Butler National Corporation · OTC:BUKS
Butler National — Shareholder Meeting (October 2024)
43 slides from Butler National's shareholder meeting presentation, Oct 30, 2024
Slide 1: Annual Shareholder Meeting
Butler National Corporation Annual Shareholder Meeting October 30, 2024
Slide 2: Personnel
Personnel Directors Officers Christopher J. Reedy – Chairman Christopher Reedy – President & CEO Jeffrey D. Yowell – Lead Independent Director Tad McMahon – CFO & Secretary Joseph P. Daly J. Aric Peters – Vice President & Director of Sales John M. Edgar David B. Hayden Michael A. Loh 10/03/2023 2
Slide 3: Agenda
Agenda 1. Formal Business Meeting 2. Presentation Welcome to the 2024 Butler National Corporation 1. Our Business Annual Shareholder Meeting 2. FY 2024 Performance 3. Subsidiaries - Opportunities/Risks 4. FY 2025 Key Strategies 5. Shareholder Questions/Concerns 10/30/2024 3. Thank you for your Inter
Slide 4: Cautionary Statement
Butler National Corporation Cautionary Statement The statements in this presentation may constitute “forward- looking statements” within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended. Forward- looking statements can often be identified by the use of forward-lookin
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Slide 6: The Butler Business
The Butler Business Considerations Aerospace Segment – Barriers to Entry Highly Regulated Highly Specialized (Background) Engineering Intensive Fabrication Capabilities (Quick Turn Work) Professional Services Highly Regulated Capital Intensive Extensive Competition Difficult to Expand Markets Market
Slide 7: Facilities New Century Airport - Kansas
Facilities New Century Airport - Kansas Butler National Corporate Headquarters The Butler National corporate headquarters is located on the second floor of our 50,000 square-foot leased facilities at 1 Aero Plaza, New Century, Kansas. Butler Avionics, Inc. Butler Avionics is co-located with the corp
Slide 8: Facilities Avcon – Newton, Kansas
Facilities Avcon – Newton, Kansas Avcon Industries headquarters is located at 714 North Oliver Road, Newton, Kansas in a 42,700 square foot leased facility of hangar and office space at the Newton City-County Airport in Newton, Kansas. Avcon is also co-located at New Century, Kansas along with Butle
Slide 9: Facilities
Facilities Butler National – Tempe, Arizona Butler National Corporation has an office and manufacturing operations at 4654 South Ash Ave., Tempe, AZ in a 16,110 square foot owned facility. KC Machine – Excelsior Springs, MO KC Machine conducts manufacturing operations at 505 S. McCleary, Excelsior S
Slide 10: Our Business
Our Business • Aerospace Segment – Aircraft Modifications – Avionics – Special Mission Electronics • Services Segment – Gaming Management Services • Kansas State Owned Gaming - Boot Hill Casino & Resort - Sports Wagering 10/30/2024 10
Slide 11: Fiscal 2024 Performance
Fiscal 2024 Performance See SEC Form 10-K for FY Ended April 30, 2024 FY2024 Earnings Per Share: $0.18 Comparative information for fiscal years ending April 30th: Dollars in Thousands 2024 2023 Total Revenue $ 78,376 $ 75,182 Net Income 12,512 4,516 Cash 17,792 21,997 Assets 113,975 113,906 Stockhol
Slide 12: FY2024 Revenue
Aircraft Avionics (BAI) FY2024 Revenue 4% Special Mission Electronics (in thousands) (TEMPE) 15% PROFESSIONAL SERVICES* $ 38,640 AIRCRAFT MODS $ 25,061 Professional Services SPECIAL MISSION ELEC. $ 11,953 49% AIRCRAFT AVIONICS $ 2,722 Aircraft Mods (AVCON) *Includes architecture revenue. For this pr
Slide 13: Comparison of Revenue
Comparison of Revenue FY 2024 FY 2023 FY 2022 $78,376,000 $75,182,000 $71,517,000 Avcon Avcon Avcon 35% Professional 35% 33% Professional Professional Services Services Services 51% 52% 49% Tempe Tempe 15% Tempe 14% 15% 10/30/2024 *Note: Professional Services includes BCS Design and Avcon Includes B
Slide 14: Key Economic Drivers for Business Segments
Key Economic Drivers for Business Segments Aerospace Avcon, Butler Avionics, BNC Tempe • Global Government Interests • Aircraft Firefighting / Search & Rescue / Mapping • Special Mission – Worldwide Stability • Current Aircraft Fleet Obsolescence • Regulatory / Aviation Mandates • Technical Advances
Slide 15: Key Economic Drivers for Business Segments
