Capstone Holding (CAPS) investor relations material

Executive summary

• Net sales for Q2 2025 were $12.9M, nearly flat year-over-year, with a net loss of $0.7M compared to a $0.4M loss in Q2 2024.

• Gross margin increased to 24.4% from 21.4% year-over-year, driven by favorable product mix, owned brands, and cost control.

• Six-month net sales declined 7% to $20.8M, with a net loss of $2.4M, reflecting colder weather and economic headwinds.

• Acquisition agreement for a Carolina-based stone company executed, expected to close within 10 days, expanding reach into the Southeast market.

• Strategy focuses on organic growth, margin expansion, and earnings-accretive acquisitions.

Financial highlights

• Q2 2025 net sales: $12.9M (down $34K YoY); six-month net sales: $20.8M (down $1.5M YoY).

• Q2 2025 gross profit: $3.1M (up 13% YoY); gross margin: 24.4% (up from 21.4%).

• Q2 2025 net loss: $0.7M; six-month net loss: $2.4M (widened from $1.5M YoY).

• SG&A expenses rose 23% in Q2 and 18% YTD, mainly due to higher investor relations costs; annualized SG&A on track at $8.5M.

• Cash at June 30, 2025: $773K; working capital (excl. current debt): $2.5M.

Outlook and guidance

• Management expects sufficient liquidity for at least one year, supported by the Revolver, equity line, and convertible note.

• Targeting a $100M revenue run-rate by year-end 2025 or Q1 2026.

• Plans to use proceeds for organic growth, network expansion, and acquisitions.

• At least one more acquisition projected to close by year-end 2025.

• Anticipates continued seasonality with stronger sales in Q3 and a rebound in order volume as market conditions normalize.