Capstone Holding Corp. · NASDAQ:CAPS
Capstone — FY2024 Earnings Presentation
23 slides from Capstone's earnings presentation, March 2025
Slide 1: Capstone Holding Corp. Built to Deliver. Positioned to Acquire.
CAPSTONE HOLDING CORP. BUILT TO DELIVER. POSITIONED TO ACQUIRE. READY TO SCALE. March 2025
Slide 2: Preamble Disclosure & Disclaimer
Preamble Disclosure & Disclaimer The following content is completely qualified by the legal disclosures on the following two slides. Our goal is to share with you some of our strategic thinking and financial analysis we are using to guide the growth of our business. The content is in line with our p
Slide 3: Legal Disclosure & Disclaimer
Legal Disclosure & Disclaimer This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act that reflect our current views with respect to, among other things, our operations, business strategy, interpretation of prior development activities
Slide 4: Contd...
Contd... THIS PRESENTATION IS NOT INTENDED TO SERVE AS A FORECAST OF ANY SUCH FUTURE PERFORMANCE OR PROSPECTS. An investor must not act on any matter contained in this document but must make its own assessment of Capstone and conduct its own investigations and analysis. Investors should assess their
Slide 5: Agenda
Agenda Agenda Capstone Goals for 2025 Performance of Instone in 2024 Earnings Power of Instone Standalone for 2025
Slide 6: Capstone Goals for 2025
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Slide 7: Capstone Key Milestones 2025
Capstone Key Milestones 2025 $100 million Revenue, $10 million Adjusted EBITDA* • By end of the year, targeting run-rate Revenue of $100 million and Adjusted Operating Income / EBITDA of $10 million for operating subsidiaries • We anticipate announcing a series of acquisitions throughout the year to
Slide 8: Acquisition Strategy
Acquisition Strategy THREE-PRONGED ACQUISITION STRATEGY Tuck In Acquisitions Grow Instone’s presence beyond the Northeast and Midwest into the South, Southeast, and Mountain States Sister Companies Invest in businesses with strong product or channel synergies that operate independently but align wit
Slide 9: Performance of Instone in 2024
Performance of Instone in 2024
Slide 10: Instone Trends: 2024
Instone Trends: 2024 Rapid interest rate increases key factor affecting 2024 environment • From March 2022 to August 2023, 18 months, saw short term rates rise from near 0.0% to over 5.0%. • Existing home sales fail to keep up with household formation and are at near 30 year lows. By mid-year market
Slide 11: Analysis of 2024 Profitability
Analysis of 2024 Profitability Illustration of 2024 Earnings adjusted for margins and costs • Instone reported a 2024 net loss of $1.7 million • With the current cost structure and 2024 revenue, Instone would have produced $2.5 million in Adjusted EBITDA • Gross Profit margins are normalized • SG&A
Slide 12: 2024 Profitability Adjustments
2024 Profitability Adjustments Gross Margin: normalized • Gross Profit margin was affected by increased freight costs during Covid years which resulted in higher cost inventory on the balance sheet • Freight costs and have since normalized and by the end of 2024 costs returned to historical levels S
Slide 13: Instone: Seasonality Explained
Instone: Seasonality Explained Seasonal temperatures impact the timing of Instone’s revenue throughout the year • Cold winters tend to yield lower revenue in the first Quarter, followed by stronger months • Warmer winters tend to yield a stronger first Quarter followed by slightly softer months
Slide 14: Earnings Plan for 2025
Earnings Plan for 2025
Slide 15: 2025 - Instone Earnings Power
2025 - Instone Earnings Power 2025 Plan: Focused On Organic Revenue Growth, Margin Expansion & Cost Control (in USD 000) Low Case Upside Case 2025 2025 Revenue 47,500 49,000 COGS 36,337 37,483 Gross Profit 11,163 11,515 Gross Profit % 23.5% 23.5% SG&A* 8,021 8,021 Operating Income (Loss) / Adjusted
Slide 16: Factors Affecting Performance
Factors Aftecting Performance GENERAL FACTORS • Weather variability • Housing shortage relative to household formation • Interest rates • Personal income and unemployment COMPANY FACTORS • Product launches • Territory expansion to Southeast and Mountain states • Market share gains • Operational exce
Slide 17: Capstone Corporate Costs
Capstone Corporate Costs Relatively Fixed: • Capstone CEO, Capstone CFO, corporate acquisition search costs, legal & insurance costs, board fees, other public company / financing costs Variable: • Investor Relations, IR/PR, marketing. These costs can be adjusted as required When valuing the business
Slide 18: Key Principals Of Capstone
Key Principals Of Capstone TRANSPARENCY ACCOUNTABILITY ADAPTABILITY Clear View Into Enables Performance Expect to Update Range Every Performance Builds Trust Management And Ownership Quarter As Year Moves Forward
Slide 19: Appendix
Appendix
Slide 20: Reconciliation of Non-GAAP Results
Reconciliation of Non- GAAP Results (in USD $000) 2024 Q1 Q2 Q3 Q4 FY Capstone Consolidated Net Income (loss) (1,109) (373) 27 (1,107) (2,562) Reconciliation to Instone Net Income (loss) Remove Capstone Expenses Taxes 6 6 6 425 442 Interest Expense 21 21 9 21 73 Total SG&A Expenses 87 71 328 117 604
Slide 21: Reconciliation of Non-GAAP Budget
Reconciliation of Non- GAAP Budget (in USD $000) Full Year 2025 Low Case Upside Case Instone 2025 Net Income / (loss) Budget (GAAP) 776 1,128 Reconciliation to Instone Net Income (loss) Capstone Management Fees 240 240 Brookstone Management Fees 400 400 Instone Board Fees 186 186 Instone Adjusted Ne
Slide 22: Financial Measures - Non-GAAP
Financial Measures - Non- GAAP Capstone uses non-GAAP Adjusted EBITDA as a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP). A non-GAAP financial measure is a numerical measure of a
Slide 23: Growth Is Just Getting Started.
GROWTH IS JUST GETTING STARTED. LEARN MORE AT www.capstoneholdingcorp.com