Key Economic Drivers for Business Segments Professional Services / Gaming Boot Hill Casino & Resort • Discretionary Spending • Inclement Weather • Patrons feel at home and have fun at BHCR • Patron Attitude towards Future of Markets • Gas & Oil Prices • Grain & Cattle Prices • Economic Factors 10/30
Slide 16: Avcon Industries, Inc. Aircraft Modifications
Avcon Industries, Inc. Aircraft Modifications 10/30/2024 16
Slide 17: Aircraft Modifications – What We Do
Avcon Industries, Inc. Aircraft Modifications – What We Do Structural Modifications Manufacturing - Fabrication Electrical Systems Integration Engineering – Design/Aero/Structural/Electrical Designated Representatives Supplemental Type Certificate Approvals (STC)/Parts Manufacturing Authority (PMA)
Slide 18: Aircraft Modifications – Product / Service Uses
Avcon Industries, Inc. Aircraft Modifications – Product / Service Uses Special Mission Design Engineering Manufacturing Mods & Installation Avcon Industries has developed FAA/EASA/DGAC/CAA approved solutions that support: •Search and Rescue (SAR) •Environmental / Atmospheric Research •Fire Detection
Slide 19: Avcon 2024 Quarterly Revenue
Avcon Industries, Inc. 2024 Revenue $9.00 $8.10 MM $8.10 $8.00 QUARTERLY REVENUE – MILLIONS $ $7.00 $6.08 MM $6.08 $6.00 $5.48 $5.48 MM $5.40 MM $5.40 $5.00 $4.00 $3.00 $2.00 $1.00 $- FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 *most projects are multi-quarter (and some multi-year) in length, reflecting variati
Slide 20: Avcon Opportunities / Risks
Avcon Industries, Inc. Opportunities / Risks • Special Mission Cessna Caravan • King Air Cargo Door – Significant market > 2,000 Built – B300 Installation / FAA Approval – Kit – Field Installation Opportunities – 20+ Airplanes Verbal Commitment – Risk: – Risk: FAA Certification / Technical Challenge
Slide 21: Opportunities / Risks – King Air Cargo Door
Avcon Industries, Inc. Opportunities / Risks – King Air Cargo Door • Most-Requested Product: • Risks: – $550,000 Target per Kit/$750,000 Installed – FAA Certification – King Air Market – 2,000 Airplane Opportunity – Unforeseen Installation Technical Challenges – Field Installation Facilities Trained
Slide 22: 2025 Key Strategies – Organic Growth
Avcon Industries, Inc. 2025 Key Strategies – Organic Growth Improving Margins: • New Century (“KC” location) – Efficiency Gains: Trained New Employees – Production Focused / Repeat Mods • Rails / Pods – Reduced Modification Time – Less than Camera Port • Sales of Kits – Customer Installation • New P
Slide 23: 2025 Key Strategies – Capital Investment
Avcon Industries, Inc. 2025 Key Strategies – Capital Investment • Significant FAA STC Approval Work – R&D New Products – King Air Cargo Door – Cessna Caravan Mods – Gulfstream Mods – King Air Mods • Expand Fabrication Facilities – Vertical Integration • Expanding KC Machine • Opportunity for Newton
Slide 24: Butler Avionics, Inc.
Butler Avionics, Inc. Installation, Service, & Repair Avionics + Engineering for FAA Approvals 12 Team Members | 2024 Revenue $2.7 Million | 2023 Revenue $2.3 Million 10/30/2024 24
Slide 25: Butler Avionics 2025 Key Strategies
Butler Avionics, Inc. 2025 Key Strategies Installations – Efficiencies / Margin Focus • King Air • Learjets – Identical Installations (TCAS) • Support Avcon Integrations 2024 FAA Approvals / STC Sales • Garmin “Glass Cockpit”– STC ST02036WI • Standby Instruments – STC ST00235MC • Clock/USB Charger –
Slide 26: Tempe Special Mission Electronics
Butler National Corporation – Tempe Special Mission Electronics Gun Controls 31 Team Members | 2024 Revenue $11.95 Million | 2023 Revenue $10.8 Million 10/30/2024 26
Slide 27: Special Mission Electronics – Products – What We Do
Butler National Corporation - Tempe Special Mission Electronics – Products – What We Do • Gun Control Units • Systems Control / Logic • Simulation Equipment • Test Equipment • Highly Specialized Cabling • COTS Manufacturing 10/30/2024 27
Slide 28: Tempe 2024 Quarterly Revenue
Butler National Corporation - Tempe 2024 Revenue $4.50 $4.25 MM $4.25 QUARTERLY REVENUE – MILLIONS $ $4.00 $3.50 $2.98 MM $2.98 $3.00 $2.80 MM $2.80 $2.50 $2.00 $1.92 MM $1.92 $1.50 $1.00 $0.50 $- FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 10/30/2024 28
Slide 29: Tempe 2025 Key Strategies – Continue the Successes
