Butler National Corporation (BUKS) Q2 2026 Earnings Call Transcript
Butler National Corporation offers a unique mix of aerospace/defense and gambling exposure, with recent aerospace strength offsetting gaming weakness. Aerospace segment revenues and margins surged, driven by robust defense demand and operating efficiency, while casino revenues declined due to local economic softness. Current fair value is $2.18, but with strong EBITDA growth, BUKS could reach $3.02, offering up to 26% upside from current levels.
Butler National is undervalued due to its underperforming Casino segment overshadowing strong Aerospace growth and margin improvement. Aerospace Products segment backlog and margins are rising, but overall results are dragged down by stagnant Casino & Gaming sales. Sum-of-the-parts valuation suggests shares could double, with a fair value of $3.50 versus current prices, reflecting deep undervaluation.
| Aerospace & Defense Industry | Industrials Sector | Mr. Christopher J. Reedy J.D. CEO | OTCQB Exchange | US1237201041 ISIN |
| United States Country | 326 Employees | - Last Dividend | - Last Split | - IPO Date |
Butler National Corporation, echoing through its name, operates with a diverse portfolio under its belt, marked by a significant focus within the aerospace domain alongside ventures into professional services. This conglomerate, with roots going back to 1960, has its base in New Century, Kansas, from where it propels its operations across various continents including North America, Europe, the Middle East, Asia, and beyond. The enterprise has tailored its structure to efficiently maneuver through the competitive landscape via two main segments: Aerospace Products and Professional Services. This strategic segmentation allows Butler National Corporation to not only cater to the intricate requirements of the aviation industry, including private, commercial, and government aircraft operators, but also to step into the realm of professional services, offering a blend of entertainment and consulting prowess.
This primary segment encompasses an extensive array of offerings aimed at business-size aircraft such as passenger-to-freighter configurations, radar systems, aerial photography enhancements, and modifications for search and rescue, environmental research, mapping, along with intelligence surveillance and reconnaissance for notable models like Learjet, Beechcraft, and Cessna. These services extend to crafting, selling, and maintaining electronics for weapon control systems on government aircraft and vehicles. Avionics are a key part of their expertise here, including sales, installations, and repairs for a wide spectrum of equipment, from airplane radio systems to complex flight control frameworks, emphasizing their capability in troubleshooting and autopilot system repairs.
Veering into a distinct direction, this segment showcases Butler National Corporation’s adaptability through the management of Boot Hill Casino and Resort, situated in Dodge City, Kansas. This facet of the company brings forth gaming, dining, and entertainment services under one roof, demonstrating a diversified business strategy. Furthermore, they engage in the acquisition, refurbishment, and sale of airplanes, primarily focusing on Learjets, alongside the ownership of properties. The consulting services here are tailored to business planning and financial coordination, specifically targeting Indian tribes with aspirations to venture into the casino business, thereby encapsulating a unique blend of traditional service offerings with strategic business advisement.