Capstone Holding Corp. (NASDAQ: CAPS) announced the consolidation of its Chicago-area warehouse operations into its Ohio distribution center, generating $0.5 million in annualized cost savings and unlocking up to $700,000 in working capital, according to a company statement.

The consolidation represents part of the building products distribution company's previously announced $2 million cost rationalization program. The initiative reduces Capstone's warehouse locations from nine to eight while maintaining coverage across the Midwest region.

The company projects establishing a positive corporate EBITDA run-rate beginning in Q2 2026, combining the cost reduction efforts with revenue growth from recently secured projects. Capstone reported more than 300,000 square feet of new project demand from multi-year programs with homebuilders including Lennar, Jayman Homes, and Marrano Homes.

"We're executing on both sides of the equation," said Matthew Lipman, Chief Executive Officer. "Costs are coming down through platform synergies, and revenue is accelerating through project wins and customer expansion."

The warehouse consolidation centralizes inventory management across the integrated facility, which the company states will improve product availability and order fulfillment rates. Customer relationships and revenue streams remain unchanged during the transition.

Capstone operates a technology-enabled distribution platform serving 38 U.S. states and Canada through eight locations. The company distributes stone veneer, hardscape materials, and modular masonry systems through its Instone operating platform.

The working capital release of $500,000 to $700,000 from inventory consolidation is expected to improve liquidity and reduce carrying costs. Several large shipments are currently underway, with additional revenue anticipated during the spring construction season.

The company plans to publish an earnings power presentation following its 2025 annual report, detailing organic growth momentum and technology development strategy.