Butler National (BUKS) 10-Q 16 Dec 13 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Oct. 31, 2013	Sep. 06, 2013
Document and Entity Information [Abstract]	'	'
Entity Registrant Name	'BUTLER NATIONAL CORP	'
Entity Central Index Key	'0000015847	'
Current Fiscal Year End Date	'--04-30	'
Entity Well-known Seasoned Issuer	'No	'
Entity Voluntary Filers	'No	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	59,619,173
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	31-Oct-13	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $)	Oct. 31, 2013	Apr. 30, 2013
In Thousands, unless otherwise specified
CURRENT ASSETS:	'	'
Cash	$4,172	$5,148
Notes and accounts receivable	2,256	2,697
Income tax receivable	1,276	1,395
Inventories	'	'
Raw materials	6,339	6,216
Work in process	1,892	1,048
Finished goods	151	240
Total inventory	8,382	7,504
Prepaid expenses and other current assets	791	829
Total current assets	16,877	17,573
PROPERTY, PLANT AND EQUIPMENT:	'	'
Land and building	4,044	4,027
Aircraft	6,723	6,723
Machinery and equipment	3,494	3,714
Office furniture and fixtures	6,443	6,358
Leasehold improvements	4,060	4,060
Property, plant and equipment, gross	24,764	24,882
Accumulated depreciation	-10,663	-9,435
Total property, plant and equipment	14,101	15,447
SUPPLEMENTAL TYPE CERTIFICATES (net of amortization of $2,633 at October 31, 2013 and $2,604 at April 30, 2013)	1,985	2,014
OTHER ASSETS:	'	'
Deferred tax asset	1,560	1,303
Other assets (net of accumulated amortization of $1,861 at October 31, 2013 and $1,213 at April 30, 2013)	7,934	7,523
Total other assets	9,494	8,826
Total Assets	42,457	43,860
CURRENT LIABILITIES:	'	'
Line of credit	1,740	1,377
Current maturities of long-term debt and capital lease obligations	4,606	4,551
Accounts payable	1,817	1,509
Customer deposits	320	193
Gaming facility mandated payment	1,225	1,337
Compensation and compensated absences	879	1,045
Other current liabilities	218	119
Total current liabilities	10,805	10,131
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, NET OF CURRENT MATURITIES:	8,571	10,155
Total liabilities	19,376	20,286
COMMITMENTS AND CONTINGENCIES	'	'
STOCKHOLDERS' EQUITY:	'	'
Common stock, par value $.01: authorized 100,000,000 shares issued and outstanding 59,619,173 shares at October 31, 2013 and 59,619,173 shares at April 30, 2013	596	596
Capital contributed in excess of par	13,051	13,034
Treasury stock at cost, 600,000 shares	-732	-732
Retained Earnings	7,388	8,022
Total stockholders' equity Butler National Corporation	20,303	20,920
Noncontrolling Interest in BHCMC, LLC	2,778	2,654
Total stockholders' equity	23,081	23,574
Total Liabilities and Stockholders' Equity	42,457	43,860
Preferred Class A [Member]	'	'
STOCKHOLDERS' EQUITY:	'	'
Preferred stock	0	0
Preferred Class B [Member]	'	'
STOCKHOLDERS' EQUITY:	'	'
Preferred stock	$0	$0

