July 1, 1996
Orlando, Florida

Galaxy Foods Company (Nasdaq: GALX) today announced preliminary first quarter sales of $3.3 million for the Company's first quarter ending June 30, 1996, a 336% increase over the same period last year. The Company also announced net sales of $3,950,455 for the fiscal year ended March 31, 1996 compared to net sales of $4,748,283 for the fiscal year ended March 31, 1995. The net loss for the fiscal year ended March 31,1996 was $3,282,598 or $0.13 per share (based on the weighted average number of shares of Common Stock outstanding at such date) versus a loss of $5,013,578 or $.54 per share for the year ended March 31, 1995.

Angelo S. Morini, Galaxy's President explained, "sales for the first two quarters of fiscal 1996 (April - September 1995) were significantly affected by the Company's proactive removal of certain key retail products. Since these products at that time were not being manufactured at Galaxy's own production facility, we felt product quality and consistency could not be assured. We opted to wait for the arrival of new, high-tech equipment which would insure product quality and used the time to obtain new and more attractive packaging. Our production runs are now significantly more consistent and efficient since our new equipment was installed in October 1995. Additionally, early last year, the Company was operating with a severe lack of working capital resulting in orders being short shipped. After the completion of a successful stock offering in July of 1995, it took the Company a few months to get sales geared up again."

Morini further stated, "during October 1995 sales began their significant rise with total third and fourth quarter sales being 111% higher than the first two quarters; and, as we begin fiscal 1997, all of our objectives, plans and strategies established during fiscal 1996 are producing escalating sales in all divisions. This is evidenced by the Company's fiscal 1997 first quarter sales of $3.3 million being 84% of fiscal 1996 total sales. We fully expect rapid sales growth of existing product lines during all of fiscal 1997 which will be further enhanced by the introduction of several new and innovative products to the marketplace during fiscal 1997. Our sales focus will be on volume and profit goals established for each division of the Company."

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 formägg, perfectly balanced nutritional products which are low in 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.

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