Q3 2026 Butler National Corporation Earnings Call

March 13, 2026

Speaker #1: At this time, all participants are in listen-only mode. Operator assistance is available at any time during this conference by pressing 0 pound. Your call leaders for today's call are Jeffrey Yowell, Executive Chairman; Christopher Reedy, President and CEO; Adam Sefchick, CFO; and David Drewitz, Investor Relations.

Speaker #1: I would now like to turn the call over to Mr. Jeffrey Yowell. Please begin, sir.

Speaker #2: Actually, it's going to me, David Drewitz. So before we begin, I wanted to thank, everybody for joining us. But, before we begin, please note that certain statements made of this call may be considered forward-looking statements.

Operator 3: Good morning, ladies and gentlemen. Today is Friday, 13 March, and welcome to the Butler National Corporation Core 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 J. Reedy, President and CEO, Adam Sefchick, CFO, and David Drewitz, Investor Relations. I would now like to turn the call over to Mr. Jeffrey D. Yowell. Please begin, sir.

Speaker #2: Under the Private Securities Litigation Reform Act, forward-looking statements are subjects to risk and uncertainties that may cause actual results to differ materially from those expressed or implied.

Speaker #2: These risks and uncertainties are 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.

David Drewitz: Actually, it's me, David Drewitz. Before we begin, I want to thank everybody for joining us. Before we begin, please note that certain statements made on this call may be considered forward-looking statements under the Private Securities Litigation Reform Act. Forward-looking statements are subject 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 said, I will actually turn it over to Jeff Yowell, now Executive Chairman of Butler National. Jeff, it's all yours.

Speaker #2: So with that read, I will actually turn it over to Jeff Yowell, now, Executive Chairman of BUTLER NATIONAL. Jeff, it's all yours.

Speaker #3: 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.

Speaker #3: 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, and then Chris, Adam, and I will address several of the questions submitted in advance.

Speaker #3: With that, I'll turn it over to Chris.

Jeffrey D. Yowell: 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, Christopher Reedy, and our CFO, Adam Sefchick, who will review the company's financial and operational highlights for the quarter. Christopher will also discuss ongoing initiatives across our aviation and gaming segments. Christopher, Adam, and I will address several of the questions submitted in advance. With that, I'll turn it over to Christopher.

Speaker #4: Hey, thank you, Jeff. And thank you, shareholders, for your interest in BUTLER NATIONAL Corporation. It is very exciting to be part of BUTLER NATIONAL, and I'm proud to share some of the details around our results with you.

Speaker #4: The past quarter, again, reflects record performance for BUTLER NATIONAL. The surge in operating and net income of $129.98%, respectively, on a 27% increase in revenue demonstrates the efforts BUTLER team is expending to drive results through product sales mix and efficiencies.

Speaker #4: The overall increase in eff 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.

Christopher J. Reedy: Hey, thank you, Jeff, and 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. The past quarter again reflects record performance for 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 Q3 compared to the previous year.

Speaker #4: Aerospace products include aircraft modifications, avionics, and special mission electronics. With aircraft modifications, we're performing on a number of significant contracts to modify large airplanes.

Speaker #4: Some of the large. Worked. The larger airplanes have greater margins. Additionally, the sales product was favorable with a number of shipped kits, from caravan products to Learjet hardpoints.

Speaker #4: 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.

Christopher J. Reedy: 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. The larger airplanes have greater margins. Additionally, the sales product was favorable with the number of shipped 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. Backlog 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.

Speaker #4: Bookings and, future business activity have not 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.

Speaker #4: 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.

Speaker #4: Our Tempe special mission electronics team, which manufactures gun control units and cabling at our Tempe, Arizona facility, also had a very positive quarter. Tempe maintained production and delivery levels over the quarter, even when our key customer was closed over the holidays.

Speaker #4: The Tempe team also is working diligently on delivering the new gun controls for the M134 minigun. The professional services segment has also has been essentially flat.

Speaker #4: 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.

Christopher J. Reedy: Our Tempe Special Mission Electronics team, which manufactures gun control units and cabling at our Tempe, Arizona facility, also had a very positive quarter. 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?

Speaker #4: 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.

Our Tempe Special Mission Electronics team, which manufactures gun control units and cabling at our Tempe, Arizona facility, also had a very positive quarter.

Speaker #4: Adam?

Speaker #5: 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%.

Tempe maintained production and delivery levels over the quarter. Even when our key customer was closed over the holidays, the temporary team also is working diligently on delivering the new gun controls for the M134 Minigun.

