, There's a revolution on
college and university campuses today that attracts no protestors. is the nation's leading source of organic convenience
food. The increase in net sales was primarily due to
higher contract manufacturing revenues. "As a result, the Company
generated a positive operating profit and cash flow during the last half of
our fiscal third quarter, and I am confident that this positive trend will
continue for the balance of the fiscal year.04) per diluted share,
for the quarter ended December 31, 2004 , versus a net loss available to common
shareholders of ($1,557,986), or ($0.37) per share, in the first nine months of FY2004.m. It also includes an attractive printable
checklist that families can post on their refrigerator to help
track their daily vegetable goals for one week.

Mix-Up Dinner Recipes - These balanced meal ideas span five
nights and offer a variety of fun and delicious ways for
families to easily get some of their daily "greens" servings .

kee soybeans

Amy's Kitchen Fuels Healthy Appetites on College Campuses

Instead,
students have demanded and campus food directors have responded with a huge
movement to provide healthy, great-tasting food options for students to feed
their bodies and fuel their brains.m.

(Financial statements on following pages)

GALAXY NUTRITIONAL FOODS , INC.

-- Fruits and vegetables may also be a useful component of
programs designed to achieve and sustain weight loss.

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To serve their students better, on-campus nutritionists and dieticians
were looking for healthy food options for students with special nutritional
needs (students who are gluten intolerant, lactose intolerant or follow a
vegan diet, for instance) and found that Amy 's was the perfect answer.

About Galaxy Nutritional Foods, Inc. Galaxy brand names include: Galaxy Nutritional
Foods(R), Veggie(R), Veggie Nature's Alternative to Milk(R), Veggie Slices(R) ,
Soyco(R), Soymage(R), Wholesome Valley(R), formagg(R), and Lite Bakery(R). Simple changes like this can help families achieve the
daily servings of vegetables needed for better health," she says.

soybeans vegetarian

SANTA ROSA, Calif. Food service
directors from across the country showed up to inquire about bringing Amy's
onto their campuses."
"Management has been aggressively reducing non-essential spending and
costs in other areas, including corporate overhead, and we have responded by
raising finished goods prices," continued Broll. The $539,856 decrease in non-GAAP operating income was
primarily the result of the narrowing in gross margin mentioned above.com .GreenGiant.

tempeh tahini

When the cafeteria is closed , Amy's is there to provide a great meal. Amy's has a nationwide network of distributors available
to service this growing college market. The Company reported a net
loss of ($1,820,759) in the first nine months of FY2005, versus a net loss of
($3,576,603) in the prior-year period.zhtml?c=102653 +s=wm+e=1015145.4% 4. Late last
year, seasoned vegetables joined the Green Giant line up of Green
Giant Classic Frozen Vegetables, Green Giant Frozen Side Dishes and
Green Giant Create a Meal! Meal Starters.GreenGiant.

foodstuffs substitutes

They are looking for food that tastes great
and is also good for you.
The Amy's booth at the NACUFS (National Association of College +
University Food Services ) Convention was a major success.

Galaxy Nutritional Foods Reports Third Quarter Operating Results

While contract manufacturing sales
generate lower gross profit margins than sales of branded products , the higher
sales volume allows the Company to spread its fixed manufacturing costs across
a larger revenue base. "For
instance, try incorporating different vegetables into a favorite
recipe for variety and added nutritional value, such as frozen
vegetables.

Green Giant offers a variety of delicious and convenient choices
to help Americans meet their daily vegetable requirements.com

Green Giant started out in Le Sueur, Minnesota as the Minnesota
Valley Canning Company in 1903, when some 11,750 cases of white
cream-style corn were sold in the company's first year.

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Through the
first nine months of the current fiscal year, the increase in casein costs was
responsible for approximately two million dollars in margin decline relative
to the prior-year period.

Footnote on non-GAAP Measures Presented Above
Management utilizes certain non-GAAP measures such as operating income, as
adjusted, net income, as adjusted and EBITDA, as adjusted, because it provides
useful information to management and investors in order to accurately review
the Company 's current on-going operations and business trends related to its
financial condition and results of operations. The call
will also be broadcast live on the Internet at
http://phx. 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. Galaxy's products are part of
the nutritional or functional foods category, the fastest growing segment of
the retail food market.
For more information, please visit Galaxy's website at
http://www .

