10-Q · August 12, 2026
Capstone’s Q2 results showed stable revenue of $12.852 million, improved gross profit of $3.130 million, and substantially stronger TotalStone operating income of $585 thousand. However, consolidated operations remained…
Earnings analysis · 10-Q
CAPS earnings analysis
Filed August 12, 2026 · Our reading of the company's report
The latest report
Capstone delivered 10.8% year-over-year net sales growth to $13.654 million, but consolidated operating results deteriorated to a $768 thousand loss from $413 thousand of operating income as SG&A and transaction costs…
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Capstone delivered 10.8% year-over-year net sales growth to $13.654 million, but consolidated operating results deteriorated to a $768 thousand loss from $413 thousand of operating income as SG&A and transaction costs increased. TotalStone remained profitable with $513 thousand of operating income, while newly acquired Carolina Stone contributed $957 thousand of revenue but a $61 thousand operating loss. Liquidity and financing risk remain acute, with $730 thousand of cash, negative nine-month operating cash flow of $3.992 million and an $8.271 million Revolver maturing December 17, 2025; the newly identified EPS control weakness further weighs on the assessment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.34
What stood out
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Revenue grew 10.8% year over year
Net sales increased to $13.654 million from $12.318 million in the prior-year quarter, up $1.336 million or 10.8%. Gross profit rose to $3.254 million from $2.993 million, while gross margin declined modestly to 23.8% from 24.3%.
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TotalStone remained profitable
TotalStone generated $12.697 million of revenue and $513 thousand of operating income, compared with $12.318 million of revenue and $605 thousand of operating income in the prior-year quarter.
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Acquisition added $957 thousand revenue
Carolina Stone Holdings contributed $957 thousand of revenue and had a $61 thousand operating loss in its first reported quarter following the August 22, 2025 acquisition.
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Operating results turned negative
Consolidated operating loss was $768 thousand versus operating income of $413 thousand in the prior-year quarter. The decline reflected SG&A of $3.370 million versus $2.580 million and $652 thousand of transaction expenses.
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Restated EPS loss narrowed
Restated diluted loss per share was $(0.34), versus $(6.33) in the prior-year quarter; the improvement was driven primarily by the increase in weighted-average shares to 5,838,134 from 157,610, while net loss attributable to stockholders increased to $2.014 million from $998 thousand.
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Financing funded cash requirements
Nine-month operating cash flow was negative $3.992 million versus positive $1.087 million in the prior-year period. Investing cash use was $2.441 million, including $2.423 million for the Carolina Stone acquisition, while financing provided $7.152 million.
What to watch
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EPS restatement and control weakness
Management identified an additional material weakness in controls over the computation and review of weighted-average shares, causing restatement of Q3 loss per share from $(0.35) to $(0.34) and nine-month loss per share from $(1.45) to $(1.22). Disclosure controls remained ineffective as of September 30, 2025.
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Near-term refinancing remains critical
The $8.271 million Revolver balance had a contractual maturity date of December 17, 2025. Management said the longer-term extension remained subject to future results and covenant compliance, despite reporting compliance with the Revolver covenants at September 30, 2025.
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Liquidity remains highly constrained
Cash was only $730 thousand at September 30, 2025, while current liabilities were $20.020 million and nine-month operating cash flow was negative $3.992 million. The company also carried $3.724 million of current long-term debt and stated that forecast results, financing extensions and note conversions involve material uncertainty.
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Acquisition valuation remains preliminary
The preliminary Carolina Stone purchase price allocation recorded $2.744 million of goodwill, and management stated that the allocation could differ significantly because the detailed valuation analysis was not complete.
Management's outlook
No numeric revenue or EPS guidance was provided. Management stated it currently believes liquidity will be sufficient to operate for at least one year from the issuance date of the September 30, 2025 interim financial statements. Management also expects the Revolver's longer-term extension to be executed, subject to future results and covenant compliance.
Earlier filings 4
10-Q · August 12, 2026
Capstone’s first-quarter results showed strong year-over-year revenue growth to $12.636 million and gross-margin expansion to 23.5%, supported by the 2025 acquisitions and a profitable $81 thousand contribution from…
10-Q · August 12, 2026
Capstone delivered strong year-over-year operating improvement in Q2 2026, with revenue up 67% to $21.480 million, gross margin up to 27.9%, and operating income turning positive at $432 thousand. Growth was primarily…
10-Q · May 20, 2026
Capstone Holding Corp. reported a revenue of $12.6 million for Q4 2026, significantly up from $7.9 million year-over-year, driven by recent acquisitions. However, the company posted a widened net loss of $1.9 million,…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.