U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1998
Commission File Number: 0-5378
George Risk Industries, Inc.
(Name of small business issuer in its charter)
Colorado 84-0524756
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
802 South Elm
Kimball, NE 69145
(Address of principal executive (Zip Code)
offices)
Issuer's telephone number: (308) 235-4645
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, $.10 par value
(Title of class)
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
Check if disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
Issuer's revenues for its most recent fiscal year: $11,508,000
The aggregate market value of the voting stock held by non-
affiliates as of July 2, 1998, is approximately $6,400,000.
State the number of shares outstanding of each class of common
equity as of the latest practicable date: As of June 30, 1998:
6,054,108
Documents incorporated by reference: None
Part I
Item 1 Business
(a) Business Development
George Risk Industries, Inc. (GRI or the company) was
incorporated in 1967 in Colorado. The company is presently
engaged in the design, manufacture, and sale of computer
keyboards, push button switches, and burglar alarm components and
systems.
GRI Telemark Corporation (Telemark), a majority owned subsidiary,
was incorporated in October 1983 for the purpose of marketing
security alarm products. As of April 13, 1993, Telemark was
merged into GRI and presently operates as a division of GRI.
Products, Market, and Distribution
The company designs, manufactures, and sells computer keyboards,
push-button switches, and burglar alarm components and systems.
The security burglar alarm products comprise approximately 89
percent of net revenues and are sold through distributors and
private board customers.
The security segment has approximately 650 customers. One of the
distributors accounts for approximately 34 percent of the
company's sales of these products. Loss of this distributor would
be significant to the company. However, this customer has
purchased from the company for many years and is expected to
continue.
The keyboard segment has approximately 300 customers. Keyboard
products are sold to original equipment manufacturers to their
specifications and to distributors of off-the-shelf keyboards of
proprietary design.
Competition
The company has intense competition in the keyboard and burglar
alarm lines.
The burglar alarm segment has five or six major competitors. The
company competes well based on price, product design, quality,
and prompt delivery.
The competitors in the keyboard segment are larger companies with
automated production facilities. GRI has emphasized small custom
order sales that many of its competitors decline or discourage.
Raw Materials
Sources for the company's raw materials have been limited in the
past. The company has been developing other sources of supply
including offshore vendors.
Research and Development
The company performs research and development for its customers
from time to time. Costs in connection with such product
development have been borne by the customers.
Employees
GRI has approximately 250 employees.
Item 2 Properties
The company's plant and offices are located in Kimball, Nebraska.
The facilities are owned by the company except for approximately
15,000 square feet rented on a month-to-month basis. The company
leases the building for $1,335 per month with Delores Spradlin,
sister of Ken R. Risk, who is an officer and director of the
company.
As of October 1, 1996, the company also began operating a
satellite plant in Gering, NE. This expansion was done in
coordination with Twin Cities Development and the company leases
approximately 3,640 square feet from Agroma International.
Currently there are 30 employees at the Gering site.
Item 3 Legal Proceedings
Not applicable.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Part II
Item 5 Market for the Registrant's Common Equity and Related
Stockholders' Matter
Principal Market
The company's Class A Common Stock is currently quoted over the
counter in the NQB "Pink Sheets" by five market makers.
<TABLE>
Stock Prices and Dividends Information
<CAPTION>
1998 Fiscal Year High Low
<S> <C> <C>
May 1-July 31 2.81 2.19
August 1-October 31 3.00 2.06
November 1-January 31 2.31 1.66
February 1-April 30 2.50 1.88
<CAPTION>
1997 Fiscal Year High Low
<S> <C> <C>
May 1-July 31 1.50 1.19
August 1-October 31 1.75 1.31
November 1-January 31 1.88 1.41
February 1-April 30 2.69 1.81
</TABLE>
No dividends were paid during fiscal years ending April 30, 1997
and 1998.
The number of holders of record of the company's Class A Common
Stock as of April 30, 1998, was approximately 1500.
Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations
GRI completed the fiscal year ending April 30, 1998, with a net
profit of 16 percent of sales. Net sales were at $11,508,000, up
4 percent over the previous year.
The company expects sales to continue to grow for the fiscal year
ending April 30, 1999. The continued growth should be achieved
by volume increase with present customers and sales to added
customers.
The material and labor increased from 45 percent to percent in
1998. The increase is due to the increased labor costs and
material costs. The company is expected to retain a gross profit
margin of 45 to 50 percent for the coming year.
