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 July 31, 2009
[ ] 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 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
September 18, 2009 was 5,075,469.
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, 2009, are attached hereto.
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2009 2009
------------ ------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 5,252,000 $ 4,671,000
Investments and securities 16,638,000 15,691,000
Accounts receivable:
Trade, net of $1,945 and $7,492
doubtful account allowance 1,171,000 1,272,000
Other 1,000 1,000
Note receivable, current 3,000 3,000
Income tax overpayment 31,000 137,000
Inventories 2,499,000 2,741,000
Prepaid expenses 68,000 81,000
Deferred current income taxes 675,000 1,127,000
------------ ------------
Total Current Assets $26,338,000 $25,724,000
Property and Equipment, net, at cost 773,000 802,000
Other Assets
Investment in Limited Land Partnership,
at cost 200,000 200,000
Projects in process 75,000 68,000
Long-term receivable 40,000 40,000
Note receivable 8,000 9,000
------------ ------------
Total Other Assets $ 323,000 $ 317,000
TOTAL ASSETS $27,434,000 $26,843,000
============ ============
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2009 2009
------------ ------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable, trade $ 81,000 $ 35,000
Dividends payable 316,000 317,000
Accrued expenses:
Payroll and related expenses 228,000 306,000
Property taxes 3,000 0
------------ ------------
Total Current Liabilities $ 628,000 $ 658,000
Long-Term Liabilities
Deferred income taxes 76,000 86,000
------------ ------------
Total Long-Term Liabilities $ 76,000 $ 86,000
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 (324,000) (940,000)
Retained earnings 27,627,000 27,423,000
Treasury stock, 3,421,013 and 3,376,548
shares, at cost (3,258,000) (3,069,000)
------------ ------------
Total Stockholders' Equity $26,730,000 $26,099,000
TOTAL LIABILITES AND STOCKHOLDERS' EQUITY $27,434,000 $28,843,000
============ ============
GEORGE RISK INDUSTRIES, INC.
INCOME STATEMENTS
FOR THE THREE MONTHS ENDED JULY 31, 2009 AND 2008
July 31,
2009 2008
------------ ------------
Net Sales $ 1,964,000 $ 2,445,000
Less: Cost of Goods Sold (1,142,000) (1,197,000)
------------ ------------
Gross Profit $ 822,000 $ 1,248,000
Operating Expenses:
General and Administrative 168,000 179,000
Sales 403,000 502,000
Engineering 15,000 18,000
Rent Paid to Related Parties 11,000 16,000
------------ ------------
Total Operating Expenses $ 597,000 $ 715,000
Income From Operations 225,000 533,000
Other Income (Expense)
Other Income 2,000 2,000
Dividend and Interest Income 183,000 209,000
Gain (Loss) on Sale of Investments (99,000) (150,000)
------------ ------------
$ 86,000 $ 61,000
Income Before Provisions for Income Taxes 311,000 594,000
Provisions for Income Taxes
Current Expense 108,000 224,000
Deferred tax expense (1,000) (24,000)
------------ ------------
Total Income Tax Expense $ 107,000 $ 200,000
Net Income $ 204,000 $ 394,000
Basic and Diluted Earnings Per Share of
Common Stock $ 0.04 $ 0.08
Weighted Average Number of Common Shares
Outstanding 5,106,296 5,176,197
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
July 31,
2009 2008
---------------------------
Net Income $ 204,000 $ 394,000
------------ ------------
Other Comprehensive Income, net of tax
Unrealized gain (loss) on securities:
Unrealized holding gains (losses)
arising during period 906,000 (720,000)
Reclassification adjustment for gains
(losses) included in net income 153,000 135,000
Income tax expense related to other
comprehensive income (443,000) 245,000
------------ ------------
Other Comprehensive Income (Loss) $ 616,000 $ (340,000)
Comprehensive Income (Loss) $ 820,000 $ 54,000
============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
For the three months
ended July 31,
2009 2008
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 204,000 $ 394,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 40,000 41,000
(Gain) loss on sale of investments 99,000 150,000
Reserve for bad debts 2,000 0
Reserve for obsolete inventory 64,000 0
Deferred income taxes (1,000) (24,000)
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 99,000 116,000
Inventories 179,000 (43,000)
Prepaid expenses 12,000 10,000
Other receivables 0 (2,000)
Income tax overpayment 106,000 224,000
Increase (decrease) in:
Accounts payable 46,000 2,000
Accrued expenses (76,000) (60,000)
------------ ------------
Net cash provided by (used in) operating
activities $ 774,000 $ 808,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Other assets manufactured & purchased (7,000) 2,000
(Purchase) of property and equipment (11,000) (29,000)
Proceeds from sale of marketable securities 179,000 609,000
(Purchase) of marketable securities (166,000) (1,052,000)
Proceeds from note receivable 1,000 1,000
(Purchase) of treasury stock (189,000) (1,000)
------------ ------------
Net cash provided by (used in) investing
activities $ (193,000) $ (470,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by (used in) financing
activities $ 0 $ 0
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ 581,000 $ 338,000
Cash and cash equivalents, beginning of
period $ 4,671,000 $ 4,072,000
------------ ------------
Cash and cash equivalents, end of period $ 5,252,000 $ 4,410,000
============ ============
Supplemental Disclosure of Cash Flow
Information
Cash payments for:
Income taxes $0 $0
Interest expense $0 $0
Cash receipts for:
Income taxes $0 $0
GEORGE RISK INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2009
Note 1 Unaudited Interim Financial Statements
The accompanying financial statements have been prepared in accordance
with the instructions for Form 10-Q and do not include all of the inform-
ation and footnotes required by generally accepted accounting principles 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, 2009 annual report on Form
10-K. 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. Refer
to Note 7, Fair Value Measurements, for additional information on the fair
value measurements for all assets and liabilities, including investments, that
are measured at fair value in these financial statements. Available -for-sale
investments in debt securities mature between September 2009 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 re-
ported separately as a component of stockholder's equity. Dividend and
interest income are accrued as earned.
