August 27, 1998
Orlando, FL

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

GALAXY FOODS ANNOUNCES INCREASED SALES VOLUME

ORLANDO, FLORIDA (August 27, 1998) - Galaxy Foods Company (NASDAQ: GALX), makers of healthy cheese and dairy-related products, today announced an increase in sales volume for the quarter ending September 30, 1998. The Company is projecting sales of $7.5 million for the second quarter in this fiscal year. This represents a 29% increase over the previous quarter and a 50% increase over the same period one year ago. Gross margins for the period are projected at 25%, which is consistent with prior quarters.

Angelo S. Morini, Galaxy's president stated, "We are pleased to report an increase in projected sales for the second quarter of fiscal 1999. These sales are the result of our advertising campaign promoting our Veggie line of products and increased customer loyalty for our other branded products. These trends in sales growth should continue throughout fiscal 1999 as we focus our attention on promoting our healthy products from the Veggie Kingdom. In addition to increased sales, we expect a profitable quarter and anticipate releasing earnings during the third week of October."

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 (best viewed through Netscape Navigator).