Capstone Holding Corp. · NASDAQ:CAPS
Capstone — IPO Roadshow (February 2025)
24 slides from Capstone's IPO roadshow presentation, Feb 6, 2025
Slide 1: Capstone Holding Corp. Investor Presentation
February 2025 Capstone Holding Corp. Investor Presentation Building Products Consolidation Distribution Augmented by Select Vertical Integration Issuer Free Writing Prospectus Filed Pursuant to Rule 433 Registration Number: 333 - 284105 February 6, 2025 1
Slide 2: Legal Disclosure & Disclaimer
Legal Disclosure & Disclaimer 2 Capstone Holding Corp . (“Capstone") is offering shares of common stock (the “Securities”) in a public offering (the “Offering”) . The proceeds of the Offering, if completed, are intended primarily to be used for the repayment of a term loan and general corporate purp
Slide 3: Free Writing Prospectus Statement
Free Writing Prospectus Statement 3 Capstone has filed a registration statement (including a prospectus) with the SEC for the Offering to which this communication relates . Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with
Slide 4: Special Note Regarding Forward-Looking Statements and Industry Data
Special Note Regarding Forward - Looking Statements and Industry Data 4 This presentation includes forward - looking statements within the meaning of Section 27 A of the Act and Section 21 E of the Exchange Act . Except for statements of historical fact, any information contained in this presentatio
Slide 5: Table of Contents
Table of Contents 5 Transaction & Management Overview I. Key Investment Highlights II. Industry & Strategy Overview III. Product Overview IV. Value Drivers & Customer Overview V. Platform Overview VI. Company Overview Appendix.
Slide 6: Transaction Overview
Transaction Overview Issuer: Capstone Holding Corp. Listing | Symbol: NASDAQ: CAPS (Common Stock) Offering Type: Initial Public Offering Base Offering Size: $5,000,000 at $4.00 per share Over - Allotment Option: 15.0% of base offering size IPO Shares Offered: 1,250,000 1,437,500 with full exercise o
Slide 7: Michael Toporek, Chairman and Kevin Grotke, Instone CEO
Michael Toporek Ch airman • Founder and Managing General Partner of Brookstone Partners (the ultimate beneficial owner of the majority interest in Capstone) for over 20 years • Actively works with entrepreneurial management teams to build companies and help to execute their strategic vision. • Forme
Slide 8: Experienced Management Team To Drive Growth
Michael Toporek Chairman • Chuck has 40+ years of financial and general management experience. • He started his career at GE and eventually became the President of GE Locomotives Indonesia. • Chuck joined Owens Corning in 1995, where as President of the Composite Solutions Business, he grew sales fr
Slide 9: Key Investment Highlights
9 Right Team ▪ Private equity sponsor with 25 years of deep building products investment experience has a significant stake and is driving strategy. ▪ Current platform company has executed acquisitions and integrations . ▪ Chuck Dana, a long - time operating partner is a director nominee. Right Time
Slide 10: M&A Performance: Right Timing, Right Strategy
10 M&A Performance: Right Timing, Right Strategy (1) Source: Bain & Company Global M&A Report 2024 M&A Results ▪ “Building products companies that make frequent and material acquisitions substantially outpace inactive companies in total shareholder returns, 9.6% vs 2.7%”, according to Bain & Co. (1)
Slide 11: Well Timed, Attractive Opportunity Set
▪ Most distributors privately held ▪ Over 7,000 distributors ▪ Most manufacturers fail to leverage distribution ▪ Over cycles sector has grown 5 - 7% Market Environment ▪ Acquisition platform: Proven history of success ▪ Improving Logistics through Technology ▪ Controlled by Brookstone Partners with
Slide 12: Business Growth Strategy
Business Growth Strategy ▪ Expand geography and product breadth of distribution platform ▪ Own/outsource manufacturing with owned brands ▪ Contractual relationship with unowned brands ▪ Identify and acquire under distributed manufacturing company. ▪ Seamlessly integrate acquired manufacturers into t
