SOURCE: CapSource Financial Inc.

April 04, 2007 09:47 ET

CapSource Announces 2006 Results: Sales Up 76% Over 2005 to $36 Million

BOULDER, CO -- (MARKET WIRE) -- April 4, 2007 -- CapSource Financial, Inc. (OTCBB: CPSO) announced that for the year ended December 31, 2006, its consolidated net sales increased 76.1% to $36,286,284 compared to $20,608,509 for the same period last year. Net sales is made up of two components: trailer and parts sales revenues, which improved in 2006 by $15,645,010, an increase of 77.9% over the same period of 2005; and lease/rental income, which improved by $32,674 in 2006, an increase of 6.2% over the same of 2005. The increase in trailer and parts revenue was due to an increase of $10,105,648 in the Company's Mexican operations as well as sales of $5,163,046 in the Company's newly acquired U.S. trailer sales operation, Prime Time Trailers.

Fred Boethling, President and CEO, stated that, "The results for 2006 reflect a strong contribution from our Mexican operations as well as the results of our initial integration of Prime Time Trailers into our overall operations."

For the year ended December 31, 2006, the company reported a gross profit of $2,351,000 compared to a 2005 gross profit of $1,335,800, an increase of 56.8%.

For the year ended December 31, 2006, selling, general and administrative expense was $3,739,341, including a one-time, non-cash charge of $784,678 related to the discount on conversion of shareholder debt into equity during 2006. Excluding the one-time charge, selling, general and administrative expense for the year ended December 31, 2006 increased 28.4% to $2,954,636 compared to $2,300,847 for the same period of 2005. This increase of $653,789 was due primarily to expenses incurred in the Company's acquired U.S. operation subsequent to its acquisition on May 1, 2006, including $66,452 of expenses related to the amortization of acquired intangible assets.

Randolph Pentel, Chairman and largest shareholder of CapSource said, "I'm confident that our ethics based, longer-term approach to our business is the correct approach. We established those elements as a key to our success sometime ago and we will continue to implement our plan to the best of our abilities."

The net loss for the year ended December 31, 2006 was $1,829,202, or $0.11 per diluted share, compared to a net loss of $1,794,466, or $0.16 per diluted share for the same period of 2005. The increase of $34,736 in net loss for 2006 resulted from the increase in selling, general and administrative expense, including the one-time non-cash charge of $784,678. Excluding the one time non-cash item the net loss for 2006 was $1,044,524or $.06 per fully diluted share.

About CapSource Financial, Inc.

CapSource Financial, Inc. was incorporated in 1996 to take advantage of the North American Free Trade Agreement (NAFTA) and the increased economic activity that NAFTA triggered when the world's largest free trade area was created by linking 406 million people in Mexico, the U.S. and Canada producing more than $11 trillion worth of goods and services. Mexico is now the United States' second largest trading partner with an average of $650 million in goods crossing the border each day. U.S. trade with Mexico has increased nearly 500 percent -- from $48 billion to $239 billion since the passage of NAFTA. The vast majority of this trade moves by truck.

CapSource, through its operating subsidiaries, provides over-the-road truck trailers, parts and services as well as lease/rentals, to private fleets and for-hire carriers in the U.S and Mexico. CapSource is the largest vendor of Hyundai truck trailers in North America. CapSource's common stock trades on the electronic bulletin board under the symbol CPSO.

Certain matters discussed within this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although CapSource Financial, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from our expectations include financial performance, changes in national economic conditions, economic conditions in Mexico, availability of financing, governmental approvals and other risks detailed from time to time in the company's SEC reports.

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