Butler National Corp. agrees to sell some of the intangible assets of its food distribution segment to a former officer

Business Wire, June 26, 1997

OLATHE, Kan.--(BUSINESS WIRE)--June 26, 1997--Butler National Corp. completed its April 30, 1997, agreement to sell certain intangible assets of its food distribution segment to Marvin J. Eisenbath, former president of RF Inc.

The company has not disclosed the specific terms of the transaction, but has accepted all of the shares of Butler National Corp. common stock beneficially owned by Eisenbath and other economic consideration as payment for the intangible assets. In addition, Eisenbath has agreed to dismiss all litigation against the company.

As announced by the company on June 11, 1997, the food distribution segment, including RF Inc. (Redi-Foods) and Valu Foods Inc. (Valu Foods), continues to operate in Kansas City and St. Louis under the direction of Joseph C. Johnston, president.

The company plans to concentrate on the normal operation of RF Inc., and the expansion of the Valu Foods concept of selling high-quality food products through retail outlets located in smaller communities.

Management Comments:

"We are pleased to have negotiated a mutually satisfactory resolution of our disagreement with Mr. Eisenbath. We are looking forward to the continued operation of Redi-Foods and the expansion of the Valu Foods concept," commented Clark D. Stewart, president of the company.

Forward-Looking Information:

The information set forth above may include "forward-looking" information as outlined in the recently enacted 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 you 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.

Our Business:

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

For more information, or for a complete copy of Butler National's latest 10-Q, contact the individual listed below.

CONTACT: Butler National Corp.

Edward J. Matukewicz, 913/780-9595

fax, 913/780-5088