Butler National Corporation F1Q09 (Qtr End 07/31/08) Earnings Call Transcript
Butler National Corporation (BUKS)
F1Q09 Earnings Call
September 22, 2008 10:00 am ET
Executives
Jim Drewitz - Creative Options Communication
Clark Steward - President and Chief Executive Officer
Presentation
Operator
Welcome to the Butler National Corporate first quarter financial result conference call. (Operator Instruction) Your call leaders for today’s call are Jim Drewitz, Creative Options Communication and Clark Stewart, President and Chief Executive Officer.
I would now like to turn the call over to Jim Drewitz.
Jim Drewitz
I would like to draw your attention to the fact that except for historical information contained herein, the statements in this conference call are “forward-looking” and made pursuant to the Safe Harbor provision as outlined in the Private Securities Litigation Reform Act of 1995. “Forward-looking” statements are both known and unknown risks and uncertainties which may cause Butler National results and future periods to differ materially from the expected result.
Those risks include among other thing for loss of market shares through competition or otherwise, the introduction of competing technologies by other companies, new governmental safety health and environmental regulations which could require Butler to make significant capital expenditures. The forward looking statements include in this conference call are only made as to the date of this call and Butler National undertakes no obligation to public update such forward looking statements to reflect subsequent events or circumstances.
Important factors that could cause actual results to different materially from the expectations reflected in the forward-looking statements include, but are not limited to factor described on the risk factors in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.
One other point about this conference call today, due to the Kansas Lottery Facility Review Board delaying by one week naming of the developer and manager of the South West Gaming Zone located in Dodge City, Kansas, Mr. Stewart will not accept any questions or answer any questions about Kansas gaming today. There will be an appropriate press release next week once Review Board has announced their decision. So no questions answered today. You are more than welcome, in fact, encouraged to ask questions about Butler’s corporate business and the first quarter financial result.
So with that, I would like to turn the call over to Clark Stewart, President and Chief Executive Officer of Butler National.
Clark Stewart
This is a great day in Kansas. You realized last Friday the Review Board data proved a $700 million project in Wyandotte County, great thing for our taxes. It should lower our property taxes or at least keep them even. I would not say lower but it is a good thing.
Now on the Butler, we had a good quarter. Revenue increased 11%, net income increased 37%. Shareholders equity is about $12.5 million and our sales, if we could maintain this rate all year long, we would have little over $20 million in sales. The significant thing to me which is good for all of us that we make enough money to pay federal income tax and state income tax and all that, the $318,000 is net of tax. So, we feel pretty good about that and this tax appropriate amount is in excess of $100, 000. So, we think we had a good quarter. We still have a good business ahead of us and I could say our sales and everything seems to be staying in there.
Our strong point for this quarter of course has been about for about nine months is the Airplane Modifications. They are up about 81% from the first quarter 2008 and that is primarily because of the special mission work. We have lots of it worldwide and we had people in Brazil this last week working on that type of product so this business is very strong and I remember those were usually three- or four-year cycles. Of course, to offset our gains there, we have a decrease in sales and profits at Avionics and that is primarily related to the build-to-print operations and that business is a little lumpy from time to time as the gun control boxes are shipped for the helicopters and the build-to-print product is kind of a fill in if we do not ship the Avionics for the helicopters in the given quarter, it makes us look bad so that is what happened with Avionics.
Monitoring systems, as you know is basically, a service business. We are down about 20% there. The difference is as we update the various systems for our clients or customers in Florida, we have better sales and better profitability as the result of selling equipment along with our services. This particular quarter, we did not have that much new equipment going in place. We will have that, we renewed our contracts and that will be starting up again here in this quarter and the following quarter.
Our management services came about the same as it was before. Our backlog is excess of $7 million. It seems to be, we have reduced a little less last quarter but it seems to be coming on fairly strong. We are going to have fluctuations in this backlog because we are bidding a lot bigger contracts. They running in millions of dollars and that have caused the backlog to bounce around so I do not think it is a great concern.
I am really pleased that we are so lucky to have the business we have in a very, very unstable economic time and with that Jim, I think I am ready for questions. I thank all of you for dialing in this morning.
Question-and-Answer Session
Operator
(Operator's instruction) Mr. Stuart will not be accepting questions regarding Kansas gaming.
Clark Stewart
Jim, we do not have any questions.
Jim Drewitz
Clark if there are no questions, I think you should thank everyone for participating and we will catch up with them next time.
Clark Stewart
Thank you, Jim. Thank you everyone for being with us this morning. We will try to make this short and everybody could get through their Monday morning works. So, I appreciate your time and we will talk to you next week. Thank you.
Jim Drewitz
Thank you very much.
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