Key Highlights

  • Net sales rose 46% to USD 20.0 million in the third quarter.
  • Gross profit increased 76% to USD 5.7 million, a Margin of 28.7%.
  • Income from operations was USD 0.4 million, against a loss of USD 0.8 million.
  • Net loss narrowed 69% to USD 0.6 million.

Capstone Holding (NASDAQ:CAPS) reported third-quarter 2026 net sales of USD 20.0 million, against USD 13.7 million a year earlier and an estimate of USD 22.50 million. The change of USD 6.3 million, or 46%, was driven primarily by full-period contributions from the Carolina Stone Acquisition in August 2025 and the Fraser Canyon acquisition in December 2025.

Net loss was USD 632 thousand, against USD 2,014 thousand, an improvement of 69%. The filing reports a net loss per share of USD 1.28, against USD 10.35 a year earlier, on 493,886 weighted average post-split shares.

Sales, Gross Profit and Margins

Revenue from the company's legacy Instone operations increased approximately USD 0.4 million. Carolina Stone contributed approximately USD 2.2 million and Fraser Canyon approximately USD 3.7 million, after USD 1.3 million of intercompany eliminations in the quarter. USD 792 thousand of those eliminations relate to sales in the six months ended June 30, 2026.

Gross profit was USD 5.7 million, against USD 3.3 million, up 76%. Cost of Goods Sold increased USD 3.8 million, or 37%, mainly from the Carolina Stone and Fraser Canyon acquisitions. Gross margin was 28.7%, against 23.8% a year earlier.

The filing says a USD 516.6 thousand supplier Credit recognized as a reduction of cost of goods sold contributed approximately 2.6 percentage points of the increase, of which about 2.0 points is the portion management treats as a one-time benefit. Excluding the credit, gross margin was 26.2%. The remaining increase reflects Carolina Stone, whose stone distribution and installation mix carries a gross margin of approximately 30.4%. Excluding the credit, gross margin in the TotalStone segment was 23.8%, consistent with the prior-year quarter.

Operating Expenses and Nine-Month Results

Selling, general and administrative expenses were USD 5.2 million, up USD 1.9 million, or 55%, driven by the full-period effect of Carolina Stone, at USD 645 thousand, and Fraser Canyon, at USD 1.0 million, and a USD 200 thousand increase in parent expenses. Income from operations was USD 406 thousand, against a loss of USD 768 thousand. Interest and other expense, net, was USD 1,071 thousand, against USD 594 thousand. The prior-year quarter included transaction expense of USD 652 thousand and an unrealized loss of USD 652 thousand on derivative and Debt instruments.

For the nine months, net sales were USD 54.1 million, against USD 34.4 million, an increase of USD 19.7 million. Net loss was USD 3,927 thousand, against USD 4,442 thousand, and net loss per share was USD 9.59, against USD 36.54.

Non-cash items in the nine-month Cash Flow Statement included Depreciation and amortization of USD 466 thousand and net amortization and accretion to interest expense of USD 2,285 thousand. Advertising expenses were USD 20.0 thousand for the quarter, against USD 5.0 thousand.

Corporate and Share Structure Items

The filing records that the company closed a public offering of 41,667 shares of common stock on March 7, 2025, the restructuring date. A Reverse Stock Split of its Series Z 8% Non-Convertible Preferred Stock took effect on September 30, 2025. Fees under a staffing agreement were USD 83.0 thousand for the quarter, against USD 7.0 thousand, and are included in selling, general and administrative expenses.

The reported items for the quarter are net sales of USD 20.0 million, gross profit of USD 5.7 million, income from operations of USD 0.4 million and a net loss of USD 0.6 million. The company is listed on the Nasdaq Stock Market.