United States |
Re: Butler National Corporation |
Dear Ms. Singleton: |
In response to Items 1-4, enclosed you will find examples of the comments and changes we intend to make in our FY ending April 30, 201010-K report. |
BUTLER NATIONAL CORPORATION AND SUBSIDIARIES | |||||
(unaudited) | |||||
THREE MONTHS ENDED | |||||
July 31, | |||||
2009 | 2008 | ||||
REVENUE | |||||
Aircraft / Modifications | $ | 2,280,538 | $ | 3,447,130 | |
Avionics / Defense | 2,273,373 | 871,249 | |||
Management / Professional Services | 3,514,628 | 885,743 | |||
-------------- | -------------- | ||||
Net Revenue | 8,068,539 | 5,204,122 | |||
COST OF SALES | |||||
Aircraft / Modifications | 2,005,435 | 2,455,315 | |||
Avionics / Defense | 1,147,362 | 725,667 | |||
Management / Professional Services | 2,032,152 | 281,946 | |||
-------------- | -------------- | ||||
Total Cost of Sales | 5,184,949 | 3,462,928 | |||
-------------- | -------------- | ||||
GROSS PROFIT | 2,883,590 | 1,741,194 | |||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,685,832 | 1,085,144 | |||
-------------- | -------------- | ||||
OPERATING INCOME | 1,197,758 | 656,050 | |||
OTHER INCOME (EXPENSE) | |||||
Interest expense | (120,602) | (231,036) | |||
Other | 9,264 | 2,475 | |||
- | |||||
-------------- | -------------- | ||||
Other income (expense) | (111,338) | (228,561) | |||
INCOME BEFORE PROVISION FOR INCOME TAXES | 1,086,420 | 427,489 | |||
PROVISION FOR INCOME TAXES | (368,400) | (109,105) | |||
-------------- | -------------- | ||||
NET INCOME | $ | 718,020 | $ | 318,384 | |
======== | ======== | ||||
|
BUTLER NATIONAL CORPORATION AND SUBSIDIARIES | |||||
(unaudited) | |||||
SIX MONTHS ENDED | |||||
October 31, | |||||
2009 | 2008 | ||||
REVENUE | |||||
Aircraft / Modifications | $ | 4,665,384 | $ | 5,698,049 | |
Avionics / Defense | 3,442,385 | 1,305,966 | |||
Management / Professional Services | 4,371,378 | 2,255,881 | |||
-------------- | -------------- | ||||
Net Revenue | 12,479,147 | 9,259,896 | |||
COST OF SALES | |||||
Aircraft / Modifications | 3,899,295 | 4,462,329 | |||
Avionics / Defense | 1,927,864 | 1,000,907 | |||
Management / Professional Services | 2,591,380 | 1,150,656 | |||
-------------- | -------------- | ||||
Total Cost of Sales | 8,418,539 | 6,613,892 | |||
-------------- | -------------- | ||||
GROSS PROFIT | 4,060,608 | 2,646,004 | |||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 2,750,217 | 1,994,932 | |||
-------------- | -------------- | ||||
OPERATING INCOME | 1,310,391 | 651,072 | |||
OTHER INCOME (EXPENSE) | |||||
Interest expense | (215,125) | (272,259) | |||
Other | 10,372 | 2,475 | |||
- | |||||
-------------- | -------------- | ||||
Other income (expense) | (204,753) | (269,784) | |||
INCOME BEFORE PROVISION FOR INCOME TAXES | 1,105,638 | 381,288 | |||
PROVISION FOR INCOME TAXES | (368,400) | (109,105) | |||
-------------- | -------------- | ||||
NET INCOME | $ | 737,238 | $ | 272,183 | |
======== | ======== | ||||
As a result of the above, cash flows will be restated as follows: | |||||||
BUTLER NATIONAL CORPORATION AND SUBSIDIARIES | |||||||
(unaudited) | |||||||
THREE MONTHS ENDED | |||||||
July 31, | |||||||
2009 | 2008 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 718,020 | $ | 318,384 | |||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||
(used in) operations - | |||||||
Depreciation and amortization | 78,508 | 41,458 | |||||
Amortization (STC) | 11,422 | - | |||||
- | |||||||
Changes in assets and liabilities - | |||||||
Accounts receivable | (901,048) | 317,562 | |||||
Inventories | 672,942 | (265,312) | |||||
Prepaid expenses and other current assets | 115,792 | (5,490,951) | |||||
Land | 1,503,567 | - | |||||
Accounts payable | 219,625 | 232,728 | |||||
Customer deposits | (771,304) | 260,594 | |||||
Accrued liabilities | 274,666 | (187,147) | |||||
-------------- | -------------- | ||||||
