Capstone Holding Corp. — July–August 2026 Earnings Summary

Financial Performance

• Organic revenue increased 7.6% year-over-year to approximately $14.0 million for July and August 2026.
• Organic gross profit rose 6.5% year-over-year to $3.5 million for July and August 2026.
• Year-to-date organic revenue increased 4.6% to approximately $48.1 million through August 31, 2026.
• Year-to-date organic gross profit increased 6.5% to $12.5 million through August 31, 2026.
• Year-to-date organic gross profit growth (6.5%) outpaced year-to-date organic revenue growth (4.6%).
• GAAP consolidated net sales were $13.96 million for July-August 2026 compared to $8.71 million in the prior year period.
• GAAP consolidated gross profit was $3.51 million for July-August 2026 compared to $2.04 million in the prior year period.
• Year-to-date GAAP consolidated net sales were $48.11 million compared to $29.46 million in the prior year period.
• Year-to-date GAAP consolidated gross profit was $12.48 million compared to $6.50 million in the prior year period.
• Results include all three operating businesses (Instone, Carolina Stone, and Canadian Stone Industries) on a comparable basis as if owned throughout both periods.

Guidance and Future Outlook

• The Company plans to expand its product portfolio and geographic reach through existing distribution infrastructure.
• The objective is to generate additional revenue without a proportionate increase in the cost base.
• The Company may provide additional interim operating updates at its discretion but does not intend to do so on a fixed schedule.
• Preliminary figures for July and August 2026 are unaudited and subject to change upon completion of financial closing procedures.
• Full third-quarter results will be reported in the Quarterly Report on Form 10-Q.

Business Segments and Product Lines

• Pacific Northwest Expansion: Plans to expand a regional warehouse into a full-scale distribution operation to introduce additional product lines and extend Instone's service capabilities.
• Carolina Stone Diversification: Plans to expand beyond stone into siding to generate additional revenue through existing customer relationships and infrastructure.
• Product Portfolio Growth: The successful rollout of Eldorado Stone demonstrates the ability to scale new products through the distribution platform.
• The Company intends to continue expanding its product offering and distribution across its network.

Market and Competitive Landscape

• Capstone delivered organic revenue growth despite contraction in the broader building-products market.
• The Company operates a technology-enabled building products distribution platform optimizing supply chains across 38 U.S. states and Canada.
• The platform aggregates and delivers proprietary stone veneer, hardscape materials, and modular masonry systems.
• The business model combines digital infrastructure, owned-inventory logistics, and disciplined acquisitions to drive scalable margin expansion.

Risks and Challenges

• Preliminary figures are unaudited and subject to change.
• Results for Carolina Stone and Canadian Stone Industries prior to their acquisition dates (August 22, 2025, and December 1, 2025, respectively) are based on sellers' records and have not been audited or reviewed.
• Forward-looking statements are subject to risks including liquidity and access to capital, ability to comply with financial covenants, refinancing or repayment of indebtedness, conditions raising doubt about the ability to continue as a going concern, acquisition timing and integration, seasonal demand fluctuations, macroeconomic conditions, and execution risks.
• Actual results may differ materially from projected results.

Management Commentary and Tone

• CEO Matthew Lipman stated that performance in July and August indicates strong progress against growth and profitability objectives.
• Management noted that year-to-date organic gross profit is growing faster than organic revenue.
• Lipman highlighted that the results demonstrate continued momentum despite broader uncertainty in the housing and building products market.
• Management expressed confidence in advancing the capital-efficient growth strategy in the months ahead.

Other Key Points

• The press release defines "organic revenue" and "organic gross profit" as non-GAAP measures that normalize results for acquisition timing to allow for consistent comparison.
• The 2025 comparative figures differ from reported consolidated results which reflect actual acquisition dates.
• The Company previously published figures for part of a quarter regarding tariffs in March 2025.
• Results for Canadian Stone Industries are translated into U.S. dollars at Bank of Canada monthly average exchange rates.
• The Company will report its third quarter results in its Quarterly Report on Form 10-Q.