Butler National Corporation Reports Record Third Quarter, Nine Months Financial Results and Conference Call

OLATHE, Kansas, March 1 /PRNewswire-FirstCall/ -- Butler National Corporation (BULLETIN BOARD: BUKS) , a leading manufacturer and provider of support systems for "Classic" commercial and military aircraft, announces its financial results for the third quarter and nine months ended January 31, 2006. In conjunction with the release, the Company has scheduled a conference call Friday, March 3, 2006 at 9:00 AM Central Standard Time.

What: Butler National Corporation Third Quarter and Nine Months Conference Call When: Friday, March 3, 2006 - 9:00 AM Central Standard Time How: Live via phone by dialing 800-624-7038. Code: Butler National Corporation. Participants to the conference call should call in at least 5 minutes prior to the start time.

Clark Stewart, President & CEO, Butler National Corp., will be leading the call and discussing results of the third quarter and nine months, the status of existing and new RVSM orders, gaming activities and an outlook on the balance of fiscal 2006.

Historical selected financial data related to all operations: Quarter Ended January 31 Nine Months Ended January 31 (In thousands except (In thousands except per share data) per share data) 2006 2005 2004 2006 2005 2004 Net Sales $3,071 $7,011 $2,626 $12,237 $18,113 $7,013 Operating Income 201 769 219 750 1,936 589 Net Income 37 666 178 350 1,672 484 Per Share Net Income .00 .02 .00 .01 .04 .01 Total Assets 17,931 16,783 10,695 17,931 16,783 10,695 Long-term Obligations 1,779 2,265 1,564 1,779 2,265 1,564 Shareholders' Equity 9,670 8,390 6,241 9,670 8,390 6,241 New Product Research and Development Cost 342 283 314 1,142 914 1,043 nr = not reported Management Comments:

"Our sales for the record nine months ended January 31, 2005, were $18,113,000 compared to $12,237,000 for the nine months ended January 31, 2006, a decrease of 32.4%. This has been another successful quarter for Butler National as we continue to build revenues and earnings in our Classic Aviation products. Total revenue for the third quarter-ended January 31, 2006, decreased 56% to $3.1 million as compared to a record $7.0 million for the same period last year. However, total revenue increased 17% over the same period in 2004.

We anticipate continued revenues relating to RVSM installations. We are projecting sales of approximately 50 to 100 Lear 20 series and Lear 30 series installations during the next two years. We are taking orders for both solutions. The Lear 30 Series RVSM solution is currently awaiting FAA approval and we hope to begin installations during the 4th quarter.

We are experiencing an increase, and expect to continue to experience an increase, in our base modification sales and special mission equipment. As the economy grows aircraft owners may elect to update, modify, and purchase business aircraft. We continue to work on new product development to stabilize our long-term revenues.

Avionics sales decreased 8.9% for the nine months and decreased 31% for the third quarter compared to last year. We expect this business segment to significantly increase in future years due to the addition of new fuel system protection devices, like the TSD, and classic aviation defense products. Our Avionics' backlog remains at approximately $3,000,000.

Monitoring sales increased 15% for the quarter and 16% for the nine months compared to the same periods last year. We continue to expand our customer base and installation of new systems as a result of more marketing emphasis. We expect this growth to continue under the new President of Butler National Services, Inc.

The Stables gaming facility in Miami, OK received an approved Class III gaming compact from the NIGC and the State of Oklahoma. We are continuing to see positive effects of the Class III gaming. Revenues from management services related to gaming increased 29% for the quarter and 10% for the nine months compared to the same periods last year.

Currently, our backlog is in excess of $10,000,000. We shipped in excess of $12,000,000 during the past nine months. We are maintaining the backlog, but with a much different product mix. The current backlog contains longer order to shipment cycle time orders for Avionics and Avcon Special Mission products. Last year the backlog was weighted with the shorter order to shipment cycle of the RVSM products. This backlog reflects our product development efforts and their potential results. Our challenge is to ship the backlog and further take advantage of these new products. However, because of our major investment in product development required to continue these new products, we may not always maintain smooth and continuous quarterly profits.

Our focus on 'Classic' Aviation Products, consistent with our long and significant heritage as a manufacturer of airline avionics equipment and a modification facility for airplanes, continues to make a positive showing on the financial statements. It is our intent to provide Classic Aviation Products that will support and promote continued safe commercial and general aviation. We are focused on serving the needs of our customers and enhancing shareholder value," commented Clark D. Stewart, President of the Company.

Our Business:

Butler National Corporation operates in the Aerospace and Services business segments. The Aerospace segment focuses on the manufacturing of support systems for "Classic" commercial and military aircraft including the Butler National TSD for the Boeing 737 and 747 Classic aircraft, switching equipment for Boeing/Douglas Aircraft, weapon control systems for Boeing Helicopter and performance enhancement structural modifications for Learjet, Cessna, Dassault and Raytheon business aircraft. Services include electronic monitoring of water pumping stations, temporary employee services, Indian gaming services and administrative management services.

Forward-Looking Information:

The information set forth above may include "forward-looking" information as outlined in the Private Securities Litigation Reform Act of 1995. The Cautionary Statements, filed by the Company as Exhibit 99 to the Company's Annual Report on Form 10-K, are incorporated herein by reference and investors are specifically referred to such Cautionary Statements for a discussion of factors which could affect the Company's operations and forward-looking statements contained herein.

FOR MORE INFORMATION CONTACT: Craig D. Stewart, Direct Investor Relations [phone] Investor Relations Phone office [phone] Butler National Corporation Fax office [phone] 19920 W. 161st Street Olathe, KS 66062 Jim Drewitz, Public Relations Public Relations Phone [phone] more information, please visit the Company web site: http://www.butlernational.com/