June 30, 1997
Orlando, Florida
Galaxy Foods Company (Nasdaq: GALX), makers of
healthy cheese and dairy-related products, today announced net
sales of $17,171,496 and a net loss of $2,736,600 or $0.12 per
share (based on the weighted average number of shares of Common
Stock outstanding at such date) for the fiscal year ended March
31, 1997 compared to net sales of $3,950,455 and a net loss of
$3,268,598 or $0.25 per share for the year ended March 31, 1996.
The Company expected to report a loss of $0.08 per share for
fiscal 1997; however, a new SEC position on accounting (as
described below) issued this past March, adversely affected the
Company's fiscal 1997 and fiscal 1996 earnings per share. The
Company also announced that it will release preliminary estimates
for its first quarter results ending June 30, 1997 on July 8,
1997 during market hours.
In March 1997, the Securities and Exchange Commission announced its position on accounting for preferred stock which is convertible into common stock at a discount from the market rate at the date of issuance. The position is that a preferred stock dividend should be recorded for the difference between the conversion price and the quoted market price of common stock at the date of issuance. To comply with this position, the Company has recorded a preferred stock dividend in fiscal 1997 for the April 1996 sale of convertible preferred stock and restated its prior year's financial statements to reflect a dividend related to the fiscal 1996 sales of convertible preferred stock. The Company also restated the reported net loss per share of common stock. These are non- cash transactions which affected fiscal 1997 earnings per share by $0.04 per share ($0.08 vs. $0.12) and fiscal 1996 earnings per share by $0.12 per share ($0.13 vs. $0.25).
Angelo S. Morini, Galaxy's President stated, "Fiscal 1997 was a very exciting year for Galaxy. It was a year from which we emerged as a leader in the healthy cheese category, offering a wider range of products and unique product positions. We posted significant sales increases in each division, negotiated an expandable line of credit, realized strong growth throughout our core business lines, successfully introduced new product positions, attained a higher rate of equipment utilization and significantly increased our production capacity. We fully expect these trends to continue."
Galaxy Foods Company produces a complete line of healthy cheese and dairy-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, have low or no cholesterol and no lactose and contain more vitamins and minerals than conventional cheese. Other brands names include Soyco�, Soymage�, Veggie Slices�, Lite Bakery�, and Wholesome Valley�. For more information, contact Rebecca Barksdale at 407-855-5500, extension 105.
