Butler Natl Corp

Good morning, ladies and gentlemen. Today is Thursday, March 17th. And welcome to the Butler National Corporation third quarter fiscal 2022 financial results conference call. At this time, all participants will be in a listen only mode. After the presentation, we will conduct a question and answer session. Operator assistance is available at any time during this call by pressing star zero. Your call leader for today's call are David Draywitz, Creative Options Communications, Clark Stewart, President and CEO, and Craig Stewart, President of Aerospace Group. I would now like to turn the call over to David Draywich. Mr. Draywich, you may begin.

I appreciate that. Thank you, and good morning to everyone. Before Mr. Stewart begins, I would like to draw your attention to except for historical information contained herein, the statements in this conference call are forward-looking and made pursuant to the Safe Harbor's provisions as outlined in the Private Security Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risk and uncertainties which may cause Butler National's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, the loss of market share through competition or otherwise, the introduction of competing technologies by other companies, New governmental safety, health, and environmental regulations which could require Butler to make significant capital expenditures. The forward-looking statements included in this conference call are only made of the date of this call, and Butler National undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, but are not limited to, factors described under the caption risk factors in the company's annual report on the Form 10-K filed with the Securities and Exchange Commission. All right. With that statement concluded, I'm going to turn the call over to Mr. Clark Stewart. Mr. Stewart?

Thank you, Mr. Grayowitz. We appreciate everyone's time to listen to us and discuss the business of Butler National in our last nine months in the quarter. We've had a great quarter and a great nine months. Our income during the quarter is up 24%. The income of 2.7 million or 4 cents a share versus a penny a share last year. The nine months we're sitting at revenue 55 million versus 43 million income at $8.7 million versus $809,000. So we have $0.12 a share versus a penny a share last year for the nine months. Our backlog is strong at about $18.5 million, and that's down a little from the previous, from July and from October. But we do have some prospects, and we expect the backlog to continue to hold them. at that level or maybe grow a little bit. Our staffing is always a challenge as we talk about each time and nothing really has changed there. We still need good people and we work to get good people and we seem to be holding on to them. The casino business is good, 18% of February this year versus February last year. What's going on in the casino business is a good strong market in western Kansas in our market area. February number of visitors down 8-9%. Hour of the spend for visitors spend per visit is up about 29%. So we have fewer people spending more money. And we continue our work with the Kansas legislature to maintain our position in the gaming market. And of course, everyone knows that we're in the airplane business in the legislature, and they don't give us much trouble with that. So I would call your attention to the risk factors. And I would tell you that we're all optimistic here that that the air is going to come out very well in our future looks good. And Mr. Dray with us all my comments.

All right. Thank you. Let's turn it over to question and answers for anybody out there.

At this time, we will take questions. If you would like to state a question, please press star 1 on your phone now, and you will be placed in the queue in the order received. You can press pound 1 at any time to remove yourself from the queue. Once again, if you'd like to ask a question, please press star 1 on your phone now. We do have a question from James Bates from Butler.

Please go ahead. I just wanted to know, I've been with you guys for 12 years and I got in at 15 cents a share and 88 is pretty good, but any prospects on the stock going higher or more volume?

James, this is Craig Stewart. Appreciate you being with us. You know, that's That's something we were just discussing the other day, how we can try to generate more interest in the company. Because our feeling is that if we got more interest and more volume, it may push the stock price a little bit higher. So that is something that we're working on. It's a tough thing when you're below $1. You know, you can't – it's tough to get brokers to – they can't push it. They've got regulations and rules. You know, so we're – our real – our primary focus is on, you know, continuing to generate the good numbers like you're seeing, and hopefully we can push this thing to a level where we can get a little bit more attention. But it is something that we're looking at, and it's the focus of the management team.

Yeah, it seems like everybody should be jumping on with a stock that's 80 cents, and it's got a 12-cent earnings per share.

And hopefully higher by the time we get to the end of the year, right? Well, yeah. I mean, the trailing 12 months is probably – I don't know what fourth quarter was last year, but you're probably, you know, 14, 15 cents, you know, for the trailing 12 months. So, you know, it's a – We're excited about it. We'd like to see more people get excited about it, and it's a matter of figuring out how to get the story out there to the right people so that we can get the interest in the volume.

Okay. We believe we ought to trade at least 10 times, but that's a wish, not a fact. That would help us out. We aren't trading it 10 times, is what I'm telling you.

Yeah. Okay. Well, thank you. Thank you.

And our next question comes from David Waters. Please go ahead, David. Hello, David. Are you there? Is your phone on mute?

Can you hear me now? Yeah, we can hear you now, David. Go ahead. Okay, great. Sorry about that. Yeah, so congratulations on achieving some of your major objectives this year, purchasing the casino and rolling up the minority interest. Your company's been simplified. We appreciate that as investors. Just curious, though, about your priorities for the cash. I mean, the company has a very healthy amount of cash in the balance sheet, and I think investors would appreciate some more clarity about your plans for the use of that. It seems like you can more than fund your development efforts in aerospace and keep a rainy day fund, but maybe we'd consider sharing some of that with shareholders or just giving us an idea of what the plans are.

