George Risk Industries Inc.

09/14/2026 | Press release | Distributed by Public on 09/14/2026 12:02

Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

Management Discussion and Analysis of Financial Condition and Results of Operations

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 current 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, 2026.

Executive Summary

The Company's performance improved during the quarter ended July 31, 2026, as compared to the quarter ended July 31, 2025. Sales and income from operations increased, while overall net income decreased compared to the same quarter last year. Unrealized gains on investments were lower in the current quarter than in the same quarter of the prior year, resulting in a decrease in overall net income. The Company has a back-order log, but management has seen improvement in this area and continues to work towards diminishing that number. During the current quarter, despite tariffs, the economy remains strong, helping to drive our profitability. Opportunities include ramping up production to meet customers' needs, potentially through increased automation and exploring potential acquisitions. We also continue to work on new products that will be a good fit for our industry and business. Challenges in the coming months include continuing to deliver products to customers in a timely manner, addressing the continuing impact of tariffs, and purchasing raw materials at prices that will maintain the Company's profitability. Management continues to work to keep operations flowing as efficiently as possible with the hope of getting the facilities running leaner and more profitable than ever before.

Results of Operations

● Net sales for the quarter ended July 31, 2026, increased 16.14% over the same period in the prior year. This increase in sales is a result of a resilient economy and our competitive advantage with our existing product niche. Management also believes that sales will remain strong due to our ongoing commitment to outstanding customer service, our ability to customize products, and our continued manufacturing of quality products.
● The cost of goods sold percentage increased from 48.75% of sales in the quarter last year to 52.89% in the current quarter, which is just above Management's goal of keeping labor and other manufacturing expenses at or below 50%. The increase in cost of goods sold is a result of higher labor costs incurred while reducing the sales backlog. Management strives to be as efficient as possible as material costs continue to increase. Wages also continue to increase to remain competitive in the job market.
● Operating expenses increased by $106,000 when comparing the current year quarter to the same quarter for the prior year. When comparing percentages of net sales, operating expenses decreased slightly to 19.28% for the quarter ended July 31, 2026, from 20.6% for the corresponding quarter last year. The dollar increase is primarily due to higher sales commissions. The Company maintained the operating expense ratio below 30%, which is in line with historical ratios.
● Income from operations for the quarter ended July 31, 2026, was $1,906,000, which is an increase of 5.42% over the corresponding quarter last year, which had income from operations of $1,808,000.
● Other income and expenses showed a $1,453,000 gain for the quarter ended July 31, 2026, as compared to a $2,915,000 gain for the quarter ended July 31, 2025. For the three months ended July 31, 2026, $802,000 of unrealized gains from equity securities were recorded, compared to $2,381,000 of unrealized gains from equity securities recorded for the three months ended July 31, 2025. The remainder of the decrease is primarily due to lower dividend and interest income paid from investments.
● Net income for the quarter ended July 31, 2026, was $2,192,000, a 42.19% decrease from the corresponding quarter last year, which was $3,792,000.
● Earnings per share for the quarters ended July 31, 2026, and 2025, were $0.45 and $0.78 per common share, respectively.

Liquidity and capital resources

Operating
● Net cash increased $1,686,000 during the quarter ended July 31, 2026, compared to an increase of $1,789,000 during the corresponding quarter last year. Details by category are listed below.
● Accounts receivable, net decreased $371,000 for the quarter ending July 31, 2026, compared to a $466,000 increase for the same quarter last year. The decrease in cash flow from accounts receivable is directly attributable to the increase in sales and to timely collections on past due accounts. Management works with customers to collect accounts and to keep past due accounts to a minimum. An analysis of accounts receivable shows that 7.12% of the balance was over 90 days at July 31, 2026.
● Inventories, net, increased by $1,236,000 during the current quarter, compared to a $173,000 decrease for the same quarter last year. The current period's increase is primarily due to the Company's continued sales growth and having the ability to replenish inventory levels in a timely manner.
● For the quarter ended July 31, 2026, there was a $396,000 decrease in prepaid expenses and other current assets, compared to an increase of $48,000 for the quarter ended July 31, 2025. The current decrease is due to an increase in raw material prepayments during the quarter.
● Income tax refund receivable decreased by $351,000 during the quarter ended July 31, 2026, with no activity in the account during the quarter ended July 31, 2025. The decrease is the result of the collection of funds due to amending prior-year income tax returns (FY 2023 & 2024) to claim additional research and development tax credits under the One Big Beautiful Bill Act, which was passed in 2025.
● Accounts payable decreased $250,000 for the quarter ended July 31, 2026, compared to an increase of $163,000 for the same quarter the year before. The variance is primarily due to timing differences in the receipt of products. Management strives to pay all payables within terms, unless there is a problem with the merchandise.
● Accrued expenses and other current liabilities decreased $79,000 for the current quarter, as compared to a $26,000 increase for the quarter ended July 31, 2025. The difference in the amounts is primarily due to the timing of payroll cycles.
● Income tax payable increased $521,000 for the quarter ended July 31, 2026, compared to a $447,000 increase in income tax payable for the quarter ended July 31, 2025. The increase in current-year income tax payable is due to higher operating income.
Investing
● The Company purchased $6,000 of property and equipment during the current fiscal quarter. In comparison, $133,000 was spent on property and equipment purchases during the corresponding quarter last year.
● The Company continues to purchase marketable securities, which include municipal bonds and quality stocks. Cash spent on purchases of marketable securities for the quarter ended July 31, 2026, was $238,000 compared to $210,000 spent during the quarter ended July 31, 2025. We continue to use "money manager" accounts for most stock transactions. By doing this, the Company authorizes an independent third-party firm, an expert in this field, to buy and sell stocks at will. The Company pays quarterly service fees based on the value of the investments.
Financing
● The Company continues to repurchase common stock when opportunities arise. For the quarter ended July 31, 2026, the Company repurchased $13,000 of treasury stock. In comparison, $9,000 worth of treasury stock was repurchased during the quarter ended July 31, 2025.

New Product Development

● The Company and its engineering department perpetually work to develop enhancements to current 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 Underwriter Laboratories (UL) listed for hazardous locations are in development. There has been demand from our customers for this type of high-security magnetic reed switch.
● Research is underway on programmable temperature and humidity sensors with built-in hysteresis, a miniature profile overhead door contact based on our popular 4532 series, and a brass water valve shut-off system.
● 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. We are also working on wireless versions of monitoring devices that include glass break detection, tilt sensing, and environmental monitoring.

Other Information

In addition to researching and developing new products, management is always open acquiring a business or product line that would complement our existing operations. Given the Company's strong cash position, management believes this could be achieved without outside financing. The intent is to leverage the equipment, marketing techniques, and established customer base 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.

PART I. FINANCIAL INFORMATION

George Risk Industries Inc. published this content on September 14, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on September 14, 2026 at 18:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]