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $)	Oct. 31, 2013	Apr. 30, 2013	Oct. 31, 2013	Apr. 30, 2012	Apr. 30, 2013	Oct. 31, 2013	Apr. 30, 2012	Apr. 30, 2013	Oct. 31, 2013	Apr. 30, 2013
In Thousands, except Share data, unless otherwise specified			Class A [Member]	Class A [Member]	Class A [Member]	Class B [Member]	Class B [Member]	Class B [Member]	Class A and B [Member]	Class A and B [Member]
ASSETS	'	'	'	'	'	'	'	'	'	'
SUPPLEMENTAL TYPE CERTIFICATES net of amortization	$2,633	$2,604	'	'	'	'	'	'	'	'
OTHER ASSETS	'	'	'	'	'	'	'	'	'	'
Other assets, accumulated amortization	1,861	1,213	'	'	'	'	'	'	'	'
STOCKHOLDERS' EQUITY:	'	'	'	'	'	'	'	'	'	'
Preferred stock, par value (in dollars per share)	'	'	$5	'	$5	$5	'	$5	'	'
Preferred stock, shares authorized (in shares)	'	'	50,000,000	'	50,000,000	50,000,000	'	50,000,000	'	'
Preferred stock, designated classes (in shares)	'	'	'	'	'	'	'	'	200,000	200,000
Preferred stock, stated value (in dollars per share)	'	'	$1,000	'	$1,000	$1,000	'	$1,000	'	'
Preferred stock, dividend rate (in hundredths)	'	'	9.80%	9.80%	'	6.00%	6.00%	'	'	'
Preferred stock, liquidation preference value (in hundredths)	'	'	9.80%	9.80%	'	6.00%	6.00%	'	'	'
Preferred stock, redemption value	'	'	$100	'	$100	$1,000	'	$1,000	'	'
Preferred stock, shares issued (in shares)	'	'	0	'	0	0	'	0	'	'
Preferred stock, shares outstanding (in shares)	'	'	0	'	0	0	'	0	'	'
Common stock, par value (in dollars per share)	$0.01	$0.01	'	'	'	'	'	'	'	'
Common stock, shares authorized (in shares)	100,000,000	100,000,000	'	'	'	'	'	'	'	'
Common stock, shares issued (in shares)	59,619,173	59,619,173	'	'	'	'	'	'	'	'
Common stock, shares outstanding (in shares)	59,619,173	59,619,173	'	'	'	'	'	'	'	'
Common stock, shares owed but not issued (in shares)	0	0	'	'	'	'	'	'	'	'
Treasury stock (in shares)	600,000	600,000	'	'	'	'	'	'	'	'

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Oct. 31, 2013	Oct. 31, 2012	Oct. 31, 2013	Oct. 31, 2012
REVENUE:	'	'	'	'
Professional services	$7,855	$9,170	$16,601	$18,977
Aerospace products	3,289	4,367	5,959	8,028
Total revenue	11,144	13,537	22,560	27,005
COSTS AND EXPENSES:	'	'	'	'
Cost of professional services	4,791	5,370	9,569	10,507
Cost of aerospace products	2,433	3,177	4,944	6,101
Marketing and advertising	1,253	997	2,317	2,117
Employee benefits	513	522	1,080	1,004
Depreciation and amortization	875	745	1,760	1,456
General, administrative and other	1,477	2,027	2,945	3,836
Total costs and expenses	11,342	12,838	22,615	25,021
OPERATING INCOME	-198	699	-55	1,984
OTHER INCOME (EXPENSE):	'	'	'	'
Interest expense	-362	-332	-752	-678
Other income, net	2	1	40	10
Total other income (expense),	-360	-331	-712	-668
INCOME (LOSS) BEFORE INCOME TAXES	-558	368	-767	1,316
PROVISION FOR INCOME TAXES	-102	68	-257	208
Net income	-456	300	-510	1,108
Net income attributable to noncontrolling interest in BHCMC, LLC	111	-186	-124	-726
NET INCOME (LOSS) ATTRIBUTABLE TO BUTLER NATIONAL CORPORATION	($345)	$114	($634)	$382
BASIC EARNINGS PER COMMON SHARE (in dollars per share)	($0.01)	$0	($0.01)	$0.01
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION (in shares)	59,019,173	57,546,314	59,019,173	57,546,314
DILUTED EARNINGS PER COMMON SHARE (in dollars per share)	($0.01)	$0	($0.01)	$0.01
WEIGHTED AVERAGE SHARES USED IN PER SHARE CALCULATION (in shares)	59,019,173	57,546,314	59,019,173	57,546,314

