BUKS - Earnings call transcript Q2 2019 | Butler National Corporation

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Operator

Good morning, ladies and gentlemen. Today is Tuesday December 18 and welcome to the Butler National Corporation Second Quarter Fiscal 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] Your call leaders for today's call are David Drewitz, Creative Options Communications; Clark Stewart, President and CEO; Craig Stewart, President of Aerospace Group. call Mr. the turn now over to I'll David Drewitz. Mr. you begin. may Drewitz,

David Drewitz

and Great. happy good holidays you, to And morning. Thank everyone.

statements information Before of Mr. attention herein, are historical your as made Harbor's Act pursuant in to like conference to the forward-looking contained the and Stewart begins, Reform to the I except Private XXXX. would Litigation in call this provision Safe draw outlined for Securities

risks periods Forward-looking actual expenditures. competition and differ the known statements in unknown this forward-looking uncertainties National’s results. call otherwise, regulations other future and statements caption are and date obligation technologies expectations to Annual circumstances. Butler Factors” that cause loss the Exchange from events of and the or cause of by conference environmental forecasted the among Important results may only from call, update market in companies, include -- share to capital other new to the materially subsequent include statements which results could actual publicly the which of or to statements materially The Butler are risks forward-looking of in safety, could limited the in to Butler made Commission. health, reflect this to through XX-K involve under described the introduction Those included governmental forward-looking not require Company’s filed Form Report factors things and competing on significant no but differ factors with make undertakes reflected National such “Risk Securities

Clark Stewart. the turn like Mr. completed, Mr. to that ahead. with So would over to I Stewart, go call

Clark Stewart

taking join morning. appreciate and us gentlemen, Mr. you, morning Drewitz. time to Thank you your this we Good ladies

and press should X-months XX was the of release ended X-months the that talks You December XX, October about the status XXXX. a dated have that

operating income, and is previous from about also million and up significantly previous net from months up You our in the $X.X it the substantially in quarter, that year. six will million also about million up six the months, substantially notice the up is $X revenue was income $X.X the

Our I believe that – that is long-term million or that six obligation about comparing $X.X we’re is year, a XXXX down since and here. is that’s months

it’s think year. a I

million horse is spent this we period. development XXX, are year equity on up product the $X.X busy last have spent and in it’s we’d power product too more month spending So development the We short period to money don’t have $XXX,XXX if X.X. enough on this six - we year and in actually

better. so look glad makes are business, have earnings we to a the that the So lot

Our backlog business. is aerospace adds side nice in of our steady at marketing the the which definitely Casino is about pleased we’re City and that. with $XX.X Dodge million, doing real business, we’re side up million workout and the to program is of to a $XX --

probably American will We’re Mexico, going which the additional also management work happening demand to the is occur FAA pleased and in traffic thing with segment XX, countries. very special the and is system a of the another of mission and due same XXXX, which the the December in add lot is South in ADS-B through

three the our deals the with outside and So the second deal compensation I as page, at that advisors would we good attention starts get paragraph we committee we’ve you caution result months something we’ve on of earnings in out how it next a four resolved the your the two, to or whenever Garmin item fourth back. in on like on X that should December results a call XX, can that up you the tax in that in to see December every transponders as tax year XX-Q Supreme $X.X at Kansas I the looking paid essentially. about, concerned we for that out of That collected been – was is put our XX. have would there which it just get X the sales and XXXX of thing the with expect ruling, basically we through item that through look have we since we XXXX sales XXXX. October million overhang Court

is situation effect a between onetime that net and our or income X. about tax X $XXX,XXX So the is on after

that XXXX out as little a There And left a it may of so, in good one-time that shows there November thing, the is think have that’s after will there, in let’s even of not results, business just it, that to but positive backlog be in be maybe produce still more we that. small a a income, but nice amount the say continue money out increase of taking after good that of that’s interest. essentially and bit our But and I results factoring $XXX,XXX that. end minority income some should

product of revenue Let's some implement wings see and now And continued pods integration and items. those if airplane develop I the to from got on anything those other we’ve getting aerospace to else in some stores generating under and are business, customer’s system here. into new

