CapSource Financial, Inc. announces full year 2007 revenues of $45 million vs. $36 million in 2006;
Gross profits increase by 21.2%

BOULDER, CO – (MARKET WIRE) – CapSource Financial, Inc. (OTC BB: CPSO.OB - News) announced today that for the year ended December 31, 2007, consolidated net sales increased by 26.5%, or $9,617,191, to $45,903,475 compared to $36,286,284 for the same period of 2006. Net sales is made up of two components: trailer and parts sales, which improved in 2007 by $9,622,400, an increase of 26.9% over the same period of 2006; and lease/rental income, which declined by $5,209 in 2007, a reduction of 0.9% compared to the same period last year. The trailer/parts sales increase resulted from a 17.6% increase in sales volume in 2007, or $6,331,653, of which $3,810,635 was due to increased sales volume in the Mexican operations, and sales volume improvement of $2,521,019 in the U.S. operations. In addition, price increases of approximately 9.3% in the Mexican operations added $3,573,370 to the total growth in consolidated net sales. Due to pricing pressures in the U.S. market, the U.S. operations experienced an average price decline in 2007 of approximately 3.8%, negatively affecting consolidated net sales by $282,624. The sales volume growth in both the Mexican and U.S. operations was driven by a continuing emphasis on expanding trailer sales. The price increases in the Mexican operations were driven principally by our need to raise prices to offset significant increases in the costs to acquire both new and used trailer inventory. In 2007 the Company continued to concentrate our working capital in trailer sales inventory and facilities.

Fred Boethling, President and CEO stated, “We are gratified by our increase in sales and gross profits for 2007 as compared to 2006.  However, the apparent slowing of the economy at the present time may present challenges for the future.”

For the year ended December 31, 2007, gross profit increased 21.2% to $2,849,813 compared to $2,351,863 for the same period last year. This increase in gross profit was due, in part, to the increase in total sales volume, partially offset by a reduction in the average gross profit per unit sold by the U.S. operations. The decline in average gross profit per unit in the U.S. operations was the result of pricing pressures brought on by weakening demand for truck trailers in 2007. In order to stimulate sales concurrent with the inventory cost increases, the Company has not passed on some of the cost increases to our U.S. customers.

For the year ended December 31, 2007, selling, general and administrative expense was $3,480,736 compared to $3,739,314 for the same period of 2006. In 2006, the Company recorded a one-time, non-cash charge of $784,679 related to the conversion of stockholder debt. Excluding the one-time charge in 2006, selling, general and administrative expense for the year ended December 31, 2007 increased by $526,101 compared to $2,954,635 for the same period of 2006. This increase was due in part to growth in 2007 of approximately $402,000 in selling, general and administrative expense of the acquired U.S. operations. The Company also incurred additional expenses in 2007 related to filing the registration statement in conjunction with the private placement that took place in 2006, including legal expenses and the penalty expense of $69,000 caused by the delay the Company experienced in having the registration statement declared effective.

Operating loss consists of net sales less cost of sales and operating leases and selling, general and administrative expenses. For the year ended December 31, 2007, the Company recognized an operating loss of $630,923, compared to $1,387,451 for the same period of 2006. Excluding the one-time charge of $784,679 in 2006, the operating loss for the year ended December 31, 2007 increased by $28,151 compared to $602,772 for the same period of 2006. This increase in the operating loss resulted from the increase in selling, general and administrative expense, partially offset by the growth in trailer sales and gross profit.
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The net loss for the year ended December 31, 2007 was $1,765,795, or $0.09 per diluted share, compared to a net loss of $1,829,202, or $0.11 per diluted share for the same period of 2006. The improvement of $63,407 in net loss includes the impact of increased sales and gross profit, offset by the increases in selling, general and administrative expense, net interest expense and other expense. In addition, net loss in 2006 includes the one-time charge of $784,679.
                                                                                   

For Additional Information Contact:   CapSource: Fred Boethling at (888) 574-6744
                                                Visit the company’s website:  www.capsource-financial.com