Slide 13: Product Overview: Owned & Controlled Product Offerings
Product Overview: Owned & Controlled Product Offerings Aura (Landscape Stone) Interloc (Stone Veneer) Toro Stone (Stone Veneer) Pangea (Stone Veneer) Product Portfolio Control ▪ Key strategy is to own or control brands and products that the Company sells ▪ Five of the eight brands we sell are under
Slide 14: New Product Driving Growth: Toro
New Product Driving Growth: Toro National brand of man - made stone No Logo on all pages Quality Product ▪ Jointly developed with a manufacturer in Mexico. ▪ Optimal quality vs. price value relationship engineered into popular SKU’s. ▪ 30 SKUs offered currently, further product development in progre
Slide 15: New Product Driving Growth: Pangaea
Quality Product ▪ Natural Stone priced competitively against premium manufactured stone options. ▪ Each stone is tooled, trimmed, fitted with GripSet® technology. Smart Packaging ▪ Each layer is formulated to achieve optimal yield for mason. User - Friendly Design & Purchase Tools ▪ Product visualiz
Slide 16: Value Driver: Service Platform
Value Driver: Service Platform 16 Frequent Delivery ▪ Smaller orders grouped together, minimizing LTL Costs ▪ Customers can get products twice a week with short lead time, improving service level Product Offering Wide range of complimentary products, ▪ prices, and applications Differentiated brands
Slide 17: Customer Overview
LTM Sep - 24 FY 2023 FY 2022 LTM Sep - 24 FY 2023 FY 2022 (in 000s) 6% 5% 5% 2,462 2,583 2,816 Customer 1 2% 4% 3% 754 2,012 1,616 Customer 2 4% 3% 2% 1,547 1,520 1,203 Customer 3 4% 3% 4% 1,715 1,456 2,280 Customer 4 4% 3% 3% 1,605 1,447 1,811 Customer 5 2% 3% 3% 842 1,250 1,676 Customer 6 3% 2% 3%
Slide 18: Platform Profile: Instone
Platform Profile: Instone Building products distribution platform that owns or controls over 50% of the products it distributes in 31 states in the US will: ▪ Grow its distribution footprint ▪ Expand product lines ▪ Continue to drive density growth organically and through acquisition Successful tran
Slide 19: Closing Thoughts
Building Businesses, Investing in People Closing Thoughts Platform run by industry veterans that understand the business cycle and buying patterns of customers Conservative capital structure Solid cash flow generation and anticipated share price appreciation 19
Slide 20: For More Information
For More Information: Matthew Lipman Chief Executive Officer and Director +1 (212) 302 - 0699 matt.lipman@capstoneholding.net
Slide 21: Appendix – Geographic Diversity & Potential Target Areas
▪ The key to the current growth trajectory has been positioning distribution centres in demand dense geographies. This in turn drives recurring revenue and customer diversification. Potentially Targeted Add Ons Current Appendix – Geographic Diversity & Potential Target Areas 21
Slide 22: Appendix - Company History
Building Businesses, Investing in People Appendix - Company History Brookstone Investment • CAPS had an NOL in excess of $150 million Ownership Increase • Brookstone expanded its ownership as a portion of debt was repaid with equity but did not trigger NOL constraints. Currently at about 77% of comm
Slide 23: Appendix - Current Capitalization Summary
Appendix - Current Capitalization Summary (in thousands)Actual as of September 30, 2024 (unaudited)Pro Forma (unaudited)Pro Forma as Adjusted(unaudited)Cash and cash equivalents13$ 3,571$ 2,825$ Total current assets16,481 20,039 19,293 Total current liabilities15,469 15,469 14,723 Total long-term li
Slide 24: Appendix - Historical Financials Summary
Appendix - Historical Financials Summary 24 PGL LTM Sep 24 FY 23 (in 000s) FY 22 34,563 48,354 61,561 Net Sales 27,062 38,743 45,030 COGS 7,501 9,611 16,531 Gross Profit 21.7% 12.2% 2c.2% Gross Profit % 7,791 10,867 12,538 SG&A (290) (1,256) 3,993 (Loss)/Income from Operations - 0.8% - 2.c% c.5% (Lo