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ALSIP, IL - Capstone Holding Corp. (NASDAQ:CAPS), a distributor of building products, has reiterated its financial goals for 2025, aiming to reach a $100 million revenue run-rate and $10 million in adjusted EBITDA by year-end. This represents a significant increase from current revenue of $44.88 million and negative EBITDA of $0.12 million. InvestingPro analysis shows the company currently trades near its 52-week low, with 10+ additional insights available to subscribers. The company’s CEO, Matthew Lipman, expressed confidence in achieving these targets through a mix of organic growth and strategic mergers and acquisitions (M&A).
The company is actively evaluating several acquisition opportunities, with valuations between 4-6x EBITDA, and plans to finance these deals with a mix of cash and non-cash considerations. Capstone has also arranged an Equity Line of Credit (ELOC) to support its acquisition strategy without incurring high-interest debt or significant equity dilution. According to InvestingPro data, the company maintains a current ratio of 1.02, indicating tight but manageable liquidity for its growth plans.
Capstone’s subsidiary, Instone, reported stable margins and disciplined cost management in the first quarter, with sales and general administrative expenses on track at an $8 million annual run-rate. Despite weather-related disruptions in the Northeast and Midwest, Instone is expected to see a rebound in order volumes by the third quarter.
The company’s M&A strategy focuses on smaller, complementary acquisitions as well as larger platform investments, aiming to leverage the ongoing demand for housing that outpaces supply. Lipman emphasized the importance of ensuring that any capital deployed through the ELOC is immediately accretive to earnings, thus protecting shareholder value.
Instone continues to grow geographically and develop proprietary products, with expectations for increased momentum in the latter half of the year. While the company’s financial health score is currently rated as WEAK by InvestingPro, its gross profit margin stands at 21.33%, suggesting potential for improvement as scale increases. Subscribers can access detailed financial health metrics and real-time valuations to track the company’s progress toward its ambitious goals.
Capstone has made available an investor presentation and audio commentary detailing its first-quarter performance and strategic outlook on its website, under the Investor Relations section.
This news is based on a press release statement and contains forward-looking statements that involve risks and uncertainties, including those related to acquisition timing, market conditions, and execution risks. Capstone does not commit to updating these forward-looking statements, except as required by law.
In other recent news, Capstone Holding Corp. reported an 8% increase in revenue for the fourth quarter of 2024 compared to the same period in the previous year. The company’s CEO, Matt Lipman, expressed satisfaction with the performance and highlighted plans to double the company’s size through targeted acquisitions. Capstone aims to achieve a $100 million operating company revenue run rate and at least $10 million in Adjusted Instone EBITDA by the end of 2025. Instone, a wholly-owned subsidiary, played a crucial role in this growth, focusing on customer acquisition and expanding its market presence. During the fourth quarter, Instone introduced Toro Stone in six new states, installed 90 displays, and secured orders from over 50 customers. The company also implemented cost reduction initiatives, resulting in improved gross margins. Capstone’s acquisition strategy for 2025 includes Tuck-In Acquisitions, Sister Companies, and Platform Acquisitions, with a significant portion of the acquisition consideration expected to be non-cash. This strategy has strengthened Capstone’s position as a leading national platform in the building products space. The company continues to expand its portfolio of proprietary brands and enhance its geographic reach.
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