Owner Scorecard
An independent research publication · data as of July 9, 2026

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CEPL, Capstone Energy Plus Inc.

Industrial Machinery capital-intensive Distress / turnaround

A capital-goods maker, whose demand swings with its customers' own spending.

Latest annual: FY2026 10-K
CEPL · Capstone Energy Plus Inc.
I

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026
$106M
+23.9% YoY · 9% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $106M 5-yr avg $84M
Gross margin 32% 5-yr avg 19%
Operating margin 3.2% 5-yr avg −16.4%
Owner-earnings margin −3% 5-yr avg −18%
Free cash flow margin −3% 5-yr avg −22%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation
Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
What moves the needle
Operating margin has run around −24% through the cycle on a 13% gross margin, the operating line deeply negative — so the lever is the path to a margin at all: revenue growth against the cost curve and the cash runway, not the level of a margin that isn't there yet. Inventory runs near 23% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the capital-goods cycle and the aftermarket.
Is it a good business?
Return on capital has rarely cleared the cost of capital (median −74%, above 15% in 0 of 8 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

II

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2026

realized figures from each filing · older years to the left
2016’162018’182019’192020’202021’212022’222023’232024’242025’252026’26TTMTTMMar 2026
Income statement
$85M$83M$83M$69M$68M$64M$74M$91M$86M$106M$106MRevenueRevenue
15%18%11%13%7%9%12%16%27%32%32%Gross marginGross mgn
32%24%25%32%27%35%34%35%31%25%25%SG&A / revenueSG&A/rev
12%5%4%5%4%5%3%3%3%3%3%R&D / revenueR&D/rev
($24M)($9M)($15M)($17M)($16M)($20M)($18M)($20M)($6M)$3M$3MOperating incomeOp. inc.
−28.7%−10.5%−18.1%−24.4%−24.1%−31.2%−25.0%−22.3%−6.5%3.2%3.2%Operating marginOp. mgn
($25M)($10M)($17M)($22M)($21M)($22M)($25M)$7M($7M)$3M$3MNet incomeNet inc.
———————0%—-2%-2%Effective tax rateTax rate
Cash flow & returns
($22M)($9M)($18M)($20M)$2M($27M)($8M)($28M)$8M($3M)($3M)Operating cash flowOp. cash
$2M$1M$1M$2M$1M$2M$3M$4M$4M$4M$4MDepreciationDeprec.
($2M)($371K)($3M)($329K)$20M($8M)$13M($41M)$11M($10M)($10M)Working capital & otherWC & other
$2M$2M$3M$4M$3M$10M$8M$5M$879K$835K$835KCapexCapex
1.8%2.1%4.0%6.1%4.7%15.5%11.1%5.1%1.0%0.8%0.8%Capex / revenueCapex/rev
($24M)($10M)($19M)($21M)$249K($29M)($11M)($32M)$7M($3M)($3M)Owner earningsOwner earn.
−28.1%−11.8%−22.7%−30.9%0.4%−46.0%−15.1%−35.4%8.0%−3.2%−3.2%Owner earnings marginOE mgn
($24M)($10M)($21M)($24M)($2M)($37M)($16M)($32M)$7M($3M)($3M)Free cash flowFCF
−28.1%−12.5%−25.3%−34.7%−2.2%−58.5%−21.9%−35.4%8.0%−3.2%−3.2%Free cash flow marginFCF mgn
-148%-60%-58%-73%-232%-76%—-49%-233%——ROICROIC
-102%-39%-72%-492%-930%——————Return on equityROE
−102%−39%−72%−492%−930%——————Retained to equityRetained/eq
Balance sheet
$12M$14M$30M$16M$50M$23M$13M$2M$9M$28M$28MCash & investmentsCash+inv
$14M$16M$16M$10M$13M$16M$7M$7M$7M$13M$13MReceivablesReceiv.
$16M$16M$20M$24M$22M$30M$37M$21M$17M$22M$22MInventoryInvent.
$13M$14M$17M$11M$20M$25M$27M$15M$14M$18M$18MAccounts payablePayables
$17M$18M$20M$24M$15M$21M$17M$12M$10M$17M$17MOperating working capitalOper. WC
$49M$54M$70M$56M$89M$74M$65M$35M$36M$68M$68MCurrent assetsCur. assets
$31M$32M$28M$32M$48M$103M$122M$73M$53M$71M$71MCurrent liabilitiesCur. liab.
1.6×1.7×2.5×1.7×1.9×0.7×0.5×0.5×0.7×1.0×1.0×Current ratioCurr. ratio
$56M$58M$80M$73M$108M$102M$108M$84M$75M$111M$111MTotal assetsAssets
$74K$130K$27M$30M$53M$51M—$58M$32M$51M$51MTotal debtDebt
($12M)($14M)($3M)$14M$3M$28M—$56M$24M$22M$23MNet debt / (cash)Net debt
-38.3×-14.3×-10.1×-3.2×-3.2×-4.0×-3.0×-3.7×-1.4×0.8×0.8×Interest coverageInt. cov.
$25M$26M$23M$4M$2M($8M)($24M)($15M)($22M)($44M)($44M)Shareholders’ equityEquity
3.0%0.7%1.1%1.3%1.4%1.9%1.2%2.3%0.3%0.7%0.7%Stock comp / revenueSBC/rev
Per share
54.5M51.3M6.7M8.2M11.3M14.7M17.2M18.8M19.1M20.8M20.8MShares out (diluted)Shares
$1.56$1.61$12.45$8.46$5.99$4.34$4.29$4.86$4.49$5.09$5.09Revenue / shareRev/sh
$-0.46$-0.20$-2.49$-2.69$-1.84$-1.52$-1.43$0.39$-0.38$0.14$0.14EPS (diluted)EPS
$-0.44$-0.19$-2.83$-2.62$0.02$-2.00$-0.65$-1.72$0.36$-0.16$-0.16Owner earnings / shareOE/sh
$-0.44$-0.20$-3.14$-2.93$-0.13$-2.54$-0.94$-1.72$0.36$-0.16$-0.16Free cash flow / shareFCF/sh
$0.03$0.03$0.50$0.52$0.28$0.67$0.48$0.25$0.05$0.04$0.04Cap. spending / shareCapex/sh
$0.45$0.50$3.46$0.55$0.20$-0.52$-1.40$-0.78$-1.13$-2.13$-2.13Book value / shareBVPS