-- Diets low in saturated fat and cholesterol may reduce the risk
of heart disease. In fact ,
according to a new survey of dietary behavior commissioned by
the American Institute for Cancer Research (AICR), four in
five weight-conscious Americans turn to salads, vegetables and
fruits when trying to shed a few pounds.

tahini tempeh

amys.com.
Its products are available nationally in natural foods stores, many
supermarket chains and in select warehouse club stores.6 million in the
third quarter of FY2004. Higher casein costs
alone accounted for approximately one million dollars of our margin decline in
the third quarter, when compared with the prior-year period.7 million in the
corresponding period of the previous fiscal year.13) $(0.

seaweed slices

For the three months ended December 31, 2004 , net sales increased 10% to
approximately $10.

morningstar veggie

Nine-month Sales Increase 22% to Record $33. As an incentive, a Green Giant gift pack
will be awarded each month through April to 25 randomly
selected individuals who complete the quiz.
Recipes include an "Italian Feast" of Mushroom and Vegetable
Lasagna and a "Mexican Celebration" of Chicken-Filled
Tortillas.

-- Green Giant frozen vegetable varieties that are low in
fat, saturated fat and cholesterol include: Cauliflower
and Cheese, Baby Vegetable Medley, Broccoli Spears, and
Herb Seasoned Garden Vegetable.

tofu primm

A portion of such
increased costs will be passed through to customers via price increases
through the end of the current fiscal year.13) per share, in the nine months ended December
31, 2004, compared with a net loss available to common shareholders of
($5,411 ,184), or ($0.corporate-ir.net/playerlink. More than half didn't know that one serving
of cooked vegetables was 1/2 cup, and nearly a quarter said they had
no idea of the recommended number of servings of vegetables for a
young child (age 2-6).

primm soyfoods

Students today are more aware of their health and
the benefits of eating natural and organic foods," says Craig Forrest, who
heads up Amy's campus development program for colleges. Additionally, these measures
are key factors upon which the Company prepares its budgets, forecasts and
evaluates loan covenants.net/playerlink. READERS
ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THOSE FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE HEREOF .
Balance Sheets

DECEMBER 31, MARCH 31,
2004 2004
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $111,618 $449,679
Trade receivables, net 5,253,821 3,964,198
Inventories 5,003,660 4,632,843
Prepaid expenses and other 214,542 266,301

Total current assets 10,583,641 9,313,021

PROPERTY AND EQUIPMENT, NET 18 ,758,623 20,232,089
OTHER ASSETS 303,718 416 ,706

TOTAL $29,645,982 $29,961,816

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Line of credit $5,546,703 $4,605,277
Accounts payable 2,292,650 1,266,346
Accrued liabilities 1,314,926 1,812,300
Warrant liability 500,000 --
Current portion of accrued
employment contracts 586,523 366,305
Current portion of term notes payable 1,657,500 1,140,000
Current portion of obligations
under capital leases 194,331 231 ,432

Total current liabilities 12,092,633 9,421,660

ACCRUED EMPLOYMENT CONTRACT, less
current portion 1,141,433 1,293,142
TERM NOTES PAYABLE, less current portion 6,914,485 8,241,985
OBLIGATIONS UNDER CAPITAL LEASES, less
current portion 134,369 204,967

Total liabilities 20,282,920 19 ,161,754

COMMITMENTS AND CONTINGENCIES -- --

REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 2,573,581

STOCKHOLDERS ' EQUITY:
Common stock 183,882 156,573
Additional paid-in capital 67,450,115 64,520,084
Accumulated deficit (45,378,274) (43,557,515)

22,255,723 21,119,142
Less: Notes receivable arising from
the exercise of stock options
and sale of common stock (12,772,200) (12,772,200)
Treasury stock, 26,843 shares, at cost (120,461) (120,461)

Total stockholders ' equity 9,363,062 8,226,481

TOTAL $29,645,982 $29,961,816

GALAXY NUTRITIONAL FOODS, INC .6%

S. For the past
100 years, the Giant's Valley is where the freshest and
greatest -tasting vegetables are grown and picked at the peak of
perfection.

hummus veggie

"In the last
year, interest and impetus to get Amy's into college campus "c-stores"
(convenience stores stocked with food and incidentals that students need) has
come from the students themselves. Broll, Chief Executive Officer of Galaxy
Nutritional Foods, Inc. The
call will be archived on the Internet through May 14, 2005 at
http://phx.

