Butler National Corporation

What they do

Butler National designs, engineers, manufactures, and services aerospace products including aircraft modifications, avionics, and special mission electronics, operating FAA Repair Stations and holding Supplemental Type Certificates. It also manages the Boot Hill Casino and Resort in Dodge City, Kansas, under a contract with the Kansas Lottery, including sports wagering. The Aerospace Products segment focuses on Learjet, King Air, and Cessna turboprop aircraft, while Professional Services manages the casino's approximately 500 slot machines, 15 table games, a restaurant, and a sportsbook.

Revenue drivers

• Aerospace Products — Generates revenue from system design, engineering, manufacturing, installation, and modification of aerostructures and avionics, and from special mission electronics like gun control units and cabling for military vehicles. Substantial growth driven by Avcon and Tempe operations.
• Professional Services (Boot Hill Casino) — Manages the Boot Hill Casino and Resort, earning management fees from gaming and dining operations. Includes approximately 500 slot machines, 15 table games, and sports wagering, with all gaming owned by the Kansas Lottery.
• Special Mission Electronics (Tempe) — Supplies defense-related commercial off-the-shelf products to government and commercial customers, including gun control units and test equipment. The Tempe operation sells almost entirely to one customer, contributing to strong demand and production volumes.

Recent performance

For fiscal year 2026 (ended April 30, 2026), revenue increased 17% to $98.0 million, operating income rose 69% to $28.5 million, and net income increased 75% to $21.9 million, with diluted EPS of $0.34. This compares to fiscal 2025 revenue of $84.0 million, operating income of $16.8 million, and net income of $12.6 million. Quarterly revenue grew sequentially from $20.1 million in Q1 FY2026 to $27.7 million in Q4. Cash and equivalents were $35.1 million with long-term debt of $24.6 million as of April 30, 2026.

Strategy

Management highlights investments in new product development, manufacturing capabilities, and operational efficiency. They are expanding special mission capabilities through certifications like the Challenger 605 650 platform and CASA CN-235 sensor integration, and growing sales of modification kits for customer installation. The company also continues share repurchases and avoiding shareholder dilution, and the Board is conducting a search for a permanent CEO.

Risks

• Customer concentration — In fiscal 2026, five customers generated 39.1% of revenue, with two major customers providing 29.9%, and the Tempe operation sells almost entirely to one customer.
• Dependence on government spending — A significant portion of revenue relies on U.S. government and foreign country spending, which could be affected by shutdowns or policy changes.
• Gaming regulation and licensing — The casino operation is heavily regulated, and failure by the company or stockholders to maintain applicable gaming licenses could harm the business.
• Supply chain and labor issues — Potential disruptions in supply chain and labor availability could impact aerospace production and casino operations.

Outlook

Management expects continued growth from aerospace products, citing record backlog of $47.1 million. They plan to leverage new special mission capabilities and kits for future derivative products and recurring revenue. For the first quarter of fiscal 2027, operating income increased 32% to $4.7 million from prior year, indicating continued momentum.