Speaker #5: Aerospace segment revenue was $17.1 million, compared to $11.4 million same quarter. Increase. Professional services and gaming segment revenue was $9.9 million, compared to $9.8 million same quarter last year.

The Professional Services segment in Al has been essentially flat. The local economic factors that we discussed at the annual meeting continued to play a significant role with the legacy gaming results. However, sports wagering continues to contribute positively to the financial results.

Speaker #5: And 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.

With our questions and answers following our CFO discussion, I’ll provide a little more insight into the business activities.

I'll now turn over the call to Adam seek our Chief Financial Officer to review the financial results in a little more detail.

Adam Sefchick: 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.

Thank you, Chris. I'll provide a more detailed look at our quarterly financial performance.

Speaker #5: Earnings per share for the quarter was $0.10, up from $0.05. Prior quarter. Earnings per share for the nine-month period was $0.25, compared to $0.14 for the same period in the prior fiscal year.

Total revenue for the quarter was $26.9 million, compared to $21.2 million in the same quarter last year, up 27%.

Speaker #5: 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.

Aerospace segment revenue was $17.1 million compared to $11.4 million in the same quarter.

Percent increase.

Professional Services and Gaming segment revenue was $9.9 million compared to $9.8 million in the same quarter last year.

Speaker #5: 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 '26, compared to 19% in Q3 fiscal year '25, with operating income as a percentage of revenue.

And net income for the quarter was $6.7 million, up from $3.4 million in the same quarter last year.

Operating income for the quarter was $9.2 million, up from $4 million in the same quarter last year.

Speaker #5: 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.

Earnings per share for the quarter was 10 cents, up from 5 cents.

Adam Sefchick: 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 products 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 missions electronics. From a percentage perspective, both costs and expenses decreased 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.

Prior quarter earnings per share for the 9-month period was 25 cents compared to 14 cents for the same period in the prior fiscal year.

Speaker #5: 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.

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 missions Electronics.

Speaker #5: 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.

Speaker #6: Thanks, Adam. And as always, we invite questions for our conference call. Our, first question is: How reliable is backlog or contracted work as an indicated indicator of future revenue?

Revenue, our backlog remains strong at 37 million.

Speaker #6: 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.

Adam Sefchick: 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 Q3. This concludes the financial overview. I'll now turn it back to Jeff and Chris to begin the Q&A.

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.

Costs for gaming were down 4%, while expenses were up 2%.

Speaker #6: 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 the backlog is a mix from both aircraft modifications business and the special mission electronics or gun controls.

These quarterly revenue and operating income results are company records overall. We are very proud of these results.

Additionally, we did purchase 222,000 shares of our outstanding common stock during the third quarter.

Christopher J. Reedy: 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 31 January 2026, the corporation has a solid pipeline of contracted work, repeat customers, and engineering programs that provide. The backlog is a mix from both aircraft modifications business and the special mission electronics or gun controls. Many of our special mission and electronics projects extend over multiple quarters, and in some cases, multiple years.

This concludes the financial overview for now. I'll turn it back to Jeff and Chris to begin the Q&A.

Thanks, Adam. And, as always, we invite questions for our conference call.

Speaker #6: Many of our special mission and electronics projects extend over multiple quarters, and in some cases, multiple years. Additionally, once the STC is certified or FA approved, it creates recurring installation opportunities that can support revenue consistency over time.

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.

Speaker #6: The recurring installations may be at our facility or the sale of a kit to qualified installation facility. Our focus remains on building a balanced mix of development programs and repeatable product offerings.

We disclose a formal quarterly, backlog figure. The backlog is based upon contracted sales as of January 312022.

Speaker #6: 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?

The backlog is a mix from both aircraft modifications business and the Special Mission Electronics, or gun controls.

Many of our special missions and electronics projects extend over multiple quarters, and in some cases, multiple years.

Christopher J. Reedy: Additionally, once a STC is certified or FAA approved, it creates recurring installation opportunities that can support revenue consistency over time. 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, track of growth. Our next question is. Given the specialized nature of your aerospace work, how should investors think about customer concentration risk? Adam, you wanna take this one?

Speaker #6: Adam, you want to take this one?

Speaker #5: 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.

Speaker #5: 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.

Additionally, once an STC is certified or FAA approved, it creates recurring installation opportunities that can support revenue consistency over time. The recurring installations may be at our facility or involve 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.

Speaker #5: 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.

Contract of growth.

Our next question is.

Adam Sefchick: 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.

Speaker #6: 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?