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Oct. 31, 2013	Oct. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net income	($510)	$1,108
Adjustments to reconcile cash flows from operating activities	'	'
Depreciation and amortization	2,175	1,520
Stock issued for services	0	91
Stock options issued to employees and directors	17	74
Gain and loss on disposal of other assets	-36	0
Increase (Decrease) in Deferred Income Taxes	-257	0
Increase (Decrease) in Other Noncurrent Assets	12	0
Changes in assets and liabilities	'	'
Accounts receivable	580	742
Income tax receivable	119	0
Inventories	-968	123
Prepaid expenses and other current assets	38	-557
Accounts payable	308	591
Customer deposits	127	-571
Accrued liabilities	-166	-426
Gaming facility mandated payment	-112	182
Other liabilities	99	88
Increase (Decrease) in Deferred Income Taxes	-257	0
Increase (Decrease) in Other Noncurrent Assets	12	0
Cash flows from operating activities	1,426	'
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Capital expenditures	-166	-6,952
Cash flows from investing activities	-166	'
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Borrowings promissory notes, net	363	440
Borrowings of promissory notes, long-term debt and capital lease obligations	0	4,598
Repayments of promissory notes, long-term debt and capital lease obligations	-2,599	-1,451
Cash flows from financing activities	-2,236	3,587
NET DECREASE IN CASH	-976	'
CASH, beginning of period	5,148	7,431
CASH, end of period	4,172	'
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	'	'
Interest paid	754	677
Income taxes paid	0	783
NON CASH OPERATING ACTIVITY	'	'
Non cash stock issued for services	0	91
Non cash stock options issued to employees and directors	17	74
Capitalized lease intangible assets	1,070	0
Capitalized lease obligation	$1,070	$0

Organization_Consolidated_and_

Organization, Consolidated and Presentation of Financial Statements	6 Months Ended
	Oct. 31, 2013
Organization, Consolidated and Presentation of Financial Statements [Abstract]	'
Organization, Consolidated and Presentation of Financial Statements	'
	1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the annual report on Form 10-K for the fiscal year ended April 30, 2013. In our opinion, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the three and six months ended October 31, 2013 are not indicative of the results of operations that may be expected for the fiscal year ended April 30, 2014.
	Certain reclassifications within the condensed financial statement captions have been made to maintain consistency in presentation between years. Financial amounts are in thousands of dollars except per share amounts.

Net_Income_Loss_Per_Share

Net Income (Loss) Per Share	6 Months Ended
	Oct. 31, 2013
Net Income (Loss) Per Share [Abstract]	'
Net Income (Loss) Per Share	'
	2. Net Income (Loss) Per Share: The Company follows ASC 260 that requires the reporting of both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with ASC 260, any anti-dilutive effects on net earnings (loss) per share are excluded. Potential common shares as of October 31, 2013 are 66,281,237.

Research_and_Development

Research and Development	6 Months Ended
	Oct. 31, 2013
Research and Development [Abstract]	'
Research and Development	'
	3. Research and Development: We invested in research and development activities. The amount invested in the six months ended October 31, 2013 and 2012 was approximately $1,043 and $797 respectively.

Borrowings

Borrowings	6 Months Ended
	Oct. 31, 2013
Borrowings [Abstract]	'
Borrowings	'
	4. Borrowings: At October 31, 2013, the Company was utilizing three lines of credit totaling $4.0 million. The unused line at October 31, 2013 was $2.3 million. During the current year these funds were primarily used for the purchase of inventory and aircraft modification STC development for the modifications and avionics operations.
	Our $1.0 million line of credit has been extended to August 2014. Our $2.5 million line of credit matures April 2015. Our $0.5 million line of credit matures June 2015.  The lines of credit are collateralized by the first and second positions on all assets of the Company.
	At October 31, 2013, there were several notes collateralized by aircraft security agreements totaling $1,539. These notes were used for the purchase and modifications of these collateralized aircraft and Kings Avionics, Inc.
	There are three notes at a bank totaling $1,606 for real estate located in Olathe, Kansas and Tempe, Arizona. The due date for these notes is March 2019 and August 2019.
	One note totaling $326 remain for real estate purchased in November 2007 and June 2009 in Dodge City, Kansas.
	One note with a balance of $69 is collateralized by the first and second position lien on all assets of the Company. This was used as capital for our daily business operations in 2006.
	BHCMC entered into an obligation with Konami Gaming Inc. effective August 1, 2012 in the amount of $1,733. The purchase of the gaming system was installed at Boot Hill Casino in mid-August and has a current balance of $737.
	BHCMC arranged to acquire for ownership by the Kansas Lottery additional gaming machines. The balance of this financed payable is $1,458.
	We are not in default of any of our notes as of October 31, 2013.
	We believe that our current banks will provide the necessary capital for our business operations. However, we continue to maintain contact with other banks that have an interest in funding our working capital needs to continue our growth in operations in 2013 and beyond.

