Capstone Holding (CAPS) Q1 2025 earnings summary

Executive summary

• 2025 guidance reaffirmed with targets of $100M run-rate revenue and $10M adjusted EBITDA by year-end, supported by anticipated acquisitions and product expansion.

• Robust acquisition pipeline and equity line of credit established to fund strategic deals, supporting growth while minimizing dilution.

• Instone experienced a slow Q1 due to harsh winter and economic uncertainty but expects a strong rebound in the second half as market conditions normalize.

• Capstone Holding Corp. completed a public offering in March 2025, raising $3.25 million and executing significant debt and equity restructuring.

• Capstone distributes masonry stone products in 31 US states, serving over 400 customers, with a focus on expanding its product mix and executing accretive acquisitions.

Financial highlights

• Instone Q1 2025 revenue was $7.9M, down from $9.4M in Q1 2024, with gross margin declining to 16.8% from 18.6%.

• Q1 2025 adjusted EBITDA for Instone was $(0.6)M, compared to $(0.4)M in Q1 2024.

• Net loss attributable to stockholders was $2.4M in Q1 2025, compared to $2.0M in Q1 2024.

• SG&A costs remained well controlled due to 2024 cost reductions, tracking to a sustainable $8M annual run-rate.

• Working capital improved to $2.1M as of March 31, 2025, up from $0.25M at year-end 2024.

Outlook and guidance

• 2025 run-rate revenue target of $100M and adjusted EBITDA of $10M reaffirmed, contingent on closing acquisitions.

• Instone 2025 plan projects revenue between $47.5M and $49M, with gross profit margins of 23.5% to 25.5%.

• Management expects sufficient working capital for at least one year, with plans to use public offering proceeds for organic and inorganic growth.

• Guidance will be refined quarterly to provide updated performance views.

• Anticipating a strong rebound in Q3 as weather and macroeconomic conditions normalize.