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The market for organic foods is among the fastest growing grocery
categories, with sales expanding at more than 23 percent annually, to an
estimated $3 billion this year. However , the Company has also continued to incur a
substantial increase in the cost of certain key food ingredients and raw
materials, which caused gross margin to decline $579,495 in the most recent
quarter, when compared with the prior-year period.
"Since the beginning of our second fiscal quarter, Galaxy has been
operating in an environment of rapidly escalating raw materials and
ingredients costs ," noted Michael E.
EBITDA, as adjusted, (a non-GAAP measure) Reconciliation
(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2004 2003 2004 2003

NET SALES $10,632,877 $9,638,571 $33,725,108 $27,664,259

NET LOSS $ (739,401) $(1,378,354) $(1,820,759) $(3,576,603)
Plus:
Non-cash compensation
(income ) expense 361,186 (255,712) 402,388 1,179,677

Employment Contract
Expense -- 1,830,329 444,883 1,830,329

Interest expense 288,556 253,934 812,380 1,019,391

Depreciation and
amortization expense 541,170 548,632 1,633,256 1,657,431
EBITDA, as adjusted 451,511 998,829 1,472,148 2,110,225

As a % of Net Sales 4.
"Our survey recorded eating habits before the new Guidelines were
released," says Andy Dahlen, marketing manager for Green Giant.

seaweed morningstar

Excluding these non-cash compensation and
employment contract items, the Company 's operating loss, as adjusted (a non-
GAAP measure), totaled ($89,659) in the quarter ended December 31, 2004,
compared with operating income, as adjusted, of $450,197 in the quarter ended
December 31, 2003. "So
with the increased recommendations, it's even more important to
educate parents and encourage them to get more vegetables into their
diet, as they are an important influence on their children's eating
habits and can help form life-long healthy food patterns. The brand is
also reducing the sodium content in some of its products, including
popular Broccoli and Cheese. The wide range of Green Giant frozen vegetable varieties
include bagged and boxed classic frozen vegetables , frozen side dishes
and Create a Meal! Meal Starter.

substitutes wheaty

The Company reported a net operating loss of ($450,845) in the third
quarter of FY2005, versus a net operating loss of ($1,124,420) in the quarter
ended December 31, 2003.galaxyfoods.
Statements of Cash Flows
(UNAUDITED)

Nine Months Ended December 31, 2004 2003

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,820,759) $(3,576,603)
Adjustments to reconcile net income
(loss) to net cash from (used in)
operating activities:
Depreciation and amortization 1,633,256 1,657,431
Amortization of debt discount and
financing costs 65,881 192,078
Provision for losses on trade receivables 109,000 14,000
Non-cash compensation related to options
and warrants 402,388 1,179,677
(Increase ) decrease in:
Trade receivables (1,398,623) 854,539
Inventories (370,817) 1,208,195
Prepaid expenses and other 51,759 26,492
Increase (decrease) in:
Accounts payable 1,026,304 (1,151,801)
Accrued liabilities 120,973 1,564,055

NET CASH FROM (USED IN) OPERATING
ACTIVITIES (180,638) 1,968,063

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (77,207) (175,311)
Decrease in other assets 34,482 1,806

NET CASH FROM (USED IN) INVESTING ACTIVITIES (42,725) (173,505)

CASH FLOWS FROM FINANCING ACTIVITIES:
Book overdrafts -- (1,151,276)
Net borrowings (payments ) on lines of credit 941,426 (549,916)
Repayments on subordinated note payable -- (4,000,000)
Borrowings on term note payable -- 2,000 ,000
Repayments on term notes payable (810,000) (1,246,760)
Principal payments on capital lease
obligations (190,282) (297 ,821)
Financing costs for long term debt -- (232,230)
Redemption of preferred stock (2,279,688) --
Proceeds from issuance of common stock,
net of offering costs 2,223,846 4,158,587

NET CASH FROM (USED IN) FINANCING ACTIVITIES (114,698) (1,319,416)

NET INCREASE (DECREASE ) IN CASH (338,061) 475,142

CASH, BEGINNING OF PERIOD 449,679 1,598

CASH, END OF PERIOD $111,618 $476,740

GALAXY NUTRITIONAL FOODS, INC. 12 by the U. Specific features
at the Web site to help families reach this goal include:

Veggie IQ Quiz - Visitors can test their vegetable knowledge
about serving sizes and health benefits in a short,
interactive quiz.

