January 19, 1999
Orlando, FL

Contact: Tracy Rushwin
(407) 855-5500, extension 105

GALAXY FOODS ANNOUNCES THIRD QUARTER SALES AND PROFITS

ORLANDO, FLORIDA (January 19, 1999) - Galaxy Foods Company (NASDAQ: GALCD, formerly GALX), makers of healthy cheese and dairy-related products, today announced preliminary results for the third fiscal quarter and nine months ended December 31, 1998.

For the quarter, the Company reported record sales of $8,016,245, up 75% compared with $4,568,397 for the same quarter in 1997. Gross margins for the quarter ended December 31, 1998 were 35.9% compared to 29.2% in the quarter ended December 31, 1997. Net income for the quarter rose to a record $641,894, or 223% ahead of $198,615 for the third quarter last year. Earnings per share for the quarter ended December 31, 1998 was $0.01 compared to nil last year. Galaxy has announced a proposed one for seven reverse stock split to become effective on February 11, 1999. Adjusting for the effects of this split, earnings per share would be $0.06 compared to $0.02 last year.

For the nine month period ended December 31, 1998, net sales were $21,362,621, up 38% compared with $15,483,848 in last year's first nine months. Gross margins were 31%, versus 24% in those two time frames. Net income for the current fiscal year's nine month period was a record $1,236,880, or 256% over last year's $347,128 . Earnings per share for the nine months ended December 31, 1998, were $0.02, against nil in the same period last year. However, adjusting for the proposed one for seven reverse split, earnings per share would be $0.13, compared to $0.04 in the nine months ended December 31, 1997.

The continuing growth trend for Galaxy's sales and profits are the result of an increase in mass-market consumer acceptance of healthy food alternatives. Galaxy markets its healthy products in grocery stores, health food centers, and restaurants. In addition, the Company has initiated a targeted advertising campaign to build brand awareness for their flagship line of products, Veggie.

Galaxy Foods Company is the inventor and originator of a new, healthier and better way to make cheese and dairy-related products. Our products are primarily low or no fat (no saturated fat), have no cholesterol and no lactose and contain more vitamins and minerals than conventional cheese. Galaxy brand names include formägg, Soyco, Soymage, Veggie Slices, Wholesome Valley, and Lite Bakery. For more information, contact Tracy Rushwin at (407) 855-5500, extension 105. You may also obtain more information from our site on the World Wide Web at http://www.galaxyfoods.com.

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements that speak only as of the date hereof. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect unanticipated events or developments.