Given the specialized nature of your Aerospace work, how should investors think about customer concentration risk? Adam, you want to take this one? Yes, thanks, Chris. Customer concentration is something we monitor closely as part of our risk management process.

Speaker #6: Jeff, you want to take this one?

Speaker #4: 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.

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.

Speaker #4: 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.

Christopher J. Reedy: 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 wanna take this one?

Our objective is to balance maintaining strong long-term relationships while continuing to expand our customer portfolio. Thanks, Adam. Our next question that we received is:

As Butler National strengthens its balance sheet.

Speaker #4: Organic growth remains our primary focus today, but we believe maintaining financial flexibility positions us well should the right opportunity emerge.

Should investors expect acquisitions to play a role in future growth? Jeff, do you want to take this one?

Jeffrey D. Yowell: 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.

Speaker #6: 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.

Speaker #6: 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.

Speaker #6: 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 and attracting skilled professionals.

Yes. Um, 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 J. Reedy: 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.

Our next question is.

Aerospace companies across the industry have cited engineering talent constraints.

Speaker #6: Maintaining this capability is central to sustaining ABCON's competitive position. Similarly, from a technician recruitment perspective, where developing talent internally, we've also retained a recruiter to help us with exceptional and hard-to-find talent.

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 our engineering team and in creating an environment that supports long-term retention.

Speaker #6: 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?

We've also hired program managers.

Modifications and certification programs reflect the depth of that expertise.

Speaker #5: 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 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.

Speaker #5: We view the segment as both dependable earnings contributor and a source of balance within our operating model. Our approach is to manage the property efficiently and best thoughtfully in the guest experience, and preserve its ability to support long-term contractual commitments to the Kansas Lottery and our corporate objectives.

Maintaining this capability is central to sustaining AFCON's competitive position.

Similarly, from a technician recruitment perspective, we are developing talent internally. We've also retained a recruiter to help us with exceptional and hard-to-find talent.

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

Speaker #6: Our next question is: Many aerospace investors favor companies with repeatable product revenue rather than purely project-based work. How is ABCON evolving in that regard?

Our next question is, how should investors think about the strategic role of Boot Hill within Butler Nationals? And within the broader portfolio?

Adam Sefchick: 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 the 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.

Speaker #6: 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 airport aircraft platforms.

Adam, you want to take this one? Yes, thanks. Chris, Boot Hill plays an important role in generating consistent cash flow for the company; its stability helps support reinvestment.

In such a zero space, while contributing to our overall financial strength.

Speaker #4: Each successful STC effectively becomes a long-lived asset for the company, often generating revenue opportunities for many years. Generating the FA approvals for an FAA STC takes a considerable time and many resources.

We view the 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 J. Reedy: 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.

Our next question is.

Speaker #4: 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.

Many aerospace investors favor companies with repeatable product revenue, rather than purely project-based work.

Speaker #4: Another investor asked, "Beyond potential uplifting, are there additional steps management is considering to broaden investor awareness?" Jeff, you want to take this one? Yes.

How is Avcon evolving in that regard? I'll take this one as well. Uh, 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 our aircraft platforms.

Each successful STC effectively becomes a long-lived asset for the company, often generating revenue opportunities for many years.

Speaker #4: 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.

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.

Speaker #4: Our objective is straightforward: to ensure that Butler National's 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.

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

Another investor asked.

Speaker #6: Our next question is: Butler National 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?

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: 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.

Speaker #6: 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.

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's 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 J. Reedy: Our next question is, Butler National financial performance over the past two quarters, how should shareholders think about the sustainability of these results? Are they profitable 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 BNC Tempe, we experienced elevated production levels driven by increased demand for our gun control units. 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.

Our next question is.

Butler.

Speaker #6: At Butler National Tempe, we experienced elevated production levels driven by increased demand for our gun control units. 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.

Financial performance over the past two quarters.

How should shareholders think about the sustainability of these results?

Are they?

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.

Speaker #6: We have also recently added a new product line, the M30 134 minigun, GCU, and its related cabling as a product offering. These factors position the business to perform well even as procurement cycles evolve.

Speaker #6: At ABCON, 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.

While quarterly performance may vary, particularly in Aerospace where program timing, government funding, and 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, temporarily, we experienced elevated production levels driven by increased demand for our gun control units.

Speaker #6: All of which support more repeatable revenue opportunities. At Boot Hill Casino, continues to provide stable cash flow, contributing to the overall financial strength and balance of the company.

Christopher J. Reedy: 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. 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.

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.

