Capstone Holding Corp. (CAPS) | FY 2025 Annual Presentation | April 2026
In this investor presentation, Capstone Holding Corp. (Nasdaq: CAPS) recaps a transformational 2025 and lays out its strategic roadmap for 2026. In just one year, Capstone expanded from a single-subsidiary, 4-location distributor to a 9-location North American platform spanning 38 U.S. states and Canada; completing two acquisitions (Carolina Stone and Canadian Stone Industries) and uplisting to Nasdaq.
Key highlights include 4.5% revenue growth YoY, gross margin expansion from 21.3% to 23%, and a clear path to $100M+ revenue in 2026 as the first full year with all three subsidiaries operating. Management outlines four strategic priorities for 2026: new product launches, Pacific Northwest and Southeast geographic expansion, facility consolidation saving $480K annually, and a company-wide AI transformation initiative.
Topics covered:
- 2025 recap & M&A execution
- FY 2026 budget ($72M revenue, 26% gross margin, 5.2% Adj. EBITDA)
- Acquisition pipeline (150+ targets at 4–6× EBITDA)
- Strategic priorities: products, geography, facilities & AI
- Full financial results & non-GAAP reconciliation
www.capstoneholdingcorp.com | $CAPS on Nasdaq
This presentation contains forward-looking statements. See full legal disclosure in the appendix.
Slide 1 — Cover
Good morning, and thank you for joining us.
I’m Matthew Lipman, CEO of Capstone Holding Corp., ticker C-A-P-S, listed on Nasdaq. Capstone is a building products distribution platform serving North America with stone, masonry, and hardscape products.
Today’s presentation covers our 2025 results, our goals for 2026, and the financial performance of the platform. Capstone is built to deliver, positioned to acquire, and ready to scale.
Slide 2 — Preamble Disclosure & Disclaimer
Today’s content is fully qualified by the legal disclosures in the appendix. Our goal is to share the strategic thinking and financial analysis guiding the business — consistent with our principles of being accountable and transparent with shareholders.
We operate in a hyper-dynamic economic environment. What we share is based on our best estimates and assumptions, and we reserve the right to revise our point of view as conditions change. Despite that uncertainty, we have to plan and make decisions. This presentation lays some of that out for your review.
Slide 3 — Agenda
Three sections today. First, a 2025 recap focused on execution and growth. Second, Capstone’s goals for 2026 — our key focus areas, the FY 2026 budget, and the outlook. Third, a walk through the financial performance and our non-GAAP reporting.
Slide 4 — 2025: Transformational Year at a Glance
2025 was a transformational year. We uplisted to Nasdaq in March, closed Carolina Stone in August, and closed Canadian Stone Industries — or CSI — in December.
Capstone went from a single-subsidiary, four-location distributor to a three-subsidiary, nine-location platform spanning 38 U.S. states and Canada — with over a thousand active customers and roughly $68 million of pro forma revenue.
Slide 5 — 2025 Baseline Expectations and Reality
Setting expectations against reality.
On interest rates, we planned for roughly 100 basis points of cuts and got about 50 — and they came later than forecast, pushing demand recovery into 2026.
Tariffs were an unforecasted headwind. Policy uncertainty drove customer hesitation and project delays across the year.
Construction demand split regionally. Demand was delayed, not cancelled. The Southeast outperformed; the Northeast and Midwest lagged.
Slide 6 — 2025 Key Operating Accomplishments
Even with that backdrop, the operating wins were real.
Two subsidiaries added — Carolina Stone gave us our entry into the Southeast; CSI made us a Canadian market leader and filled out the North American footprint.
Revenue grew 4.5% year over year. That growth was acquisition-led: legacy organic revenue declined modestly with delayed rate cuts and tariff uncertainty, and Carolina Stone contributed four months at a slower season while CSI contributed one month off-season. Both headwinds reverse in 2026 — full-year acquisition contribution layers in, and organic recovery is positioned to follow as the cycle improves, particularly in the South.
Gross profit grew 12.8% — well ahead of revenue. That is structural, from sourcing improvement and a stronger product mix, not just volume leverage.
Gross margin expanded 170 basis points, from 21.3% to 23%. The owned-brand mix is rising, and that shift is structural, not cyclical.
Slide 7 — 2025 M&A Execution
Two deals. On time. On multiple.
