipts for:
Income taxes $0 $0
Supplemental Disclosure of Noncash and
Financing Activities
Issuance of treasury stock in lieu of
compensation $0 $0
GEORGE RISK INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 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. It is suggested that these condensed finan-
cial statements be read in conjunction with the financial statements and
notes thereto included in the Company's April 30, 2008 annual report on Form
10KSB. In the opinion of management, all adjustments, 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
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 September
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 July 31, 2008, investments available-for-sale consisted of the
following:
Gross Gross
Cost Unrealized Unrealized Fair
Basis Gains Losses Value
------------ ------------ ------------ ------------
Municipal bonds $ 8,621,000 $ 35,000 $ (261,000) $ 8,395,000
Federal agency mortgage
backed securities $ 375,000 $ 2,000 $ (2,000) $ 375,000
Corporate bonds $ 504,000 $ 0 $ (36,000) $ 468,000
Equity securities $ 7,419,000 $ 467,000 $ (904,000) $ 6,982,000
Money markets/CDs $ 1,022,000 $ 0 $ 0 $ 1,022,000
------------ ------------ ------------ ------------
Total $17,941,000 $ 504,000 $(1,203,000) $17,242,000
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 $104,000 for the quarter ended July 31, 2008 and $5,000 for the
quarter ended July 31, 2007.
The following table shows the investments with unrealized losses that
are not deemed to be other-than-temporarily impaired, aggregated by invest-
ment category and length of time that individual securities have been in a
continuous unrealized loss position, at July 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
$1,541,000 $ (60,000) $3,661,000 $(122,000) $ 5,202,000 $ (182,000)
Federal agency mortgage backed securities
-- -- $ 198,000 $ (2,000) $ 198,000 $ (2,000)
Corporate bonds
-- -- $ 468,000 $ (36,000) $ 468,000 $ (36,000)
Equity securities
$2,747,000 $(520,000) $1,653,000 $(464,000) $ 4,400,000 $ (984,000)
----------- ---------- ----------- ---------- ------------ ------------
Total
$4,288,000 $(580,000) $5,980,000 $(624,000) $10,268,000 $(1,204,000)
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 July 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
maturity, the Company does not consider these investments to be other-than-
temporarily impaired at July 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 July 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
July 31, 2008.
Note 3 Inventories
Inventories at July 31, 2008, consisted of the following:
Raw Materials $ 1,981,000
Work in Process 851,000
Finished Goods 416,000
------------
$ 3,248,000
Less: allowance for obsolete inventory (105,000)
------------
Net Inventories $ 3,143,000
============
Note 4 Business Segments
The following is financial information relating to industry segments:
For the quarter ended
July 31,
2008 2007
---------------------------
Net revenue:
Security alarm products 2,156,000 2,537,000
Other products 289,000 702,000
------------ ------------
Total net revenue $ 2,445,000 $ 3,239,000
Income from operations:
Security alarm products 470,000 748,000
Other products 63,000 207,000
------------ ------------
Total income from operations $ 533,000 $ 955,000
Identifiable assets:
Security alarm products 4,177,000 4,039,000
Other products 1,086,000 1,496,000
Corporate general 22,936,000 23,077,000
------------ ------------
Total assets $28,199,000 $28,612,000
Depreciation and amortization:
Security alarm products 7,000 8,000
Other products 26,000 26,000
Corporate general 8,000 7,000
------------ ------------
Total depreciation and amortization $ 41,000 $ 41,000
Capital expenditures:
Security alarm products 0 2,000
Other products 21,000 85,000
Corporate general 8,000 0
------------ ------------
Total capital expenditures $ 29,000 $ 87,000
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 July 31, 2008
----------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
------------- -------------- ---------
Net Income $ 394,000
=============
Basic EPS $ 394,000 5,176,197 $ 0.0761
Effect of dilutive securities:
Convertible preferred stock 0 20,500 (0.0003)
------------- -------------- ---------
Diluted EPS $ 394,000 5,196,697 $ 0.0758
For the three months ended July 31, 2007
----------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
------------- -------------- ---------
Net Income $ 823,000
=============
Basic EPS $ 823,000 5,335,666 $ 0.154
Effect of dilutive securities:
Convertible preferred stock 0 20,500 (0.001)
------------- -------------- ---------
Diluted EPS $ 823,000 5,356,166 $ 0.153
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 $3,000 were paid during the quarter ending
July 31, 2008 and approximately $4,000 of matching contributions were paid
during the quarter ending July 31, 2007. There were no discretionary con-
tributions paid during the quarters ending July 31, 2008 and 2007, re-
spectively.
GEORGE RISK INDUSTRIES, INC.
PART I. FINANCIAL INFORMATION
Item 2. Management Discussion and Analysis of Financial Condition and
Results of Operations
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached con-
densed consolidated financial statements, and with the Company's audited
financial statements and discussion for the fiscal year ended April 30, 2008.
Liquidity and capital resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Operating
---------
Net cash increased $338,000 during the quarter ended July 31, 2008 as com-
pared to an increase of $625,000 during the corresponding quarter last year.
