Attached files
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, 2012
[ ] 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 13, 2012 was 5,037,501.
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, 2012, are attached hereto.
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2012 2012
------------ ------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 6,506,000 $ 5,773,000
Investments and securities 20,398,000 20,280,000
Accounts receivable:
Trade, net of $5,000 and $6,000
doubtful account allowance 1,593,000 1,669,000
Other -- 1,000
Note receivable, current 5,000 4,000
Inventories 2,306,000 2,351,000
Prepaid expenses 146,000 141,000
Deferred current income taxes 130,000 119,000
------------ ------------
Total Current Assets $31,084,000 $30,338,000
Property and Equipment, net, at cost 766,000 771,000
Other Assets
Investment in Limited Land Partnership,
at cost 228,000 228,000
Projects in process 31,000 44,000
Note receivable 1,000 5,000
Other 1,000 1,000
------------ ------------
Total Other Assets $ 261,000 $ 278,000
TOTAL ASSETS $32,111,000 $31,387,000
============ ============
GEORGE RISK INDUSTRIES, INC.
BALANCE SHEETS
July 31, April 30,
2012 2012
------------ ------------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable, trade $ 49,000 $ 96,000
Dividends payable 589,000 589,000
Accrued expenses:
Payroll and related expenses 279,000 212,000
Property taxes 2,000 --
Income tax payable 465,000 246,000
------------ ------------
Total Current Liabilities $ 1,384,000 $ 1,143,000
Long-Term Liabilities
Aircraft ownership deposit payable 4,000 5,000
Deferred income taxes 114,000 124,000
------------ ------------
Total Long-Term Liabilities $ 118,000 $ 129,000
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 336,000 278,000
Retained earnings 31,039,000 30,603,000
Treasury stock, 3,460,282 and 3,460,282
shares, at cost (3,451,000) (3,451,000)
------------ ------------
Total Stockholders' Equity $30,609,000 $30,115,000
TOTAL LIABILITES AND STOCKHOLDERS' EQUITY $32,111,000 $31,387,000
============ ============
GEORGE RISK INDUSTRIES, INC.
INCOME STATEMENTS
FOR THE THREE MONTHS ENDED JULY 31, 2012 AND 2011
July 31,
2012 2011
------------ ------------
(unaudited) (unaudited)
Net Sales $ 2,542,000 $ 2,598,000
Less: Cost of Goods Sold (1,356,000) (1,191,000)
------------ ------------
Gross Profit $ 1,186,000 $ 1,407,000
Operating Expenses:
General and Administrative 202,000 206,000
Sales 425,000 341,000
Engineering 18,000 16,000
Rent Paid to Related Parties 11,000 11,000
------------ ------------
Total Operating Expenses $ 656,000 $ 574,000
Income From Operations 530,000 833,000
Other Income (Expense)
Other Income 14,000 8,000
Dividend and Interest Income 203,000 192,000
Gain (Loss) on Sale of Investments (151,000) 379,000
------------ ------------
$ 66,000 $ 579,000
Income Before Provisions for Income Taxes 596,000 1,412,000
Provisions for Income Taxes
Current Expense 222,000 292,000
Deferred tax expense (provision) (62,000) 328,000
------------ ------------
Total Income Tax Expense $ 160,000 $ 620,000
Net Income $ 436,000 $ 792,000
Basic and Diluted Earnings Per Share of
Common Stock $ 0.09 $ 0.16
Weighted Average Number of Common Shares
Outstanding 5,042,550 5,048,365
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
July 31,
2012 2011
---------------------------
(unaudited) (unaudited)
Net Income $ 436,000 $ 792,000
------------ ------------
Other Comprehensive Income, net of tax
Unrealized gain (loss) on securities:
Unrealized holding gains (losses)
arising during period (461,000) (564,000)
Reclassification adjustment for gains
(losses) included in net income 561,000 (114,000)
Income tax expense related to other
comprehensive income (42,000) 283,000
------------ ------------
Other Comprehensive Income (Loss) $ 58,000 $ (395,000)
Comprehensive Income (Loss) $ 494,000 $ 397,000
============ ============
GEORGE RISK INDUSTRIES, INC.