Share counts before 2018 are restated ×3 for a stock split, so per-share figures sit on one basis.

The diluted share count moved ×1/7.66 into 2019 — shares retired, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded
10-yr5-yr
Revenue / share+12.5%/yr−3.2%/yr
Capital spending / share+3.7%/yr−32.4%/yr

The record, charted

FY2016–2026

Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.

Share count
21Mpeak FY2016
ROIC
−233%low FY2025
Gross margin
32%low FY2021

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($3M)owner earningsvs.$3Mnet incomelow FY2024

Owner-earnings bridge

FY2022–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business reported $3M of profit but ($3M) of owner earnings: $6M less than the profit line, taken out by capital spending and the timing of cash.

FY2026FY2025FY2024FY2023FY2022
Reported net income$3M($7M)$7M($25M)($22M)
Depreciation & amortizationnon-cash charge added back+$4M+$4M+$4M+$3M+$2M
Stock-based compensationreal costnon-cash, but a real cost+$777K+$262K+$2M+$863K+$1M
Working capital & othertiming of cash in and out, other non-cash items−$10M+$11M−$41M+$13M−$8M
Cash from operations($3M)$8M($28M)($8M)($27M)
Maintenance capital expenditurethe spending needed just to hold position and volume−$835K−$879K−$5M−$3M−$2M
Owner earnings($3M)$7M($32M)($11M)($29M)
Growth capital expenditurediscretionary; spent to get bigger, not to stand still———−$5M−$8M
Free cash flow($3M)$7M($32M)($16M)($37M)
Owner-earnings marginowner earnings ÷ revenue-3%8%-35%-15%-46%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $777K), owner earnings is nearer ($4M).

Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

  • Can it pay its interest? 0.8×
    Does not cover its interest
    Operating income $3M ÷ interest expense $4M
    What this means

    A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.

  • How heavy is the debt, net of cash? $23M · 6.7× operating profit
    Heavy net debt
    Cash $28M − debt $51M
    What this means

    Netting $28M of cash and short-term investments against $51M of debt leaves $23M owed, about 6.7× a year's operating profit (15.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

  • How long is cash tied up? 67d
    Long (60+ days)
    DSO 44 + DIO 112 − DPO 89 days
    What this means

    Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

  • Return on invested capital —
    Not meaningful here
    Invested capital ($22M) = debt $51M + equity ($44M) − cash
    Industry peers: median 3%
    What this means

    Invested capital is near zero or negative, usually years of buybacks pulling equity down. ROIC explodes or flips sign and stops meaning anything. Judge this one on Owner Earnings instead.

  • Owner-earnings margin -23%
    Consumes cash through the cycle
    10-yr median margin, range -46%–8%; latest ($3M) = operating cash ($3M) − maintenance capex $835K
    Industry peers: median 0%
    What this means

    What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -3% of revenue this year, a -23% median across 10 years. Treating stock comp as the real expense it is (less $777K of SBC) leaves ($4M).