GRI will continue upgrading the equipment and increase automation
for the plant.
The company is still developing new switches for the security
segment. The new switches are expected to be improved in design
and technology. The expansion of new products will enhance
applications in the areas of hydraulics, automotive, machine
tools, material handling and others.
The company is continuing to search for a business that would
complement the existing business. This would require no outside
financing. The intent is to utilize the equipment, marketing
techniques and established customers to increase sales and
profits.
Liquidity has improved each year and the ratio of cash,
securities and accounts receivables to current obligations was
11.0 and 9.0 for the fiscal years ending April 30, 1998, and April
30, 1997, respectively. The company has marketable securities of
$4,463,000 as compared to last year with $3,430,000. There was an
unrealized loss of $120,000 on securities as compared to an
unrealized loss of $90,000 on marketable securities during the
previous year.
There are no known seasonal trends with any of GR'Is products,
since they sell to distributors and OEM manufacturers. The
products are tied to the housing industry and will fluctuate with
building trends.
Item 7 Financial Statements
Independent Auditor's Report
Board of Directors
George Risk Industries, Inc.
Kimball, Nebraska
We have audited the accompanying balance sheet of George Risk
Industries, Inc. as of April 30, 1998, and the related statements
of income, stockholders' equity, and cash flows for the two years
then ended. These financial statements are the responsibility of
the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of George Risk Industries, Inc. as of April 30, 1998, and the
results of their operations and their cash flows for the two
years then ended, in conformity with generally accepted
accounting principles.
Mason Russell West, LLC
Littleton, Colorado
June 5, 1998
<TABLE>
George Risk Industries, Inc.
Balance Sheet
April 30, 1998
<CAPTION>
Assets
<S> <C>
Current Assets:
Cash and cash equivalents $ 903,000
Marketable securities 4,463,000
Accounts receivable:
Trade, net of allowance for doubtful
accounts of $50,000 1,770,000
Income tax overpayment
Officer and employees 16,000
Inventories 1,656,000
Prepaid expenses 44,000
Deferred income taxes 31,000
__________
Total Current Assets 8,883,000
__________
Property and Equipment, net, at cost 665,000
__________
Other Assets
Deposit 52,000
Projects in process 104,000
Officer advance 35,000
Deferred tax asset 56,000
__________
Total Other Assets 247,000
__________
Total Assets $9,795,000
<FN>
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Stockholders' Equity
<S> <C>
Current Liabilities:
Accounts payable-trade $ 196,000
Accrued expenses:
Payroll and payroll taxes 281,000
Income taxes 79,000
Deferred retirement benefit payable 12,000
Notes payable-current portion 51,000
__________
Total Current Liabilities 619,000
__________
Deferred Income Taxes 33,000
Long-term debt 157,000
Commitments and Contingencies 0
__________
Total Long-Term Liabilities 190,000
__________
Stockholders' Equity
Convertible preferred stock, 1,000,000 shares
authorized, Series 1-noncumulative, $20
stated value, 25,000 shares authorized, 12,850
issued and outstanding 257,000
Common stock, Class A, $.10 par value, 10,000,000
shares authorized, 8,502,832 shares issued 850,000
Additional paid-in capital 1,674,000
Net unrealized loss on marketable securities (120,000)
Retained earnings 6,941,000
Less cost of treasury stock,
2,448,724 shares, at cost (616,000)
__________
Total Stockholders' Equity 8,986,000
__________
Total Liabilities and Stockholders' Equity $9,795,000
__________
</TABLE>
<TABLE>
George Risk Industries, Inc.
Statements of Income
<CAPTION>
For the Years Ended
April 30,
1998 1997
<S> <C> <C>
Net Sales $11,508,000 $11,059,000
Less cost of goods sold 6,089,000 5,798,000
__________ __________
Gross Profit 5,419,000 5,261,000
Operating Expenses:
Selling and shipping 2,071,000 2,120,000
General and administrative 584,000 578,000
Engineering and research 82,000 18,000
Rent expense paid to
related parties 51,000 35,000
___________ __________
2,788,000 2,751,000
___________ __________
Income From Operations 2,631,000 2,510,000
Other Income (Expense):
Other 30,000 (25,000)
Dividend and interest income 261,000 191,000
Interest expense (26,000) (35,000)
(Loss)/gain on sale of investments (20,000) 9,000
___________ __________
Income Before Provision for Income
Taxes 2,876,000 2,650,000
Provision for Income Taxes:
Current expense 1,006,000 1,036,000
Deferred tax (benefit) expense 6,000 (35,000)
___________ __________
1,012,000 1,001,000
___________ __________
Net Income $ 1,864,000 $1,649,000
___________ __________
Income per Share of Common Stock $ .30 $ .27
___________ __________
Weighted Average Number of Common
Shares Outstanding 6,053,483 6,068,109
___________ __________
<FN>
See accompanying notes to financial statements
</TABLE>
<TABLE>
George Risk Industries, Inc.
