Good morning, ladies and gentlemen. Today is Thursday, March 19, 2015, and welcome to the Butler National Corporation's Third Quarter Fiscal 2015 Financial Results Conference Call. [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. I would now hand the call over to Mr. David Drewitz. Mr. Drewitz, you may begin.

Thank you, Erica, and good morning, everyone. Before Mr. Stewart begins, I would like to draw your attention to, except for historical information contained herein, the statements in this conference call are forward-looking and made pursuant to the Safe Harbor provisions as outlined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risk and uncertainties which may cause Butler National's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, the loss of market share through competition or otherwise; the introduction of competing technologies by other companies; new governmental, safety, health and environmental regulations, which could require Butler to make significant capital expenditures. The forward-looking statements included in this conference call are made as of the date of this call, and Butler National undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, but are not limited to, factors described under the caption Risk Factors in the company's annual report on Form 10-K filed with the Securities and Exchange Commission. So with that completed, I would like to turn the call over to Mr. Clark Stewart. Mr. Stewart, the floor is yours. Clark D. Stewart: Thank you, David. Good morning, ladies and gentlemen. We're pleased to have you join us this morning on this shareholder call. You should have a press release and a Form 10-Q as we filed for quarter 3 of the fiscal year ending April 30, 2015. We're pleased and we're concerned about the overall status of where we're going here today a little bit, and I want to just go through some of the numbers. As you can see, our sales are up about 2% for the quarter, and so we're up $3 million for the year-to-date, which is good. The operating income is up in the quarter from $18,000 the previous year to $535,000, and those are thousands, in the current quarter. Year-to-date, a loss of $38,000 to a profit of $1,708,000. And the net income of all of this turns out for the quarter to be $68,000 for the quarter versus a loss of a year ago of $219,000 and year-to-date, a profit of $350,000 versus a loss of $853,000. So we got $1.1 million swing in net income for year-to-year for the 9 months, which we're real happy with that. It's a lot harder to deal with that $853,000 loss. Our long-term debt, as you know, is -- we've been reducing. It's down about $2.5 million year-to-date since April of 2014. And the total debt, including the line of -- lines of credit and all debt included, were down about $2.1 million year-to-date. That is about $200,000 with the airplane operations, BNC non-casino and about $2 million for the casino for the year-to-date. So we are on a rapid pace of reducing the debt in accordance with the cost of the capital out there. We spent $461,000 real cash on research and development this last quarter. We spent $1.2 million year-to-date. We think that's real important to maintaining our position in the marketplace and continuing to develop business for the Aerospace side. Our total cash is down $1.2 million year-to-date, which amazingly enough is about equal to the new product R&D. I didn't realize that until -- I'm not ready to tell you that, but that is a significant expenditure that we are doing, and we feel it's really requires -- required to do that. As you know, the casino requires approximately $3 million balance to operate. We have about $5 million showing at January 31, so there's about $2 million that is Aerospace and the rest of the business related cash. So we aren't plushed with a lot of cash as many people think we should be, and that's just the way this is. We have major fluctuations. I will talk to you about those a little bit later when we answer questions. Our current backlog is sitting at about $10.1 million. If we review the backlog. From April 30, it was $5.6 million. July 31, it was $4.4 million. October, it was $5.9 million. And now we're at $10.1 million, which is about equal to what it was a year ago at this time, $10.2 million. So our backlog is performing as it did in total numbers. The concern we have is we have -- both the year-ago and this current backlog has an order in there in excess of $5 million, which makes it hard to deal with because you've got to fund that $5 million and then you got to collect it. Eventually, you get it in the bank, and it takes about a year to get that accomplished or more sometimes. So we have major challenges with that type of backlog. We'd rather have a little bit smaller orders and more of them than these big ones. But that's basically where we are financially at this point. I would call your attention to forward-looking information relative to the comments we're going to make from here forward. And we have a guest today that is going to address the Professional Services side. We have Sharon Stroburg, our Casino Manager for BHCMC. And she is one of the top marketing experts in the casino business, we believe, and I think the industry believes that also. And she's going to talk to you a little bit about what's happening in the Professional Services segment and its related operations in that city. Sharon, welcome to the group. Thank you very much. Sharon Wheeler-Stroburg: Thank you. Thank you. Good morning. So revenue from the Professional Services increased over the past 3 months. We attribute this to positive revenue growth in the gaming operation. We've seen that positive revenue growth for about the last 6 months, and we're optimistic that this trend will continue. We've