Butler National Corp

OTC:BUKS

Earnings Call Transcript

[Operator]

00:04 Good morning, ladies and gentlemen. Today is Tuesday, September fourteen. Good morning and welcome to Butler National Corporation First Quarter Fiscal twenty twenty two Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the presentation we’ll conduct a question-and-answer session. Your call leader for today's call are David Drewitz, Creative Options Communications; Clark Stewart, President and CEO; Craig Stewart, President of Aerospace Group.

00:31 I’ll now turn the call over to Mr. David Drewitz. Mr. Drewitz, you may begin.

[David Drewitz]

00:37 Appreciate that. Thank you, and good morning to everyone. Before Mr. Stewart begins, I would drill like to draw your attention to accept for historical information contained herein. The statements in this conference call are forward looking may pursuant to the safe Harbor provisions as outlined in the Private Securities Litigation Reform Act of nineteen ninety five.

00:58 Forward looking statements involve known and unknown risks 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 technology by other companies, new governmental safety, health and environmental regulations, which could require butler to make significant capital expenditures.

01:27 The forward looking statements included in this conference call are only made as 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 Form ten K filed with the Securities and Exchange Commission.

02:01 So with that statement completed, I'm going to turn the call over to Mr. Clark Stewart. Mr. Stewart, this is yours.

[Clark Stewart, President and Chief Executive Officer]

02:09 Thank you, David. Good morning, ladies and gentlemen. We appreciate you taking your time to join us on the Butler National conference call or shareholder call as we call it. We're excited about the quarter and we believe that you need to understand that the PPP money was forgiven for two million six hundred and twenty eight thousand dollars of two million six hundred and twenty eight dollars, something like that.

02:41 And so that's somewhat overstating the total income, but the bottom line when all the dust settles we still made two point eight million dollars. And I think that's a great accomplishment given the fact that we're dealing with the COVID world and all kinds of restrictions here and there and I think we're are pleased to have zero point zero four dollars a share or zero point zero two dollars share however, you want to compute it, but that basically is where we are.

03:13 As you know on the COVID money, the PPP, money was provided a year ago and used to keep our employees at the casinos and that have gone busy during the close downs in twenty twenty.

03:35 We did not get that forgiven through the bank until June of this year, and so that's why it distort the numbers. Numbers are also somewhat distorted because of the sixty five days that we were closed at the casino in the spring of twenty twenty.

03:56 So having said all that, I'm really pleased with what we have. Our cash position is strong. As you can see by looking at it, our liabilities, of course now include our purchase of the land and building from our partner. And our total equity is up by almost twelve percent

04:22 So, I'm pleased with that. I think our backlog is strong at around twenty four million and of course, most of that is Avcon and Tempe. Professional Services has almost five hundred thousand in backlog in our architectural and engineering work.

04:42 So I'm pleased with all the things that have gone on. I don't know that I've missed a whole lot here.

04:50 Craig have you got any observations that I have not covered?

[Craig Stewart, President, Aerospace Group]

04:55 No. I think the Aerospace segment; both Arizona and Avcon are doing a great job. We’ve got probably the second highest backlog we've ever had and that’s second to the backlog we had on July one. We're off about one point five million dollars from that backlog, and that's just the deliveries over the month of July, basically there and the timing of it, but we're excited about the Aerospace Segment.

05:26 I think [indiscernible] is coming up, that'll be one of the first shows that we've actually attended here since COVID hit. So, we're hoping that we'll start to be able to be a little bit more active.

05:39 With customers and internationally, we've had a number of customers come to visit us. We're hoping that we'll get back to a little bit more normal from a sales cycle.

[Clark Stewart, President and Chief Executive Officer]

05:52 We've been faced with the fact that we really couldn't travel and see these customers eye-to-eye and of course, as you know, people buy things from other people and so we're looking forward to some time getting to where we can operate that way.

06:06 We’ve done some like I say, our R&D, we continue to spend money on new product development. And we're working on a number of those projects at this time. We probably can't really disclose that information. But we're also working on this, as you know, we've diluted to the fact that someday we might be able to work on the minority interest and usually we get a question to that effect, so I would tell you, yes, we're still working on that, no that hasn't evaporated. So we're in the process of doing that.

06:47 And I guess with that, that's probably [indiscernible] anything else? David, I think that's all we have to say unless someone has some questions.

