MAPLE SHADE, N.J., July 14, 2004 (PRIMEZONE) -- The following is a statement issued by Gavella Corp. (OTCBB:GVLA):
We are pleased to report that we made considerable progress in our first quarter, which ended March 31, 2004, when compared to our 2003 first quarter. Our revenues increased by $30,888, or 14.3% to $246,885, due primarily to a 3.8% increase in our unit rental rates and an increase in our occupancy to approximately 99%. Our operating loss decreased by $13,555 to $67,762, and that is after deducting $38,719 in depreciation. Generally our first quarter is our worst quarter in the fiscal year since a significant portion of our heating costs are incurred in the first quarter.
As discussed in our annual report, we are anticipating improved operating results in 2004 due to a change in management and a refinancing that occurred in November of 2003. The refinancing and improving operating results have provided us some liquidity. On March 31, 2003 we had $89,601 of cash on hand. As of March 31, 2004 we had $238,217 of cash on hand, some of which we plan to invest in new businesses and new business opportunities, as discussed at our annual meeting and in a recent press release.
In January we acquired H. James Santoro, Inc., a consulting company that provides management and administrative services to us and consulting services to unrelated companies. We expect that going forward, H. James Santoro, Inc. will focus most of its efforts on Gavella's current businesses and future investment opportunities.
A June 23 article in The New York Times reported that many cities are experiencing a glut of apartments yet the prices being paid for apartment properties are rising. Though nationally occupancy rates averaged 93% in the first quarter, our occupancy was 99%. We believe we are very competitive for reasons explained in our annual report. Our real estate has appreciated substantially over the past several years. However, due to the high prices being paid for multi-family real estate, and hence low returns on investment, we see little reason to invest in additional multi-family units at the present time. Accordingly, we plan to use our real estate business as a base but we plan to invest in other businesses and business opportunities in 2004.
We are currently engaged in two lines of business: owning and operating income producing real estate, and making investments in and providing consulting services to other businesses.
Certain statements made in this Press Release are "forward looking statements". Without limiting the generality of the foregoing, such information can be identified by the use of forward-looking terminology such as "anticipate", "will", "would", "expect", "hope", "intend", "plans to" or "believes", or other variations thereon, or comparable terminology. Actual results, performance or developments may differ materially from those expressed or implied by such forward-looking statements as a result of market uncertainties or industry factors. We believe that the following factors, among others, could affect our future performance and cause our actual results to differ materially from those expressed in or implied by forward-looking statements made by us or on our behalf: (a) changes in interest rates; (b) the rental rate and demand for apartment rental units; (c) fluctuations in the costs to operate our business; (d) uninsurable risks; (e) general economic conditions; (f) acts of terror, and other risks described in periodic reports we file with the Securities and Exchange Commission including Form 10KSB. Gavella Corp. disclaims any obligation or responsibility to update any such forward-looking statements.