Thank you, and welcome to everyone. Before we begin, please note that certain statements made on this call may be considered forward-looking statements under the Private Securities Litigation Reform Act.

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied. These risks and uncertainties are described in our filings with the Securities and Exchange Commission, including our most recent Form 10-K and Form 10-Q.

We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. And with that statement complete, I will now turn the call over to Jeff Yowell, Executive Chairman of Butler National Corporation.

Jeff, it's all yours.

Thank you, David, and thank you to everyone joining the call. We appreciate your interest in Butler National and your participation in our quarterly earnings calls.

These calls are an important part of our commitment to transparency and to keeping shareholders informed about Butler National's performance and direction. Today, you'll hear from myself and our CFO and Interim CEO, Adam Sefchick, who will review the company's financial and operational highlights for the first quarter of fiscal 2027.

Adam and I will also address several of the questions submitted in advance. With that, I'll turn it over to Adam.

Thank you, Jeff, and thank you, shareholders, for your interest in Butler National Corporation. It has been another successful quarter for Butler National, and I'm proud to share some of the results around with you.

The first quarter of our fiscal '27 year again reflects outstanding performance for Butler National as the business continued to perform exceptionally well. In Q1 of fiscal '27 as compared to Q1 of fiscal '26, we saw significant increases in operating income and net income of 59% and 43%, respectively, on a 53% increase in revenue.

This was led by a 92% increase in aerospace products revenue, which includes aircraft modifications, avionics and special mission electronics. Importantly, the significant increase in revenue also translated into strong profitability with our overall operating margin increasing to 24% compared to 23% in the prior year quarter.

Professional Services segment experienced a 3% increase in overall revenue, driven primarily by increased traditional gaming revenue and patron spending. Professional services operating income also increased 8% compared to the prior year quarter.

Here is a more detailed look at our quarterly financial performance. Total revenue for the quarter was $30.8 million compared to $20.1 million in Q1 fiscal '26, up 53%.

Aerospace Products segment revenue was $21.7 million compared to $11.3 million in Q1 fiscal '26, a 92% increase. Professional Services segment revenue was $9.0 million compared to $8.8 million in the prior year quarter.

Net income for the quarter was $5.3 million, up from $3.7 million in the prior year quarter. Operating income for the first quarter was $7.4 million, a 59% increase from prior year quarter operating income of $4.7 million.

Earnings per share for the quarter was $0.08, up from $0.06 in the prior year quarter. For the Aerospace Products segment, the Aircraft Modifications division had an exceptional 189% increase in revenue to $16.3 million compared to $5.6 million in the prior year quarter.

More broadly, Aerospace Products operating income increased 91%, generally consistent with the 92% increase in segment revenue, while maintaining an operating margin of approximately 25%. The development of new STCs, which are FAA-approved supplemental type certificates as well as repeat modifications utilizing previously developed STCs and our marketing efforts in both domestic and international markets supported the increase.

The increased sale of various kits for installation in the field also contributed to both revenue and margin results. We also benefited from higher activity on more larger and complex special missions aircraft projects.

With respect to professional services and gaming, traditional casino gaming revenue increased to $6.8 million in Q1 fiscal '27, a 6% increase. Mobile sports wagering revenue decreased slightly to $1.1 million compared to $1.3 million in Q1 of prior year, reflecting a decrease in the hold percentage during the quarter.

The hold percentage represents the portion of amounts wagered that is retained as gaming revenue. Within the segment, direct operating costs declined 6%, partially offset by increased marketing, promotional and other operating expenses, resulting in an 8% increase in professional services operating income for the quarter.

Our balance sheet also remains strong. Stockholders' equity increased 5% during the quarter, while total liabilities decreased 11%.

We ended the quarter with $35.3 million of cash and cash equivalents, providing us continued financial flexibility to invest in the business and opportunities. And our Aerospace Products backlog reached a record $51.1 million at July 31, '26, providing significant visibility into future business activity.

With that, we'll move on to the question-and-answer segment of our call.

We continue to receive thoughtful questions from shareholders and investors through our investor outreach efforts. We grouped a number of questions covering similar topics so that Jeff and I can provide more complete responses.