Carolina Stone closed in August — about $11 million of revenue, at roughly 4.7 to 5.2 times EBITDA. It is our Southeast entry, anchored in the Triangle and Charlotte metros, and it adds higher-margin installation and value-added services.
CSI closed in December — about $15 million of revenue, acquired at book value. CSI is the Canadian market leader and gives us a single point of entry for any manufacturer wanting U.S. and Canadian coverage.
Our integration playbook proved itself. We went live on day one at CSI with full ERP visibility from close. The pipeline remains active — 150-plus targets, with the Southeast and Pacific Northwest prioritized.
Slide 8 — New Geographic Profile
Four new locations took us from five to nine, coast to coast.
We now serve 38 U.S. states and Canada. Carolina Stone added two locations in the Southeast; CSI added three locations across Canada with a California foothold that gives us West Coast presence.
Capstone has transitioned from a regional operator to a North American building products platform.
Slide 9 — Operational Wins
Five wins worth highlighting.
Rapid integration — what peers take 60 days to do, we did on day one at CSI. That playbook is repeatable for every future deal.
Brand portfolio — six premium brands across price points, with national and regional coverage and dealer pull-through driving cross-sell.
Margin expansion — gross margin from 21.3% to 23%, with COVID-era inventory fully cleared. The owned-brand mix shift is structural.
M&A pipeline — over 150 targets identified at 4 to 6 times EBITDA, with SG&A held at run-rate so deployment stays disciplined.
AI initiative — external consultants engaged, an AI-powered pricing engine in development, with rollout targeted for the second half of 2026.
We are executing with discipline and positioned to scale in 2026.
Slide 10 — Capstone Goals for 2026
We turn now to 2026 — our outlook, our plans, and the budget.
Slide 11 — 2026 Year of Execution: Key Focus Areas
We are calling 2026 our year of execution. Four focus areas.
New products — targeting high-growth segments. New geography — entering the Pacific Northwest and expanding the Southeast. Facilities — consolidating into more efficient hubs. And AI transformation — in full swing across the company.
Together, these give us a clear path to $100 million-plus in revenue, with margin expansion, a scalable platform, and multiple growth levers.
Slide 12 — 2026 Outlook: How We Enter 2026
Four points on how we enter the year.
Strategic initiatives are already underway across operations, new product launches, and geographic expansion.
The platform is stronger — greater scale, broader reach, deeper integration.
The path to a $100 million-plus run rate is supported by owned-brand growth, logistics efficiency, and cost discipline.
And we are positioned to capture upside as end-market conditions improve.
Slide 13 — The Platform Is Built. Now It Pays Off. FY 2026 Budget
2026 is the first full year with all three subsidiaries in the numbers — and it is where the platform starts paying off for C-A-P-S shareholders.
Combined Stone Business revenue steps from $46.9 million in 2025 to $72.1 million in 2026 — a 54% increase. Gross profit nearly doubles to $18.7 million. Gross margin expands 300 basis points to 26%.
Adjusted EBITDA grows nearly fourfold, from $987 thousand to $3.8 million. The Adjusted EBITDA margin sequence tells the story: 2.5% in 2024, 2.1% in 2025 reflecting integration drag from the partial-year stubs, and 5.2% targeted for 2026.
Three drivers carry that step-up. First, the full-year contribution from Carolina Stone and CSI — both businesses producing for twelve months instead of partial stubs at off-season. Second, gross margin expansion to 26% as the owned-brand mix rises and sourcing leverage compounds. Third, SG&A leverage as the run-rate cost base absorbs the higher revenue. Greater product breadth and new geography drive the result.
Slide 14 — 2026 Strategic Priorities: New Products
We are expanding the brand lineup — building toward the broadest natural and manufactured stone portfolio in North America.
Two new brand launches in the first half of the year. Eldorado Stone in April. Nature’s Edge in the second quarter. Both leverage our fixed cost infrastructure to support higher margins.
On the CSI product pipeline: FlexBrick — a thin-brick alternative for interiors; Aura Stone — a premium manufactured line; and Nature’s Edge Canada, a cross-border launch leveraging CSI manufacturing for U.S. distribution. Two new product lines launching in the first half of 2026 expand our owned-brand revenue mix.