Statement of Changes in Stockholders' Equity
From May 1, 1996 Through April 30, 1998
<CAPTION>
Common Stock
Preferred Stock Class A
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Balances, May 1, 1996 12,850 $257,000 8,502,832 $850,000
Treasury stock issued
to officers at 1.25
cents in lieu of cash
compensation 0 0 0 0
Increase in unrealized
loss on marketable
securities 0 0 0 0
Net income 0 0 0 0
______ ________ _________ ________
Balances, April 30,
1997 12,850 257,000 8,502,832 850,000
Purchase of common
stock for treasury 0 0 0 0
Increase in
unrealized loss on
marketable securities 0 0 0 0
Net income 0 0 0 0
______ ________ _________ ________
Balances, April 30,
1998 12,850 $257,000 8,502,832 $850,000
______ ________ _________ ________
<FN>
See accompanying notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Treasury Stock loss on
Paid-In (Common Class A) marketable Retained
Capital Shares Amount securities Earnings Total
<C> <C> <C> <C> <C> <C>
$1,644,000 2,457,439 $(566,000) $ (35,000) $3,428,000 $5,578,000
30,000 (42,000) 10,000 0 0 40,000
0 0 0 (55,000) 0 (55,000)
0 0 0 0 1,649,000 1,649,000
__________ _________ ________ _________ __________ __________
1,674,000 2,415,439 (556,000) (90,000) 5,077,000 7,712,000
0 33,285 (60,000) 0 0 (60,000)
0 0 0 (30,000) 0 (30,000)
0 0 0 0 1,864,000 1,864,000
__________ _________ _________ _________ __________ __________
$1,674,000 2,448,724 $(616,000) $(120,000) $6,941,000 $8,986,000
__________ _________ _________ _________ __________ __________
</TABLE>
<TABLE>
George Risk Industries, Inc.
Statements of Cash Flows
<CAPTION>
For the Years
Ended April 30,
1998 1997
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $1,864,000 $1,649,000
Adjustments to reconcile net income
to net cash provided by
operating activities
Depreciation 124,000 109,000
Change in unrealized loss
on investments (30,000) (55,000)
Net book value of assets retired 0 9,000
Changes in assets and liabilities:
(Increase) decrease in:
Marketable securities (1,033,000) (1,275,000)
Accounts receivable (495,000) (306,000)
Inventories 22,000 (207,000)
Prepaid expenses 23,000 (10,000)
Other assets (113,000) 60,000
Receivable - officers and
employees 15,000 (64,000)
Income tax overpayment 0 (9,000)
Deferred tax asset 7,000 (43,000)
Increase (decrease) in:
Accounts payable (1,000) 138,000
Accrued expenses (27,000) (35,000)
Accrued income taxes 108,000 37,000
Deferred tax liability 0 7,000
__________ __________
Net cash provided by operating
activities 464,000 5,000
__________ __________
Cash Flows From Investing Activities:
Purchase of property and equipment (108,000) (232,000)
Purchases of treasury stock 60,000 0
__________ __________
Net cash used in investing
activities (168,000) (232,000)
__________ __________
Cash Flows From Financing Activities:
Principal payments on long-term debt (46,000) (67,000)
Treasury stock issued 0 40,000
___________ __________
Net cash used in financing activities (46,000) 27,000
___________ __________
Net Increase (Decrease) in Cash and
Cash Equivalents 250,000 (254,000)
Cash and Cash Equivalents, beginning of
year 653,000 907,000
__________ __________
Cash and Cash Equivalents, end of year $ 903,000 $ 653,000
__________ __________
Supplemental Disclosure of Cash
Flow Information:
Cash payments for:
Income taxes $1,012,000 $1,006,000
__________ __________
Interest expense $ 26,000 $ 35,000
__________ __________
Supplemental disclosure of noncash
investing and financing
activities-issuance of treasury stock
in lieu of compensation $ 0 $ 40,000
__________ __________
<FN>
See accompanying notes to financial statements
</TABLE>
George Risk Industries, Inc.