With our Annual Shareholder Meeting scheduled for September 30, which we invite all of our investors and interested parties to attend, we're going to keep today's Q&A relatively focused. I'll read each question, and either Jeff and I will respond.

Our first question combines several questions we've received regarding the performance of Avcon and Butler National Tempe. Given the strong growth we've experienced in aerospace products, do you believe Avcon and Tempe can continue growing over the next several years?

And how should investors think about margins and capacity as those businesses grow? I'll take this one.

We remain very positive about the long-term opportunities at both Avcon and Tempe. At the same time, I do want to be careful about suggesting that either business will grow at the same rate every quarter or every year.

The timing of aircraft deliveries, customer orders, government programs and certification activities can create variability in our results. At Avcon, we continue to see opportunities across aircraft modifications on multiple platforms as well as kit sales and mission systems integrations.

An important part of our strategy is growing areas of the business that will allow us to leverage our engineering and certification expertise without requiring a proportional increase in physical labor and capacity. Kit sales are a good example.

Once we have completed the engineering and certification work, a kit can potentially be manufactured and shipped to qualified installation partners rather than requiring every aircraft to come through our facilities. That gives us greater geographic reach and creates a more scalable business model.

At Tempe, demand continues to be driven by our specialized electronic control systems and defense-related applications. Tempe has grown significantly, and we continue investing in people, production capabilities and product development to support the opportunities we see ahead.

Capacity is something we manage closely at both businesses. Depending on the particular program, the pacing item could be engineering resources, specialized technical labor, manufacturing capacity, hangar availability, customer timing or regulatory approvals.

There isn't one capacity constraint that applies to every project. Regarding margins, we remain focused on increasing operational efficiency and growing the mix of higher-value products and programs.

However, the timing of delivery of equipment and services as well as our product and project mix can cause margins to vary from quarter-to-quarter. So investors should not assume that any individual quarter represents a permanent margin level.

Overall, we continue to believe there is meaningful runway for growth in both Avcon and Tempe. And on to our next question.

We've received a number of questions asking us to explain STCs, kit sales and mission systems integrations in greater detail, including how these activities fit together and how they contribute to Avcon's future growth. Jeff, can you give shareholders a little more insight into how we think about these parts of the business?

Absolutely. I think this is a good opportunity to provide a brief explanation on how the Avcon business model is evolving.

An STC is an FAA approval allowing a specific modification to an aircraft. Developing an STC requires expertise in engineering, certification work, investment and time.

But once we've developed and certified that intellectual property, we own the sole right to perform that modification. And so it can potentially create opportunities extending well beyond the initial aircraft.

Historically, a significant portion of Avcon's business involved bringing an aircraft into our facility, engineering a modification and performing the installation ourselves. That remains an important capability, particularly for complex special mission aircraft.

But we're increasingly looking for opportunities to leverage our engineering and certification across multiple aircraft. That's where kits become particularly attractive.

If we can engineer and certify a modification and then manufacture a kit that can be shipped to qualified installation partners, we can potentially sell that solution repeatedly without every aircraft occupying our hangar, expands our geographic reach and makes portions of the business more scalable. We're also deliberately expanding the types and sizes of aircraft covered by our certification.

Our recent work involving the Challenger 604, 605 and 650 platforms are good examples of expanding Avcon's capabilities on the larger aircraft. The other important piece is mission systems integration.

Historically, much of our STC and mod work has focused on the structural changes necessary to add mission-specific equipment to an aircraft, such as sensors, cameras and communications equipment. That requires our engineering expertise and FAA certification necessary to physically incorporate that equipment into the aircraft.

Mission systems integration takes that capability a step further. It involves integrating the newly installed equipment into a complete functional system within the aircraft.

That can include operator workstations, power and control systems, communication interfaces and other technologies that allow the various mission components to operate together and can be controlled from within the aircraft. Avcon's combination of engineering, certification, structural modification, manufacturing and mission systems integration capabilities allows us to provide more of that total solution.

So when we talk about Avcon's evolution, these aren't separate strategies. STCs create intellectual property, kits allow us to scale that intellectual property and mission systems integration allows us to provide a higher value, more comprehensive solution to the customer.

