Butler National Q3 2026 Earnings Report

Butler National EPS Results

• Actual EPS: $0.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Butler National Revenue Results

• Actual Revenue: $26.91 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Butler National Announcement Details

• Quarter: Q3 2026
• Date: 3/12/2026
• Time: Before Market Opens
• Conference Call Date: Friday, March 13, 2026
• Conference Call Time: 11:00AM ET

Butler National (OTCMKTS:BUKS) Corporation is a diversified company headquartered in Olathe, Kansas, with operations in aerospace and gaming. Its aerospace business provides aircraft modification, maintenance, repair, and overhaul services, along with specialized avionics and electronic systems for military and civilian aircraft.

The company also develops and supplies aircraft components and related products, and operates as an FAA-certified repair station. Its aerospace services support aircraft owners, operators, and government and commercial customers, with work performed primarily in the United States.

Through its gaming operations, Butler National owns and operates Boot Hill Casino & Resort in Dodge City, Kansas. The property includes casino gaming, dining, entertainment, and hospitality services. Butler National has historically been led by Clark D. Stewart, who has served as the company's chairman and chief executive officer.

Butler National Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company reported strong quarterly results with 27% revenue growth, net income of $6.7M (up 98%), and an improved operating margin of 34%, driven by higher-margin aerospace work.
• Positive Sentiment: Aerospace momentum was led by aircraft modifications and special mission electronics, with a reported $37 million backlog and a strategic push toward FAA-certified, repeatable STC products to increase recurring revenue.
• Neutral Sentiment: Management noted bookings and future activity dipped slightly due to contract timing, highlighting that aerospace revenue visibility remains sensitive to the timing of large modification awards.
• Negative Sentiment: The gaming/professional services segment remains essentially flat amid local economic headwinds, and management flagged emerging prediction markets that could modestly divert sports-wagering handle from traditional sportsbooks.
• Positive Sentiment: Balance-sheet actions included repurchasing 222,000 shares, and management says it will remain patient on acquisitions while keeping financial flexibility to pursue selective, value-accretive opportunities.

Presentation

[Operator]

Good morning, ladies and gentlemen. Today is Friday, March 13th, and welcome to the Butler National Corporation conference call. At this time, all participants are in listen-only mode. Operator assistance is available at any time during this conference by pressing zero pound. Your call leaders for today's call are Jeffrey D. Yowell, Executive Chairman, Christopher Reedy, President and CEO, Adam Sefchick, CFO, and David Drewitz, Investor Relations.

[Operator]

I would now like to turn the call over to Mr. Jeffrey D. Yowell. Please begin, sir.

[David Drewitz, Head of Investor Relations at Butler National Corporation]

Actually, it's going to me, David Drewitz. Before we begin, I want to thank everybody for joining us. Before we begin, please note that certain statements made of this call may be considered forward-looking statements under the Private Securities Litigation Reform Act. Forward-looking statements are subjects to risks and uncertainties that may cause actual results to differ materially from those expressed or implied. These risks and uncertainties are described in our filings with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. With that read, I will actually turn it over to Jeff Yowell, now Executive Chairman of Butler National. Jeff, it's all yours.

[Jeffrey D. Yowell, Executive Chairman at Butler National Corporation]

Thank you, David, and thank you to everyone joining the call. We appreciate your interest in Butler National and your participation in our quarterly earnings calls. These calls are an important part of our commitment to transparency and to keeping shareholders informed about Butler National's performance and direction. Today, you'll hear from our President and CEO, Chris Reedy, and our CFO, Adam Sefchick, who will review the company's financial and operational highlights for the quarter. Chris will also discuss ongoing initiatives across our aviation and gaming segments. Chris, Adam, and I will address several of the questions submitted in advance. With that, I'll turn it over to Chris.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Hey, thank you, Jeff. Thank you, shareholders, for your interest in Butler National Corporation. It is very exciting to be part of Butler National. I'm proud to share some of the details around our results with you. Butler National. The surge in operating and net income of 129% and 98% respectively on a 27% increase in revenue demonstrates the efforts Butler team is expending to drive results through product sales mix and efficiencies. The overall increase in revenue and efficiency is driven by gains in our aerospace product segment. These results reflect a 50% increase in revenue from aerospace products in the third quarter compared to the previous year. Aerospace products includes aircraft modifications, avionics, and special mission electronics. With aircraft modifications, we're performing on a number of significant contracts to modify large airplanes. Some of the large work.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

