December 21, 2000
Orlando, FL

Contact
Wilma Williams, Investor Relations
Galaxy Nutritional Foods
407/855-5500
wwilliams@galaxyfoods.com

Jennifer Colbert, Robert Rinderman
Jaffoni & Collins Incorporated
212/835-8500
gxy@jcir.com

GALAXY NUTRITIONAL FOODS REGISTERS SHARES, UNDERLYING WARRANTS HELD BY FINOVA MEZZANINE CAPITAL INC.

ORLANDO, Florida (December 21, 2000) - Galaxy Nutritional Foods, Inc. (AMEX: GXY), a leading producer of delicious and nutritious health-promoting dairy and dairy-related alternatives for the retail, foodservice and industrial markets, today announced that on November 28, 2000 it filed on behalf of FINOVA Mezzanine Capital Inc. a registration statement with the Securities and Exchange Commission related to 815,000 shares of its common stock issuable to FINOVA upon the exercise of warrants held by FINOVA. The Securities and Exchange Commission declared the registration statement effective as of 10:00 a.m. December 20, 2000.

The warrants are exercisable at a price of $3.41 per share. Under the terms of a warrant placement agreement, FINOVA will receive a minimum return of $1.00 per share sold, with Galaxy receiving the remaining net proceeds from the sale of the shares. FINOVA has agreed to defer for one year the collection of amounts payable by Galaxy to FINOVA upon the sale of the shares. The deferred payment obligation will be reflected in an amendment to Galaxy's credit facility currently outstanding with FINOVA. Tucker Anthony Capital Markets will act as exclusive placement agent to offer the FINOVA shares.

Keith Ewing, Galaxy's Chief Financial Officer, commented, "We have two primary objectives in registering these shares. The first is to reduce the potential overhang caused by the FINOVA warrants, and the second is to introduce the Company and its products to new institutional investors who can invest in our Company."

Galaxy intends to use the proceeds from this transaction to pay down short-term debt and fund working capital needs. Angelo Morini, CEO, President and Chairman of Galaxy's Board of Directors, stated, "This transaction has come at the perfect time for us as we begin to integrate our $8.5 million in new plant equipment. The working capital will help fund the necessary increases in inventory and receivables as we ramp up production and sales."

The offering of the securities shall be made only by means of the prospectus contained in the effective registration statement. This release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of the securities in any State in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

A copy to the prospectus may be obtained from Tucker Anthony Capital Markets by contacting
Christine Hickey, Tucker Anthony Capital Markets, 1 Beacon Street, Boston, MA 02108, (800) 453-8205.

A copy of the prospectus is also available from Wilma Williams, Galaxy Nutritional Foods, 2901 Titan Row, Suite 136, Orlando, FL 32809, (407) 855-5500 ext. 105.

About Galaxy Nutritional Foods, Inc.
The Company's plant-based products are low or no fat (no saturated fat), have no cholesterol and no lactose and contain more vitamins and minerals than conventional dairy products. Galaxy products are part of the nutritional or functional food category, the fastest growing segment of the retail food market. Galaxy brand names include Veggie Milk™, Veggie Slices™, Soyco®, Soymage®, Wholesome Valley™, and Lite Bakery®. For more information, please visit the Company's web site 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.