# George Risk Industries, Inc.: Form 10-Q for the period ended Oct 31, 2024

- Company: [George Risk Industries, Inc.](/companies/rskia.md) (CIK 84112)
- Form: 10-Q
- Filed: 2024-12-16
- Accepted by EDGAR: Dec 16, 2024, 16:36 ET
- Period: 2024-10-31
- Accession: 0001493152-24-050238
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/84112/000149315224050238/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/84112/000149315224050238/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-10-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-08-01 to 2024-10-31 | $5.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-05-01 to 2024-10-31 | $11.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-08-01 to 2024-10-31 | $2.9m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2024-05-01 to 2024-10-31 | $5.7m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-08-01 to 2024-10-31 | $2.7m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-05-01 to 2024-10-31 | $5.7m | us-gaap:GrossProfit |
| Operating income | 3 months, 2024-08-01 to 2024-10-31 | $1.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-05-01 to 2024-10-31 | $3.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-08-01 to 2024-10-31 | $438.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-05-01 to 2024-10-31 | $1.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-08-01 to 2024-10-31 | $2.2m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-05-01 to 2024-10-31 | $4.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-08-01 to 2024-10-31 | $0.45 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-05-01 to 2024-10-31 | $1.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-08-01 to 2024-10-31 | $0.45 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-05-01 to 2024-10-31 | $1.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-08-01 to 2024-10-31 | 4,917,230 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-05-01 to 2024-10-31 | 4,917,230 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-05-01 to 2024-10-31 | $2.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-08-01 to 2024-10-31 | $203.0k | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 6 months, 2024-05-01 to 2024-10-31 | $308.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2024-05-01 to 2024-10-31 | $4.4m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2024-10-31 | $5.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-10-31 | $59.7m | us-gaap:AssetsCurrent |
| Total assets | at 2024-10-31 | $62.8m | us-gaap:Assets |
| Current liabilities | at 2024-10-31 | $5.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-10-31 | $8.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-10-31 | $54.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 13,443 characters.

MANAGEMENT DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

*This Quarterly Report on Form 10-Q, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the “safe harbor” created by those sections. Any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project” or “continue,” and the negatives of such terms are intended to identify forward-looking statements. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.*

*The following discussion should be read in conjunction with the attached condensed financial statements, and with the Company’s audited financial statements and discussion for the fiscal year ended April 30, 2024.*

### Executive Summary

The Company’s performance remained steady through the first half of the current fiscal year with the second quarter showing a decrease in sales over the first quarter of the current fiscal year. This is mainly due to not having a few vital raw materials that are needed to complete the manufacture of our products. Also, management is not seeing as many high dollar orders as there were in the first quarter This is because production has caught up on back orders and, since we are tied to the housing market, there almost always is a decline from the first to second quarter and inflation is still very high. As far as overall company performance, the net income is up when comparing the current six-month period to the prior six-month period. Management continues to keep manufacturing and operating expenses in check and the current year realized and unrealized gains on investments have increased over the same periods last year. Opportunities include keeping up with the business growth, finding ways to get our products out to our customers in a timelier manner, which includes looking into more automation, and to continue looking at businesses that might be a good fit to purchase. We also continue to work on new products that will be fit for our industry and business. Challenges in the coming months include continuing to get product out to customers in a timely manner and dealing with ongoing effects of inflation. Management continues to work at keeping operations flowing as efficient as possible with the hopes of getting the facilities running leaner and more profitable than ever before.

