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 July 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: 6,061,698 PART I. FINANCIAL INFORMATION GEORGE RISK INDUSTRIES, INC. Balance Sheet July 31, 1996 [CAPTION] [S] [C] ASSETS Current Assets Cash $ 1,501,000 Marketable securities 2,385,000 Accounts receivable: Trade, net of $50,000 doubtful account allowance 1,022,000 Officers and employees 1,000 Inventories (Note 1) 1,205,000 Prepaid expenses 115,000 Deferred income taxes 52,000 ___________ Total current assets 6,281,000 Property And Equipment, Net, At Cost 594,000 Other Assets 75,000 ___________ TOTAL ASSETS $ 6,950,000 [CAPTION] LIABILITIES AND STOCKHOLDERS EQUITY [S] [C] Current Liabilities Accounts payable, trade $ (6,000) Notes payable, current portion 77,000 Accrued expenses 645,000 ___________ Total current liabilities 716,000 Long term Liabilities Notes payable, FKI, Inc. 229,000 Deferred Income Taxes 27,000 ___________ Total long term liabilities 256,000 Stockholders Equity Convertible preferred stock 257,000 Common stock, Class A 850,000 Additional paid-in capital 1,644,000 Retained earnings 3,793,000 Less cost of treasury stock (566,000) ___________ Total stockholders equity 5,978,000 ___________ TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 6,950,000 [FN] See Accompanying Notes to Financial Statements GEORGE RISK INDUSTRIES INC. STATEMENTS OF INCOME (unaudited) [CAPTION] for three months ended Jul.31 1996 1995 _______________________ [S] [C] [C] Net sales $2,716,000 $2,402,000 Less cost of goods sold 1,429,000 1,199,000 _______________________ Gross profit $1,287,000 $1,203,000 Operating expenses G&A 139,000 154,000 Sales 469,000 458,000 Engineering 1,000 14,000 _______________________ $ 609,000 $ 626,000 Income from operations 678,000 577,000 Other income (expenses) Interest income 52,000 39,000 Interest expense (9,000) _______________________ $ 41,000 $ 39,000 Income before prov- ision for income tax $ 721,000 $ 616,000 Provision for income tax Current expense 303,000 273,000 _______________________ Net Income $ 418,000 $ 343,000 Net income per common share $ 0.07 $ 0.06 Weighted average number of common shares out- standing 6,061,698 6,622,908 [FN] See Accompanying Notes To Financial Statements GEORGE RISK INDUSTRIES, INC Statements of Cash Flows For The Three Months Ended July 31, 1996 and 1995 [CAPTION] 1996 1995 ___________________________ [S] [C] [C] Cash Flow From Operating Activities: Net income $ 418,000 $ 343,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 24,000 22,000 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (53,000) 52,000 Note Receivable 1,000 0 Inventories 265,000 (123,000) Prepaid expenses 51,000 (4,000) Increase (decrease) in: Accounts payable (64,000) (17,000) Accrued expenses (25,000) 13,000 Notes payable (16,000) (100,000) Income tax payable 303,000 218,000 Net cash provided by (used in) _________ __________ operating activities 904,000 404,000 Cash Flows From Investing Activities: (Purchase) sale of property and equipment (63,000) (28,000) (Purchase) sale of marketable securities (247,000) (88,000) Net cash provided by (used in) __________ __________ investing activities (310,000) (116,000) Net increase (decrease) in cash $ 594,000 $ 288,000 Cash at beginning of period $ 907,000 $ 479,000 Cash at end of period $1,501,000 $ 767,000 GEORGE RISK INDUSTRIES, INC NOTES TO FINANCIAL STATEMENTS January 31, 1996 Note 1. Inventories At July 31, 1996, and April 30, 1996, respectively, inventories consisted of the following: Raw materials $ 881,000 $ 1,124,000 Work in process 201,000 166,000 Finished goods 170,000 227,000 ___________ ___________ 1,252,000 1,517,000 ___________ ___________ Less allowance for obsolete inventory <46,000> <46,000> ___________ ___________ Totals $ 1,205,000 $ 1,471,000 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, 1996. Net cash increased $594,000 during the quarter ended July 31, 1996 as compared to an increase of $288,000 during the corres- ponding quarter last year. Inventories decreased $265,000 or 18% during the current quarter. This is due in part to an increase in sales which resulted in less stocked items on hand. Inventories increased $123,000 during the quarter ended July 31, 1995. Prepaid expenses decreased $51,000 during the quarter ended July 31, 1996. The deposit on the new computer system, which totalled $41,000, was moved from the prepaid expense to property, plant and equipment when it became operational in May. The purchases of marketable securities and property and equip- ment totalled $310,000 for the current quarter. The company invested $200,000 in the purchase of additional municipal bonds. Fixed asset purchases included a pen plotter for the Engineering department and a welder and drill press for production. Cash used in investing activities totalled $116,000 for the com- parable period last year. Working capital at July 31, 1996 was $5,565,000 as compared to $4,418,000 at July 31, 1995. The current ratio was 8.78 for the quarter ended July 31, 1996 and 7.30 for the quarter ended July 31, 1995. The acid test ratio was 6.9 at July 31, 1996 as compared to 4.8 at July 31, 1995. The accounts receivable turnover for the first quarter ended July 31, 1996 was 2.7 as compared to 2.6 for the first quarter last year. Net sales for the three months ended July 31, 1996 increased 13% as compared to the corresponding three month period last year. As a percent of sales, cost of goods sold increased 2.71% as compared to the quarter ended July 31, 1995. This increase is due mainly to higher labor and wage related expenses in relation to keeping up with the increase in sales. Effective July 1, 1996 management authorized a .10 (ten cent) per hour wage increase for all full time hourly employees. This across the board increase will increase the company's payroll expenses approximately $30,000 for the fiscal year ending April 30, 1997. Interest expense totalled $9,000 for the current quarter compared to no interest expense for the three months ended July 31, 1995. The expense is comprised of imputed interest on the Forward Kimball Industries note payable and the W.A. Richardson note payable. The purpose of these notes was the purchase of George Risk Industries Inc., common stock by the company as reported at the time of purchase. Interest income increased 32% for the quarter ended July 31, 1996 as compared to the same period last year. The company continues to invest its excess cash in interest bearing marketable securities. During the next quarter the company will be purchasing a TMC molding machine with an approximate cost of $52,000. This machine is fully automated and computerized and will be oper- ated in addition to the four machines that are in use now. The machine will enable the department to keep up with the increased demand for plastic parts and will be more energy efficient. Management announced that they will expand assembly operations in Gering, Nebraska in late September 1996. This will result in the initial hiring of 20 additional employees with the possibility of more at a later date. Management does not anticipate any increase in overall operating expenses or capital asset purchases that will be material to the company's financial position. The company purchased a used mini van in August 1996 for sales purposes and will utilize it for any commuting or transportation to and from the Gering site. Also effective in the next quarter will be a wage increase due to the change in the minimum wage law passed by congress recently. Effective September 1, 1996, all full time hourly employees who are earning less than $5.00 per hour will receive an increase to $5.00 per hour. All part-time hourly employees will be in- creased to the mandatory $4.75 per hour minimum wage. Salaried employees and others earning more than $5.00 per hour will be compensated for the change individually at the time of their annual review. Management anticipates that this will increase the payroll and related expenses approximately $60,000 this fiscal year, bringing the annual payroll to slightly more than $3,000,000. 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 July 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 07-31-96 Ken R. Risk Ken R. Risk, Director Date 07-31-96 Eileen M. Risk Eileen M. Risk, Director