Well, I guess I would tell you that we've been discussing the possibility of some acquisitions that match up with where we are, and we've actually had some activity in that area, and so we're We're looking to do that and maybe we can add some more to the 15 cents share by doing that. And so that's what we're looking at right now. Our cash is down about 7.5 million from where it was the last time we reported on it. So that's, of course, used to buy out the minority interest and some of that other items that we needed for expansion. But we are looking at prospective purchases, and I think that would add to the size and the momentum and the support of the company, and we'd probably pick up some new shareholders and maybe pick up some price. So that's kind of the plan. We haven't published anything more than what I've said to you today, but we are actively doing that.

Okay, I appreciate the info on there. And only other question I had was, was it was about the numbers of the casino? I mean, obviously, they've been just incredible lately. I mean, far surpassing anything from pre COVID times. Is there any concern on your end that inflation and the price of gas will have an impact on on the on the consumers at the casino? Or have you not seen that yet?

We haven't seen it yet. We don't know. Of course, as you know, we We basically have a market area that's almost 200, 300 miles away on a lot of the markets. So we're talking about buying some gas, so that could be a factor. We haven't seen it, and we haven't had any discussion of it as far as among our patrons. So I think the higher spend indicates that they want to get out and participate in society, so they're coming to the casino to do that. But as far as the economic impact of the gas price, I don't see that as that great, actually. Everybody out there is used to driving 50 miles for a kid's baseball game, you know. I mean, that's back 50 to 80 miles is nothing out of the ordinary for a little league baseball.

It is a concern, though, if we continue to see the type of inflation that we're seeing right now. You know, it could be something that comes into play, you know, as this is normally one of the busier times of the year out at the casino. As we get in towards the summer, it could have an impact as we get to the slower times that people may, you know, choose to not come as many times or as frequently or spend quite the same amount of money that they're doing right now. So it's something on our radar, and, you know, it is a concern, but hopefully, you know, Hopefully it doesn't affect us too bad.

Okay. Thanks for taking my questions.

Thank you. Our next question comes from Keith Vickers. Please go ahead, Keith. Good morning. Can you hear me?

Yep. Okay, very good. Yeah, I've been an investor in Butler for about 30 years now. I've actually bought some at $4 a share. I bought some a lot cheaper sense. I appreciate your good quarter and your good first nine months. Things are looking good. I, too, am frustrated with the fact that the price is not reflecting those earnings at this point. I understand the issue with regard to the stock not being attractive or the limitations, I should say, when you're less than $1. Any thoughts to a reverse split? I know we discussed it before. Could you remind me of the pluses and minuses of a reverse split?

Well, what happens if the – yes, we've talked about the reverse split a number of times over the last 20 years. We don't seem to all agree on how it ought to work. But the reverse split, since basically we're at 80 cents now, that gives us about 20, 25, 30 cents to be deadly over a dollar. We think maybe we can do that without doing a reverse split at this point. If we have another couple good quarters, we should be able to get enough interest to get it over a dollar. Once we get it over a dollar, the promotional efforts of the company change as far as the public market. And, Greg, you might want to address some of that if you want. But that's really what we need to do is get it over a dollar. Yeah, and the risk of

The risk of the reverse split is you'll see a lot of them. We've researched a number of companies that have done it. The risk is that you do a reverse split, the story's not strong enough, and you just erode shareholder value because you end up about the same price. You started with more shares. The times when that typically happens are more times when companies are in trouble. The ones where it's successful are the ones where they've got a really good story that's exciting with growth. And, you know, we need to get into that point where we've got, you know, more exciting news that will really catch people's attention. The numbers are great. But having a story that's a longer-term growth story is something that companies that have been successful in doing reverse splits have had. And so I think it's something that's always on the table. I think we've got some shareholders that are in favor of it. We've got some shareholders that are against it. And it's just a matter of the timing and the story that we've got to tell. But it's not something that's off the table. Ideally, we'd get to the dollar and be able to get rid of some of the obstructions that we've got to get more attention on the stock just kind of organically.

Thank you very much. One more question, if I could, Mike. I'm just curious. I look at the SEC filings from time to time, and I see when people go over 5%. About how many investors in the company are over 5%? I think we have two that are non-insiders.

Okay. I understand that.

Okay, and I know who those are now, so okay, thank you.

Once again, to ask a question, please press star 1 on your phone now. And gentlemen, at this time, there appears to be no further questions.

Very good. Thank you very much, everyone, for listening to us. Being a participant in the Butler National Corporation, thank you for doing that and putting your trust in us. We are working to improve the stock price, as you hear from us, and we're also having a good year. We need to put a couple or three of these good quarters together, and then we'll be in a much stronger position. I thank you all for taking your time. We're out.

this concludes today's conference call thank you for attending