Capstone reduces convertible debt by 72%, reaffirms 2026 guidance

Capstone Holding Corp. (NASDAQ: CAPS) reported that 72% of its original convertible note principal has been converted, leaving $1.90 million outstanding as of May 1. The building products distribution company published an investor FAQ detailing the debt reduction and reaffirming its fiscal 2026 financial outlook.

Of the $6.82 million in convertible note principal originally issued in July and October 2025, approximately $4.92 million has been converted. The company maintained its fiscal 2026 guidance of $72.1 million in revenue, representing a 54% increase, and gross profit of approximately $18.7 million, up 73%.

The company projected EBITDA of approximately $3.8 million for fiscal 2026, which would represent a 322% increase year-over-year. Capstone expects to achieve a positive EBITDA run-rate beginning in the second quarter.

"We believe the capital structure is materially better than it was a year ago, and the operating business is materially larger," said Matthew Lipman, Chief Executive Officer of Capstone. "We expect both trends to continue."

At year-end 2025, Capstone had approximately $7.9 million drawn against its $11.5 million Beacon Bank & Trust revolver and remained in compliance with all financial covenants. Management indicated it is in discussions to extend the facility.

The technology-enabled distribution platform operates across 38 U.S. states and Canada, delivering stone veneer, hardscape materials, and modular masonry systems through its Instone operating platform.

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