Get Your Greens! Family Meal Commitment - Visitors will be
invited to sign the Get Your Greens! Family Meal Commitment,
which offers families the opportunity to promise to get their
daily vegetables together and commit to make a change for at
least one week.

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The $574,478 decrease in non-GAAP net
income was primarily due to the decrease in gross margin, as mentioned above. In its determination of non-GAAP measures,
management excludes the non-cash compensation related to options and warrants
as well as the employment contract expense from its analysis of operating
income because it believes that these items do not accurately reflect the
Company's current on-going operations. EST,
shareholders and other interested parties may participate in the conference
call by dialing 800-500-0311 (international/local participants dial 719-457-
2698), a few minutes before 11:00 a.

THIS PRESS RELEASE CONTAINS "FORWARD -LOOKING" STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

Health Benefits of Going Green

Health benefits of eating more vegetables and fruits include:

-- Increased fruit and vegetable intake is associated with
decreased risk of type 2 diabetes and certain cancers.

slices soyfoods

, Galaxy Nutritional Foods,
Inc.6 million, compared with approximately $9."
Results for the third quarter of FY2005 included non-cash compensation
expense of ($361,186 ), whereas results for the prior-year quarter included
non-cash compensation income of $255,712.
EBITDA, as adjusted (a non-GAAP measure), for the quarter ended December
31, 2004, declined to $451,511, or 4. After the deduction of non-cash
preferred stock dividends and non-cash preferred stock accretion for estimated
redemption value, the Company's net loss available to common shareholders
totaled ($2,106,936), or ($0.3% 10. They are convenient and just as nutritious as fresh, can
be prepared in five minutes or less and are easy to incorporate into
many dishes.

soyfoods nuggets

To find out more about Amy's products
and their college campus program, visit http://www.corporate-ir. 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 .37)

GALAXY NUTRITIONAL FOODS, INC.
"To help increase vegetable consumption, parents may want to
rethink the way they plan dinner," says Juli Hermanson, registered
dietitian and senior nutrition scientist at General Mills.

tahini slices

Net loss for the third quarter of FY2005 totaled ($739,401), versus a net
loss of ($1,378,354) in the quarter ended December 31 , 2003.3% of net sales, compared with EBITDA, as
adjusted, for the quarter ended December 31, 2003 of $998,829, or 10.
Cash flow provided by operating activities during the quarter ended
December 31, 2004 totaled $443,570, compared with cash flow provided by
operating activities of $1,157,359 in the third quarter of FY2004. The
decrease in operating cash flow versus the prior-year period was primarily due
to increased accounts receivable and inventory levels resulting from higher
sales volumes. With respect to non-cash compensation,
it is calculated based on fluctuations in the Company 's stock price which are
outside the Company's control and typically do not reflect the Company's
operations. EST on February 14, 2005.
Statements of Operations
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2004 2003 2004 2003

NET SALES $10,632,877 $9,638,571 $33,725,108 $27,664,259

COST OF GOODS SOLD 8,289,551 6,715,750 25,860,850 19,096,843
Gross margin 2,343,326 2,922,821 7,864,258 8,567,416

OPERATING EXPENSES:
Selling 1 ,213,549 1,110,097 4,246,419 3,870,829
Delivery 549,379 544,930 1,757,962 1,430,706
Non-cash compensation
related to options +
warrants 361,186 (255,712) 402,388 1,179,677
Employment contract
expense -- 1,830,329 444,883 1,830,329
General and
administrative 595,196 752,123 1,794,506 2,621,621
Research and development 74,861 65,474 226,479 191,466
Total operating
expenses 2,794 ,171 4,047,241 8,872,637 11,124,628

LOSS FROM OPERATIONS (450,845) (1,124,420 ) (1,008,379) (2,557,212)

Interest expense (288,556) (253,934) (812,380) (1,019,391)
Other expense -- -- -- --

NET LOSS $(739,401) $(1,378,354) $(1,820,759) $(3,576,603)

Preferred Stock Dividends -- 48,556 82,572 157,172
Preferred Stock Accretion
to Redemption Value -- 131,076 203,605 1,677,409

NET LOSS AVAILABLE TO
COMMON SHAREHOLDERS $(739,401) $(1,557,986) $(2,106,936) $(5,411,184)

BASIC and DILUTED NET
LOSS PER COMMON SHARE $(0. Departments of Agriculture
and Health and Human Services, Green Giant(R) is launching a Web-based
initiative today, called "Mix-Up Dinner: Get Your Greens!" to help
families increase their daily vegetable intake.com and
commit to consume more vegetables on a daily basis.

