Core Viewpoint - Capstone Holding Corp. is implementing a cost rationalization program aimed at achieving positive free cash flow and EBITDA by Q2 2026 through immediate overhead reductions and aligning management compensation with shareholder equity [1][2]. Financial Impact - The company has initiated a program that will result in approximately $2.0 million in annualized corporate overhead savings, effective immediately [2][9]. - The expected reduction in operating expenses (OpEx) is around $1.7 million for FY 2026, which will positively impact the bottom line [3][9]. - The CEO has voluntarily reduced his annual base cash salary to $1.00, aligning executive compensation with shareholder equity appreciation [3][9]. - Management targets a positive EBITDA run-rate starting in Q2 2026, independent of revenue growth, which will enhance Capstone's financial stability against macroeconomic fluctuations [9]. Strategic Focus - The company is prioritizing asset efficiency and directing resources towards the proprietary Instone Inventory Portal to optimize supply chains across its 38-state footprint, aiming for greater margin efficiency [5]. - The material impact of the cost reductions is expected to be visible in the first quarter of 2026, with clearer results by the quarter ending June 30, 2026 [5]. Future Guidance - Capstone plans to release an earnings power presentation by the first week of February, outlining various EBITDA expectations under different macroeconomic scenarios [6]. Company Overview - Capstone Holding Corp. is a technology-enabled building products distribution platform operating across 38 U.S. states and Canada, focusing on optimizing supply chains and delivering proprietary building materials [7].
Capstone Executes $2.0 Million Cost Rationalization; CEO Reduces Cash Salary to $1.00 to Anchor Positive EBITDA Target