Notes to Financial Statements
1. Nature of Business and Summary of Significant Accounting
Policies
Nature of Business-The company is engaged in the design,
manufacture, and marketing of computer keyboards, push-
button switches, and security alarm components.
At April 30, 1993, the financial statements of the company,
George Risk Industries, Inc. (GRI), and its majority-owned
subsidiaries, GRI Telemark Corp. (Telemark), and R&D Labs
were consolidated. Effective April 30, 1993, the company
acquired the entire minority interest in Telemark by
issuing 22,160 shares of its Class A common stock and
merged Telemark into GRI.
Cash and Cash Equivalents - The company considers all
investments purchased with a maturity of three months or
less to be cash equivalents.
Inventories - Inventories are stated at the lower of cost or
market. Cost is determined using the average cost-pricing
method. The company uses standard costs to price its
manufactured inventories approximating average costs.
Property and Equipment - Property and equipment are recorded
at cost. Depreciation is calculated based on the following
estimated useful lives using the straight-line method:
<TABLE>
<CAPTION>
Useful
Classification Life Cost
in Years
<S> <C> <C>
Dies, jigs, and molds 3-7 $ 283,000
Machinery and equipment 5-10 526,000
Furniture and fixtures 5-10 132,000
Leasehold improvements 2-3 1/2 140,000
Buildings 20 326,000
Automotive 3-5 54,000
Software 2-5 65,000
Land N/A 13,000
__________
Total 1,539,000
Accumulated depreciation (875,000)
__________
Net $ 664,000
__________
</TABLE>
Depreciation expense of $124,000 and $109,000 has been provided as
of April 30, 1998 and 1997, respectively.
Maintenance and repairs are charged to expense as incurred,
and expenditures for major improvements are capitalized.
When assets are retired or otherwise disposed of, the
property accounts are relieved of costs and accumulated
depreciation and any resulting gain or loss is credited or
charged to operations.
Income Taxes - The company has adopted the provisions of the
SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109
requires use of the liability method, whereby current and
deferred tax assets and liabilities are determined based on
tax rates and laws enacted as of the balance sheet date.
Deferred tax expense represents the change in the deferred
tax asset/liability balances.
The flow-through method of accounting for tax credits has
been adopted by the company. Such credits are reflected as
a reduction of the provision for income taxes in the year
in which they become available.
Net Income Per Common Share - Net income per common share is
based on the weighted average number of common shares
outstanding during each fiscal year. Shares issuable upon
the conversion of preferred stock are excluded from the
calculations since their effect is insignificant.
Accounting Estimates - The preparation of these financial
statements requires the use of estimates and assumptions
including the carrying value of assets. The estimates and
assumptions result in approximate rather than exact
amounts.
2. Inventories
<TABLE>
<CAPTION>
Inventories at April 30, 1998, consisted of the following:
<S> <C>
Raw materials $1,073,000
Work in process 353,000
Finished goods 276,000
__________
1,702,000
__________
Less allowance for obsolete
inventory (46,000)
__________
Totals $1,656,000
__________
</TABLE>
3. Marketable Securities
Marketable equity securities are recorded at the lower of
cost or market and are classified as available-for-sale
securities. The cost of marketable securities sold is
determined on the average cost method with realized gains
or losses being reflected in the statement of operations
and any unrealized gains and losses being reported as a
separate component of stockholders' equity until realized.
Dividend and interest income are accrued as earned.
Marketable equity securities and unrealized gains and
losses consist of the following as of April 30, 1998:
<TABLE>
<S> <C>
Cost basis $4,583,000
Market value 4,463,000
__________
Net unrealized gain (loss) $ (120,000)
__________
Gross unrealized gain $ 12,000
__________
Gross unrealized loss $ 132,000
__________
</TABLE>
4. Notes Payable
<TABLE>
<CAPTION>
Notes payable consists of the following at April 30, 1998:
<S> <C>
Note payable, 11 percent imputed interest, secured
by 725,000 shares of treasury stock monthly
principal and interest payments of $6,000, due $ 208,000
November 1, 2001
Less current portion 51,000
_________
Net long-term debt $ 157,000
_________
</TABLE>
5. Stockholders' Equity
Preferred Stock - Each share of the Series #1 preferred stock
is convertible at the option of the holder into five shares
of Class A common stock and is also redeemable at the
option of the board of directors at $20 per share. The
holders of the convertible preferred stock shall be
entitled to a dividend at a rate up to $1 per share
annually, payable quarterly as declared by the board of
directors.