The larger airplanes have greater margins. Additionally, the sales product was favorable with the number of ship kits from Caravan products to Learjet hardpoints. Avcon has also worked a number of previously approved modifications, therefore no engineering was involved. With that said, we continue R&D work for new products, including on these larger airplanes. Bookings and future business activity decreased slightly for the period. It continues to reflect strong ongoing demand for our products. The decrease is primarily based upon the timing of receipt of contracts. When the company receives a large modification contract at the end of the quarter, the backlog significantly increases. Overall, we remain positive about the level of our business activity. Our Tempe Special Mission Electronics team, which manufactures gun control units and cabling at our Tempe, Arizona facility, also had a very positive quarter.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Tempe maintained production and delivery levels over the quarter, even when our key customer was closed over the holidays. The Tempe team also is working diligently on delivering the new gun controls for the M134 Minigun. The professional services segment has been essentially flat. The local economic factors that we've discussed at the annual meeting continue to play a significant role with the legacy gaming results. However, sports wagering continues to contribute positively to the financial results. With our questions and answers following our CFO discussions, I'll provide a little more insight into the business activities. I'll now turn over the call to Adam Sefchick, our Chief Financial Officer, to review the financial results in a little more detail. Adam.

[Adam Sefchick, VP and CFO at Butler National Corporation]

Thank you, Chris. I'll provide a more detailed look at our quarterly financial performance. Total revenue for the quarter was $26.9 million, compared to $21.2 million same quarter last year, up 27%. Aerospace segment revenue was $17.1 million, compared to $11.4 million same quarter, percent increase. Professional services and gaming segment revenue was $9.9 million, compared to $9.8 million same quarter last year. Net income for the quarter was $6.7 million, up from $3.4 million same quarter last year. Operating income for the quarter was $9.2 million, up from $4 million same quarter last year. Earnings per share for the quarter was $0.10, up from $0.05 prior quarter.

[Adam Sefchick, VP and CFO at Butler National Corporation]

Earnings per share for the nine-month period was $0.25 compared to $0.14 for the same period in the prior fiscal year. From the aerospace product segment, the increase in revenue is primarily due to a $3.1 million increase in aircraft modifications and a $2.3 million increase in Special Mission Electronics. From a percentage perspective, both costs and expenses decrease compared to the same quarter last year. This resulted in an operating margin of 34% in Q3 fiscal year 2026, compared to 19% in Q3 fiscal year 2025, with operating income as a percentage of revenue. Our backlog remains strong at $37 million. With respect to management services and gaming, as Chris noted, economic challenges in the local market due to the cattle and agricultural industries continue to impact discretionary spending.

[Adam Sefchick, VP and CFO at Butler National Corporation]

Costs for gaming were down 4%, while expenses were up 2%. These quarterly revenue and operating income results are company records, and overall, we are very proud of these results. Additionally, we did purchase 222,000 shares of our outstanding common stock during the third quarter. This concludes the financial overview. I'll now turn it back to Jeff and Chris to begin the Q&A.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Thanks, Adam. As always, we invite questions for our conference call. Our first question is: How reliable is backlog or contracted work as an indicator of future revenue? Can you discuss the visibility you currently have into aerospace demand? I'll take that one. That's an important question because visibility is a key factor in evaluating long-term growth. We disclose a formal quarterly backlog figure. The backlog is based upon contracted sales. As of January 31, 2026, the corporation has a solid pipeline of contracted work, repeat customers, and engineering programs that provide me. The backlog is a mix from both aircraft modifications business and the special mission electronics or gun control units. Many of our special mission electronics projects extend over multiple quarters and, in some cases, multiple years. Additionally, once an STC that can support revenue consistency over time.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

The recurring installations may be at our facility or the sale of a kit to a qualified installation facility. Our focus remains on building a balanced mix of development programs and repeatable product offerings, a combination we believe strengthens predictability and attractive growth. Our next question is: Given the specialized nature of your aerospace work, how should investors think about customer concentration risk? Adam, you want to take this one?

