Capstone Holding Corp.

Good morning and thank you for joining us. I'm Matthew Lippmann, CEO of Capstone Holding Corp, ticker CAPS. Capstone is built to deliver, positioned to acquire, and ready to scale. Today's presentation covers our Q3 year-to-date results, the integration of our acquisitions, and our outlook as we move forward towards 2026. This content is fully qualified by the legal disclosures that follow. Our goal today is simple, to give you a clear, transparent view of how we are operating the business, what is driving our performance, and how we are executing our strategy. We operate in a dynamic environment. Interest rates, consumer demand, and policy continue to shift. What we share today reflects our best current estimates and we will adjust as conditions evolve. Despite uncertainty, we must plan, invest, and build. This presentation lays out that roadmap. Please review the full legal disclosures. This presentation contains forward-looking statements and non-GAAP financial metrics. Actual results may differ materially. Today, we'll walk through our 2025 goals and progress, the acquisition strategy and pipeline, year-to-date platform performance, integration milestones, and our outlook for 2026. Year-to-day performance reflects strong integration and disciplined execution. Revenue is up 19% year-over-year, driven by the Carolina Stone acquisition. Gross profit is up 34%, with margin expansion from 21.7% to 24.4%, driven largely by sourcing improvements and a stronger product mix. And our adjusted EBITDA is up by 46%, reflecting acquisition growth and cost discipline. Our platform is scaling towards its $100 million trajectory. Capstone is continuing to execute on its strategy towards its goal of $100 million in revenue. By the end of 2025, we'll have executed on two acquisitions, adding $26 million in revenue. the Carolina Stone acquisition, which closed in August of 2025, and a multi-location distributor targeted to close in December of 2025. Our pipeline remains active with strong synergies in discipline pricing. These acquisitions further demonstrate our ability to source, structure, and close transactions that accelerate scale and earnings. The world changed from our initial expectations 2025 included delayed rate cuts, tariff uncertainty, and a slower sales cadence. Still, we will have executed on two acquisitions adding revenue and delivered margin growth. Going into 2026, we've seen two rate cuts already, and it looks like more are coming. As the economic environment improves, we're set up to grow organically, expand earnings, and keep moving forward on acquisitions.

Our acquisition strategy remains unchanged.

Tuck-ins to expand our platform and add earnings momentum. Sister companies with product and channel synergy to unlock cost savings and mutual growth. And longer term, new platforms to drive diversification. Valuations remain attractive at four to six times EBITDA, typically with 20 to 45% non-cash consideration. We are delivering on our promise to remain disciplined on pricing, structure, and fit. We're executing on the build out of our North American platform. InStone, CarolinaStone, and the expected fourth quarter acquisition come together to form a true multi-regional distributor with scale. We also have the foundation in place to complete three to four acquisitions in 2026. More importantly, now we have the execution capability to capitalize on these investments. The integration work at CarolinaStone, ERP, logistics, and marketing is complete. and that same playbook will allow us to quickly align our next acquisition. Our M&A pipeline remains strong. Market conditions are producing realistic seller expectations and limited competition. Some of the best targets are waiting for the market to improve, and Capstone is nurturing those relationships. The timing of new acquisition announcements is always speculative. With that said, it is highly unlikely we will announce another deal in 2025. We do expect to close our previously announced acquisition by December 15 and we are targeting three to four deals next year and hope to announce one that meets our criteria.