STATEMENT OF CASH FLOWS
For the three months
ended July 31,
2012 2011
---------------------------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 436,000 $ 792,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 42,000 37,000
(Gain) loss on sale of investments 151,000 (379,000)
Reserve for bad debts (1,000) 21,000
Reserve for obsolete inventory (13,000) 8,000
Deferred income taxes (62,000) 328,000
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable 77,000 (406,000)
Inventories 57,000 (243,000)
Prepaid expenses (6,000) (6,000)
Increase (decrease) in:
Accounts payable (47,000) (37,000)
Accrued expenses 69,000 60,000
Income tax payable 219,000 290,000
------------ ------------
Net cash provided by (used in) operating
activities $ 922,000 $ 465,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Other assets manufactured & purchased 13,000 145,000
(Purchase) of property and equipment (36,000) (169,000)
Proceeds from sale of marketable securities 1,000 8,000
(Purchase) of marketable securities (170,000) (169,000)
(Loans) made to employees -- (2,000)
Collection of loans to employees 2,000 2,000
(Purchase) of treasury stock -- (20,000)
------------ ------------
Net cash provided by (used in) investing
activities $ (190,000) $ (205,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by (used in) financing
activities $ -- $ --
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $ 732,000 $ 264,000
Cash and cash equivalents, beginning of
period $ 5,773,000 $ 5,254,000
------------ ------------
Cash and cash equivalents, end of period $ 6,505,000 $ 5,518,000
============ ============
Supplemental Disclosure of Cash Flow
Information
Cash payments for:
Income taxes $0 $0
Interest expense $0 $0
GEORGE RISK INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2012
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, 2012 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 invest-
ments, that are measured at fair value in these financial statements.
Available-for-sale investments in debt securities mature between August 2012
and June 2042. 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 stockholder's equity
and other comprehensive income. Dividend and interest income are accrued as
earned.
As of July 31, 2012, investments available-for-sale consisted of the
following:
Gross Gross
Cost Unrealized Unrealized Fair
Basis Gains Losses Value
------------ ------------ ------------ ------------
Municipal bonds $ 9,350,000 $ 355,000 $ (35,000) $ 9,670,000
Corporate bonds $ 354,000 $ 13,000 $ -- $ 367,000
Equity securities $ 8,681,000 $ 524,000 $ (279,000) $ 8,926,000
Money markets/CDs $ 1,435,000 $ -- $ -- $ 1,435,000
------------ ------------ ------------ ------------
Total $19,820,000 $ 892,000 $ (314,000) $20,398,000
In accordance with US GAAP, 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 im-
pairment losses of $20,000 for the quarter ended July 31, 2012 and did not
record any impairment losses for the quarter ended July 31, 2011.
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, 2012.
Less than 12 months 12 months or greater Total
----------------------- --------------------- ---------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Loss Value Loss Value Loss
...........................................................................
Municipal bonds
$ 511,000 $ (5,000) $ 870,000 $ (30,000) $ 1,381,000 $ (35,000)
Corporate bonds
$ 152,000 $ -- $ -- $ -- $ 152,000 $ --
Equity securities
$1,690,000 $(162,000) $ 931,000 $(117,000) $ 2,621,000 $ (279,000)
----------- ---------- ----------- ---------- ------------ ------------
Total
$2,353,000 $(167,000) $1,801,000 $(147,000) $ 4,154,000 $ (314,000)
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, 2012.
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,
2012.
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. The individual holdings have been
evaluated, and due to management's plan to hold on to these investments for
an extended period, the Company does not consider these investments to be
other-than-temporarily impaired at July 31, 2012.
Note 3 Inventories
Inventories at July 31, 2012, consisted of the following:
Raw Materials $ 1,688,000
Work in Process 521,000
Finished Goods 275,000
------------
$ 2,484,000
Less: allowance for obsolete inventory (178,000)
------------
Net Inventories $ 2,306,000
============
Note 4 Business Segments
The following is financial information relating to industry segments:
For the quarter ended
July 31,
2012 2011
---------------------------
Net revenue:
Security alarm products 2,228,000 2,279,000
Other products 314,000 319,000
------------ ------------
Total net revenue $ 2,542,000 $ 2,598,000
Income from operations:
Security alarm products 465,000 731,000
Other products 65,000 102,000
------------ ------------
Total income from operations $ 530,000 $ 833,000
Identifiable assets:
Security alarm products 3,372,000 3,495,000
Other products 1,182,000 1,201,000
Corporate general 27,557,000 25,591,000
------------ ------------
Total assets $32,111,000 $30,287,000
Depreciation and amortization:
Security alarm products 6,000 6,000
Other products 32,000 25,000
Corporate general 4,000 6,000
------------ ------------
Total depreciation and amortization $ 42,000 $ 37,000
Capital expenditures:
Security alarm products 1,000 --
Other products 35,000 169,000
Corporate general -- --
------------ ------------
Total capital expenditures $ 36,000 $ 169,000
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, 2012
----------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
------------- -------------- ---------
Net Income $ 436,000
=============
Basic EPS $ 436,000 5,042,550 $ 0.0865
Effect of dilutive securities:
Convertible preferred stock -- 20,500 (0.0004)
------------- -------------- ----------
Diluted EPS $ 436,000 5,063,050 $ 0.0861
For the three months ended July 31, 2011
----------------------------------------
Income Shares Per-share
(Numerator) (Denominator) Amount
------------- -------------- ---------
Net Income $ 792,000
=============
Basic EPS $ 792,000 5,048,365 $ 0.1569
Effect of dilutive securities:
Convertible preferred stock -- 20,500 (0.0007)
------------- -------------- ----------
Diluted EPS $ 792,000 5,068,865 $ 0.1562
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 quarters ending
July 31, 2012 and 2011, respectively. There were no discretionary con-
tributions paid during the quarters ending July 31, 2012 and 2011, re-
spectively.