As of July 31, 2009, investments available-for-sale consisted of the
following:
Gross Gross
Cost Unrealized Unrealized Fair
Basis Gains Losses Value
------------ ------------ ------------ ------------
Municipal bonds $ 8,632,000 $ 124,000 $ (156,000) $ 8,600,000
Federal agency mortgage
backed securities $ 125,000 $ 3,000 $ 0 $ 128,000
Corporate bonds $ 270,000 $ 1,000 $ (14,000) $ 257,000
Equity securities $ 6,781,000 $ 459,000 $ (978,000) $ 6,262,000
Money markets/CDs $ 1,387,000 $ 4,000 $ 0 $ 1,391,000
------------ ------------ ------------ ------------
Total $17,195,000 $ 591,000 $(1,148,000) $16,638,000
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 $55,000 for the quarter ended July 31, 2009 and $104,000 for the
quarter ended July 31, 2008.
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, 2009.
Less than 12 months 12 months or greater Total
----------------------- --------------------- ---------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Loss Value Loss Value Loss
...........................................................................
Municipal bonds
$ 912,000 $ (18,000) $2,810,000 $(138,000) $ 3,722,000 $ (156,000)
Corporate bonds
$ 150,000 $ (14,000) $ -- $ -- $ 150,000 $ (14,000)
Equity securities
$1,110,000 $(270,000) $2,439,000 $(708,000) $ 3,549,000 $ (978,000)
----------- ---------- ----------- ---------- ------------ ------------
Total
$2,172,000 $(302,000) $5,249,000 $(846,000) $ 7,421,000 $(1,148,000)
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, 2009.
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, 2009.
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,
2009.
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, 2009.
Note 3 Inventories
Inventories at July 31, 2009, consisted of the following:
Raw Materials $ 1,606,000
Work in Process 793,000
Finished Goods 291,000
------------
$ 2,690,000
Less: allowance for obsolete inventory (191,000)
------------
Net Inventories $ 2,499,000
============
Note 4 Business Segments
The following is financial information relating to industry segments:
For the quarter ended
July 31,
2009 2008
---------------------------
Net revenue:
Security alarm products 1,711,000 2,156,000
Other products 253,000 289,000
------------ ------------
Total net revenue $ 1,964,000 $ 2,445,000
Income from operations:
Security alarm products 196,000 470,000
Other products 29,000 63,000
------------ ------------
Total income from operations $ 225,000 $ 533,000
Identifiable assets:
Security alarm products 2,912,000 4,177,000
Other products 1,421,000 1,086,000
Corporate general 23,101,000 22,936,000
------------ ------------
Total assets $27,434,000 $28,199,000
Depreciation and amortization:
Security alarm products 6,000 7,000
Other products 27,000 26,000
Corporate general 7,000 8,000
------------ ------------
Total depreciation and amortization $ 40,000 $ 41,000
Capital expenditures:
Security alarm products 0 0
Other products 6,000 21,000
Corporate general 5,000 8,000
------------ ------------
Total capital expenditures $ 11,000 $ 29,000
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, 2009
----------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
------------- -------------- ---------
Net Income $ 204,000
=============
Basic EPS $ 204,000 5,106,296 $ 0.0400
Effect of dilutive securities:
Convertible preferred stock 0 20,500 (0.0002)
------------- -------------- ----------
Diluted EPS $ 204,000 5,126,796 $ 0.0398
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
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 $2,000 were paid during the quarter ending
July 31, 2009 and approximately $3,000 of matching contributions were paid
during the quarter ending July 31, 2008. There were no discretionary con-
tributions paid during the quarters ending July 31, 2009 and 2008, re-
spectively.