#### Results of Operations

- Net sales were $5,613,000 for the quarter ended October 31, 2024, which is a 7.27% decrease from the corresponding quarter last year. Year-to-date net sales were $11,394,000 at October 31, 2024, which is a 5.69% increase from the same period last year. The decrease in sales in the current quarter is a result of the business getting caught up on back orders and seeing the lingering results of inflation having smaller orders coming in. But management believes the ongoing commitment towards outstanding customer service and customization of products are just a few of the many reasons sales continue to grow.
- Cost of goods sold was 51.65% of net sales for the quarter ended October 31, 2024 and was 48.72% for the same quarter last year. Year-to-date cost of goods sold percentages were 50.33% for the current six months and 50.19% for the corresponding six months last year. The current cost of goods sold percentage goals of keeping labor and other manufacturing expenses at less than 50% are just slightly over for the quarter and year-to-date results. The increased cost of goods sold percentages are a result of increased wages and some increased material costs as management continues to work on finding ways to be more efficient.
- Operating expenses were up $95,000 for the quarter and were up $188,000 for the six-months ended October 31, 2024 as compared to the corresponding periods last year. When comparing percentages in relation to net sales, the operating expenses for the quarter ended October 31, 2024 was 21.93% of net sales while it was 18.77% of net sales for the same quarter the prior year. For year-to-date numbers, operating expense were 21.09% and 20.55% of net sales for the six months ended October 31, 2024 and 2023, respectively. The Company has been able to keep the operating expenses at less than 25% of net sales for many years now; however, the actual dollar amount increase is because of increased commission amounts (since sales have increased) and additional labor costs for wage increases.
- Income from operations for the quarter ended October 31, 2024 was at $1,483,000, which is a 24.64% decrease from the corresponding quarter last year, which had income from operations of $1,968,000. Income from operations for the six months ended October 31, 2024 was at $3,256,000, which is a 3.20% increase from the corresponding six months last year, which had income from operations of $3,155,000.
- Other income and expenses are up when comparing the current quarter to the same quarter of the prior year, with an increase of $3,273,000 in the current quarter. Comparably, other income and expenses are up by $3,375,000 when comparing the current six-month period to the prior six-month period. Most of the activity in these accounts consists of investment interest, dividends, real gains or losses on sale of investments, and unrealized gains or losses on equity securities. The main reason for the gains in the current quarter and year-to-date numbers are the unrealized gain and loss on equity securities numbers. The stock market influences these figures, and the current state of the economy has been performing well.
- Overall, net income for the quarter ended October 31, 2024 was up $2,270,000, or 4,127.27%, over the same quarter last year. Conversely, net income for the six-month period ended October 31, 2024 was up $2,601,000, or 112.16%, over the same period in the prior year.
- Earnings per common share for the quarter ended October 31, 2024 were $0.45 per share and $1.00 per share for the year-to-date numbers. EPS for the quarter and six months ended October 31, 2023 were ($0.01) per share and $0.47 per share, respectively.

21

#### Liquidity and capital resources

#### Operating

- Net cash decreased $1,658,000 during the six months ended October 31, 2024 compared to a decrease of $1,381,000 during the corresponding period last year.
- Accounts receivable increased $19,000 for the six months ended October 31, 2024 compared with a $553,000 increase for the same period last year. The smaller current year increase is a result of improved collection on accounts receivable. An analysis of accounts receivable shows that 6.69% of the receivables were over 90 days at October 31, 2024, while 6.71% were over 90 days for the same period last year.
- Inventories decreased $435,000 during the current six-month period compared to a $1,103,000 increase last year. The decrease in the current year is primarily due to fewer purchases of raw materials compared to the prior six-month period.
- Prepaid expenses and other current assets increased $21,000 for the current six months, primarily due to increased prepayments on inventory during the current six-month period. The prior year six months showed a $608,000 decrease in prepaid expenses.
- The federal solar tax credit receivable represents the remaining federal solar tax credits we will receive from our purchase of transferrable tax credits, pursuant to transferability provisions of the Inflation Reduction Act of 2022.
- Accounts payable decreased $33,000 for the current six-month period compared to a decrease of $323,000 for the prior six-month period. The company strives to pay all invoices within terms, and the variance is primarily due to the timing of receipt of products and payment of invoices.
- The federal solar tax credit payment payable represents the remaining liability for the purchase of transferrable tax credits. This amount was paid in November 2024.
- The deferred gain on solar tax credit represents the portion of the gain on the purchase of federal solar tax credits that has not yet been recognized. This will be recognized as more of the federal solar tax credits are applied to income tax payable.
- Accrued expenses decreased $29,000 for the current six-month period compared to a $72,000 decrease for the six-month period ended October 31, 2023. The difference in the amounts is primarily due to timing issues.
- Income tax payable increased $65,000 for the current six-month period, compared to having a decrease of $25,000 in income tax receivable for the six-months ended October 31, 2023. The current year income tax payable increase is a result of increased income.