Convertible preferred stock without par value may be issued
from time to time as determined by the board of directors.
Shares of different series shall be of equal rank but may
vary as to terms and conditions.
Class A Common Stock - The holders of the Class A common
stock shall be entitled to receive dividends as declared by
the board of directors. No dividends may be paid on the
Class A common stock until the holders of the Series #1
preferred stock have been paid a dividend for the four
prior quarters and provision has been made for the full
dividend in the current fiscal year.
Stock Transfer Agent - The company does not have an
independent stock transfer agent. All stock records are
maintained by the company.
6. Commitments, Contingencies, and Related Party Transactions
Leases - The company leases facilities from certain
officers/directors/stockholders of the company. One lease
requires an annual payment of $3,400 due each July 1 while
the other leases are on a month-to-month basis requiring
payments of $1,335 and $300.
Total lease expense under these arrangements for the fiscal
years ended April 30, 1998 and 1997, was $23,000 and
$23,000, respectively.
The company leases an airplane from an
officer/director/stockholder of the company on a month-to-
month basis requiring payments of $2,250 ($1,000 in 1997).
Airplane lease expenses charged to operations for the fiscal
years ended April 30, 1998 and 1997, were $27,000 and $12,000.
7. Income Taxes
<TABLE>
<CAPTION>
1998
Federal State
____________ ____________
<S> <C> <C>
Income before taxes $2,876,000 $2,876,000
State income tax (202,000) (202,000)
Nontaxable income (68,000) (82,000)
Nondeductible expenses
and timing differences 15,000 15,000
__________ __________
Taxable income $2,621,000 $2,607,000
__________ __________
Income tax $ 804,000 $ 202,000
__________ __________
Tax rate to taxable income 30.7% 7.7%
__________ __________
</TABLE>
<TABLE>
<CAPTION>
1997
Federal State
__________ __________
<S> <C> <C>
Income before taxes $2,650,000 $2,650,000
State income tax (163,000) (163,000)
Phase-in cash to accrual
conversion of sub. 47,000 47,000
Nontaxable income (48,000) (57,000)
Nondeductible expenses
and timing differences 118,000 118,000
__________ __________
Taxable income $2,604,000 $2,595,000
__________ __________
Income tax $ 873,000 $ 163,000
__________ __________
Tax rate to taxable income 33.5% 6.3%
__________ __________
</TABLE>
<TABLE>
Deferred tax asset (liability) consist of the following
components at April 30, 1998 and 1997:
<CAPTION>
1998 1997
__________ _________
<S> <C> <C>
Deferred tax current assets:
Accrued expenses $ 76,000 $ 94,000
Excess capital losses 11,000 0
Deferred tax noncurrent
liability:
Property and equipment (33,000) (34,000)
________ ________
Net deferred tax asset
(liability) $ 54,000 $ 60,000
________ ________
</TABLE>
8. Business Segments
<TABLE>
The following is financial information relating to industry
segments:
<CAPTION>
April 30,
1998 1997
<S> <C> <C>
Net revenue:
Keyboard products $ 977,000 $ 975,000
Security alarm products 10,531,000 10,084,000
___________ ___________
Total net revenue $11,508,000 $11,059,000
___________ ___________
Income from operations:
Keyboard products $ 236,000 $ 735,000
Security alarm products 2,395,000 1,775,000
___________ __________
Total income from operations $ 2,631,000 $ 2,510,000
___________ ___________
Identifiable assets:
Keyboard products $ 555,000 $ 552,000
Security alarm products 4,500,000 4,500,000
Corporate general 2,900,000 2,841,000
___________ ___________
Total assets $ 7,955,000 $ 7,893,000
___________ ___________
Depreciation and
amortization:
Keyboard products $ 0 $ 0
Security alarm products 92,000 79,000
Corporate general 32,000 30,000
___________ ___________
Total depreciation and
amortization $ 124,000 $ 109,000
___________ ___________
Capital expenditures:
Security alarm products $ 91,000 $ 170,000
Corporate general 18,000 62,000
___________ ___________
Totals $ 109,000 $ 232,000
___________ ___________
</TABLE>
9. Major Customers and Significant Concentration of Credit
Risk
The company made sales to unaffiliated customers that
individually represent more than 10 percent of the
company's total sales for the years ended April 30, 1998
and 1997 as follows:
<TABLE>
<CAPTION>
Customers 1998 1997
<S> <C> <C>
A 34% 42%
</TABLE>
Accounts receivable from this customer at April 30, 1998
and 1997, were approximately $626,000 and $454,000,
respectively.