and is On seem bank six positive working casino, remaining contract. the there’s buy get that, is be at the option on that loan moving to to comfortable to years with forward. fact It only out building the land the the reasonably

some a don’t certainly Kansas forward in we needs office administration [ph]. are in David believe to do. think [broadly] moving to Democrat should mid-January. new and so is extension. are continue yet, all maybe whatever the they a conclusion the Republican on casinos any it, with from need favorable we -- to have going said changing questions that, also probably and have coming more state or We extension. We for ready into I money, Having favorable administration, movement are the January, we’re administration to the as Everyone knows the We the

yours all So David.

Operator

question first Our Please Macmillan. state question. Instructions] Timothy your from [Operator comes

Unidentified Analyst

you indicated all? Are also Craig that there finding rectifying mentioned had Are Good meeting, you under you had dire shortage morning, a at I still quite as far gentlemen. Clark, in was that annual the straits you as still of labor. people? it think

Clark Stewart

Pete’s are the side -- and going spring ADS-B, the it We’re to in -- the we but of in mechanic we in need really searching fall holding everyday, aircraft the through needed of there, to seem be XXXX. be

So building that up. we’re gradually

work it’s backlog have significant how all We there, the about it. of and a market shuffles

You vendor somebody believe, the we know the as to whether we’ve numbers share we indicated our and been it else but I does, by get or getting by are having. conversations as

seeing to I were is answer the seeing that the do people than for people think looking every are complaining. I and that question we’re always we good your day. more we And time was last we So,

quit we’ve it’s to in got staff a the tell and that I'll keep growing So you maintain complaining, them challenge. but I’ll here because

Craig Stewart

and when tight It’s Cessna on [indiscernible] makes else life the both type market everybody now. labor I sheet know metal avionics the on a hiring on very mechanics guys hiring is tough – or they’re right for Textron down the is hiring.

Unidentified Analyst

this you saying your saying strong no, you’re backlog very that basically year You’re XXXX through forth XXXX? -- with project, are calendar and so

Craig Stewart

see too with and in the backlog -- many don’t honest year block next you. in the fluctuations end calendar I be the of to between now

Clark Stewart

on you Oh, in day. we that aren’t of or five December of and and at big shopping about popping And talk the Let’s bit of what’s up backlog, four so the really projects in are Tim or it’s phone XXXX. ADS-B ISO, up like working don’t shows about really those They’re surveillance it. we know, what’s the one. even whether and calls not. an I’ll in little airplane what the know there really one you -- are that’s order. why say, kind they what But don’t – of due rate don’t you mission, a backlog, you Intelligence have really the a That’s are the, stuff get special on

The limited. July So starting because situation. it’s set and the vendors our work availability to competitors According or like with most is information of to do are panic August the through something out that that. our in type dealing pretty the others of Cessnas to the stuff booked of is

out, and the question? of have about trying we that Does how So airplane and market, of but to best and situation share that's so it’s can just more more more we’re I more think the we address answer and tough all a get we’ll do. see it for your get to think plays the prepared, owners it

Unidentified Analyst

Yes.

you’d Arizona and the in down mentioned annual nicely? talking you’re at the gun also meeting there in rapid Now situation about orders increase the that about gun, progressing is there,

Clark Stewart

you need answer Craig, to that.

Craig Stewart

our to that as very customer had it’s Yes, far the we’re it this point. - be continuing as high I But don’t to expected is see demand know where not at off. quite

that continuing is we’re will capacity these backlog their out XX the continue there, and next So months. strong, for sure through increased

Unidentified Analyst

it in knows. annual at number what so from Craig several again increase just that months mentioned to the number last was you meeting everybody what What the

Craig Stewart

and about – about over we’re, I month. probably calendar a now per XX year, XX XX GCUs, a a at up a think looking from that there’s that’s get the month up possibility XX here to we’re XXX is -- and next there we’re in to to been we’ve GCUs

