BOULDER, Colo., May 6, 2004 (PRIMEZONE) -- CapSource Financial, Inc. (OTCBB:CPSO) announced that its consolidated net sales for the fourth quarter ended December 31, 2003 were $2,352,510 compared with $614,300 for the same period last year, an increase of 283%. For the year ended December 31, 2003 consolidated net sales were up 55% to $6,206,151 compared with $4,008,517 for the same period last year. The increases were primarily due to additional trailer sales resulting from the company's expanded sales efforts during 2003, including the opening of a new trailer sales facility in Mexico City. Lease/rental income was approximately equal to that of 2002.
CapSource reported an operating loss for the fourth quarter of 2003 of $451,974 compared with a loss of $299,732 for the same period in 2003. For the year ended December 31, 2003 the operating loss was $1,351,457 compared with $853,275 for the same period last year. The increased operating loss was attributable, in part, to costs incurred in expanding the company's sales operations. The company also incurred additional legal and administrative expenses associated with its initial public offering, which concluded in July 2003, as well as other costs related to compliance with legal and regulatory requirements of being a public company.
Fred Boethling, President and CEO of CapSource noted that, "the dramatic increases in sales clearly validates our business model which predicts significant increases in demand for transportation equipment in Mexico due to expanded trade brought about by NAFTA." Steven Kutcher, Vice-President and CFO added that, "after the 2003 expenses, which were necessary to expand our sales efforts, we are well positioned for 2004 and beyond."
CapSource recognized net interest expense of $376,421 in the fourth quarter of 2003, including a non-cash charge of $291,593 related to the unaccreted discount on the convertible stockholder note that was converted to common stock on October 21, 2003, prior to maturity. Excluding the non-cash charge, net interest expense in the fourth quarter of 2003 was $84,828, compared with $111,822 in the same period of 2002. This decrease resulted from the lower debt levels in the fourth quarter of 2003 as a consequence of the conversion of the stockholder notes during the quarter.
For the year ended December 31, 2003, the company reported net interest expense of $795,795, including the non-cash charge of $291,593 related to the conversion of the convertible stockholder note prior to maturity. Excluding the non-cash charge, net interest expense in the year ended December 31, 2003 was $504,202, compared with $301,401 in 2002. This increase resulted from additional debt required to finance additional trailer sales inventory and to fund the prepaid public offering costs. The debt was substantially reduced in October 2003 by the conversion of $2,064,135 in stockholder debt to common stock. The conversion is expected to save the company approximately $350,000 of interest expense in 2004, including approximately $150,000 of accretion of the discount on the convertible note payable.
CapSource reported a net loss of $857,776, or $0.09 per share (fully diluted) for the fourth quarter of 2003. Excluding the non-cash charge of $291,593 related to the conversion of the stockholder debt, the net loss for the fourth quarter of 2003 was $566,183, or $0.06 per share (fully diluted), compared with a net loss of $436,608, or $0.06 per share (fully diluted), for the same period of 2002. For the year ended December 31, 2003, the net loss was $2,267,538 or $.27 per share (fully diluted). Excluding the non-cash charge of $291,593 related to the conversion of the stockholder debt, the net loss for 2003 was $1,975,945, or $.24 per share (fully diluted), compared with a net loss of $1,260,220 or $0.16 per share (fully diluted), for the year ended December 31, 2002. The increased net loss in 2003 resulted from the additional costs associated with the expansion of the company's sales efforts, including interest expense to fund inventory, as well as the public offering costs and related legal and regulatory compliance expenses.
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 trailer sales through it RESALTA subsidiary, both based in Mexico City. CapSource's common stock trades on the electronic bulletin board under the symbol CPSO.