spent a lot of time and energy and marketing dollars to help grow the market in Dodge City. And we'll continue to do so and hope that, that will continue to drive positive revenue growth as we move through the rest of this fiscal year and next year. Clark D. Stewart: Thank you, Sharon. I also have Craig here to talk to you a little bit about aerospace products, Craig Stewart. He can tell you a little bit about those. And then, we will deal with the questions we've had from shareholders that we received in the last quarter, and I will address some of those concerns. Craig D. Stewart: Okay. Aerospace has been kind of up and down. We've -- out in Arizona, we got our big order for $5 million here in -- I believe, that was end of January, 1st of February. Those -- that order -- those shipments will start going out in the August, September time frames. Right now, it's a build-out process of those units, but we're very encouraged by the continued business out in Arizona. Our business at Avcon, the modification facility, has fluctuated quite a bit in both demand and product types that we're dealing with there. The backlog at Avcon is about $3.5 million. So it's staying pretty strong, but we'd like to see it get a little bit better and turn those over a little bit faster there at Avcon. Clark D. Stewart: Thank you, Craig. The questions we've received deal with the stock buyback and dilution of the 401(k) matched to the employees. And both of those, of course, are related to cash and related to our bank loans. We have looked at our bank loan documents, and we are restricted on dividends and buybacks of shareholder -- buyback of stock from shareholders. The bank kind of feels somehow that if we have extra cash, we ought to pay down the loan instead of doing some of those things. And I guess we're a little bit of old-school country banking as in those documents have been around for a long time, and there isn't really much we can do about that. On the match with the 401(k), we have not made up our mind how we're going to handle that. We need to have a discussion about the case situation, which I thought I would share with you a little bit today to give you a feel of what kind of things we deal with here and why we have the casino and Professional Service type business involved with the Aerospace business, and you'll understand a little bit more of what the challenges are. For example, in the last week or so, we were expecting to collect here this week about a $700,000 payment on arrival of some airplanes for -- or 1 airplane for modification. That was just the deposit part of it. And we have received information now that, that payment probably won't be coming in for another 30 days. We have -- we are in a position where we're having to advance funds for the Tempe order in excess of $500,000, $600,000 in the near future here. So if you look at that, all of a sudden, we've got $1.3 million swing in our cash situation in a week, and that is the big thing when we're trying to operate with $2 million cash balance at the max. So we have that going on. We have the funding of the research and development of another $1.2 million that requires cash to keep that going. We expect that to be very productive in the legacy aircraft and in the world of ADS-B, which is the mandated reporting by the FAA of the -- basically, the position, the altitude, direction and all this status information electronically from every airplane that's flying back and forth with the FAA without human intervention. So these are the things we're working on. So as you can see, we have no business running the cash much below $1 million in worst case. The other thing we're doing is the refinancing of the Phase 2 debt -- or obligation, I should say. Really, it's more like an obligation because it's confusing at the Boot Hill. And it's a unique situation here where each financing agency, when we go to a different one, has to learn the rules of Kansas gaming, which is a fact that we pay for the gaming equipment and the state owns it. And therefore, we really don't have an equity interest in those machines, and they are not on our books as assets. They're out there as some kind of intangible, which is there as part of this -- an accounting requirement. It's hard to define, and I'm not going to try to define it here today. But the facts are there's no basis for a loan against those machines, and so you have to convince someone that, that's not a variable asset. So we hope to get that done, in the case of this refinancing, within the next 60 days and have that refinanced, which will save us about 10 points on the interest cost. And that has taken a lot longer than we expected, but it's not unusual for those kind of questions to have to be dealt with. We also have, from time to time, continued -- really continuously, over time, an interest in purchasing various parts of the business, predominantly the Boot Hill operation. And as you know, we have plans for the spinning out of that thing at some point in time when we get it refinanced to the point where we could do that, and so this refinancing that we're talking about in the next 60 days is step 1 to accomplish that procedure. And once we get this one in place, hopefully, our documentation will be such that we will be able to move forward with that program. So that kind of wraps up where we are. And like I say, I call your attention to the forward-looking information statements we have in the 10-Q and the 10-K because all this stuff is very speculative, as I've just described to you. And we appreciate your patience in this longer discussion than normal here this morning, but I felt it was important that you understood about how we're seeing this thing. So with that, David, I'm ready for questions.

