July 11, 2001
Orlando, FL

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Investor Relations
Galaxy Nutritional Foods
407/855-5500

GALAXY NUTRITIONAL FOODS CLARIFIES INACCURATE REPORTING BY THE ORLANDO SENTINEL

ORLANDO, Florida (July 11, 2001) - Today, Galaxy Nutritional Foods (AMEX: GXY), a leading producer of nutritious plant-based dairy alternatives for the retail and foodservice markets, clarified inaccuracies in a business article written July 10, 2001, by Susan Strother Clarke, a staff writer from the Orlando Sentinel, a newspaper owned by the Chicago Tribune. Mrs. Clarke wrote the article to report on the Company's July 9, 2001 fiscal year-end earnings press release, her direct phone conversation with Galaxy's Chairman and President, Angelo S. Morini and her participation in a simultaneous webcast and conference call with Mr. Morini and Acting Chief Financial Officer, Cynthia Hunter. The headline of her article was entitled, "Layoffs loom at Galaxy after loss."

Mr. Morini commented, "It is quite apparent that Mrs. Clarke misunderstood much of what was written in our press release and said in our conference call. In April 2001, I made strategic adjustments in management, eliminating and realigning positions to become more efficient and cost effective. Around the same time, we also cutback some production employees because some of our new equipment became operational. This new production equipment is even more automated than our existing equipment and consequently we do not require as many workers to operate them. We also modernized our existing equipment to be more productive and efficient. The cutbacks that we may incur in the next few weeks will also be a result of more of our new production equipment becoming operational. Galaxy will gain greater efficiencies from our new higher speed equipment and modernized existing equipment and realize significant labor and overhead savings. We now have the ability to produce more than $600 million in product. It is unfortunate that the tone and content of Mrs. Clarke's article portrays a very gloomy picture for Galaxy and I would like to assure you that that is far from the case."

Morini continued, "When I was asked the question if there was any circumstances under which these jobs would be saved, I commented that if we have a major upturn in business in the next few weeks it may become necessary to keep some of these workers. But let me stress that these cutbacks are not a result of financial sustenance, they are the result of becoming more efficient. We did experience a few quarters of losses due to higher selling expenses which were directly related to our new equipment not being installed on time, but I am pleased to report that with almost all of our new equipment operational, we are now cash flow positive. I would like reiterate that Galaxy is doing very well; our products continue to be in great demand, we have several new and innovative products and concepts to launch this fiscal year and we continue to take the necessary steps to return Galaxy to profitability. "

"In conclusion, Morini stated, I felt it was necessary to issue this press release because of the many phone calls I received from concerned shareholders and customers after this article was published. I also felt it was necessary to go on record because inaccurate reporting by the Orlando Sentinel a few years ago caused Galaxy to lose a potential $10 million account."

About Galaxy Nutritional Foods, Inc.
Galaxy Nutritional Foods is the leading producer of health-promoting plant-based dairy and dairy-related alternatives for the retail and foodservice markets. These phytonutrient- enriched products, made from nature's best grains - soy, rice and oats - are low and no fat (no saturated fat and no trans-fatty acids), have no cholesterol, no lactose, are growth hormone and antibiotic free and have more calcium, vitamins and minerals than conventional dairy products. Because they are made with plant proteins, they are more environmentally friendly and economically efficient than dairy products derived solely from animal proteins. Galaxy's products are part of the nutritional or functional foods category, the fastest growing segment of the retail food market. Galaxy brand names include: Veggie™, Nature's Alternative, Galaxy™, Soyco™, Soymage™, Wholesome Valley™, formägg®, Lite Bakery®, Veggie Café™ and Veggie Lite Bakery™. For more information, please visit Galaxy's website at 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 by such forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements which 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.