#### Investing

- As for our investment activities, the Company purchased $308,000 of property and equipment during the current six-month period. In comparison, $243,000 was spent on purchases of property and equipment during the corresponding six months last year.
- The Company continues to purchase marketable securities, which include municipal bonds and quality stocks. During the six-month period ended October 31, 2024 there was quite a bit of buy/sell activity in the investment accounts. Net cash used to purchase marketable securities for the six-month period ended October 31, 2024 was $361,000 compared to $273,000 cash used in the prior six-month period. 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.

22

- The Company received a cash distribution of $269,000 from the investment in the limited land partnership during the six-month period ending October 31, 2024. This was the second distribution received from the sale of the limited land partnership and the rest of the proceeds are contingent on finishing wetland restoration of the land.

#### Financing

- The Company continues to purchase back its common stock when the opportunity arises. For the six-month period ended October 31, 2024, the Company did not purchase any treasury stock, compared to $41,000 repurchased in the corresponding six-month period last year.
- The company declared a dividend of $1.00 per share of common stock on September 30, 2024, which was paid out during the second quarter. This is an increase to the dividend of $0.65, which was declared and paid during the second fiscal quarter last year.

#### New Product Development

The Company and its engineering department continue to develop enhancements to product lines, develop new products that complement existing products, and look for products that are well suited to our distribution network and manufacturing capabilities. Items currently in various stages of the development process include:

- Explosion proof contacts that will be UL listed for hazardous locations are in development. There has been demand from our customers for this type of high security magnetic reed switch.
- The Company is developing magnetic contacts which are listed under UL 634 Level 2. These sensors are for high security applications such as government buildings, military use, nuclear facilities, and financial institutions.
- Research is being done on updating our small profile glass break detector, in addition to looking at the development of programmable temperature and humidity sensors with built-in hysteresis. An expansion of the GR3045 panic switch is in the works to include single pull, double throw (SPDT) versions, latching, and non-latching with LED indicator lights. A miniature profile overhead door contact based on the popular 4532 is also in development.
- Wireless technology is a main area of focus for product development. We are considering adding wireless technology to some of our current products. A wireless contact switch is in the final stages of development. Also, we are working on wireless versions of monitoring devices which include glass break detection, tilt sensing and environmental monitoring. A redesign of our brass water valve shut-off system is near completion.

#### Other Information

In addition to researching and developing new products, management is always open to the possibility of acquiring a business or product line that would complement our existing operations. Due to the Company’s strong cash position, management believes this could be achieved without the need for outside financing. The intent is to utilize the equipment, marketing techniques and established customers to deliver new products and 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.

## Controls and procedures

As filed, 3,491 characters.

Our management, under the supervision and with the participation of our chief executive officer (also working as our chief financial officer), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of October 31, 2023. Based on that evaluation, management concluded that the disclosure controls and procedures employed at the Company were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

In our annual report filed on Report 10-K for the year ended April 30, 2024, management identified the following material weakness in our internal control over financial reporting:

- The small size of our Company limits our ability to achieve the desired level of separation of duties for proper internal controls and financial reporting, particularly as it relates to financial reporting to assure material disclosures or implementation of newly issued accounting standards are included. We have hired a Controller, and a secondary review of annual and quarterly filings does occur with an outside CPA. However, the current CEO and CFO roles are being fulfilled by the same individual and we do not have an audit committee. We do not believe we have met the full requirement for separation of duties for financial reporting purposes.

Despite the material weaknesses in financial reporting noted above, we believe that our financial statements included in this report fairly present our financial position, results of operations and cash flows as of and for the periods presented in all material respects.

We are committed to the establishment of effective internal controls over financial reporting and will place emphasis on quarterly and year-end closing procedures, timely documentation, and internal review of accounting and financial reporting consequences of material contracts and agreements, and enhanced review of all schedules and account analyses by experienced accounting department personnel or independent consultants.

We will continue to follow the standards for the Public Company Accounting Oversight Board (United States) for internal control over financial reporting to include procedures that:

- Pertain to the maintenance of records in reasonable detail that fairly reflect the transactions and dispositions of the Company’s assets;
- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and
- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

### Changes in Internal Control over Financial Reporting

Other than those mentioned above, there were no changes in our internal control over financial reporting during the fiscal quarter ended October 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

GEORGE RISK INDUSTRIES, INC.

Filed Dec 16, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-050238. Last ingested by Listed: Oct 24, 2026, 14:54 ET. No prices; not investment advice.