Together, those capabilities expand both the markets we can address and the value we can provide to our customers.

Thanks, Jeff. We've also received a question about the decision to rebrand KC Machine as Butler Machine.

Jeff, can you explain the thinking behind the name change and how Butler Machine fits into our broader aerospace strategy?

The change from KC Machine to Butler Machine is more than simply a name change. It reflects how we see that business fitting into the long-term strategy for our Aerospace Products segment.

Butler Machine gives us precision manufacturing capabilities that complement the engineering certification, aircraft modification, mission systems integration and defense electronics capabilities we already have across Butler National. Our objective is to increasingly position Butler Machine toward complex, higher-value manufacturing opportunities in aerospace, defense and other mission-critical markets where quality, technical capability and reliability are important differentiators.

At the same time, we remain committed to Butler Machine's existing customers and programs. Changing the name also more clearly identifies the operation as part of Butler National and reinforces the increasingly integrated way we are approaching the Aerospace Products business.

Ultimately, we believe combining engineering and certification expertise with precision manufacturing and production capabilities allows us to provide more value to customers and pursue opportunities that individual Butler National businesses might not be able to pursue independently.

Great. Thank you, Jeff.

We've received several questions about aerospace backlog and the visibility it provides into future growth, including -- can you explain what we consider backlog, how investors should think about the timing of converting backlog into revenue and how confident you are in the pipeline of opportunities needed to replenish that backlog? I can take this one.

The first point I'd make is that backlog represents contracted business that meets our criteria for inclusion and therefore, represents revenue we expect to recognize in future periods. The timing of that revenue recognition, however, does not necessarily occur on a straight-line basis.

Some programs convert relatively quickly, while others can extend over multiple quarters or longer. The timing can depend on a number of factors, including customer schedules, aircraft availability, engineering requirements, regulatory approvals, material availability and the timing of equipment delivery and production schedules and the complexity of the particular project.

That's one of the reasons we encourage investors to view backlog as an important indicator of future business visibility while recognizing that it is not necessarily a precise predictor of revenue in any particular quarter. But the next important consideration is the replenishment of that backlog.

In addition to our contracted backlog, we maintain a pipeline of future potential opportunities that we are actively pursuing. These opportunities have not yet reached the point that we consider them contracted backlog, but the pipeline is important because it represents the potential future business that can replenish and grow backlog as new contracts and orders are awarded.

We continue to see a healthy pipeline of opportunities across both Avcon and Tempe. At Avcon, those opportunities include the development of new STCs and expanded applications of existing STCs, aircraft modification opportunities involving customer fleets with the potential to extend across multiple aircraft as well as new kit programs and the expansion of our mission systems integration projects.

At Tempe, as new weapon technologies continue to be developed, we see opportunities to support those platforms through new product development, including applications for our proprietary gun control software, while continuing to pursue opportunities involving our existing electronic control products. Not every opportunity in the pipeline will ultimately become an order and the timing of contract awards can vary significantly.

But based on the opportunities we're currently seeing, we remain positive about the long-term demand environment for our aerospace products. And now moving on to another reoccurring area of investor interest are questions regarding our capital allocation.

Given Butler National's financial position and the opportunities we've just described, how should shareholders think about the balance among capital expenditures, new STCs and product development, share repurchases and potentially acquisitions? I'll take this one as well.

Our approach remains disciplined and focused on long-term shareholder returns. Our first priority is investing in our existing business when we identify opportunities that we believe can generate attractive long-term returns.

This includes investments in engineering and technical talent, new STCs and certifications, manufacturing capabilities, technology, equipment and infrastructure necessary to support growth. We do not start with a predetermined capital expenditures number and then look for ways to spend it.

Capital requirements will vary depending on the opportunities in front of us. We evaluate investments based on expected market demand, strategic importance, potential returns and how they'll fit our core capabilities.

New STCs are a good example. While many new STCs are developed in connection with a customer-initiated project, Avcon can also independently identify opportunities to develop new STCs using its own resources and investment.

The initial engineering and certification investment can be meaningful, but a successful STC can create an asset that has the potential to generate numerous modification projects, kit sales and other related revenue over an extended period of time. We also continue to evaluate -- capital allocation strategy when we believe repurchasing shares represents an attractive use of shareholder capital.

