Butler National Corporation (BUKS) FY25Q1
Strong quarter with good growth in revenue and earnings.
Here is a link to my live public portfolio in Google Sheets where I record buy & sell decisions: Curious Investing Portfolio
Price on date of first blog post: $0.67 USD
Current Price: $1.22 USD
Market Cap: $83.90M
Here is a link to the quarterly earnings press release: https://www.sec.gov/Archives/edgar/data/15847/000143774924029094/ex_692434.htm
Butler National released their Q1 earnings on Friday and, as expected, this was another good one. Historically Q1 has been their weakest quarter earnings wise so it was nice to see a tripling of their earnings this quarter, but don’t expect such an increase every quarter.
**Please take a second to like this post**
Here are a few highlights from the report:
Aerospace revenue grew 30%, this revenue can be lumpy but has grown consistently over the last 10+ years.
Overall revenue grew 15%, dampened by the cash-cow casino which isn't growing as fast (excl. sportsbook which still shows signs of growth to $1M rev - 42% YoY) Sportsbook revenue is still a small portion of casino revenue however I believe revenues collected from DraftKings are high-margin due to their turn-key solution.
Backlog grew from $28.6M to $38.2M as of July 31, 2024, which is 34% in 12 days. There must have been a big order near quarter-end.
In last quarters' press release they stated the backlog was at $28.6M as of July 19, 2024:
This could be a bullish signal for continued aerospace growth.
As aerospace makes up more and more of revenue, overall revenue growth could continue to accelerate.
Continued to pay down debt.
312% increase in earnings to $2.2M. P/E should be down to around 6 now which seems cheap for a profitable and growing company with considerable tangible assets/book value ($18M cash, $10M inventory, $22M PP&E (net of mortgage) which includes land, buildings, equipment, and airplanes).
80% of net income converted to FCF which (I think) could be a reasonable go-forward assumption.
Purchases and gains on sale of airplanes skew their FCF somewhat, but as far as I can tell there were none of these accretive transactions this quarter.
Disclaimer: As of September 15, 2024, I am a shareholder of Butler National Corporation. I am not an investment or financial advisor. 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 60% (3 out of 5) of investments I make; this could be one I’m wrong on. Please do your own research and double-check my data & findings. Please also read my disclaimer and process here: Curious Investing Disclaimer and Process