Accounts receivable decreased $116,000 for the quarter ending July 31, 2008
compared with a $104,000 decrease for the same quarter last year. The reason
for the increase in cash towards accounts receivable is two fold. First, the
Company is collecting on receivables at a faster rate that the same period
last year and secondly, sales have decreased. At the quarter ended July 31,
2008, 86.09% of the receivables are considered current (less than 45 days)
and 1.75% of the total are over 90 days past due. This is in comparison to
having 78.14% of the receivables considered current and 7.37% over 90 days
past due at July 31, 2007. Inventories increased $43,000 during the current
quarter as compared to a $129,000 decrease last year. There are two reasons
for the increase in cash flow towards inventory during the quarter ended
July 31, 2008. First, our sales have decreased and management has not been
able to slow down the delivery on some major products and secondly, there
have been significant price increases of raw materials. At the quarter
ended July 31, 2008 there was an $10,000 decrease in prepaid expenses, while
at July 31, 2007, there was a $18,000 decrease. Income tax overpayment de-
creased $224,000 for the quarter ended July 31, 2008, while there was no
overpayment for the corresponding quarter last year. Management paid income
tax estimates based on prior year taxable income.
At the quarter ended July 31, 2008, accounts payable shows an increase of
$2,000 as compared to a decrease of $76,000 for the same quarter the year
before. The change in cash in regards to accounts payable can vary. It
really depends on the time of the month the invoices are due, since the
company pays all its invoices within the terms. Accrued expenses decreased
$60,000 for the current quarter as compared to a $69,000 decrease for the
quarter ended July 31, 2007. This is due to reduced sales commissions and
fewer employees.
Investing
---------
As for our investment activities, the Company has spent approximately $29,000
on acquisitions of property and equipment for the current fiscal quarter. In
comparison with the corresponding quarter last year, there was activity of
$87,000. The major increase of property and equipment for the quarter ending
July 31, 2008 was the completion and capitalization of a mold that was pre-
viously a project in process. Additionally, the Company continues to pur-
chase marketable securities, which include municipal bonds and quality
stocks. Cash spent on purchases of marketable securities for the quarter
ended July 31, 2008 was $1,052,000 compared with $2,052,000 spent during the
quarter ended July 31, 2007. We continue to 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
common stock when the opportunity arises. For the quarter ended July 31,
2008, the Company purchased $1,000 worth of treasury stock and $10,000 worth
of treasury stock for the quarter ended July 31, 2007. We have been actively
searching for stockholders that have been "lost" over the years. The pay-
ment of dividends over the last four fiscal years has also prompted many
stockholders and/or their relatives and descendants to sell back their stock
to the Company.
The following is a list of ratios to help analyze George Risk Industries'
performance:
For the quarter ended
July 31,
2008 2007
---------------------------
Working capital $ 26,473,000 $ 26,667,000
Current ratio 47.607 36.988
Quick ratio 40.570 32.591
Results of Operations
~~~~~~~~~~~~~~~~~~~~~
Net sales were $2,445,000 for the quarter ended July 31, 2008, which is a de-
crease of 24.5% from the corresponding quarter last year. Net sales for the
quarter ended July 31, 2007 were $3,329,000. The majority of the Company's
products are tied to the housing market. The decline in sales for the com-
pany is a direct result of the decline in the housing market of late. Cost
of goods sold was 48.96% of net sales for the quarter ended July 31, 2008 and
47.24% for the quarter ended July 31, 2007. Having relatively the same per-
centage of cost of goods sold from period to period shows that we keep our
costs in line. As a result of the slow down in sales, management has com-
pensated by taking extra effort in keeping labor and other manufacturing ex-
penses down.
Operating expenses were 29.2% of net sales for the quarter ended July 31,
2008 as compared to 23.3% for the corresponding quarter last year. Keeping
operating expenses under 30% of net sales, as management has been able to
achieve over the years, shows that management keeps a close eye on these ex-
penses from year to year. Any fixed costs are offset by the decrease in
selling expenses. Specifically, selling expense has decreased 7.6% for the
quarter ending July 31, 2008. This is a result of the decrease in sales be-
cause commissions are less when comparing the same numbers to the correspond-
ing quarter last year. Income from operations for the quarter ended July 31,
2008 was at $533,000, which is a 44.2% decrease from the corresponding
quarter last year, which had income from operations of $955,000.
Other income and expenses showed a $61,000 gain for the quarter ended
July 31, 2008 as compared to having a $302,000 gain for the quarter ended
July 31, 2007. The main reason for the difference in the amount of the gains
in other income from one quarter to the other is that management had to write
down $104,000 for impaired investments, as compared to a write down of $5,000
for the same quarter last year. In turn, net income for the quarter ended
July 31, 2008 was at $394,000, a 52.1% decrease from the corresponding
quarter last year, which showed net income of $823,000. Earnings per share
for the quarter ended July 31, 2008 were $0.08 per common share and $0.15 per
common share for the quarter ended July 31, 2007.