Already? Ladies and gentlemen, if you have any questions, Erica, let's open it up to questions.

[Operator Instructions] Our first question comes from Anthony Antigua [ph].

I just have 1 brief question. I wonder if you can apprise me as the reach of the motor coach program. How far do you -- can you feasibly go? Clark D. Stewart: Sharon, do you want to answer that, please? Sharon Wheeler-Stroburg: Certainly. We currently have several line runs that are established within about -- within 100 miles, I think, are the further -- the furthest out that we currently go within the State of Kansas. In April, we're going to kick off some overnight tours out of Oklahoma City. And May, we'll be going into Amarillo with some overnight tours. Feasibly, we can go as far out as anywhere in Texas, Oklahoma, Colorado, Nebraska, Missouri. It just takes time to build the business and to build the relationships with bus companies in those markets and obviously, marketing dollars to then promote that as we go. So I think in fiscal year '16, you'll see us as far out as Oklahoma City, Amarillo, Colorado Springs and possibly one other destination in Nebraska. And then over the next few years, we'll continue to build out from that radius. Clark D. Stewart: Thanks, Sharon.

Our next question comes from Michael Melby.

Was curious just on the Boot Hill casino. Maybe your rationale why maintaining a 60% economic interest in the casino isn't good enough by -- that's not the right long-term solution. Clark D. Stewart: Well, I guess, that's a good question. We could do it that way, except you understand that 40% of the spinout would probably end up belonging to that person, one way or another, over time, and I'm not sure we want to give up that much dilution to everybody else. But I think the capital requirement is significant here, and they really are in a different kind of business than the casino operation. And I'm not sure they want to be here long term. They're in the shopping center-type development situations, and they generally are only in those for 5 years or less. So I think that, in all fairness to them, we need to get them out of the ownership as soon as we can. That's their objective as well.

Got it, yes. I guess I just want to emphasize from a shareholder standpoint that to get them out, you'll have to write a check, and you want to do that at a price that is attractive to the company for that 40% interest. [Technical Difficulty]

We're all still here, and let's proceed with additional questions.

And just curious a little bit if you could comment on the STC. It looks like you spent $1.3 million thus far in developing it. Maybe any more information you have on things you're excited about there and why it's important to spend this much money to further develop those? Clark D. Stewart: Well, the thing we're excited about, I think probably the biggest revenue generator there in the -- it will be a lump-type deal, are these mandatory programs, like the ADS-B, which was like the RVSM and the transient suppression on 747s. Those kind of programs have a high margin to them, and it's very -- the ability to enter that market is hard to do in the Part 25 and up airplanes. And we are well underway in that development, and we have some customers waiting. At this point, the unit sales there are in the 15, 20 airplane up groups. And I think there's a niche to get us into a much newer model airplanes than we're dealing with right now and have gone and build a service business, so to speak, if you will, that will carry on for another 20 years or so in that marketplace. And I think that's what we're really excited about more than anything else, that's the ADS-B and all the related products that fit with that package. The rest of the STC development is to perpetuate the special mission-type work. We're a unique vendor in that business, and the airplanes that they're currently using are getting older and older. And they need newer airplanes that are capable of handling 1,000 pounds under each wing and all kinds of modifications to the aerodynamics of the airplane and still be able to operate, and those are also relatively high-margin transactions. And we've spent a lot of money on that over the last 30 years, and we continue to do that. That's what keeps us in that business. We always debate the question of, should we be in the repair and overhaul type business of these airplanes. And we've a** laid back and forth on that. The margin isn't as good, but the business is a lot more steady. So we may evaluate that as we move forward. That also, in the new world of the FAA, seems to continue to require more and more STCs. They are limiting the amount of work you can do without an STC, so we think our niche as a developer and as a person understanding the certification requirements -- it's not a person, the company understanding the certification requirements is a major plus to us going forward 3 to 5 years from now. So that's why we're spending the money. Does that answer the question?