Butler National Corporation - Tempe 2025 Key Strategies – Continue the Successes • Reduce Production Backlog – 2024 Record Year – Orders Continue to be Received – Continue Product Deliveries Ahead of Schedule • Expand GCU Offering – M134 “mini gun” control unit – 25 Ordered in FY2025 Q2 • Expand Cab
Slide 30: Tempe Opportunities/Risks
Butler National Corporation - Tempe Opportunities/Risks • Maximize Production/Orders – Risks: • Parts Costs – Apprx. 1.5 Years of Backlog Orders • Personnel Bandwidth – Turnover • Customer Concentration • Expand Cabling Product Expertise / Offerings – Risks: • Personnel Bandwidth 10/30/2024 30
Slide 31: Tempe GCU Production Forecast
Tempe GCU Production Forecast 90 (Quantities of GCUs) 80 75 72 70 70 70 70 70 70 68 61 60 60 60 60 60 56 QUANTITY 50 40 30 20 10 0 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Aug-26 Sep-26 10/30/2024 Month, Fiscal Year 31
Slide 32: Boot Hill Casino & Resort
BNSC/BHCMC, LLC Boot Hill Casino & Resort • Management Services • Kansas State Owned Gaming • Gaming Management Contract with the Kansas Lottery through Dec. 2039 • Sports Wagering Management Contract with the Kansas Lottery through Sept. 2027 • Team Members: 250 10/30/2024 32
Slide 33: Professional Services - Gaming
Professional Services - Gaming FY 2024 FY 2023 Revenue Traditional Games (Slots and Tables) $29.4 Million $30.6 Million Revenue Sports Wagering $4.6 Million $ 2.7 Million Casino Non-Gaming Revenue $4.6 Million $ 4.5 Million Total Revenue $38.6 Million $37.8 Million Long Term Debt (Gaming) $36.6 Mill
Slide 34: Professional Services Opportunities/Risks
BHCMC/BNSC – Professional Services Opportunities/Risks • Stabilize Revenue and Increase Patron Count • Restructuring Marketing Strategy – Risks: • 2% State Revenue Share (Tax Increase 12/15/24) • Mature Market, Declining Population and Increased Competition • Oklahoma and Wichita Gaming • Sports Wag
Slide 35: Shareholder Questions & Concerns: Board Changes
Butler National Shareholder Questions & Concerns Board Changes • Three New Independent Directors – Last 12 Months – Jeff Yowell – Lead Independent Director, Chairman – Compensation Committee, Member – Governance & Nominating Committee, Member – Audit Committee – Joe Daly – Chairman – Governance & No
Slide 36: Shareholder Questions & Concerns: Governance Changes
Butler National Shareholder Questions & Concerns Governance Changes • Establishment of Governance and Nominating Committee • Stock Ownership Guidelines for Directors and Officers • Lead Independent Director Established • Majority Voting Standards in Uncontested Elections to the Board • Termination o
Slide 37: Shareholder Questions: Dilution
Butler National Shareholder Questions & Feedback Dilution • Management is directed to aggressively buy-back Butler Common Stock and reduce outstanding shares – Since 4/30/2024 – Buy back of more than 750,000 shares through private transactions – Market Transactions are burdensome and extremely time
Slide 38: Shareholder Questions: Reverse Split - Proposal
Butler National Shareholder Questions & Feedback Reverse Split - Proposal • There is no immediate intent for executing a reverse split – Requires further Board Action – Primary Purpose: Increase Trading Price and Decrease Number of Outstanding Shares -- Believe this would help benefit Marketability
Slide 39: Shareholder Questions: Professional Services – Gaming – Casino
Butler National Shareholder Questions & Feedback Professional Services – Gaming – Casino Common Question: Are you going to spin-off or sell the management rights and Boot Hill Casino Property? • Intent to Continue to Manage Casino: – Management Fees/Revenue Share with State provides positive cash fl
Slide 40: Shareholder Questions: Organic v. Acquisition Growth
Butler National Shareholder Questions & Feedback Organic v. Acquisition Growth Aircraft Modifications provide the path for Short-Term Growth • Organic Growth Processes Continue to Evolve – Production Efficiencies Being Gained (Expansion of Mod Installations) – Opportunity to Control More Parts Fabri
Slide 41: Shareholder Questions: Stock Price
Butler National Shareholder Questions & Feedback Stock Price 10/30/2024 41
Slide 42: Questions?
Questions? Butler National Corporation Annual Shareholder Meeting October 30, 2024
Slide 43: Thank you for your interest in Butler National
Thank you for your interest in Butler National. Butler National Corporation Annual Shareholder Meeting October 30, 2024