New Product Development
~~~~~~~~~~~~~~~~~~~~~~~
The HVAC Kit was designed and introduced in early June 2008. It is designed
to help prevent the theft of air conditioning coils on homes and commercial
buildings with the use of two or more GRI 4561 Tilt Switches and a panel
specific resistor pack on 72" of wire. The 4561 Tilt Switches are used to
protect the cover when it is moved or tipped over and the resistor wires are
looped through the coils sending an alarm signal if the wires are cut. A GRI
4460A switch may also be used as extra protection for the cover. Other uses
include fencing, compressors; or anywhere copper, aluminum or wiring can be
removed. News stories on copper theft occurring across the country have lead
to strong sales of this product.
We have developed a surface mount switch set, which is about a third of the
size of a normal switch set. It has recently been put into production. The
switch set contains a magnet that can be used in wired or wireless applica-
tions. The switch set is designed to reduce visibility and to replace re-
cessed switches that are drilled into the vinyl window frames. We expect to
generate revenues of $100,000 to $200,000 on this product over the next year.
Final mold designs on our new #4700-A industrial wide gap track mount over-
head switches are in the final stages of approval. Production is expected to
begin in October 2008. Our overhead switches fit into larger tracks, which
facilitate ease of installation in the overhead doors. We expect this switch
to generate revenues of $40,000 and $50,000 over the next year.
Engineering continues to work on the wireless line including pool alarm,
security and environmental sensors. A new, lower cost hold-up switch is now
being developed to replace discontinued components that are no longer avail-
able. Work also continues on the Pump Guard water valve controller and
several custom products.
Recently Issued Accounting Pronouncements
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements", which
defines fair value, establishes a framework for measuring fair value, and ex-
pands disclosures about fair value measurements. The provisions of SFAS No.
157 are effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. The
Company has not yet evaluated the impact, if any, that SFAS No. 157 will have
on the Company's 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-Including an amendment of FASB
Statement No. 115" ("SFAS 159"). SFAS 159 expands the use of fair value
accounting but does not affect existing standards that require assets or
liabilities to be carried at fair value. Under SFAS 159, a company may elect
to use fair value to measure accounts and loans receivable, available-for-
sale and held-to-maturity securities, equity method investments, accounts
payable, guarantees and issued debt. Other eligible items include firm
commitments for financial instruments that otherwise would not be recognized
at inception and non-cash warranty obligations where a warrantor is permitted
to pay a third party to provide the warranty goods or services. If the use
of fair value is elected any upfront costs and fees related to the item must
be recognized in earnings and cannot be deferred, e.g., debt issue costs.
The fair value election is irrevocable and generally made on an instrument-
by-instrument basis, even if a company has similar instruments that it elects
not to measure based on fair value. At the adoption date, unrealized gains
and losses on existing items for which fair value has been elected are re-
ported as a cumulative adjustment to beginning retained earnings. Subsequent
to the adoption of SFAS 159, changes in fair value are recognized in
earnings. SFAS 159 is effective for fiscal years beginning after November
15, 2007 and the Company will be required to adopt this statement in the
first quarter of fiscal 2009. The Company is currently determining whether
fair value accounting is appropriate for any of its eligible items and can-
not estimate the impact, if any, which SFAS 159 will have on its consolidated
results of operations and financial condition.
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 Pre-
sent Fairly in Conformity With Generally Accepted Accounting Principles.
Other Information
~~~~~~~~~~~~~~~~~
Management is always open to the possibility to acquire a business that would
complement our existing operations. This would require no outside financing.
The intent is to utilize the equipment, marketing techniques and established
customers to increase sales and profits.
There are no known seasonal trends with any of GRI's products, since we sell
to distributors and OEM manufacturers. Our products are tied to the housing
industry and will fluctuate with building trends.
GEORGE RISK INDUSTRIES, INC.
PART 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 July 31,
2008, our president and chief executive officer and our chief financial of-
ficer have concluded that our disclosure controls and procedures are effec-
tive 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, summa-
rized and reported within the time periods specified in the Securities and
Exchange Commission's rules and (ii) accumulated and communicated to our
management, including our chief executive officer and our chief financial
officer, as appropriate to allow timely decisions regarding disclosure. A
control system cannot provide absolute assurance, however, that the objec-
tives of the control systems are met, and no evaluation of controls can pro-
vide 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 af-
fected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
Management's Annual Report on Internal Control over Financial Reporting:
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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
become inadequate due to change in conditions, or that the degree of com-
pliance with the policies or procedures may deteriorate.
Our management, including our principal executive officer and principal ac-
counting officer, conducted an evaluation of the effectiveness of our inter-
nal 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 manage-
ment concluded that as of July 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 July 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 09-15-2008 By: /s/ Kenneth R. Risk
Kenneth R. Risk
President and Chairman of the Board
Date 09-15-2008 By: /s/ Stephanie M. Risk
Stephanie M. Risk
Chief Financial Officer and Controller