Slide 15 — 2026 Strategic Priorities: New Geography
Coast-to-coast coverage by year-end.
Pacific Northwest expansion is the West Coast play — NorCal and PNW buildout, local sales a distribution hub to close the West Coast coverage gap.
Southeast sales expansion makes Carolina Stone the regional hub — expanded sales force, white-space mapping for new opportunities, and a target of 10-plus locations by year-end.
PNW and SE are our highest-priority expansion corridors for 2026.
Slide 16 — 2026 Strategic Priorities: Facilities
Optimize and consolidate. We have identified $480,000 of annual savings.
We are consolidating the Alsip, Illinois facility into Navarre, Ohio. That eliminates duplicate overhead, optimizes freight routes, improves fixed-cost absorption, and centralizes inventory at a single hub.
The expected impact is $480,000 of annual savings — immediate P&L benefit from rent and overhead elimination, freight cost reduction through route optimization, better fixed-cost absorption at higher throughput, and a scalable platform for future volume.
One Midwest facility. One team. One platform.
Slide 17 — 2026 Strategic Priorities: AI Transformation
We are deploying AI across five operational areas with measurable cost-reduction targets by the end of 2026.
On the team and infrastructure side: a dedicated AI team with new hires, external consultants, a real data architecture and integration layer, and initial launches already in progress.
Automation targets cover purchasing, inventory, routing, and finance and lead generation. AI-driven procurement, demand forecasting, logistics optimization, and pipeline automation. This is operating leverage in building products — not a buzzword.
Slide 18 — 2026 Outlook: Planning Assumptions
Our planning assumptions are execution-driven. We are not relying on a broad macro recovery to hit the budget — rate relief is upside, not the plan.
On rates, we expect the environment to be more supportive in 2026 than it was in 2025.
On Canada, near-term conditions are soft; we expect improvement in the second half.
Housing and repair-and-remodel demand should improve gradually, not rebound sharply. The continuing housing undersupply supports longer-term sector demand.
Slide 19 — Capstone: Acquisition Strategy & Pipeline Overview
On the M&A pipeline.
Pipeline scale — over 150 identified targets, with valuations remaining attractive at 4 to 6 times EBITDA, supported by realistic seller expectations.
Active engagement across regional distributors and niche product specialists. Relationships are being nurtured.
Near-term focus is on demonstrating the earnings power of the integrated platform. Transaction timing will be evaluated as 2026 results mature.
Deal discipline is non-negotiable. Every future deal must be accretive, disciplined, and compound per-share value.
Slide 20 — Acquisition Strategy
Three-pronged: tuck-in acquisitions, sister companies, and platform acquisitions.
Capstone is capitalizing on a favorable deal environment — attractive valuations at 4 to 6 times EBITDA, flexible consideration with 20 to 45 percent non-cash, and strong execution confidence with pricing and structure consistent with our expectations.
Slide 21 — Performance of Stone Business FY 2025
We turn now to the financials. The Stone Business first, then the parent.
Slide 22 — Stone Business FY 2025: Overview of Results
The Stone Business includes Instone for the full year, Carolina Stone from August 22, and Canadian Stone Industries from December 1.
Revenue grew 4.5%, from $44.9 million to $46.9 million. Gross profit grew 12.8% to $10.8 million. Gross margin expanded 170 basis points, to 23%.
SG&A increased to $9.8 million as the new businesses came on. The SG&A figure excludes one-time items called out in the table footnote — ERP implementation, acquisition costs, a legal amendment, other non-recurring items, and the $6.2 million goodwill impairment.
Adjusted EBITDA was $987 thousand for the year, compared with $1,124 thousand in 2024 — a modest decline that reflects integration drag from acquisitions contributing only partial-year, off-season revenue. That drag does not repeat. The full-year benefit shows up in 2026, as we walked through on slide 13.
After management fees and Instone Board fees, Stone Business net loss on a non-GAAP basis was $2.1 million; with the Class B preferred return, comprehensive loss was $2.8 million.
Slide 23 — Capstone Corporate Costs
Two views of corporate cost.
Relatively fixed: full-time employees, corporate acquisition costs, legal and insurance, board fees, and other public-company and financing costs.
Variable: investor relations, IR, PR, and marketing — all of which we can adjust as required.