[Adam Sefchick, VP and CFO at Butler National Corporation]

Yes. Thanks, Chris. Customer concentration is something we monitor closely as part of our risk management process. Historically, portions of our aerospace business have involved large programs with significant customers. However, we've been intentionally broadening our customer base geographically and across mission types to reduce reliance on any single relationship. We are seeing growing interest from international operators, governmental agencies, and special mission providers, which supports diversification. At the same time, our repeat customers are a positive indicator of execution and trust in our capabilities. Our objective is balance, maintaining strong long-term relationships while continuing to expand our customer portfolio.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Thanks, Adam. Our next question that we received is: As Butler National strengthens its balance sheet, Should investors expect acquisitions to play a role in future growth? Jeff, you want to take this one?

[Jeffrey D. Yowell, Executive Chairman at Butler National Corporation]

Yes. We evaluate strategic opportunities on an ongoing basis, always through the lens of shareholder value and disciplined capital allocation. Our priority is to pursue opportunities that enhance our technical capabilities, expand our product offerings, or provide access to attractive customer channels, particularly within aerospace. That said, we are patient and selective. We continually review opportunities as they come to us. Any transaction would need to meet our financial return thresholds and align culturally with our organization. Organic growth remains our primary focus today, but we believe maintaining financial flexibility positions us well should the right opportunity emerge.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Our next question is, aerospace companies across the industry have cited engineering talent constraints. How is Butler National positioned from a workforce standpoint? I'll take this one. Engineering talent is one of the most important assets in our aerospace business. Over the past several years, we've invested in strengthening our engineering team and creating an environment that supports long-term retention. We've also hired program managers. Our ability to execute complex modifications and certification programs reflects the depth of that expertise. We continue to recruit strategically while developing internal talent, and we believe our culture, combined with the unique nature of our projects, really helps differentiate us in attracting skilled professionals. Maintaining this capability is central to sustaining Avcon's competitive position. Similarly, from a technician recruitment perspective, we're developing talent internally. We've also retained a recruiter to help us with exceptional and hard-to-find talent.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Our next question is: How should investors think about the strategic role of Boot Hill within Butler National's broader portfolio? Adam, you want to take this one?

[Adam Sefchick, VP and CFO at Butler National Corporation]

Yes. Thanks, Chris. Boot Hill plays an important role in generating consistent cash flow for the company. Its stability helps support reinvestment such as aerospace while contributing to our overall financial strength. We view this segment as both dependable earnings contributor and a source of balance within our operating model. Our approach is to manage the property efficiently, invest thoughtfully in the guest experience, and preserve its ability to support long-term contractual commitments to the Kansas Lottery and our corporate objectives.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Our next question is: Many aerospace investors favor companies with repeatable product revenue rather than purely project-based work. How is Avcon evolving in that regard? I'll take this one as well. That observation aligns with our strategic direction. While engineering development work remains essential, our long-term objective is to expand the number of certified products and modification packages that can be installed repeatedly across aircraft platforms. Each successful STC effectively becomes a long-lived asset for the company, often generating revenue opportunities for many years. Generating the FAA approvals for an FAA STC takes a considerable time and many resources. Moreover, as technology or the airplane models change, we are often required to amend our FAA approvals to maintain marketable product offerings. As that portfolio grows, we expect the mix of repeatable work to increase, which can support margin consistency and improve operating leverage over time.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Another investor asked: Beyond potential up-listing, are there additional steps management is considering to broaden investor awareness? Jeff, you want to take this one?

[Jeffrey D. Yowell, Executive Chairman at Butler National Corporation]

Yes. Enhancing investor engagement is an ongoing priority. Resuming quarterly earnings calls is one step. We are also evaluating additional ways to improve visibility within the investment community, including expanded outreach and communication initiatives. Our objective is straightforward. To ensure that Butler National strategy, performance, and long-term opportunity are well understood by current and prospective shareholders, we believe consistent execution paired with clear communications is the most effective way to build credibility in the capital markets.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Our next question is: Butler's financial performance over the past two quarters. How should shareholders think about the sustainability of these results? Are they probable market conditions or do they reflect underlying improvements in the business? You know, that's a really important question and one we consider carefully as we evaluate the company's long-term direction. While quarterly performance may vary, particularly in aerospace, where program timing, government funding, project mix all influence results, we believe our recent strength reflects both healthy demand and structural improvements we've made across the organization. At Butler National Tempe, we experienced elevated production levels driven by increased demand for our gun control units.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