And finally, we remain open to inorganic growth opportunities. We don't believe acquisitions are necessary to execute our current growth strategy.

However, if we identify an opportunity that could add capabilities, products, customers or scale in an area where we believe Butler National has a competitive advantage, we will certainly evaluate it. Our financial position gives us the flexibility to invest in organic growth, consider the strategic opportunities and return capital to shareholders without forcing us into any one approach.

And moving on to our next question. We've also received questions about the future of sports wagering at Boot Hill.

In August, we announced extensions of our agreements with both the Kansas Lottery and DraftKings. Jeff, can you explain what was extended and why these agreements are important to Butler National?

Yes. We're very pleased to have completed both extensions.

The Kansas Lottery extended Boot Hill's Lottery sports wagering management contract for 3 years, which extends our management of sports wagering operations through 2030. Importantly, that extension maintains the same material terms as the original agreement.

In connection with the Kansas Lottery extension, Boot Hill and DraftKings also amended and extended their sports wagering agreement for 10 years. That agreement facilitates online and mobile sports wagering.

As part of the extension, we agreed to a lower revenue participation percentage than under the original agreement. While we would obviously have preferred to maintain the prior economics, we believe the new terms reflect the evolution of the Kansas sports wagering market and provide an important long-term relationship with DraftKings.

As before, the DraftKings agreement is subject to Boot Hill continuing to have sports wagering management authority under its agreement with the Kansas Lottery. From a perspective, while the economics of the DraftKings agreement are less favorable than under the prior arrangement, the extensions provide long-term stability and visibility for an important component of our professional services business.

Sports wagering has become an important part of Boot Hill's entertainment offering and continuing our relationship with DraftKings allows us to participate in online and mobile sports wagering while supporting the overall Boot Hill brand. The extensions also give us the ability to continue investing in the guest experience and sportsbook operations while supporting tourism, entertainment and economic activity in Southwest Kansas.

We appreciate the Kansas Lottery's continued confidence in Boot Hill and are pleased to continue our successful relationship with DraftKings.

Great, Jeff. Our final question relates to the search for Butler National's permanent CEO.

Jeff, can you provide shareholders with an update on the search, including the timing of the process and what the Board is looking for CEO?

The Board continues to take this responsibility very seriously. We're working closely with our outside executive recruiter and are actively evaluating a number of external candidates for the permanent CEO position.

As you would expect with a senior executive search, candidate availability and timing can be influenced by a number of professional and personal considerations. We're entering in a period of the year when those timing considerations can become more significant.

So we want shareholders to understand that the process may take some time, and we're comfortable with that. Our priority is finding the right person rather than establishing an artificial deadline for completing the search.

I also want to emphasize that Adam has done an excellent job serving as interim CEO while continuing responsibilities as CFO. The interim structure has provided the stability and continuity we wanted and allows the Board to conduct a thorough external search without disrupting the business.

As we've said previously, our objective isn't simply to hire a CEO quickly. Our objective is to identify the right leader for the next stage of Butler National's development.

We are looking for someone who can build upon the momentum that already exists within the company, work effectively with our experienced operating leaders, understand the opportunities within aerospace products, maintain our culture of disciplined execution and help us continue evolving Butler National into a larger and more sophisticated organization. We're also looking for a leader who understands that the opportunity in front of Butler National is not to fundamentally change the strategy that has produced our recent results, but rather to help us execute the strategy at an increasingly higher level.

In the meantime, Adam and the rest of our executive leadership team continue to run the business effectively, and the CEO search has not distracted us from executing our priorities. I've used the phrase before that our objective is to facilitate evolution without disrupting our growth, and that continues to describe our approach very well.

First, thanks, Adam, for your participation in this call, and thank you to everyone who submitted questions. We've received additional questions regarding aerospace products, Tempe, kit programs, professional services and other aspects of Butler National's strategy.

With our Annual Shareholder Meeting scheduled for September 30, we'll have another opportunity very shortly to discuss the company and our long-term opportunity in greater detail. We appreciate your continued interest in Butler National and look forward to speaking with many of you again at the shareholder meeting.