Unidentified Analyst

to And next $XX would you’re be quarter believe unreasonable to the that XX sales were -- that area X and quarters so the just for in, this keep million safe again think? to say the I a looking over it little million aircraft, XX, is to several the re-emphasizing aviation

Craig Stewart

to have schedule hopeful whether quarters. as come of little in are in that. through in just through a if -- world be few least But next pretty the at will two comes March probably But the what we’ve below out, that’s everything pretty [indiscernible]. right got It one here projects we’ve now that revenue, things we next these push three months scheduled then right are see we be to we’re and where will large now will pretty in on bit got we’re on the projects over if the -- may don’t what up a booked decrease fluctuations the what ISR accurate

Clark Stewart

of three whole $X million out the is $X.X I a but of you told probably. quarter to you That’s like Tim were for showing money, that than business next the a lot it the Yes, $X.X a you the segment we don’t that a say quarter lot cutoff. then expect Like, know, million at best, months quarterly one little and work year for to compared get $X.X million we’ve we I’d know expect, I’d make and get higher can’t you million million probably delivered sure. would is ago. in $X

I��d fluctuating So that say thing X were million. to it’s X a

Unidentified Analyst

profitable assumption, and And clearly looking casino of there are things kind cleared situation? better hurdles a and is casino pretty good in the the is now that you’ve some that

Clark Stewart

And open X% of the most X%, hurt budget out big I a on see there us good. casino mean that above closing we’re won’t we southeast about coming think. it’s do cost the will anything; XXX last and year but good. of Panhandle. of we doors we’re and or which [ph] to is in Guymon [indiscernible] time. so gamblers we us. can I quite are some as Yeah think up there, miles don’t business the X%, it through see marketing is Texas in we That's X% don’t, business the [running] of anyway, profitability the going money other and or But Indians in The going same we or marketplace item the to why as the be competitor the

real So, of it’s your somebody wants come it working get you tips sword, edged to some then and get you a know. and two well

Unidentified Analyst

it’s but all sudden changes this seemed I of one and this have it so isn’t comfortable Sure. they question with seems seems fault he your And all, if a seems at know know and like forth. gets at what’s comfortable and that’s with mark a then the it like it but loan and banker don’t his I then time mind left, oversimplification, like

get that is at you’re he’s this to working that’s still is on and this what point? So with trying saying comfortable

Clark Stewart

got to error probably that’s you way. Tim that realize getting you’ve Well, in my feeling

in and changed, variables gaming of the of off in about we we And seven in backed things on got they But think at [ph], and started that once what the year happen a time. should in business in every discuss it now then loan, thing out a and administration and state to gone that multitude got is election them And mind I justify just be all [indiscernible] stuff. as stable. kind want the All direction we’ve get months. they we’ve them we feelings same of from need to and that XX-year the the is that true different here. don’t [AIM] six election to three year. the kinds tell administrations the least last probably variable to relatively their really going whole dealing what's with telling Kansas, the stuff this all state’s an you’re And

say. is of what that's So, world more I political I unstable. wouldn't bank that the It's the would that say is unstable.

Unidentified Analyst

comfortable pretty hope you on you is real feel this or new feel a that that you board? is get administration comfortable Or that And Or happen? would can wish? a

Clark Stewart

and be for That’s just of think hope any wish. all I But too now just truth. square we matter And that pegs wouldn’t not that project, with the are. I’m over, but what given holes bad know here the in it’s round square will comfortable where a in a don’t It’s and holes. that’s not None are we’ve we’re be given in in we a That sure. bank like political we up. us it this situation. up don’t that don’t the It – and and do I that’s doing. pegs I period particular really the where those this getting and neither looks time are round up, states like. of what voters given the

Unidentified Analyst

All gentlemen. Okay. good. Very Thank right. you

Clark Stewart

you, Tim. Thank

Operator

Sam comes your Please from question. Our state Rebotsky. next question

Unidentified Analyst

Yes. Good morning.

