Butler National Corp. reports profit for FY 1996.

OLATHE, Kan.--(BUSINESS WIRE)--July 2, 1996--Butler National Corp. (NASDAQ:BUKS) today filed its annual report for the year ending April 30, 1996, on Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Historical selected financial data:

                                    Year Ended April 30
                            (In thousands, except per-share data)

                                   1996      1995      1994

Net Sales                        $17,339   $13,156   $17,713
Net Income                       $   144   $  (895)  $   271
Per-Share Net Income             $   .02   $  (.11)  $   .04
Total Assets                     $ 8,261   $ 4,193   $ 5,024
Long-term Obligations            $ 1,568   $   119   $   451

Highlights of the report include:

-- All operating business segments were profitable in fiscal 1996.

-- Food Distribution segment experienced record growth. Revenue

increased 44.2% to $13.7 million and operating profit increased

75.5% to $809,416. Management expects Food Distribution to

continue to grow in fiscal 1997.

-- Aircraft Modification segment increased sales 37.2%, resulting in

a 166% increase in operating profits to $356,916. Management

expects the AVCON FINS modification, certified by the Federal

Aviation Administration in May 1996, and other new modifications

to make a significant contribution to revenues and operating

profits in fiscal 1997.

-- Company's shareholders' equity at April 30, 1996, was

$4,111,962, an increase of 60% from fiscal 1995, the highest in

recent company history.

-- Consolidated backlog at April 30, 1996, was $3,107,764 and

currently stands at $3,318,799.

-- Butler National and the Miami Tribe of Oklahoma resubmitted the

management agreement for the Princess Maria to the NIGC for

approval and resubmitted the related land lease to the BIA for

approval. The Secretary of the Interior approved an amended

Constitution for the Miami Tribe on Feb. 22, 1996, giving the

heirs of Princess Maria federal recognition as Miami Indians.

Butler and the Miami Tribe feel that federal recognition of the

heirs and their consent to be governed by the Miami Tribe brings

the management agreement into compliance with the IGRA.

-- Butler National's agreement with the Miami and Modoc Tribes to

construct and manage a Class II and limited Class III Indian

gaming facility in Miami, Oklahoma, is pending approval by the

NIGC. The Secretary of the Interior approved the Compact for

this facility in February 1996. All design, engineering and

local permit approvals are complete. Construction should begin

as soon as management agreement approval is received.

-- Butler National continues to work with the Shawnee Tribe and the

Cherokee Nation of Oklahoma as a part of its support of the

beneficial owners of Shawnee Reserve No. 206, located in Johnson

County, Kan. The owners and Butler have been working since 1992

to develop a significant opportunity for Indian gaming on this

72-acre tract of Indian land. As consideration for Butler's

assistance, Butler is to be named the manager.

Management comments:

"This has been an exciting year for Butler National. We experienced a significant growth in revenues and the return to profitability in fiscal 1996. A number of accomplishments were made by our operating segments and in Indian gaming.

"Our AVCON (Aircraft Modifications) team received FAA approval of the AVCON FINS. This is a major accomplishment, considering the flight testing required. Completion of this project demonstrated the ability to develop and obtain FAA approval for new proprietary products for Learjet and other aircraft that should have a life cycle of five to ten years. Our objective is to add stability to our Modifications segment. Our estimate of the market potential for these products is $100,000,000.

R F Inc. (Food Distribution) profited in fiscal 1996 from the increased staffing and expanded marketing efforts started in fiscal 1995. R F Inc. continues to achieve record sales and contribution.

Indian gaming experienced two significant developments. First, the Secretary of the Interior approved the new Constitution for the Miami Tribe of Oklahoma, which gave federal recognition to the Indian owners of the Miami County, Kansas, Indian land. Second, after three years in Court, the United States District Court ruled that the owners of Shawnee Reserve No. 206 in Johnson County, Kansas, could retain 72 acres of their original Shawnee Reservation land as Indian land. This decision was affirmed by the 10th Circuit Court of Appeals and not accepted for reconsideration by the United States Supreme Court. These developments should allow the related tribes to move forward with their desires to conduct Indian gaming on their reservation lands in Kansas.

"I am pleased with our progress in 1996. Many programs and projects are being established to continue this progress into the next century. We are looking forward to a good year in 1997," commented Clark D. Stewart, president of the company.

Our business:

Butler National Corp. operates in the aerospace and services business segments. The Services segment includes food distribution, electronic monitoring of wastewater pumping stations, temporary employee services, Indian gaming services and administrative management services. Aerospace includes the manufacture of airborne electronic switching equipment for McDonnell Douglas and structural modification of business aircraft.

CONTACT: Butler National Corp., Olathe

Edward J. Matukewicz, 913/780-9595