UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter ended January 31, 1996
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act.
For the transition period from _____to _____
Commission file number 0-5378
GEORGE RISK INDUSTRIES, INC.
(Exact name of small business issuer as
specified in its charter)
Colorado 84-0524756
(State or other jurisdiction (IRS employers
of incorporation or organization) identification No.)
802 South Elm, Kimball, NE 69145
(Address of principal executive offices)
(308)-235-4645
(Issuer's telephone number)
n/a
(Former name, address and fiscal year, if changed since
last report)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a
plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: 6,095,397
PART I. FINANCIAL INFORMATION
GEORGE RISK INDUSTRIES, INC.
Balance Sheet
January 31, 1996
[CAPTION]
[S] [C]
ASSETS
Current Assets
Cash $ 487,000
Marketable securities 2,036,000
Accounts receivable:
Trade, net of $50,000 doubtful
account allowance 847,000
Officers and employees 2,000
Note Receivable 3,000
Inventories (Note 1) 1,887,000
Prepaid expenses 97,000
Deferred income taxes 34,000
___________
Total current assets 5,393,000
Property And Equipment, Net, At Cost 640,000
Other Assets 54,000
___________
TOTAL ASSETS $ 6,087,000
[CAPTION]
LIABILITIES AND STOCKHOLDERS EQUITY
[S] [C]
Current Liabilities
Accounts payable, trade $ 228,000
Notes payable, current portion 58,000
Accrued expenses 297,000
___________
Total current liabilities 583,000
Long term Liabilities
Notes payable, FKI, Inc. 390,000
Deferred Income Taxes 30,000
___________
Total long term liabilities 420,000
Stockholders Equity
Convertible preferred stock 257,000
Common stock, Class A 850,000
Additional paid-in capital 1,644,000
Net unrealized loss on marketable
securities (21,000)
Retained earnings 3,047,000
Less cost of treasury stock (693,000)
___________
Total stockholders equity 5,084,000
___________
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 6,087,000
[FN]
See Accompanying Notes to Financial Statements
GEORGE RISK INDUSTRIES INC.
STATEMENTS OF INCOME
(unaudited)
for three months for nine months
ended ended
Jan.31 Jan.31
1996 1995 1996 1995
_______________________ _______________________
Net sales $2,108,000 $2,377,000 $7,032,000 $7,190,000
Less cost of
goods sold 1,045,000 1,121,000 3,547,000 3,862,000
_______________________ _______________________
Gross profit $1,063,000 $1,256,000 $3,485,000 $3,328,000
Operating expenses
G&A 134,000 151,000 460,000 433,000
Sales 427,000 456,000 1,471,000 1,382,000
Engineering 17,000 12,000 45,000 32,000
_______________________ _______________________
$ 578,000 $ 619,000 $1,976,000 $1,847,000
Income from
operations 485,000 637,000 1,509,000 1,481,000
Other income
(expenses)
Interest income 34,000 6,000 118,000 (18,000)
Other (5,000) 2,000 (6,000) 27,000
_______________________ _______________________
$ 29,000 $ 8,000 $ 112,000 $ 9,000
Income before prov-
ision for income
tax $ 514,000 $ 645,000 $1,621,000 $1,490,000
Provision for income
tax
Current expense 228,000 257,000 739,000 645,000
_______________________ _______________________
Net Income $ 286,000 $ 388,000 $ 882,000 $ 845,000
Net income per
common share $ 0.05 $ 0.06 $ 0.14 $ 0.12
Weighted average
number of common
shares out-
standing 6,095,397 6,798,347 6,266,408 6,798,347
<FN>
See Accompanying Notes To Financial Statements
GEORGE RISK INDUSTRIES, INC
Statements of Cash Flows
For The Nine Months Ended January 31, 1996 and 1995
[CAPTION] 1996 1995
___________________________
[S] [C] [C]
Cash Flow From Operating
Activities:
Net income $ 882,000 $ 845,000
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 47,000 8,000
Changes in assets
and liabilities:
(Increase) decrease
in:
Accounts receivable 89,000 150,000
Note Receivable (3,000) 0
Inventories (383,000) (263,000)
Prepaid expenses (15,000) 20,000
Increase (decrease)
in:
Accounts payable 120,000 14,000
Accrued expenses (132,000) (75,000)
Notes payable 448,000 (1,000)
Class II Deferred (20,000) 0