assume amount Casino on are? sort as that price real And the be would is relative as the could there the me those The relative what and two, are and I estate. numbers greater of Boot there we kind the buy to able And quantify we pay would you of land your of the is continue the profitability owned profitability the what we land what room Let -- seeking to for if to judgment of, money Hill far value we’re the and land? it? number

Clark Stewart

changing. to then lot The by price is relative The question or will and price price where It days. really the that and fixed the when option before of problem. something more the three get of years we’ll ever stuff and we the years is opened? But when value, more -- more it’s is Yes. we or price. estate down building Really three how years or real be days agreement will answer to be answer stable. fixed appraisals anything. the a the else six is all it’s the a more the or correct. It's built not that we to not years that and -- price nailed XX XX estimates And signed good not more we long casino a XX all an

of well the are As far pretty as on pricing and interest-rate that’s pretty and is all the loan, that the is that banks grinding it doing. up to where Federal and trying hold now that stuff a it like close established kind to buyout at Reserve

with us working really they’re on that. So

price is So, political I’m and pleased Like that. a say, with price price it’s The its question. a though XXXX I good actually.

So a shape. pretty good

Unidentified Analyst

the sell to So, when in came the can a profit say, and we land, buy at a difficult to buy? significant down over point loan price the et building our we getting if we the cetera

Clark Stewart

what there problem idea pay The for would we have don’t willing a is Yes. buyer it. any

Unidentified Analyst

Okay.

Clark Stewart

different on But the it’s there’s or stream whether event it’s – support center. it’s got it facility casino a for whether different just the a a

build -- So it significantly swing to more you structure value. build that’s cost than did. a in and today we what when got cost would out The big the

Unidentified Analyst

work with, working this is is bank I bank So have, that we’re as us in we this that offer? and the as mean, there…? with the relationship is only the area far would or the

Clark Stewart

of the is good have banks. the This two or current with We three relationships one. best

Unidentified Analyst

Okay.

that see judgment Each you sort did I hinder and far process discussion look rates frame. some a indicate or is in of the of with And or this we that time any in movement your as three-month up there’s process? the fact the if -- as there progress? we guess, it’s So time are interest help going

Clark Stewart

were that aren’t. they like ends. were think banks the the I But They’ve all quarter if before calling shots. closed

to stride just that it’s So got something that get that you situation stabilized. political

Unidentified Analyst

Okay.

Clark Stewart

way it. not… a do is say best Anything we that’s to purely a else And guess, would

Unidentified Analyst

of All have aerospace. you one me Okay. you back shift? let get working amount right. are now The business the to Look, on

Craig Stewart

are We working on one shift. currently

Unidentified Analyst

more – on the Or work you it more be you to need it possibility? had a does more more one this business If profitable to if cost if than the can than would shift? had it is prohibitive Or Or work on mean? the to do you more at work if would you what to you employees, work one on shift? than you is one Presumably, point it shift? have

Craig Stewart

given people that. shift. people and period it’s there’s business people challenge the to if to the shift, shift time, non-standard locations do got work the to think we depending especially to second I supervisors that a enough of non-standard yes, to a the a are work enough will the what that matter be if short find think willing demands. I it’s And – willing and we Over go work of different for on

know may Arizona I depending of a a that out and shop, as that gone we flag think we on kicked to couple that the we’ve ADS-B. the we times I well. avionic that possibility. have have works at do and that what ships around different kind for there. have have we’ve done And And times it’s of idea on

if don’t as So of the got the want to we’ve the we that willingness look dictates can situation doing got, based do if on employees to the -- we some demand of and the at kill but we employees then

Clark Stewart

done Arizona that gone and We’ve Yes. both. they’ve in the in past

if it’s can that the do workers. get can we so skilled can we see we something And

Unidentified Analyst

backlog there want backlog is the your this guess Is your your is bidding competing it I against? or up. bids? far increase get? statement? you there are as And potential long, that more people you’re Is don’t significant that – or too go so you fair many business to prices as may is I mean, could – so And a a process basic

Clark Stewart

That’s statement. probably fair

Let’s talk about about we��ll take question The as can there’s backlog, the that. shifts many orders and get, the no we backlog.