Note 7 Fair Value Measurements
As of May 1, 2008, we adopted Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair
value as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets
and liabilities, which are required to be recorded at fair value, we consider
the principal or most advantageous market in which we would transact and the
market-based risk measurements or assumptions that market participants would
use in pricing the asset or liability, such as inherent risk, transfer re-
strictions, and credit risk.
SFAS No. 157 establishes a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (level 1 measurements) and the lowest prior-
ity to unobservable inputs (level 3 measurements). The levels of the fair
value hierarchy under SFAS No. 157 are described below:
Level 1 - Valuation is based upon quoted prices for identical in-
struments traded in active markets.
Level 2 - Valuation is based upon quoted prices for similar in-
struments in active markets, quoted prices for identical
or similar instruments in markets that are not active,
and model-based valuation techniques for which all sig-
nificant assumptions are observable in the market.
Level 3 - Valuation is generated from model-based techniques that
use significant assumptions not observable in the market.
These unobservable assumptions reflect our own estimates
of assumptions that market participants would use in
pricing the asset or liability. Valuation techniques
include use of option pricing models, discounted cash
flow models and similar techniques.
Marketable Securities
---------------------
As of July 31, 2009, our investments consisted of publicly traded equity
securities as well as certain state and municipal debt securities. Our
marketable securities are valued using third-party broker statements. The
value of the majority of securities is derived from quoted market inform-
ation. The inputs to the valuation are generally classified as Level 1 given
the active market for these securities, however, if an active market does not
exist, the inputs are recorded at a lower level in the fair value hierarchy.
Fair Value Hierarchy
--------------------
The following tables set forth our assets and liabilities measured at fair
value on a recurring basis and a non-recurring basis by level within the fair
value hierarchy. As required by SFAS No. 157, assets and liabilities are
classified in their entirety based on the lowest level of input that is
significant to the fair value measurement.
Assets Measured at Fair Value on a Recurring Basis
as of July 31, 2009
---------------------------------------------------
Level 1 Level 2 Level 3 Total
------- ------- ------- -------
Assets:
Marketable
Securities $16,638,000 $ 0 $ 0 $16,638,000
------------ ---------- ---------- ------------
Total fair value of
assets measured on a
recurring basis $16,638,000 $ 0 $ 0 $16,638,000
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, 2009.
Liquidity and capital resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Operating
---------
Net cash increased $581,000 during the quarter ended July 31, 2009 as com-
pared to an increase of $338,000 during the corresponding quarter last year.
Accounts receivable decreased $99,000 for the quarter ending July 31, 2009
compared with a $116,000 decrease for the same quarter last year. The de-
creases in cash flow for accounts receivable is a reflection of the decreases
in sales. At the quarter ended July 31, 2009, 85.36% of the receivables are
considered current (less than 45 days) and -0.08% of the total are over 90
days past due. This is in comparison to having 86.09% of the receivables
considered current and 1.75% over 90 days past due at July 31, 2008. In-
ventories decreased $179,000 during the current quarter as compared to a
$43,000 increase last year. Management has slowed down its raw material pur-
chases at a result of the decreases in sales the company has been experien-
cing for well over a year now. At the quarter ended July 31, 2009 there was
a $12,000 decrease in prepaid expenses, while at July 31, 2008, there was a
$10,000 decrease. Income tax overpayment decreased $106,000 for the quarter
ended July 31, 2009, while there was a $224,000 decrease in income tax over-
payment for the corresponding quarter last year. Management paid income tax
estimates based on prior year taxable income.
At the quarter ended July 31, 2009, accounts payable shows an increase of
$46,000 as compared to an increase of $2,000 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 com-
pany pays all its invoices within the terms. Accrued expenses decreased
$76,000 for the current quarter as compared to a $60,000 decrease for the
quarter ended July 31, 2008. This is due to reduced sales commissions and
fewer employees.