Income tax payable 63,000 0
Net cash provided by (used in) _________ __________
operating activities 1,096,000 699,000
Cash Flows From Investing
Activities:
(Purchase) sale of property
and equipment (130,000) (48,000)
(Purchase) sale of
marketable securities (382,000) (579,000)
Net cash provided by (used in) __________ __________
investing activities (512,000) (627,000)
Cash Flows From Financing
Activities:
(Purchase) Issue of
treasury stock (566,000) 0
Net cash provided by (used in) __________ __________
financing activities (566,000) 0
Net increase (decrease) in
cash $ 8,000 $ 72,000
Cash at beginning
of period $ 479,000 $ 292,000
Cash at end of period $ 487,000 $ 364,000
GEORGE RISK INDUSTRIES, INC
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
Note 1. Inventories
At January 31, 1996, and October 31, 1995, respectively,
inventories consisted of the following:
Raw materials $ 1,416,000 $ 1,205,000
Work in process 155,000 165,000
Finished goods 362,000 389,000
___________ ___________
1,933,000 1,759,000
___________ ___________
Less allowance for obsolete
inventory <46,000> <46,000>
___________ ___________
Totals $ 1,887,000 $ 1,713,000
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 condensed consolidated financial statements, and
with the Company's audited financial statements and discussion
for the fiscal year ended April 30, 1995.
Net cash decreased $362,000 during the quarter ended
January 31, 1996 but has increased $8,000 for the nine months
ended January 31, 1996. Net income decreased 27% for the
quarter ended January 31, 1996 as compared to the quarter
ended January 31, 1995. For the nine month period net
income increased 4% as compared to the same nine month period
last year. Accounts receivable increased $22,000 during the
current quarter but decreased $89,000 for the nine months
ended January 31, 1996. Inventories increased $174,000
during the quarter ended January 31, 1996 and increased
$383,000 for the nine months ended January 31, 1996 as
compared to a $208,000 increase during the same quarter last
year and an increase of $263,000 for the nine months ended
January 31, 1995. The decrease in cash flows also reflects
$225,000 being used to purchase marketable securities during
the current quarter.
Net cash used in investing activities for the current quarter
increased $280,000 and increased $512,000 for the nine months
ended January 31, 1996. Asset purchases increased $55,000
for the quarter ended January 31, 1996 compared to an
increase of $56,000 for the three months ended January 31,
1995. For the nine months ended January 31, 1996 asset
purchases increased $130,000 as compared to an increase of
$48,000 for the corresponding period last year. The asset
additions for the current quarter include a new computer
system costing $43,000. Included in the purchase price is
new software with enhancements linked to our present soft-
ware, new hardware, installation and support services.
Management made the decision to replace and upgrade the
present system because of continuing problems and increased
computer down time for repairs and restoring lost information.
The company expects to have the installation and conversion
completed by March 15, 1996. The company also capitalized
several mold designs that were completed during the quarter.
The company used $225,000 in the purchase of marketable
securities during the quarter ended January 31, 1996 compared
to $513,000 during the corresponding quarter last year. For
the nine month period ended January 31, 1996 purchases of
marketable securities totalled $382,000 as compared to
$579,000 for the same period last year.
The company used $50,000 in financing activities during the
quarter ended January 31, 1996. GRI bought back 50,004
shares of George Risk Industries, Inc. common stock through
a thirteen month installment agreement with a long-time
stockholder. There were no financing activities during
the three month or nine month periods ended January 31, 1995.