While defense-related spending can fluctuate over time, this performance also reflects the operational efficiencies we've implemented, the proprietary nature of our products, and our ability to execute reliably for our customers. We have also recently added a new product line, the M134 Minigun GCU, and its related cabling as a product offering. These factors position the business to perform well even as procurement cycles evolve. At Avcon, our results continue to benefit from a deliberate focus on higher margin programs, sales of kits and improved execution discipline, and a growing pipeline of special mission and systems integration work, all of which support more repeatable revenue opportunities. Boot Hill Casino continues to provide stable cash flow, contributing to the overall financial strength and balance of the company. That said, we remain disciplined in our outlook.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Rather than just extrapolating short-term momentum, our focus is on building a business capable of generating durable earnings through varying market conditions. We also continue to look for niche market or regulatory-driven opportunities to enhance our financial position and complex modification work. Taken together, we're committed to the continued strengthening of Butler National's operating foundation for strategic organic growth opportunities. Our next question is: In a competitive aerospace environment, what do you believe differentiates Butler National? Jeff, you wanna take this one?

[Jeffrey D. Yowell, Executive Chairman at Butler National Corporation]

Okay. Our differentiation begins with focus and expertise. Avcon operates in specialized areas of aircraft modification and systems integration where technical capability, certification experience, and execution matter greatly. These are not easily replicated competencies. Much of what we do is vertically integrated from parts fabrication to assembly to modification. This is necessary to optimize performance, another differentiator. We also benefit from a diversified operating model, combining aerospace growth with the stability of our gaming segment and a disciplined financial approach that allows us to invest strategically. Most importantly, we maintain a short-term outcomes. Finally, we are also relationship-driven with customers and vendors and not strictly transactional.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Our next question is: What is the impact of prediction markets on the sports wagering revenue received by Butler National subsidiary? Prediction markets, platforms not regulated by the state, where the users wager on the outcomes of real-world events, are increasingly influencing Kansas legalized sports wagering landscape. While their financial impact is currently modest, their growth presents both challenges and opportunities. In 2025, Kansas legalized sports betting market handled approximately $2.8 billion in wagers, generating $292 million in gross revenue and $17 million in state tax revenue. While the state taxes gross sports wagering revenues at 10%, there is no state tax on prediction markets. Prediction markets such as Kalshi and Polymarket have begun to divert a portion of betting activity from traditional sportsbooks.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Analysts estimate a 5%-10% decline in legal sports bet handle due to these platforms. However, this impact is considered by many to be overstated, as prediction markets often expand the overall gambling market rather than merely cannibalizing existing revenues. We believe Kalshi and Polymarket are not direct competitors to the traditional Kansas sports wagering. We believe their unique models and regulatory framework position them as complementary platforms that cater to a different segment of users. While prediction markets may attract some users away from traditional sportsbooks, particularly in states with restrictive gambling laws, its overall impact appears to be limited at this time. Jeff, that completes our questions.

[Jeffrey D. Yowell, Executive Chairman at Butler National Corporation]

Thank you, Chris. As we look ahead, Butler National remains committed to investing in innovation within aerospace systems, improving operational efficiency across all segments, building long-term value for our shareholders. We're pleased that you joined the call today and look forward to maintaining open communication with our shareholders as we continue to execute on our strategy. Thank you for your interest in Butler National. This concludes our call. A recording of the call will be available on the Butler National Investor Relations website page following this call for 30 days. I hope everyone has a good day and a great weekend.

[Christopher Reedy, President, CEO, and Secretary at Butler National Corporation]

Take care. Thank you.

[Operator]

Thank you, everyone. This concludes today's Butler National Corporation conference call. Thank you for attending.

Participants

Executives

• Adam Sefchick, VP and CFO
• Christopher Reedy, President, CEO, and Secretary
• David Drewitz, Head of Investor Relations
• Jeffrey D. Yowell, Executive Chairman