Cash provided by (used in) operating activities | 1,922,190 | (4,772,684) | |||||
-------------- | -------------- | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (441,270) | (367,106) | |||||
-------------- | ------------- | ||||||
Cash provided by (used in) investing activities | (441,270) | (367,106) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Borrowings under promissory notes, net | (342,568) | 4,935,647 | |||||
Borrowings of long-term debt and capital lease obligations | 375,000 | - | |||||
Repayments of long-term debt and capital lease obligations | (2,008,500) | (200,198) | |||||
-------------- | -------------- | ||||||
Cash provided by (used in) financing activities | (1,976,068) | 4,735,449 | |||||
-------------- | -------------- | ||||||
NET INCREASE (DECREASE) IN CASH | (495,148) | (404,341) | |||||
CASH, beginning of period | 1,978,038 | 2,969,715 | |||||
-------------- | -------------- | ||||||
CASH, end of period | $ | 1,482,890 | $ | 2,565,374 | |||
======== | ======== | ||||||
Analysis and Discussion of Cash Flow During the first quarter of fiscal year 2010 our cash position decreased by $495,148. This decrease is, attributed to the following. Cash provided by operating activities was $1,922,190. We reported net income of $718,020 during the first quarter. Non-cash charges to income for depreciation and amortization were $89,930. Other cash used in operating activities included an increase in accounts receivable of approximately $901,000 and a decrease in customer deposits of $771,304. The change in accounts receivable and deposits by segment were 57% aircraft modification, 27% to Avionics and the remaining increase in accounts receivable of 16% to management and professional services. Accounts payable and accrued liabilities resulted in a net contribution of $494,291. A decrease in prepaid expenses and other current assets resulted in a contribution of $115,792. Inventory decreased by more than $672,000 as a result of the large shipment of products from our Avionics segment and the sale of a new home in Junction City, Kansas. In June, 2009 we sold developed casino land in Dodge City, with a cost of $1,503,567. Management's Discussion and Analysis 7. & 8.We will amend to expand our discussion to included revenue generated and clarified the sales of land in Dodge City as reflected in comment 5. and 6. | |||||||
Results of Operation July 31, 2009 | |||||||
Corporate / Professional Services: Services in this segment include the architectural services of BCS Design, Inc., activities related to gaming and other real estate development, on site contract management of gaming establishments, and engineering consulting services. During the three months ended July 31, 2008 and 2009 these revenues consisted entirely of architectural services and revenues related to completed construction projects. Revenue related to completed construction projects and architectural service were $432,048 for the three months ending July 31, 2009 and $104,596 for the three months ended July 31, 2008. Operating profits related to architectural and construction projects increased $179,628 for the quarter to a profit of $63,836 at July 31, 2009 from an operating loss of $115,792 for the quarter ending July 31, 2008. | |||||||
9.We will amend to included the following certification
In connection with responding to the SEC comments Butler National acknowledges that: - Butler National Corporation is responsible for the adequacy and accuracy of the disclosure in all filings; - Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission for taking any action with respect to the filing; and - Butler National Corporation may not assert staff comments as a defense in any proceeding initiated by the commission or any person under the federal securities laws of the United States | |||||||
Sincerely, |