Two items worth flagging in 2025. Investor relations expense of $1.1 million is non-recurring. Acquisition-related expense of $1.0 million reflects the M&A activity completed during the year.
When valuing the business, corporate overhead, Capstone and Brookstone management fees, and board fees are non-essential to the operating subsidiaries. Those costs are excluded when valuing Instone, Carolina Stone, and CSI.
Slide 24 — Capstone Standalone FY 2025: Overview of Results
Capstone standalone — the parent — does not generate revenue. SG&A stepped up to $3.2 million in 2025, driven by the non-recurring investor relations spend, IPO-related Instone fees, compensation, and financial services costs.
Capstone standalone net loss on a non-GAAP basis was $6.5 million.
Two FY 2025 items are excluded from this view, both non-cash. First, a $7.2 million increase in the deferred tax asset valuation allowance. That is an accounting judgment — auditors apply conservatism to NOL utilization until platform profitability is established. It is not a cash tax cost, and we expect to release the allowance as the platform scales into profitability. Second, an $0.8 million unrealized gain on a derivative — mark-to-market accounting, not part of operating performance.
Both items appear in the GAAP-to-non-GAAP reconciliation in the appendix.
Slide 25 — 2026: Positioned for Scalable Growth
Integration is complete. Growth is accelerating. C-A-P-S enters 2026 stronger, leaner, and ready to scale.
Rate relief is starting to fuel housing and renovation demand. Integration is done; owned brands are scaling; new ones are coming. The platform is built, the playbook is proven, and the business is built to compound. Margin expansion is coming from sourcing, logistics, and mix. The platform is ready for sustained growth and cash generation.
Pro forma 2025 revenue of approximately $68 million ramps to a $72 million budget for 2026, with a $100 million-plus run-rate target as the platform matures. Adjusted EBITDA grows nearly fourfold in 2026, from $987 thousand to $3.8 million.
Six dated catalysts to watch through 2026. Q1 2026 earnings in May — the first quarter with all three subsidiaries in the run-rate. The Eldorado Stone product launch in April. The Nature’s Edge launch in the second quarter. The Alsip-to-Navarre consolidation through the third quarter, with $480 thousand of identified annual savings. The annual stockholder meeting on June 18. And M&A pipeline activity continuing through the year against our 4-to-6-times-EBITDA discipline.
Slide 26 — Key Principles of Capstone
Three principles guide how we deliver long-term value.
Transparency — a clear view into performance builds trust.
Accountability — it enables performance management and ownership.
Adaptability — we expect to update our range every quarter as the year moves forward.
Capstone Holding Corp. — Nasdaq, ticker C-A-P-S. Thank you for your time. For more information, please reach out at investors@capstoneholdingcorp.com.
Slide 27 — Appendix
The following pages include the GAAP reconciliation, our non-GAAP definitions, and the full legal disclosure.
Slide 28 — Reconciliation of Non-GAAP Results
The full GAAP-to-non-GAAP walk:
Capstone consolidated GAAP net loss was $21.9 million in 2025, versus $2.6 million in 2024.
We remove Capstone parent expenses — the $7.2 million deferred tax valuation, $2.3 million of interest, $3.2 million of SG&A, $1.0 million of other expense, and the $0.8 million unrealized derivative gain. We also remove the $6.2 million Instone goodwill impairment.
That brings us to Stone Business net loss of $2.8 million on a non-GAAP basis.
We then add back management fees, Instone board fees, the Class B preferred return, taxes, interest, other expense, and depreciation and amortization to arrive at Adjusted Stone Business EBITDA of $987 thousand for 2025, versus $1,124 thousand for 2024.
Slide 29 — Financial Measures: Non-GAAP
Capstone uses non-GAAP Adjusted EBITDA as a supplemental measure of performance. It is not a substitute for GAAP measures, and other companies may define it differently. We use it because it lets us compare operating performance consistently period over period and isolate the trends affecting the business. The full definition is included on this page.
Slide 30 — Legal Disclosure & Disclaimer
The full legal disclosure is included on this page. Please review.
Slide 31 — Continued Legal
The legal disclosure continues. Please review.
Slide 32 — Closing
Capstone Holding Corp., Nasdaq C-A-P-S — growth is just getting started.
Learn more at www.capstoneholdingcorp.com.
Thank you.