Yes, Clark. That's very helpful.

Our next question comes from Timothy McMillan [ph].

Clark, we had a $1.3 million judgment in our favor. When do you expect to receive those funds? Clark D. Stewart: We've received those funds, Tim. And as you might expect, we have plenty of places where we have borrowed money to cover that in the past, and basically, our reduction in our credit lines reflect that because banks like to get paid back somewhat timely. And so that's what happened to some of that. The rest of it is still in boot -- at Boot Hill. We increased the working cash out there some. And of course, as you know, that money was received at Boot Hill, and therefore, we only get 60% credited to our income and 40% to our partner's income. So we -- there was not a great windfall here. In any case, you did notice there that we had to give up parts to Bally in the settlement, and those parts have value to them and had value on our books. So we basically -- we did receive some cash. We made our cushion at Boot Hill, just easier to operate with that additional cash. So that's where it is.

And then on your financing, you're in the phase now and expected to be done in 60 days, and then it's hopefully full bore on dealing with the partners. Is that what I understand? Clark D. Stewart: Well, I wouldn't say that. What we're doing here is there's 2 phases to this, Tim. There's the phase of replacing the approximately $9 million worth of upfront debt that we had, which includes the Phase 2 expansion of about $3 million. So there's a $7 million and a $3 million package, which adds up to about $10 million. That's been paid down to $5 million or a little less, and that's what we're refinancing. That's the first step, and that takes part of the purchase price out of the equation. And then we're in a business, probably 3 to 4 months after that, of trying to take care of the rest of the ownership position. So we're probably talking next fall before we get it all accomplished, but we're certainly a lot closer than we have been in the past. That's about all I can say about it.

I understand. That's a good time frame. You really haven't been able to give us that kind of time frame up until now. So that -- and you're pretty confident this first phase is going to get handled in 60 days? You have a good... Clark D. Stewart: I'm pretty confident, but I would point out to you, Tim, our -- what do we call them? Forward-looking information is subject to the forward look. How's that?

Well, that's good. Clark D. Stewart: Yes, I feel pretty good about that. I do have one other thing that we should note. As far as you might have seen an 8-K filed that reported the change of the auditor from -- let's see. What was... Sharon Wheeler-Stroburg: L.L. Bradford Clark D. Stewart: L.L. Bradford was the last one. This one is RBSM, not to be confused with RVSM, but RBSM. What happened is the SEC partners from Bradford went to this other firm, and that, in effect, we needed to change the name of the auditor to make sure we maintain our SEC auditing requirement. So there's nothing different other than they changed names at the firm. So that's just something that I'm not concerned about, and I don't think anyone else is either. But I wanted to make sure we mention it here today. More questions?

[Operator Instructions] Clark D. Stewart: Sounds like we're done, David.

Well, very good. Thank you, everyone. Clark, do you have any closing statements? Clark D. Stewart: I do. I figured out that the distance from -- as the crow flies, from Oklahoma City to Dodge City and from Amarillo to Dodge City is approximately 200 to 220 miles, plus or minus. So we're in -- when Sharon answered your busing question, of the 100 miles we're using today, we're basically doubling that distance. I would -- I didn't know that number until I looked at my map, so that's piece of information. Thank you very much for your patience with this call. This is taking about 0.5 hour of your time, and I really appreciate that time. Thank you, all, very much. Appreciate the questions. That's it, David.

Thank you, everyone, and have a great day.

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