For Immediate Release:
January 17, 2002

GALAXY NUTRITIONAL FOODS
ANNOUNCES THIRD QUARTER 2002 EARNINGS GUIDANCE

ORLANDO, Florida (January 17, 2002) - Galaxy Nutritional Foods (AMEX:GXY), a leading producer of nutritious plant-based dairy alternatives for the retail and foodservice markets, announced preliminary results for the third quarter ended December 31, 2001. The Company expects to report earnings of nearly break even versus a loss of $(0.27) for the comparable quarter one year ago. Revenue for the quarter was approximately $______ versus revenue of $11.2 million one year ago.

Earnings results were positively affected by several factors including the decrease in non-cash compensation expense related to employee loans on stock, increased efficiencies of new production equipment, significant savings from manufacturing restructuring initiatives and strengthened internal controls. Henceforth, management expects revenues to steadily increase as these efficiency goals and control factors will enable the Company to reinforce its position as a leading producer of dairy alternatives.

The Company plans to announce its third quarter results before the market opens on Thursday, February 14, 2002. A conference call with management will be held the same day at 10:00 AM ET. All shareholders and interested parties are invited to call toll free in the United States 1-888-209-1261. All international callers should dial 1-706-679-5328. The call will be simultaneously web-cast at the following event page URL: http:/www.videonewswire.com/event.asp?id+2191.

Individuals who do not have access to call or listen on the Internet will be able to get a digitally recorded version by calling Galaxy Nutritional Foods at 407-854-0433. Transcripts will be available on our web-site: www.galaxyfoods.com.

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.