Note 7 Fair Value Measurements
Generally accepted accounting principles in the United States of America
(US GAAP) 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 restrictions, and credit risk.
US GAAP 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 priority to un-
observable inputs (level 3 measurements). The levels of the fair value
hierarchy under US GAAP 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, 2012, our investments consisted of money markets, CDs,
publicly traded equity securities and certain state and municipal debt
securities. Our marketable securities are valued using third-party broker
statements. The value of the investments is derived from quoted market in-
formation. 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, which is the case for municipal and corporate bonds, the
inputs are recorded as Level 2.
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 US GAAP, 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, 2012
---------------------------------------------------
Level 1 Level 2 Level 3 Total
------- ------- ------- -------
Assets:
Money Markets and CDs $ 1,435,000 -- -- $ 1,435,000
Equity Securities $ 8,926,000 -- -- $ 8,926,000
Municipal and
Corporate Bonds $ -- $10,037,000 -- $10,037,000
----------- ----------- ----------- -----------
Total fair value of
assets measured on a
recurring basis $10,361,000 $10,037,000 $ -- $20,398,000
=========== =========== =========== ===========
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, 2012.
Liquidity and capital resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Operating
---------
Net cash increased $732,000 during the quarter ended July 31, 2012 as com-
pared to an increase of $264,000 during the corresponding quarter last year.
Accounts receivable decreased $77,000 for the quarter ending July 31, 2012
compared with a $406,000 increase for the same quarter last year. The de-
crease in cash flow for accounts receivable for the current period is a re-
flection of a slight decrease in sales. At the quarter ended July 31, 2012,
68.42% of the receivables are considered current (less than 45 days) while
1.09% of the total are over 90 days past due. This is in comparison to
having 68.42% of the receivables considered current and 4.95% over 90 days
past due at July 31, 2012. Inventories decreased $57,000 during the current
quarter as compared to a $243,000 increase last year. Raw material purchases
have declined as a result of the decrease in sales and the price of raw
materials has stabilized from the enormous price increase we experienced that
the same time last year. At the quarter ended July 31, 2012 there was a
$6,000 increase in prepaid expenses and at July 31, 2011, there was a $2,000
increase.
At the quarter ended July 31, 2012, accounts payable shows a decrease of
$47,000 as compared to a decrease of $37,000 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 increased
$69,000 for the current quarter as compared to a $60,000 increase for the
quarter ended July 31, 2011. Income tax payable increased $219,000 for the
quarter ended July 31, 2012, as it also increased $290,000 for the cor-
responding quarter the same year. The slight decrease in income tax payable
is a reflection of the decrease in income for the current quarter.
Investing
---------
As for our investment activities, the Company has spent approximately $36,000
on acquisitions of property and equipment for the current fiscal quarter. In
comparison with the corresponding quarter last year, there was activity of
$169,000. The $169,000 from last year represents an in-house mold, pre-
viously a project in process, which was completed during the quarter.
Additionally, the Company continues to purchase marketable securities, which
include municipal bonds and quality stocks. Cash spent on purchases of mar-
ketable securities for the quarter ended July 31, 2012 was $170,000 compared
with $169,000 spent during the quarter ended July 31, 2012. 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. Un-
fortunately, for the quarter ended July 31, 2012 the Company did not purchase
back any treasury stock but $20,000 worth of treasury stock was purchased
back during the quarter ended July 31, 2011. We have been actively searching
for stockholders that have been "lost" over the years. The payment of
dividends over the last eight fiscal years has also prompted many stock-
holders 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,
2012 2011
---------------------------
Working capital
(current assets - current liabilities) $ 29,700,000 $ 28,058,000
Current ratio
(current assets / current liabilities) 22.460 24.961
Quick ratio
((cash + investments + AR) / current liabilities)
20.590 22.932
Results of Operations
~~~~~~~~~~~~~~~~~~~~~
Net sales were $2,542,000 for the quarter ended July 31, 2012, which is a
decrease of 2.16% from the corresponding quarter last year. Net sales for
the quarter ended July 31, 2011 were $2,598,000. The Company's products are
tied to the housing market and the decrease in sales is a result of the con-
tinued struggles in the economy. The Company is focusing on keeping and in-
creasing sales by having excellent customer service and being willing to make
many customized parts. Cost of goods sold was 53.34% of net sales for the
quarter ended July 31, 2012 and 45.84% for the quarter ended July 31, 2011.