Investing
---------
As for our investment activities, the Company has spent approximately $11,000
on acquisitions of property and equipment for the current fiscal quarter. In
comparison with the corresponding quarter last year, there was activity of
$29,000. With the decreases in sales, the company is only buying equipment
that is needed. Additionally, the Company continues to purchase marketable
securities, which include municipal bonds and quality stocks. Cash spent on
purchases of marketable securities for the quarter ended July 31, 2009 was
$166,000 compared with $1,052,000 spent during the quarter ended July 31,
2008. We continue to use "money manager" accounts for most stock trans-
actions. 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 invest-
ments. Furthermore, the Company continues to purchase back common stock when
the opportunity arises. For the quarter ended July 31, 2009, the Company
purchased $189,000 worth of treasury stock and $1,000 worth of treasury stock
for the quarter ended July 31, 2008. We have been actively searching for
stockholders that have been "lost" over the years. The payment 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,
2009 2008
---------------------------
Working capital $ 25,710,000 $ 26,473,000
Current ratio 41.939 47.607
Quick ratio 36.721 40.570
Results of Operations
~~~~~~~~~~~~~~~~~~~~~
Net sales were $1,964,000 for the quarter ended July 31, 2009, which is a de-
crease of 19.7% from the corresponding quarter last year. Net sales for the
quarter ended July 31, 2008 were $2,445,000. 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 58.15% of net sales for the quarter ended July 31, 2009 and
48.96% for the quarter ended July 31, 2008. Management has been trying to
keep labor and other manufacturing expenses down, but our sales have been
much lower than anticipated. Therefore, that is the reason for the almost
10% increase in costs of good sold percentage.
Operating expenses were 30.4% of net sales for the quarter ended July 31,
2009 as compared to 29.2% for the corresponding quarter last year. Keeping
operating expenses around 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 19.7% for the
quarter ending July 31, 2009, when comparing to the same quarter last year.
This is a result of the decrease in sales because commissions are less when
comparing the same numbers to the corresponding quarter last year. Income
from operations for the quarter ended July 31, 2009 was at $225,000, which is
a 57.79% decrease from the corresponding quarter last year, which had income
from operations of $533,000.
Other income and expenses showed a $86,000 gain for the quarter ended
July 31, 2009 as compared to having a $61,000 gain for the quarter ended
July 31, 2008. The main reason for the bigger gains in other income for the
current quarter is that management did not have to write down as much for
impaired investments. For the quarter ended July 31, 2009, management wrote
down $55,000 in impaired investments, while $104,000 was written down for the
corresponding quarter last year. In turn, net income for the quarter ended
July 31, 2009 was at $204,000, a 48.2% decrease from the corresponding
quarter last year, which showed net income of $394,000. Earnings per share
for the quarter ended July 31, 2009 were $0.04 per common share and $0.08 per
common share for the quarter ended July 31, 2008.
New Product Development
~~~~~~~~~~~~~~~~~~~~~~~
The Omni-Directional Tilt Sensor (pt # ODTS-1) is now in production. When
mounted onto an object, such as industrial equipment, tool boxes, air con-
ditioners, museum pieces, skylight, and such, it can detect a slight movement
of tilt in any direction should a thief or burglar try to tamper with or re-
move the equipment or device. With copper theft from air conditioning units
at all time highs, this product is now being installed commonly on A/C units
behind homes and businesses.
Another new product, the Quick Disconnect Cord (pt # QDC-20), is routinely
used by security installers to transfer power from one side of a fence across
a gate or door to the other side of a fence. It can also be used on overhead
doors and is intended to meet certain specialty applications for security
installers.
Engineering continues to work on a wireless swimming pool alarm design, a
low cost hold-up switch for banks and offices, a pump guard watering station
monitor, and a high security contact switch.
Recently Issued Accounting Pronouncements
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In June 2009, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 168, "The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles" ("SFAS No. 168"). SFAS No. 168
will become the single source of authoritative nongovernmental U.S. generally
accepted accounting principles ("GAAP"), superseding existing FASB, American
Institute of Certified Public Accountants ("AICPA"), Emerging Issues Task
Force ("EITF"), and related accounting literature. SFAS No. 168 reorganizes
the thousands of GAAP pronouncements into roughly 90 accounting topics and
displays them using a consistent structure. Also included is relevant
Securities and Exchange Commission guidance organized using the same topical
structure in separate sections. SFAS No. 168 will be effective for financial
statements issued for reporting periods that end after September 15, 2009.
This will have an impact on our financial statements since all future ref-
erences to authoritative accounting literature will be references in
accordance with SFAS No. 168.
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
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 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 ob-
jectives 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 con-
trols 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 finan-
cial reporting and the preparation of financial statements for external pur-
poses, in accordance with generally accepted accounting principles. Because
of inherent limitations, a system of internal control over financial re-
porting 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
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 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, 2009
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 09-18-2009 By: /s/ Kenneth R. Risk
Kenneth R. Risk
President and Chairman of the Board
Date 09-18-2009 By: /s/ Stephanie M. Risk
Stephanie M. Risk
Chief Financial Officer and Controller