For the years ended April 30, 1998 and 1997, approximately
97 percent and 91 percent, respectively, of the company's
sales relate to the security alarm components.
10. Concentrations of Credit Risk Arising from Cash Deposits
in Excess of Insured Limits
The company maintains its cash balance in a financial
institution in Kimball, Nebraska. The balance is insured by
the Federal Deposit Insurance Corporation up to $100,000.
At April 30, 1998, the company's uninsured cash balance
totaled $561,000.
Item 8 Disagreements on Accounting and Financial Disclosures
There were no disagreements with accountants on accounting and
financial disclosure.
Part III
Item 9 Directors and Executive Officers of the Registrant
(a) Identification of Directors and Executive Officers
All of the executive officers of the corporation serve at the
pleasure of the board of directors and do not have fixed terms.
The following information as of April 30, 1998, is furnished with
respect to each director and executive officer:
<TABLE>
<CAPTION>
Year First
Became a Term
Age Director/Officer Expiration
<S> <C> <C> <C>
Ken R. Risk 50 1976 Stockholders'
Chairman of the Board option
and President
Eileen M. Risk 80 1976 Stockholders'
Secretary/Treasurer option
Mary Ann Brothers 58 1984 Stockholders'
Executive Vice option
President
Jerry Andersen 67 1978 Stockholders'
Director option
Roy Bowling 61 1986 Stockholders'
Director option
Michael J. Nelson 57 1992 Stockholders'
Director option
(b) Business Experience of Directors and Executive Officers
Ken R. Risk and Eileen M. Risk, executive officers listed above,
have served in various executive capacities with the company over
the past six years.
Ken R. Risk, chairman of the board, president and director,
worked with the company after he returned from naval service for
several years. He left GRI in 1977 to start his own company,
Platte Valley Sales, in Hastings, Nebraska. He returned to the
company to assume the position of president and CEO in late 1989
after the death of his father, George Risk.
Mary Ann Brothers was controller of the company for five years
and also served as executive vice president and general manager
prior to becoming president of GRI Telemark Corporation. She
became executive vice president when Telemark was merged with GRI
in 1993.
Jerry Andersen, director, has worked in the banking industry
since 1967. Currently, he is the vice president of American
National Bank in Kimball, Nebraska.
Roy Bowling, Director, has been in the alarm industry for over 20
years. He founded Labor Saving Devices of Lakewood, Colorado, 12
years ago and is actively involved with that company.
Michael J. Nelson, director, has worked in the banking business
since 1963 and has been the president of the First State Bank in
Kimball, Nebraska for the past 15 years.
(c) Identification of Certain Significant Employees
Ken R. Risk is also an employee of the company. (See Item 9 [b].)
(d) Involvement in Certain Legal Proceedings
George Risk Industries, Inc. has been named in certain legal
proceedings discussed in Items 1 and 3.
