SOURCE: CapSource Financial Inc.

November 23, 2005 11:26 ET

CapSource Financial Announces 3rd Quarter Results: Revenue up 230% vs. Same Period Last Year

BOULDER, CO -- (MARKET WIRE) -- November 23, 2005 -- CapSource Financial, Inc. announced today that its consolidated total revenue for the third quarter ended September 30, 2005 was $6,080,492 compared with $1,965,789 for the same period last year, an increase of 209.3%. Total revenue is made up of two components: trailer sales/service revenues, which grew in the third quarter of 2005 by $4,142,881 an increase of 230.1% over the same period of 2004; and lease/rental income, which declined by $28,179, a reduction of 17.1% compared to the same period last year. Trailer sales growth was driven by the Company's continued emphasis on expanding our trailer sales volume in Mexico.

President Fred Boethling said, "We have continued to concentrate our working capital in trailer sales inventory and facilities. In addition, we were able to obtain sufficient trailer inventory during the first nine months of 2005, as compared to last year when most trailer manufacturers were unable to produce an adequate supply of trailers to meet a strong growth in demand."

For the nine months ended September 30, 2005, the Company's consolidated total revenue increased 226.3% to $15,317,032, compared to $4,693,861 in the same period last year. This increase was a result of increased trailer sales, partially offset by reduced lease/rental income.

Gross profit consists of total revenue less cost of sales and operating leases. For the third quarter ended September 30, 2005, gross profit increased 118.8% to $409,589 compared to $187,239 for the same period last year. This increase in gross profit was due, in part, to the increase in trailer sales, partially offset by lower profit margins resulting from pricing pressures on trailer sales during 2005, as well as the impact of the decline in lease/rental income.

For the nine months ended September 30, 2005, gross profit increased 89.8% to $1,014,611 compared to $534,538 for the same period last year. This improvement resulted from the increase in trailer sales, partially offset by lower profit margins resulting from pricing pressures on trailer sales during 2005, as well as the impact of the decline in lease/rental income.

Operating loss consists of total revenue less cost of sales and operating leases and selling, general and administrative expenses. CapSource recognized an operating loss of $130,031 in the third quarter ended September 30, 2005, compared to $281,003 for the same period last year. This operating loss improvement of $150,972 resulted from the growth in trailer sales and gross profit, partially offset by the increase in selling, general and administrative expense.

For the nine months ended September 30, 2005, the Company's operating loss was $614,824, compared to $847,863 for the same period last year. This operating loss improvement of $223,039 resulted from the growth in trailer sales and gross profit, partially offset by the increase in selling, general and administrative expense.

Boethling noted that, "We require additional financing to support our rapid growth and we are currently negotiating with third party investors to supply additional debt or equity funding, although no financing agreements have been completed." Boething added that, "The Company is, and has been, dependent on its Chairman and largest stockholder to provide cash through loans, some of which have been subsequently converted to equity. We are extremely fortunate to have his continued support as we attempt to attract outside investment capital -- the alternative would be to scale back our rapid growth, a possibility we obviously want to avoid."

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 owns and manages a lease/rental fleet of over-the-road truck trailers and related equipment through its REMEX subsidiary and sells trailers under an exclusive relationship with Hyundai through its RESALTA subsidiary. Both REMEX and RESALTA are based in Mexico City. CapSource's common stock trades on the electronic bulletin board under the symbol (OTC BB: 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 expectation reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectation 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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