Butler National Corporation (BUKS) Q2 Earnings
Acquisition of KC Machine and good quarter overall
Butler National Corporation released their latest quarterly results on Friday:
https://www.sec.gov/Archives/edgar/data/15847/000143774923034495/ex_572071.htm
I think it was a good quarter for Butler National. Here are some rough notes I took from the 10-Q:
Purchased a recognized provider of high-quality precision machine parts (KC Machine) for ~$2.9M Cash (Butler National Acquires KC Machine Business - Butler National Corporation).
Only $205K goodwill implies this was mostly an asset & skilled labour deal and potentially a good price.
Employees in the Aerospace division have increased from 111 to ~132 YoY driven by the acquisition of KC Machine, operationalization of the new hangar, and likely efforts to address their backlog.
There was a one-time $3.7M gain on sale of airplanes. As mentioned in a previous post, their net book value is almost as much as their market cap AND they have assets sitting on their book at less than fair value.
Adjusted net income of $2.4M (adjusted for one-time gain and estimated tax of 20%) though this is typically one of their more profitable quarters historically. Unadjusted quarterly net income of $5.0M (after tax with gain).
It is possible they also had some one-time legal fees related to their acquisition which are not adjusted.
The net income after tax including gain on sale of airplanes is $5.0M which is very good for a $50M market cap company with considerable book value.
Sportsbook revenue of $1.3M this quarter, somewhat flat to YoY run-rate.
Less spend per customer in the casino likely due to less disposable income as a result of tough economic conditions.
Paid down debt.
Joseph Daly continues to buy and is now the largest shareholder.
Disclaimer: As of December 16, 2023, I am a shareholder of Butler National Corporation at an average cost base of $0.73. My plan at the time of writing is to hold these shares long-term, but I may have sold my position by the time you’re reading this. This is not a purchase recommendation and I can only hope that I’m right on 3 out of 5 (60%) investments I make — this could be one I’m wrong on. Please do your own research and double-check my data & findings.
Original investment case on BUKS here: Butler National Corporation (BUKS)
Second article on BUKS here: Butler National Corporation (BUKS) Q3 Earnings
Third article on BUKS here: Butler National Corporation (BUKS) May 12 PR
Fourth article on BUKS here: Butler National Corporation 10-K (Year-ended April 30) Fifth article on BUKS here: Butler National Corporation Q1