Capstone Reaffirms $100M Revenue Target for 2025, Accelerates M&A Strategy with Flexible Growth Capital
Rhea-AI Summary
Capstone Holding Corp. (NASDAQ:CAPS) has reaffirmed its 2025 financial targets of $100 million revenue run-rate and $10 million in adjusted EBITDA. The company is pursuing growth through both organic initiatives and strategic M&A, currently evaluating multiple acquisition targets at 4-6x EBITDA valuations, with 20-45% in non-cash consideration.
The company has secured an Equity Line of Credit (ELOC) to facilitate acquisitions without requiring high-interest debt or immediate equity dilution. Its subsidiary, Instone, maintained margin stability in Q1 2025 with SG&A tracking at an $8 million annual run-rate, despite weather-related challenges. Instone expects order volumes to rebound by Q3 2025 and continues expanding geographically while rolling out proprietary products like Toro and Pangea.
Positive
- Reaffirmed strong 2025 targets: $100M revenue run-rate and $10M adjusted EBITDA
- Favorable M&A valuations at 4-6x EBITDA with 20-45% non-cash consideration
- Secured flexible Equity Line of Credit for M&A without immediate dilution
- Instone subsidiary maintaining margin stability and $8M annual SG&A run-rate
Negative
- Weather conditions affected Q1 project timing in Northeast and Midwest regions
- Potential future dilution from ELOC usage for acquisitions
- Dependency on M&A execution for reaching revenue targets
News Market Reaction
On the day this news was published, CAPS gained 47.59%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Capstone Holding Corp. Highlights - Q1 2025 & 2025 Outlook
ALSIP, IL / ACCESS Newswire / May 16, 2025 / Capstone Holding Corp. (NASDAQ:CAPS), a national platform of building products distribution businesses, today announced its financial and strategic highlights for the first quarter of 2025 and reaffirmed full-year 2025 guidance.
The Company continues to target a
Guidance Reaffirmed: Capstone reiterates its 2025 financial targets of
$100M run-rate revenue and$10M adjusted EBITDA, with expected contributions from both organic initiatives and strategic M&A.Active M&A Pipeline: The company is currently evaluating multiple acquisition targets at attractive 4-6x EBITDA valuations, with 20
-45% of deal consideration in non-cash consideration. If consummated, these transactions will be highly accretive to earnings.Flexible Capital Access: Capstone has secured an Equity Line of Credit (ELOC) giving it access to acquisition capital only when needed, without resorting to high interest debt or large, upfront equity dilution.
Instone Performance on Track: Instone maintained margin stability and cost discipline amid typical Q1 seasonality. SG&A remains on track at a sustainable
$8M annual run-rate, with Q3 order volumes expected to rebound as conditions normalize.Scalable Acquisition Framework: Capstone's M&A strategy spans tuck-ins, sister companies, and new platform targets-positioning the Company to capitalize on a major structural tailwind: persistent housing demand outpacing supply.
Shareholder-Aligned Growth Strategy: The Company's capital deployment strategy is designed to be earnings accretive, ensuring value-accretive growth to enhance long-term shareholder value.
"Our strategy is working. We are reaffirming our 2025 targets" said Matthew Lipman, Chief Executive Officer of Capstone. "Through a disciplined M&A approach, favorable valuations, and solid on the ground execution, we are positioned to double the size of our business in the near term. We remain focused on earnings growth and margin expansion while protecting shareholder value."
"The Equity Line of Credit gives us the flexibility to act quickly and efficiently on M&A opportunities without burdening our capital structure," further explained Mr. Lipman. "We intend to use the facility only for transactions that are immediately accretive to earnings - ensuring that any share issuance is tied directly to profitability."
Instone Subsidiary: Positioned for Second-Half Upside
Capstone's Instone business delivered margin performance within target range in Q1 and maintained disciplined cost control with SG&A tracking to about an
Access to Full Materials
Capstone has posted an investor presentation and audio commentary discussing Q1 2025 and its strategic outlook. These materials are available in the Investor Relations section of www.capstoneholdingcorp.com.
About Capstone Holding Corp.
Capstone Holding Corp. (NASDAQ:CAPS) is a diversified platform of building products businesses focused on distribution, brand ownership, and acquisition. Capstone's Instone subsidiary currently serves 31 U.S. states, with proprietary offerings including stone veneer, landscape stone, and modular masonry systems. Capstone's strategy blends organic growth with disciplined accretive M&A, supported by a shareholder-aligned capital structure.
Investor Contact:
Investor Relations
Capstone Holding Corp.
investors@capstoneholdingcorp.com
www.capstoneholdingcorp.com
Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements relate to future events and performance, including guidance regarding revenue and EBITDA targets, M&A strategy, use of capital, and operating outlook. Actual results may differ materially from those projected due to a range of factors, including but not limited to acquisition timing, macroeconomic conditions, and execution risks. Please review the Company's filings with the SEC for a full discussion of risk factors. Capstone undertakes no obligation to revise forward-looking statements except as required by law.
SOURCE: Capstone Holding Corp.
View the original press release on ACCESS Newswire
FAQ
What are Capstone's (CAPS) revenue and EBITDA targets for 2025?
How is Capstone (CAPS) financing its M&A strategy?
What are the M&A valuation multiples Capstone (CAPS) is targeting?
How is Capstone's Instone subsidiary performing in 2025?
What products is Capstone's Instone subsidiary launching?