Speaker #6: That said, we remain disciplined in our outlook, rather than just extrapolating short-term momentum, our focus is on building a business capable of generating durable earnings through varying market conditions.

We have also recently added a new product line: the M31-134 Minigun GCU and its related cabling as a product offering.

Speaker #6: We also continue to look for niche market or regulatory-driven opportunities to enhance our financial position and complex modification work. Taken together, we are committed to the continued strengthening of Butler National's operating foundation for strategic organic growth opportunities.

At Avcon, our results continue to benefit from a deliberate focus on higher margin programs, sales of kits, and improved execution discipline, as well as a growing pipeline of special mission and systems integration work, all of which support more repeatable revenue opportunities.

Speaker #6: Our next question is: In a competitive aerospace environment, what do you believe differentiates Butler National? Jeff, you want to take this one?

Boot Hill Casino continues to provide stable cash flow, contributing to the overall financial strength and balance of the company.

Speaker #4: Okay. our differentiation begins with focus and expertise. ABCON operates in specialized areas of aircraft modification and systems integration where technical capability certification experience and execution matter greatly.

Speaker #4: 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.

That said, we remain disciplined in our outlook 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 calm.

Christopher J. Reedy: 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?

complex modification work.

Speaker #4: 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.

Taken together, we are 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 want to take this one?

Jeffrey D. Yowell: 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 long-term perspective. Our decisions are guided by durability, not short-term outcomes. Finally, we are also relationship-driven with customers and vendors and not strictly transactional.

Speaker #4: Most importantly, we maintain a long-term perspective. Our decisions are guided by durability, not short-term outcomes. Finally, we are also relationship-driven with customers and vendors and not strictly transactional.

Okay, um, our differentiation begins with focus and expertise.

Speaker #6: Our next question is: What is the impact of predictive markets on the sports wagering revenue received by Butler National's subsidiary?

Speaker #4: Predictive 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.

Speaker #4: 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.

Con 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 long-term perspective. Our decisions are guided by durability, not short-term outcomes. Finally, we are also relationship driven with customers and vendors and not strictly transactional.

Christopher J. Reedy: Our next question is: What is the impact of predictive markets on the sports wagering revenue received by Butler National subsidiary? Predictive 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.

Speaker #4: Generating $202,292 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.

Question is.

What is the impact of predictive markets on sports? Wagering revenue received by Butler National subsidiary.

Speaker #4: Prediction markets such as Cal State and Polymarket have begun to divert a portion of betting activity from traditional sports books. Analysts estimate a 5 to 10 percent decline in legal sports bet handle due to these platforms.

Predictive markets platforms, not regulated by the state, where the users wager on the outcomes of real-world events, are increasingly influencing Kansas's legalized sports wagering landscape.

While their financial impact is currently modest, their growth presents both challenges and opportunities.

Speaker #4: However, this impact is considered by many to be overstated, as prediction markets often expand overall gambling market rather than merely cannibalizing existing revenues. We believe Cal State and Polymarket are not direct competitors to the traditional Kansas sports wagering.

In 2025, Kansas' legalized sports betting market handled approximately $2.8 billion in wagers, generating $202.292 million in gross revenue and $17 million in state tax revenue.

Speaker #4: 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 sports books, particularly in states with restrictive gambling laws, its overall impact appears to be limited at this time.

While the state taxes gross sports wagering at 10%, there is no state tax on prediction markets.

Christopher J. Reedy: Analysts estimate a 5 to 10% decline in legal sports betting 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.

Prediction markets such as Calci and Polymarket have begun to divert a portion of betting activity from traditional sportsbooks.

Speaker #4: Jeff, that completes our questions. 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.

Analysts estimate a 5% to 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 calcium and poly market are not direct competitors to the traditional Kansas sports wagering.

Speaker #4: 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.

We believe their unique models and regulatory framework position them as complementary platforms that cater to a different segment of users.

Speaker #4: 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.

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.

Speaker #4: I hope everyone has a good day and a great weekend.

Jeff that completes our questions.

Jeffrey D. Yowell: 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 thirty days. I hope everyone has a good day and a great weekend.

Speaker #6: Take care. Thank you.

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 we 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.

Ations website page following this call for 30 days. I hope everyone has a good day and a great weekend.

Christopher J. Reedy: Take care. Thank you.

Take care. Thank you.

Operator 3: Thank you, everyone. This concludes today's Butler National Corporation conference call. Thank you for attending.

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

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

Q3 2026 Butler National Corporation Earnings Call

Request a DemoDemo

BUKS

Butler National

Earnings