Leases

Leases	6 Months Ended
	Oct. 31, 2013
Leases [Abstract]	'
Leases	'
	5. Leases: BHCMC, LLC ("BHCMC") as tenant entered into a lease dated May 1, 2011, and amended via an addendum dated January 1, 2012 (collectively, the "Lease"), with BHC Investment Company, L.C. ("BHCI") as landlord for a total obligation of $7,423.  BHCI provided funds to BHCMC for the purchase of certain intangible items and gaming items related to the Boot Hill Casino.  Commencing on January 1, 2012, BHCMC is obligated to make a minimum payment to BHCI of $177 per month until September 30, 2017.  The remaining balance on the obligation is $5,316.
	On August 24, 2012 BHCMC and BHCI entered into a second lease ("Second Lease") of $2,500 for tenant improvements related to expansion of the Boot Hill Casino.  Commencing on November 1, 2012. BHCMC is obligated to make a minimum payment to BHCI of approximately $55 per month until November 30, 2017.  The remaining obligation is $2,212.

Other_Assets

Other Assets	6 Months Ended
	Oct. 31, 2013
Other Assets [Abstract]	'
Other Assets	'
	6. Other Assets: Our other asset account includes assets of $5,500 related to the Kansas Expanded Lottery Act Management Contract privilege fee, $2,252 of gaming equipment we were required to pay for ownership by the State of Kansas Lottery, and JET autopilot intellectual property of $1,417.  BHCMC expects the $5,500 privilege fee to have a value over the remaining life of the Management Contract with the State of Kansas which will end in December 2024.  There is no assurance of the Management Contract renewal.  The Managers Certificate asset for use of gaming equipment is being amortized over a period of three years based on the estimated useful life of gaming equipment.  The JET intellectual property is being amortized over a period of 15 years.

Stockholders_Equity

Stockholders' Equity	6 Months Ended
	Oct. 31, 2013
Stockholders' Equity [Abstract]	'
Stockholders' Equity	'
	7. Stockholders' Equity: On May 8, 2012, the Company issued 238,750 shares of Company common stock to Reign Strategy & Investment Group, LLC ("RSIG"). The market value was $91 at date of issue. These shares were issued in consideration for RSIG's marketing and consulting services related to increasing public awareness and shareholder interest in the Company.
	The issuance of stock by the Company to RSIG is exempt from registration pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended. RSIG has represented to the Company and the Company believes that RSIG is an "accredited investor" as defined in Rule 501(a) of Regulation D.

Stock_Options

Stock Options	6 Months Ended
	Oct. 31, 2013
Stock Options [Abstract]	'
Stock Options	'
	8. Stock Options: At October 31, 2013 we had 7,262,064 outstanding stock options that were issued on December 31, 2010 all of which expire on December 31, 2015.
	The exercise price for the incentive stock options is $0.49. The Board of Directors approved the issuance of incentive stock options on December 31, 2010 with the goals of increasing shareholder value, expanding the number of managers participating in the program, and increasing the percentage of compensation tied to share price performance.
	The incentive stock options are allocated in three groups with two conditions for vesting. The first condition is stock price and the second condition is time. There are 2,420,688 options at $0.49 that may be exercised if and when the share price reaches $0.92, and 2,420,688 options at $0.49 that may be exercised if and when the share price reaches $1.41, and 2,420,688 options at $0.49 that may be exercised on or after December 31, 2013 if and when the share price reaches $1.90.