Item 10 Executive Compensation
The following table sets forth certain information regarding the
compensation paid or accrued by the company to or for the account
of the chief executive officer and each of the four other most
highly compensated executive officers of the company for services
rendered in all capacities during each of the company's fiscal
years ended April 30, 1996, 1997, and 1998:
</TABLE>
<TABLE>
Annual Compensation
<CAPTION>
(a) (b) (c) (d) (e)
Other Annual
Position Year Salary Bonuses Compensation
<S> <C> <C> <C> <C>
Ken R. Risk 1998 163,000 0 0
Chief Executive 1997 156,000 0 20,000 stock shares
Officer 1996 140,000 0 0
Mary Ann Brothers 1998 110,000 0 0
Executive Vice 1997 105,000 0 6,000 stock shares
President 1996 98,000 0 0
Peggy Dilley 1998 49,000 0 0
Chief Financial 1997 47,000 0 6,000 stock shares
Officer 1996 47,000 0 0
John Kloempken 1998 22,000 0 0
Director of 1997 39,000 0 0
Engineering 1996 39,000 0 0
Dan Douglas 1998 39,000 0 0
Vice President of 1997 38,000 0 0
Materials 1996 8,000 0 0
</TABLE>
<TABLE>
Long-Term Compensation
<CAPTION>
(a) (b) (f) (g) (h) (i)
Restricted Options LTIP All
Position Year Stock /SARS Payouts Other
Awards
<S> <C> <C> <C> <C> <C>
Ken R. Risk 1998 0 0 0 0
1997 0 0 0 0
1996 0 0 0 0
Mary Ann 1998 0 0 0 0
Brothers 1997 0 0 0 0
1996 0 0 0 0
Peggy 1998 0 0 0 0
Dilley 1997 0 0 0 0
1996 0 0 0 0
John 1998 0 0 0 0
Kloempken 1997 0 0 0 0
1996 0 0 0 0
Dan Douglas 1998 0 0 0 0
1997 0 0 0 0
1996 0 0 0 0
</TABLE>
Members of the board of directors were each compensated $150 for
their services during the fiscal year.
Ken R. Risk and Mary Ann Brothers do not have employment
contracts with the company. Both officers have a base salary and
also receive compensation based on a percentage of net sales for
the year.
Item 11 Security Ownership of Certain Beneficial Owners and
Management
Below is certain information concerning persons who are known by
the company to own beneficially more than 5 percent of any class
of the company's voting shares on April 30, 1998.
<TABLE>
<CAPTION>
Title Name and Address Amount of Percent
of of Beneficial Beneficial of
Class Ownership Ownership Class
<S> <C> <C> <C>
Class Ken R. Risk 2,892,355 48.0%
A Hastings, NE
68901
Class Eileen M. Risk 26,386 .4%
A Kimball, NE 69145
Class Forward Kimball 190,000 4.0%
A Ind./
GRI Employee Fund
Kimball, NE 69145
</TABLE>
None of the directors or officers has the right to acquire any
additional shares either directly or indirectly through any
contracts or arrangements with other shareholders.
Item 12 Certain Relationships and Related Party Transactions
During each of three years ended April 30, 1998, 1997, and 1996,
the company executed transactions with related entities and
individuals. Each of the transactions was in terms at least as
favorable as could be obtained from unrelated third parties.
<TABLE>
<CAPTION>
Related Party 1998 1997 1996
<S> <C> <C> <C>
Airplane Lease
Ken R. Risk $27,000 $12,000 $12,000
President
Building and Warehouse
Leases/Rentals $ 3,400 $ 3,400 $ 3,400
Eileen M. Risk
Secretary/Treasurer $ 3,600 $ 3,600 $ 3,600
Eileen M. Risk
Secretary/Treasurer $16,020 $16,020 $16,020
Delores Spradlin
Sister, Ken R. Risk
Stock Transfer Agent
Eileen M. Risk
Secretary/Treasurer $20,000 $20,770 $20,000
</TABLE>
Item 13 Exhibits and Reports on Form 8-K
3.(1).a Articles of Incorporation - Filed as Exhibit 5 to the
Registrant's Form 10-K for the fiscal year ended
April 10, 1970, and incorporated by reference herein
3.(i).b Certificate of Amendment to the Articles of
Incorporation of the Registrant - Filed as Exhibit 1.2
to the Registrant's Form 10-K for the fiscal year
ended April 30, 1971, and incorporated by reference
herein
3.(ii).c By-laws - Filed as Exhibit 1.3 to the Registrant's Form
10-K for the fiscal year ended April 10, 1971, and
incorporated by reference herein
16. 8-K letter on change in certifying accountant
8-K Amendment 1. Letter on change in certifying
accountant
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
George Risk Industries, Inc.
By: /s/ Ken R. Risk
Ken R. Risk, President and
Chairman of the Board
August 11, 1998
Pursuant to the requirements of the Securities Exchange Act
of 1934, this Report has been signed below by the following
persons on behalf of the Registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/ Ken R. Risk President and August 11, 1998
Ken R. Risk Chairman of the Board
/s/ Peggy Dilley Chief Financial Officer August 11, 1998
Peggy Dilley and Controller
/s/ Jerry Andersen Director August 11, 1998
Jerry Andersen
/s/ Michael J. Nelson Director August 11, 1998
Michael J. Nelson
