February 11, 1997
Orlando, Florida
Galaxy Foods Company (Nasdaq: GALX) today announced sales of
$4,376,126 for the Company's third quarter ended December 31,
1996, a 325% increase over sales of $1,029,786 for the same
period last year. The Company also reported a net loss of
$575,122 for the
quarter or $.02 per share (based on the weighted number of shares
of Common Stock outstanding on December 31) versus a net loss of
$751,862, or $.02 per share for the same quarter one year ago.
Angelo S. Morini, Galaxy's President stated, "Galaxy's third quarter results did not meet expectations; however, we are quite pleased by the great strides we have made as compared to the same quarter a year ago. Third quarter net sales and net loss were greatly affected by the unprecedented drop in dairy commodity prices over the last several months. This steady price plummet caused Galaxy, in order to stay competitive, to reduce its pricing on custom foodservice products it sells to certain prestige accounts. This price reduction resulted in a significant drop in foodservice sales and profit for the third quarter and will also affect part of our fourth quarter. Had this not occurred, third quarter results would have been much more favorable. It is important to note that Galaxy's profit margins for the Company's core products, which are based on Galaxy's proprietary technology, remained stable or increased. These products are not affected by fluctuating dairy commodities."
Morini further stated, "Sales for the nine months total $12,864,562 versus nine month sales of $2,298,666 a year ago, a 460% increase. We continue to look at our future with great optimism and have high expectations for our new fiscal year beginning April 1, 1997. This past week, Galaxy's second "hot pack" individually wrapped slice (IWS) machine became operational giving Galaxy the largest production capacity for IWS slice distribution in the Southeast. In August 1997, a pullman/ribbon loaf machine for foodservice cheese slices will become operational. This machine can produce up to $100 million annually in product and will place Galaxy in a competitive position to sell the most popular cheese product for foodservice. Galaxy will be the only producer of this type product in the Southeast, giving the Company a strong competitive advantage over other manufacturers."
"For calendar 1997", Morini concluded, "we
intend to continue increasing retail supermarket distribution of
the Company's higher margin branded products and to introduce
Galaxy's other branded products, presently sold only in health
food stores, to mainstream supermarkets where there is an ever
increasing demand for healthier products. Efforts also continue
on building
international sales. In foodservice, the sales focus will be to
sell more Galaxy processed products which, because of our unique
technology, bring Galaxy higher profit margins as opposed to the
lower margin custom products we currently sell certain
foodservice accounts. Our $2 million expandable line of credit
will enhance our ability to meet our goals, both short and long
term."
Galaxy Foods Company produces a complete line of healthy cheese and cheese related products for the retail, food service and industrial markets. Galaxy Foods is the inventor and originator of form�gg�, a new, healthier and better way to make cheese. Form�gg products are low or no fat (0 saturated fat), have no cholesterol and no lactose and contain more vitamins and minerals than conventional cheese. Other brands names include Soyco�, Soymage� and Lite Bakery�. For more information, contact Rebecca Barksdale at 407-855-5500, extension 105. You may also obtain more information from the WWW at http://www.galaxyfoods.com (best viewed through Netscape Navigator).