For more information and easy ideas to incorporate vegetables into
meals, visit www.

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Campus favorites
are Amy's burritos, bowls, entrees and pizzas, all available in the freezer
section.
Once Amy's was available on campus, students of all kinds -- not just
those on a special diet -- were hooked on Amy's delicious food. Now celebrating its 17th year, Amy 's Kitchen
is a family-owned and operated business based in Sonoma County, California. Excluding the
non-cash compensation and employment contract items noted above, the Company
incurred a net loss, as adjusted (a non-GAAP measure), of ($378,215) for the
quarter ended December 31, 2004, compared with net income, as adjusted, of
$196,263 in the year-earlier period. EBITDA, as adjusted, is comprised of net income before interest,
taxes, depreciation and amortization, and is exclusive of employment contract
expense and non-cash compensation related to stock options and warrants.4% 7.
The Green Giant Vegetable Report, based on a Harris Interactive
survey of parents with children 18 and under, also found that parents
were confused about what made up a serving size and how many servings
young children need daily.

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A key player in this "healthy revolution" is Amy's Kitchen, the nation's
top-selling brand of natural and organic vegetarian convenience foods -- now
carried by over 500 US colleges in their convenience stores.7 Million

Downward Pressure on Gross Margin continues as Key Commodity Costs Remain High

ORLANDO, Fla. Additionally, results for the third
quarter of FY2005 and FY2004 included employment contract expense of $0 and
($1,830,329 ), respectively.
For the nine months ended December 31, 2004, net sales increased 22% to a
record $33. These non-GAAP measures are not in accordance with, or an
alternative for, generally accepted accounting principles and may be different
from non-GAAP measures reported by other companies. Because they are made with plant proteins, they
are more environmentally friendly and economically efficient than dairy
products derived solely from animal proteins.
The new Dietary Guidelines recommend that the average adult eat 2
1/2 to 6 1/2 cups (five to 13 servings) of fruits and vegetables each
day, an increase from the previously recommended 2 1/2 to 4 1/2 cups
(five to nine servings).

Yet, according to the Green Giant Vegetable
Report, 70 percent of parents and more than three-quarters of moms say
they don't get enough vegetables in their diets.

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(Amex: GXY), a leading producer of nutritious plant-based dairy
alternatives for the retail and foodservice markets, today reported its
operating results for the third quarter and first nine months of FY2005.04) $(0.
Most Green Giant frozen vegetables carry an on-pack nutrition
claim, "Frozen Vegetables Are As Nutritious As Fresh!" Beginning this
month, Green Giant will feature specific nutrient benefits in the
upper right corner of each package to help consumers better understand
the nutritional offerings of each Green Giant variety .

foodstuffs wheaty

About Amy's Kitchen
Amy's Kitchen, Inc. "Casein, packaging, film and transportation costs
account for the largest percentage of these increases.
After non-cash preferred stock dividends and non-cash preferred stock
accretion for estimated redemption value, the Company reported a net loss
available to common shareholders of ($739,401), or ($0.4% of net
sales.7 million, compared with approximately $27.
Galaxy Nutritional Foods is the leading producer of great-tasting, health -
promoting plant-based dairy and dairy-related alternatives for the retail and
foodservice markets .10) $(0.

Green Giant Launches Campaign to Help Americans 'Get Their Greens'

Business Editors/Health Editors

MINNEAPOLIS----

Revised Dietary Guidelines Call for Increased Vegetable Consumption;
New Report Finds 70 Percent of Parents Not Eating Enough Veggies

In response to the sixth edition of Dietary Guidelines for
Americans released on Jan. The pack will
include a vintage-style Green Giant T-shirt, recipes and tips.

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10) per diluted share, for the quarter
ended December 31, 2003.

CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host an investor conference call today at 11:00 a.zhtml?c=102653+s=wm+e=1015145. 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 ."

Green Giant Launches "Get Your Greens!"

With the "Mix-Up Dinner: Get Your Greens!" initiative , families
are encouraged to take part in activities at www.