Net_Income_Loss_Per_Share_Deta

Net Income (Loss) Per Share (Details)	6 Months Ended
	Oct. 31, 2013
Net Income (Loss) Per Share [Abstract]	'
Potential common shares excluded from earnings per share calculation (in shares)	66,281,237

Research_and_Development_Detai

Research and Development (Details) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Oct. 31, 2013	Oct. 31, 2012
Research and Development [Abstract]	'	'
Research and development	$1,043	$797

Borrowings_Details

Borrowings (Details) (USD $)	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Oct. 31, 2013	Jul. 31, 2013
		Line of Credit [Member]	Line of Credit 1 [Member]	Line of Credit 2 [Member]	Notes Collateralized by Aircraft Security Agreements [Member]	Notes Payable to Bank [Member]	Notes for Real Estate [Member]	Note Collateralized by First and Second Position on All Assets of The Company [Member]	Notes Collateralized by Automobiles and Equipment [Member]	Note With Konami Gaming [Member]	BHCMC Lottery Gaming Machines [Member]
						Note	Note	Note		Note	Note
Debt Instrument [Line Items]	'	'	'	'	'	'	'	'	'	'	'
Number of lines of credit	1	3	'	'	'	'	'	'	'	'	'
Unused line	'	$2,300,000	'	'	'	'	'	'	'	'	'
Line of Credit Facility, Maximum Borrowing Capacity	500	4,000,000	1,000	2,500	'	'	'	'	'	'	'
Line of credit facility borrowing capacity	500	4,000,000	1,000	2,500	'	'	'	'	'	'	'
Notes payable	'	'	'	'	1,539,000	1,606,000	326,000	69,000	122,000	737,000	1,458,000
Number of notes	'	'	'	'	'	3	1	1	'	1	1
Notes payable due date	'	'	'	'	'	31-Mar-13	'	'	'	'	'
Face value of note entered	'	'	'	'	'	'	'	'	'	$1,733,000	'

Leases_Details

Leases (Details) (USD $)	1 Months Ended
In Thousands, unless otherwise specified	Aug. 24, 2012	Oct. 31, 2013
Lease Agreement With BHC [Member]	'	'
Operating Leased Assets [Line Items]	'	'
Total lease obligation	'	$7,423
Minimum monthly lease payments	'	177
Amount of balance on lease obligation	'	5,316
Second Lease Agreement With BHCI [Member]	'	'
Operating Leased Assets [Line Items]	'	'
Minimum monthly lease payments	'	55
Amount of balance on lease obligation	'	2,212
Advance for tenant improvements related to expansion of casino and resort	$2,500	'

Other_Assets_Details

Other Assets (Details) (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Oct. 31, 2013
Kansas Expanded Lottery Act Contract Privilege [Member]	'
Finite-Lived Intangible Assets [Line Items]	'
Other intangible assets	$5,500
Intangible Gaming Support Items [Member]	'
Finite-Lived Intangible Assets [Line Items]	'
Other intangible assets	2,252
JET Autopilot Intellectual Property [Member]	'
Finite-Lived Intangible Assets [Line Items]	'
Other intangible assets	$1,417
Useful life	'15 years

Stockholders_Equity_Details

Stockholders' Equity (Details) (USD $)	6 Months Ended
In Thousands, except Share data, unless otherwise specified	Oct. 31, 2013	Apr. 30, 2013	8-May-12
Stockholders' Equity [Abstract]	'	'	'
Common stock, shares issued (in shares)	59,619,173	59,619,173	238,750,000
Amortization of stock issuance cost	$91	'	'

Stock_Options_Details

Stock Options (Details) (USD $)	1 Months Ended
	Dec. 31, 2010	Oct. 31, 2013
Stock Options [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Shares issued (in shares)	7,200,000	'
Expiration date	31-Dec-15	'
Stock exercise price (in dollars per share)	'	$1.42
Incentive stock options condition for vesting [Abstract]	'	'
Shares outstanding (in shares)	'	7,262,064
Incentive Stock Option [Member] | Year 1 Target [Member]	'	'
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]	'	'
Stock exercise price (in dollars per share)	'	$0.49
Incentive stock options condition for vesting [Abstract]	'	'
Number of options than can be exercised (in shares)	'	2,420,688
Target price of share (in dollars per share)	'	$0.92
Incentive Stock Option [Member] | Year 2 Target [Member]	'	'
Incentive stock options condition for vesting [Abstract]	'	'
Number of options than can be exercised (in shares)	'	2,420,688
Target price of share (in dollars per share)	'	$1.41
Incentive Stock Option [Member] | Year 3 Target [Member]	'	'
Incentive stock options condition for vesting [Abstract]	'	'
Number of options than can be exercised (in shares)	'	2,420,688
Target price of share (in dollars per share)	'	$1.90