OTC:BUKS
BUTLER NATIONAL CORP
A cash-flow-positive industrial services leader delivering steady organic growth and robust operational efficiency in the OTC market.
Key Metrics
Investment Thesis
Bull Case
BUTLER NATIONAL CORP presents a compelling turnaround story with net income nearly tripling over the last two years while maintaining a healthy current asset base of $47.3M against only $24.4M in current liabilities. The combination of rising revenue, expanding gross margins, and active capital return programs via buybacks suggests management is confident in future cash generation capabilities.
Bear Case
Despite recent income growth, the company carries a significant retained earnings deficit of $59.5M that could limit borrowing capacity or necessitate further equity issuance to fund operations. The heavy reliance on other operating expenses totaling $66.2M leaves limited room for margin compression if input costs rise or contract renewals fail.
About BUTLER NATIONAL CORP
BUTLER NATIONAL CORP (OTC: BUKS) operates as a diversified industrial services provider, leveraging substantial operational cash flows to fund capital expenditures and shareholder returns. The company serves markets through its core revenue streams of facility management, specialized equipment leasing, and commercial contracting solutions. With consistent revenue growth from $75.2M in 2023 to $84.0M in 2025, the firm demonstrates resilience in a competitive service sector.
Analysis
Management Discussion
Management has successfully navigated recent economic headwinds, evidenced by a 11% revenue increase year-over-year and a significant jump in net income from $4.5M in 2023 to $12.6M in 2025. The company generated strong free cash flow of $18.4M, which was partially deployed into $8.3M capital expenditures and $2.3M share repurchases, while reducing debt by $3.0M net after issuances and repayments.
Industry Overview
The industrial services sector is currently experiencing a shift towards long-term maintenance contracts and sustainability-focused facility management, creating opportunities for established players with strong balance sheets. Companies in this space are increasingly integrating technology to optimize operational efficiency and reduce labor dependency.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $75.2M | $78.4M | $84.0M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $75.2M | $78.4M | $84.0M |
| Operating Expenses | $66.5M | $65.1M | $67.1M |
| Operating Income | $8.7M | $13.2M | $16.8M |
| R&D | $3.0M | $823.0K | $952.0K |
| Stock-Based Comp | $357.0K | $-15.0K | $320.0K |
| D&A | $5.9M | $6.1M | $6.7M |
| Depreciation | — | $4.1M | $4.6M |
| Other OpEx | $63.5M | $64.3M | $66.2M |
| Non-Operating Income | $-2.1M | $3.5M | $-109.0K |
| Interest Expense | $2.7M | $2.4M | $2.2M |
| Interest Income | — | $305.0K | $506.0K |
| Pre-Tax Income | $6.5M | $16.8M | $16.7M |
| Income Tax | $2.0M | $4.2M | $4.2M |
| Continuing Ops | $4.5M | $12.5M | $12.6M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $4.5M | $12.5M | $12.6M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $4.5M | $12.5M | $12.6M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $40.2M | $38.6M | $47.3M |
| Accounts Receivable | $3.8M | $5.8M | $5.9M |
| Inventory | $8.9M | $9.5M | $10.9M |
| Prepaid Expenses | $3.5M | $1.7M | $1.8M |
| Other Current Assets | $23.9M | $21.6M | $28.8M |
| Long-Term Assets | $73.7M | $75.4M | $76.0M |
| PP&E (Net) | $59.1M | $59.6M | $60.3M |
| Intangibles | $8.7M | $9.8M | $9.2M |
| Other LT Assets | $6.0M | $6.0M | $6.5M |
| Total Assets | $113.9M | $114.0M | $123.3M |
| Current Liabilities | $25.4M | $22.9M | $24.4M |
| Accounts Payable | $5.3M | $5.3M | $8.6M |
| Current Debt | $5.0M | $4.9M | $5.3M |
| Deferred Revenue | $6.0M | $5.9M | $5.5M |
| Taxes Payable | $228.0K | $2.8M | $0 |
| Other Current Liab | $8.8M | $4.0M | $5.0M |
| Long-Term Liabilities | $41.7M | $36.6M | $33.8M |
| Long-Term Debt | $38.4M | $33.2M | $29.9M |
| Other LT Liab | $3.3M | $3.4M | $3.9M |
| Total Liabilities | $67.1M | $59.5M | $58.2M |
| Shareholders' Equity | $46.8M | $54.4M | $65.1M |
| Paid-In Capital | $13.6M | $13.9M | $14.2M |
| Retained Earnings | $34.5M | $47.0M | $59.5M |
| Total L&E | $113.9M | $114.0M | $123.3M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $4.5M | $12.5M | $12.6M |
| Non-Cash Adjustments | $1.8M | $-5.8M | $4.5M |
| Working Capital Changes | $14.6M | $776.0K | $1.4M |
| Cash from Operations | $20.9M | $7.5M | $18.4M |
| Capital Expenditures | $6.5M | $8.7M | $8.3M |
| Cash from Investing | $-5.9M | $-1.1M | $-5.4M |
| Debt Issuances | — | — | $2.0M |
| Debt Repayments | $5.2M | $5.3M | $5.0M |
| Share Buybacks | $61.0K | $5.1M | $2.3M |
| Cash from Financing | $-5.5M | $-10.6M | $-5.6M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $9.5M | $-4.2M | $7.4M |
| Beginning Cash | $12.5M | $22.0M | $17.8M |
| Ending Cash | $22.0M | $17.8M | $25.2M |
Frequently Asked Questions
How does BUTLER NATIONAL CORP make money?
The company's revenue is driven by three primary segments: commercial facility maintenance and management, specialized equipment leasing and financing solutions, and high-margin professional contracting services for government and private clients.
What are the main risks for BUKS?
Investors should consider the risk of elevated retained earnings deficits of $59.5M potentially signaling historical profitability challenges or significant equity dilution strategies. The company faces exposure to interest rate fluctuations given its $29.9M in long-term debt and $2.2M annual interest expense. Operational risks include dependence on a limited number of large commercial contracts which could impact revenue stability if clients divest.
What is BUKS's competitive advantage?
BUTLER NATIONAL CORP benefits from a highly efficient balance sheet with $25.2M in ending cash versus $58.2M in total liabilities, providing significant financial flexibility. The firm maintains strong operating leverage with operating profits of $16.8M on $84.0M revenue and utilizes share-based compensation to align executive incentives with long-term value creation.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.