that them problem the in the to with cases you -- those and we kind the government that agency work float Now associated around we probably change But directly and when of some in of not accommodate try we're will as that kind have those are those lot delivery that's people has mission, to of a stuff. with know is somewhere, us overtime customer the dealing the change and special on those and dates customers that. dates

here the have we don't and the little all And so want And bit. the a course, other but stuff what's is on have regulatory don't mandated the going they is matter droves, most minute. to in if it. be the starts until do everybody And last that position a overtime is we then thing then if the working of up a a we it. It's in capability do where we're giving in doing that's by the calling don't increasing And profit start of mandated to efficient of they FAA waiting avionics anything. people then price drives way

what's So and or will the now done to business between happen you like from May. other that. how these year of through now. won't worked on all them really April If And they've run many get mandates, can't tell going next and

past as over we had the in the I have do it to in locations So say also like if we shift. to the done can time second we the do best and and we try all

the we think. skilled Phoenix the companies because those –Sprint, the in Boeing the work doing in for people economy and the those whatever well. type of in contractor, people that with is – Sprint though their And the the for and doing is, tough it's the for Textron independent doing skilled people We sub compete technical mechanics. And -- down or the with Tempe. airplane with compete other their I we is market – also item well are then that compete So big Wichita

to there out hire that and trying so people where everybody's is. that's And

goes we're So spring we Right and summer. how through think we'll it now, right. see doing all

Unidentified Analyst

you many shares Okay. in you far bought Or available. XXX,XXX you guess as the And I and how open November Is October. more -- to there buyback more at are buy? $X.XX, the as stock any or stock bought have December?

Craig Stewart

was planning couldn't the XX I think what are we a quiet buy we our that on XXX,XXX continuing And the XXX, available end to us. approved -- when is buy. buy shares to in October continuing until period, the shares for I board's of we're can't Friday remember between that’s We're total because what but are the

Unidentified Analyst

Yes.

$XXX,XXX? So it’s to authorized purchase

Craig Stewart

Right.

Unidentified Analyst

-- X, XXXX. how So through much May

million is board what against does So or you increase increase do already number XXX? X.XXX the that bought? that need to it? XXX,XXX, you go Would that approval you Or that

Craig Stewart

the approval that board we of bought but need XXX. would expect, gives us kind shares We to the values it, of increase we that gives kind

the for the it XXX. year think I XXX increased board from last to

it I and long company cash the So willing as and as view our with at looking the the it makes way board think we're stock. increase -- the they is position how to sense for

Clark Stewart

that number bought have shares there, dollars. quoted a not and June, those are May million We you

Unidentified Analyst

what I'm That's saying. Right.

a So, mean I million…

Clark Stewart

So is the dollars. XXX

Unidentified Analyst

Yes.

Okay.

it’s -- buy. against so fronts, and the something could these be I benefit everything you and that you And think what you’re the all aerospace – get do. had mean, could that of I short this improve doing we difference you closes the you okay. further, whatever I its stock luck. level. Well Hopefully, hopefully achieve left in because on milestones front your you seems Good better diminished to quarter. all you. more against sooner of look, got earnings in your good, $X.XX that a the one have could But Well, the to XXX,XXX, that gotten I compare what’s guess. possibilities what is So casino, to And guess,

Clark Stewart

the share. on the you for Thank question

weighted XXX,XXX share plus If can buyback, that. see reduced by about there, so average by you we’ve you the look at the the details

dollars. gaining are we that So it shares on and are those not --

done. we’ve what that’s So

time So We you for very appreciate thank your it. much taking ask question. you to the

Operator

further no we And questions. Instructions]. have [Operator

Clark Stewart

are to appreciate have optimistic taking you And talk the like We their you’d things morning call. great of we All cautiously this time everyone we us on do. that right. meet with us Thank can much. the all very to

very a you season. great So much. thank holiday Have

David Drewitz

Thank you everyone.

Operator

This Thank for conference concludes today’s attending. call. you

Butler National (BUKS) 18 Dec 182019 Q2 Earnings call transcript