[David Drewitz]

06:59 Alright. Well, let's open it up to questions very quick. Can we get that going?

[Operator]

07:04 [Operator Instructions] Our first question comes from Roy [indiscernible]. Please state your question.

[Unidentified Analyst]

07:26 First of all, congratulations on a great quarter and a great start to a new year. I'd like to know why the earnings releases never appear on yahoo finance anymore. They used to show on there a couple years back. And the last information they have on Yahoo Finance was nine months ago about your closing of the Boot Hill land deal and I do get David's emails in a very timely manner, and I thank him for that, but this to me is like preaching to the [indiscernible], why can’t the same information go on Yahoo Finance, which has millions of people that see it every day, especially in this crazy market? And we need more potential investors. We need more volume even after that great announcement on Friday, the last two days, yesterday and Friday, we traded less than one hundred thousand shares, and so, I just like to see, I don't know why this cannot be put or Yahoo Finance.

[Craig Stewart, President, Aerospace Group]

08:36 Roy, this is Craig and what we're doing right now is we dismay it through the OTC market’s website, and I guess Yahoo doesn't pick up the feed from the OTC markets. We can do the releases through PR Newswire, which is more expensive but we will look into that and see if we should get them back on PR News to [indiscernible] through PR News as well, so they hit more broader market.

[Unidentified Analyst]

09:08 Great. I would appreciate that and I know I'm not TD Ameritrade, they will have on there the transcript. They had the one in July from our meeting then, and I know that the – this one here will be probably put on there too, but they don't pick it up either. And, but David, does a great job getting e-mails out. So, I appreciate that. Thank you and congratulations again. Have a good day.

[David Drewitz]

09:38 Thank you, Roy.

[Clark Stewart, President and Chief Executive Officer]

09:39 Thank you.

[Operator]

09:42 [Operator Instructions] Our next question comes from [indiscernible]. Please state your question.

[Unidentified Analyst]

09:55 My question is regard to the somewhat the same as the previous gentleman, lack of interest in bank’s stock and BUKS stock. I'd like to think a reverse stock split maybe say, ten to one would get your market price above five dollars and should enhance interest and invest in many more investors, your thoughts.

[Clark Stewart, President and Chief Executive Officer]

10:23 Well, I'll give you the first answer on that. We've talked about that for at least fifteen years. And we have a group of people that don't think we should do it and then we have a group of people that think we should.

10:39 And we're going to have the annual meeting here in another few weeks. And I think that maybe we ought to discuss it at the annual meeting and see what the current feeling is. To be honest with you, we got all excited about doing it about ten years ago or twelve.

10:57 And so, we did all the paperwork and got ready to go. And then I had a whole lot of resistance from the shareholders saying they didn't want to do that. So, we put our back on the shelf and it's been resting there for that period of time. So, I appreciate the question. I agree that we need wider broader interest in the stock and maybe a higher price would help. I'm not sure.

[Unidentified Analyst]

11:25 I just can't imagine what a reason would be not to do a split to get to price up and therefore get all kinds of new interest from new investors. But I guess that’s your board decision.

[Clark Stewart, President and Chief Executive Officer]

11:45 Yeah. We'll take it up to the annual meeting and see where we are. We appreciate the question.

[Unidentified Analyst]

11:51 Okay. Thank you.

[Operator]

11:57 [Operator Instructions] At this time we have no further questions.

[Clark Stewart, President and Chief Executive Officer]

12:07 Well, let’s close this – I’m sorry go ahead.

[David Drewitz]

12:12 I was just going to say, Clark, do you have any closing statements?

[Clark Stewart, President and Chief Executive Officer]

12:15 Yes. I want to acknowledge and complement all our people from the casino, from Avcon, Tempe, and from the [indiscernible] team here at Butler Avionics for all of their support and their attitude toward all of these ups and downs that the economies had and their attitudes with customers and all not able to talk to them. And we really thank them, they've been real strong team members and supported the company in all cases. And I do appreciate that and that would be my closing comment, David.

[David Drewitz]

12:59 Excellent. Thank you everybody and have a tremendous day.

[Clark Stewart, President and Chief Executive Officer]

13:03 Thank you.

[Craig Stewart, President, Aerospace Group]

13:04 Thank you.

[Operator]

13:05 This concludes today's conference call. Thank you for attending.