For the nine months ended January 31, 1996 net cash used in
financing activities totalled $566,000. This is comprised of
the previously reported stock purchase from Forward Kimball
Industries in addition to the purchase during the current
quarter. As previously reported, during the quarter ended
October 31, 1995 there was a stock distribution to officers
as compensation totalling 52,000 shares. During the current
quarter an error in the number of shares reported was
detected and and corrected. There were actually 32,000 shares
distributed. The current quarter financial statements
reflect the correction of this error.
Working capital at January 31, 1996 was $4,810,000 as compared
to $3,828,000 at January 31, 1995. The current ratio was 9.25
at January 31, 1996 and 8.5 at January 31, 1995. The acid
test ratio was 5.78 at January 31, 1996 as compared to 5.8 at
January 31, 1995. The accounts receivable turnover was 2.52
for the quarter ended January 31, 1995 and 2.41 for the cor-
responding period last year. Accounts receivable collections
have averaged $777,000 per month for the nine months ended
January 31, 1996.
Net sales decreased 12% during the current quarter ended
January 31, 1996 as compared to to the quarter ended January
31, 1995. For the nine months ended January 31, 1996 net
sales decreased 2% as compared to the nine month period
ended January 31, 1995. Management cites the major snowstorms
on the east coast and the general decline in economic con-
ditions as major reasons for the decrease in sales during the
current quarter. Also, the company has lost approximately
$1.5 million in sales since the end of the last fiscal year
due to two major customers that have gone out of business.
Several smaller customers in both Canada and the United
States have also gone out of business since the beginning of
the current fiscal year. Management expects a levelling out
of security sales to continue through the next quarter. This
is due in part to the decline in the home building industry.
However, the company has added 52 new customers during the
quarter including one distributor that is expected to be a
significant customer.
Cost of goods sold for the quarter ended January 31, 1996
decreased $76,000 as compared to the quarter ended January
31, 1995. Cost of goods sold remains at 50% of net sales
for both the three and nine month periods ended January 31,
1996. Cost of goods sold also averaged 50% of net sales for
the corresponding periods last year.
Operating expenses were 28% of sales for the three and nine
month periods ended January 31, 1996. Operating expenses
were 26% of sales for both the three and nine month periods
last year.
Other income totalled $29,000 for the quarter ended January
31, 1996. This is comprised of interest and dividends on
investments. For the three months ended January 31, 1995
other income was $8,000. For the nine months ended January
31, 1996 and January 31, 1995 other income totalled
$112,000 and $9,000 respectively.
The company's current tax expense for the quarter ended
January 31, 1996 was $228,000 as compared to $257,000 for
the quarter ended January 31, 1995. For the nine months
ended January 31, 1996 the company's tax expense was
$739,000 as compared to $645,000 for the corresponding
period last year. The company has incurred additional
tax expense of $39,000 to be paid in the next quarter as a
result of an IRS audit of the 1994 federal tax return. The
tax was based on an error in the calculation of the M-1
reconciliation of prepaid expenses on the return.
George Risk Industries is adding a new type of magnet to its
product line. The neodinium magnet has more strength and
will be replacing the magnets currently used in select switch
sets. These magnets will also be sold seperately for use by
customers in other applications. The company has also
released a new product through the keyboard segment that is a
component in fire alarm systems. Management expects the
"power loop supervisor" to open up a new market for the
company. The company is also awaiting UL approval on the
pool alarm for commercial installations.
GEORGE RISK INDUSTRIES, INC.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings n/a
Item 2. Changes in Securities n/a
Item 3. Defaults upon Senior Securities n/a
Item 4. Submission of Matters to a Vote
of Securities n/a
Item 5. Other Information n/a
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
No 8-K reports were filed during the
quarter ended January 31, 1996.
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 01-31-96 Ken R. Risk
Ken R. Risk, Director
Date 01-31-96 Eileen M. Risk
Eileen M. Risk, Director