  • Are earnings backed by cash? -0.90×
    Thinly cash-backed
    Cash from ops ($3M) ÷ net income $3M
    What this means

    How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

  • Where do the earnings go? —
    Not enough data
    What this means

    The filing data didn't include the inputs for this check.

  • Investing or harvesting? 0.20×
    Harvesting
    Capex $835K ÷ depreciation $4M
    What this means

    Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

  • Adequate size Miss
    Revenue ≥ $2B · $106M
    What this means

    Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

  • Strong liquidity Miss
    Current ratio ≥ 2× · 0.96×
    What this means

    Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

  • Conservative debt Miss
    Debt ≤ working capital · $51M vs ($3M) WC
    What this means

    Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

  • Earnings stability Miss
    A profit every year (10-yr record) · 8 loss years
    What this means

    Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

  • Dividend record Miss
    Uninterrupted dividends · none paid
    What this means

    An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

  • Earnings growth —
    Earnings +33% over the record · —
    What this means

    Earnings were negative early in the record, a growth rate isn't meaningful.

  • Moderate price —
    P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
    What this means

    Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.05/share (latest year $0.14), the averaged base the calculator's gate runs on, and book value is $-2.13/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2026

Whether the record’s returns held, and what the capital reinvested earned.

  • Profitable years 2 of 10
    What this means

    Lost money in 8 year(s), look at what happened there before trusting the average.

  • Return on capital ≥ 15% 0 of 8 yrs
    What this means

    A moat shows up as a high return on invested capital that holds year after year, not one good vintage.

  • Operating margin −19% → −9% (3-yr avg ends)
    What this means

    Through the cycle the operating margin widened — about −19% early to −9% lately, median −24% — pricing power intact or improving.

  • Reinvestment, incremental ROIC —
    What this means

    The reinvested base moved too little against the change in profit to read a reliable return on it here — the figure would be a small-denominator artifact, not a moat. Judge this one on the owner-earnings record and the cash it returns instead.

  • Worst year 2022 · −31.2% op. margin
    What this means

    Operations went underwater in 2022, understand why before trusting the good years.

  • Share count +1.4%/yr
    What this means

    The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$68M
  • Cash & short-term investments$28M
  • Receivables$13M
  • Inventory$22M
  • Other current assets$5M
Current liabilities$71M
  • Debt due within a year$25M
  • Accounts payable$18M
  • Other current liabilities$28M
Current ratio0.96×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.65×stricter: inventory excluded
Cash ratio0.40×strictest: cash alone against what's due
Working capital($3M)the cushion left after near-term bills
Debt due this year vs. cash$25M due · $28M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Cash runway8.4 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate
Revenue, latest quarter vs. a year ago+46.1%the freshest read on whether the business is still growing
Current ratio, recent quarters0.7× → 1.0×
Deeper floors
Tangible book value($50M)equity stripped of goodwill & intangibles
Net current asset value($14M)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$61M$10M of it operating leases
Deferred revenue$11Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Management, ownership & pay

From the proxy: how much of the business the people running it own, and how they are paid.

  • Stock-based compensation$777K

    The slice of the business handed to employees in shares this year, 1% of revenue, equal to 23% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Capstone Energy Plus Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2026.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

  • Look hereDid debt outgrow the business?$74K → $51M

    Debt rose from $74K to $51M while owner earnings went from about ($18M) to ($10M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean
  • Is it less profitable than it was?
  • Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Industrial Machinery

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

CompanyRevenueGross marginOp. marginROICOwner earn. margin
PSIXPower Solutions International Inc.$722M16%-0.6%15%0%
TWINTwin Disc Incorporated$341M28%3.4%5%0%
GHMGraham Corporation$245M22%1.9%3%6%
OUSTOuster Inc.$169M27%-297.0%-101%-224%
ERIIEnergy Recovery Inc.$135M69%13.5%13%8%
CEPLCapstone Energy Plus Inc.$106M14%-23.2%-74%-19%
ASYSAmtech Systems Inc.$79M37%1.8%1%-4%
VELOVelo3D Inc.$46M-5%-153.6%-147%-140%
Group median—24%0.6%2%-2%
IV

The price

What a price has to assume.

What the price implies

reverse-DCF

Capstone Energy Plus Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

$
The assumptions

Revenue, delivered10%/yr’21→’26

Enter a price to run it.

Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today−3%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh CEPL against another business →

The owners of CEPL: the meeting and the votes →

Cite: Owner Scorecard, "Capstone Energy Plus Inc. (CEPL), the owner's record," https://ownerscorecard.com/c/CEPL, data as of 2026-07-09.

Manual order: ← CENX its page in the Manual CERS →

Industry order: ← CECO the Industrial Machinery chapter CHRN →