Capstone Holding Corp. announced its second quarter 2025 financial results, revealing a mixed performance. For the six months ended June 30, 2025, net sales decreased by $1.5 million, or 7.0%, to $20.75 million compared to $22.25 million in the prior year. This decline was primarily attributed to colder winter temperatures and broader challenging economic conditions.
Despite top-line pressure, the company demonstrated notable operational resilience with gross profit margin expanding significantly from 21.4% in Q2 2024 to 24.4% in Q2 2025. However, Capstone reported a net loss of $2.43 million for the six months ended June 30, 2025, compared to a net loss of $1.49 million in the prior year. This increased loss was largely influenced by a $932 thousand, or 18%, rise in selling, general and administrative (SGA) expenses, primarily due to a $681 thousand increase in investor relations costs.
In terms of liquidity and compliance, Capstone successfully extended its Revolving Credit Note maturity to December 2025 and was in compliance with its financial covenants as of June 30, 2025, after receiving waivers for prior non-compliance in 2024. Working capital, excluding current portion of long-term debt, increased by $400 thousand to $2.5 million.
However, the company also disclosed that its disclosure controls and procedures were deemed 'not effective' as of June 30, 2025, due to material weaknesses. These weaknesses included a lack of segregation of duties and limited internal control structure review, though a controller was hired in April 2025 to address this.
On a positive strategic note, Capstone announced it has executed an agreement for its first acquisition, a Carolina Based Stone Company, which is expected to close within 10 days. This acquisition is anticipated to be immediately accretive and will extend the company's reach into the high-growth Southeast market, expanding Instone's distribution platform. This move aligns with Capstone's aggressive M&A strategy.
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