Management's goal is to keep labor and other manufacturing expenses within
the range of 45 to 50%. But the slight decrease in sales and the increase
in raw materials and wages have kept the Company outside of its goal.
Operating expenses were 25.81% of net sales for the quarter ended July 31,
2012 as compared to 22.1% for the corresponding quarter last year. Manage-
ment's goal is to always keep the operating expenses around 30% or less of
net sales, as management has been able to achieve over the years. Income
from operations for the quarter ended July 31, 2012 was at $530,000, which is
a 36.37% decrease from the corresponding quarter last year, which had income
from operations of $833,000.
Other income and expenses showed a $66,000 gain for the quarter ended July
31, 2012 as compared to having a $579,000 gain for the quarter ended July 31,
2011. The main reason for the smaller gain in other income for the current
quarter is that we had a $151,000 of realized loss on investments for the
quarter as compared to a $379,000 realized gains for the corresponding
quarter last year. In turn, net income for the quarter ended July 31, 2012
was at $436,000, a 44.95% decrease from the corresponding quarter last year,
which showed net income of $792,000. Earnings per share for the quarter
ended July 31, 2012 were $0.09 per common share and $0.16 per common share
for the quarter ended July 31, 2011.
New Product Development
~~~~~~~~~~~~~~~~~~~~~~~
The Garage Door Monitor (pt # DM?1) is now on the market and showing good
sales with repeat customers. The DM?1 will monitor when the garage door has
been left open and will automatically shut the door - either by a timed delay
after the door has been opened or closing at a set time every day. Manage-
ment believes this will be a good upsell as many home burglars gain access
through a garage door that is left open or unlocked.
Engineering has completed work on a plastic housing for our very popular
MF-875 flat magnet and new rare earth flat magnet (MMF-875). They are also
looking to complete a design on a 110V Current Controller that would work
with our contact switches to secure the door of a storage unit. This switch
can also turn on the light when the door is opened.
A fuel level monitor is in the engineering stage. Several security companies
from around the world have told us fuel theft is a major problem. They are
looking for a product that will tie into the security system if tanks or
trucks are tampered with.
Other products in engineering include a vent airflow sensor that will send a
signal if the air conditioner breaks, loses power or freezes up in a server
room or anywhere else temperatures need to be monitored. We are also con-
tinuing work on a wireless pool alarm and a triple biased high security
switch.
Recently Issued Accounting Pronouncements
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In June 2011, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income
("ASU 2011-05"), which amends the disclosure requirements for the present-
ation of comprehensive income. This guidance, effective retrospectively for
interim and annual periods beginning on or after December 15, 2011, requires
presentation of total comprehensive income, the components of net income, and
the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate, but consecutive state-
ments. ASU 2011-05 eliminates the option to present the components of other
comprehensive income as part of the statement of changes in equity. ASU
2011-05 does not change the items that must be reported in other comprehen-
sive income, or when an item of other comprehensive income must be reclass-
ified to net income. We have included a Statement of Comprehensive Income in
our financial statements. The adoption of this accounting guidance had no
impact on our financial statements.
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. 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,
2012, 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 object-
ives 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
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
financial 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
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, 2012 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 Section
404(c) of the Sarbanes-Oxley Act of 2002, as amended, that permits the Cor-
poration 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. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information relating to the Company's
repurchase of common stock for the first quarter of fiscal year 2013.
Period Number of shares repurchased
------------------------------- ----------------------------
May 1, 2012 - May 31, 2012 --
June 1, 2012 - June 30, 2012 --
July 1, 2012 - July 31, 2012 --
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. (Removed and Reserved)
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, 2012.
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 09-13-2012 By: /s/ Ken R. Risk
Ken R. Risk
President and Chairman of the Board
Date 09-13-2012 By: /s/ Stephanie M. Risk
Stephanie M. Risk
Chief Financial Officer and Controller
