Replies to post #87331 on Value Microcaps Motherboard

[researcher59]

MikeS: GXYF is really tanking now .... bid down to $0.25 after hitting a high of $0.47 this morning .... oh well, I picked up only a few shares and won't sell at firesale prices. Guess I'll have to wait for a rebound or take a long term view. Thanks for the conf call info. I would have been on the call, but didn't have the time.

[Knowledge is King]

GXYF reports $.01 vs $.03


(PR NEWSWIRE) Galaxy Nutritional Foods Reports Third Quarter Operating Results
Galaxy Nutritional Foods Reports Third Quarter Operating Results

ORLANDO, Fla., Feb. 8 /PRNewswire-FirstCall/ -- Galaxy Nutritional Foods,
Inc. (OTC Bulletin Board: GXYF), a leading developer and marketer of cheese
alternatives, organic dairy and other organic and natural food products, today
reported its operating results for the third quarter and first nine months of
FY2008.
In the three months ended December 31, 2006, the Company reported net
income of $726,184 or $0.03 per diluted share, on net sales of approximately
$6.1 million. Operating expenses during this prior year third quarter
included $154,519 in costs related to disposal activities and $10,000 in non-
cash stock-based compensation expense. Exclusive of these charges, the
Company would have reported net income of $890,703 in the three months ended
December 31, 2006.
For the three months ended December 31, 2007, the Company reported net
income of $295,365, or $0.01 per diluted share, on net sales of approximately
$6.4 million. This decline in net income versus the prior year third quarter
is primarily due to a decrease in gross margin caused by a substantial
increase in the cost of one of our primary ingredients, casein. We expect the
fourth quarter of the current fiscal year to be similarly affected due to the
historically high casein costs which we are now facing.
In the nine months ended December 31, 2006, the Company reported a net
loss of ($54,681), or ($0.00) per diluted share, on net sales of approximately
$20.7 million. Operating expenses during the first nine months of FY2007
included $1,428,000 in charges related to a reserve on a stockholder note
receivable, $327,827 in costs related to disposal activities and $108,160 in
non-cash stock-based compensation expense. Exclusive of these charges, the
Company would have reported net income of $1,809,306 in the nine months ended
December 31, 2006.
For the nine months ended December 31, 2007, the Company reported net
income of $1,106,705, or $0.05 per diluted share, on net sales of
approximately $18.8 million. Operating expenses during the first nine months
of FY2008 included a previously disclosed non-recurring employment contract
expense of $346,447. Exclusive of this charge, the Company would have reported
net income of $1,453,152 in the nine months ended December 31, 2007. This
decline in year to date net income versus the first three quarters of our
prior fiscal year was primarily due to the aforementioned substantial increase
in ingredient costs in the third quarter of the current fiscal year.
The Company generated EBITDA, as adjusted, (a non-GAAP measure), of
$1,842,285 (9.8% of net sales) in the first nine months of FY2008, compared
with EBITDA, as adjusted, of $2,608,181 (12.6% of net sales) in the first nine
months of FY2007 (see EBITDA table at end of this release for further non-GAAP
information). This decline in EBITDA, as adjusted, versus the prior year is
primarily due to the lower net income in the current year as mentioned above.
"We are pleased that branded, net sales remain relatively strong and that
our operating profit slightly exceeded our expectations, given the substantial
increase in material costs we have absorbed." stated Michael E. Broll, Chief
Executive Officer of Galaxy Nutritional Foods, Inc.
"Higher ingredient costs will challenge us in the short term, but we are
confident we have the resources to continue to support our brands," concluded
Broll.
CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host an investor conference call today, February 8, 2008
at 11:00 a.m. EST; Shareholders and other interested parties may participate
in the conference call by dialing 888-200-8867 (international/local
participants dial 973-935-8765) and referencing the ID code 34196574 a few
minutes before 11:00 am EST on February 8, 2008. A replay of the conference
call will be available on Galaxy Nutritional Foods
Website at: http://www.galaxyfoods.com/investors/transcripts.asp starting on
Monday, February 11, 2008.
About Galaxy Nutritional Foods, Inc.
Galaxy Nutritional Foods, Inc. (OTC BB: GXYF) develops and globally
markets plant based cheese alternatives, organic dairy and other organic and
natural food products to grocery and natural foods retailers, mass
merchandisers and foodservice accounts. Galaxy Nutritional Foods Veggie(R),
the leading brand in the grocery cheese alternative category and the Company's
top selling product group, is primarily merchandised in the produce section
and provides calcium and protein without cholesterol, saturated fat or trans-
fat. Other popular brands include: Galaxy Nutritional Foods Rice(R), Veggy(R),
Vegan(R), Rice(R) Vegan and Wholesome Valley Organic(R). Galaxy Nutritional
Foods, Inc. is dedicated to developing nutritious and delicious food products
made with high quality natural ingredients that exceed the expectations of
today's health conscious consumers. Galaxy is also committed to reducing its
environmental impact as part of an Eat Green for Body & Earth(TM) program that
offsets carbon emissions associated with product shipping and emphasizes the
use of organic ingredients. For more information on Galaxy's products or green
initiatives, visit www.galaxyfoods.com . Galaxy Nutritional Foods, Inc. is
headquartered in Orlando, Florida, and its common stock is quoted on the OTC
Bulletin Board under the symbol "GXYF".
This press release includes a non-GAAP financial measure with respect to
EBITDA, as adjusted. The non-GAAP financial measure included in this press
release may be different from, and therefore may not be comparable to, similar
measures used by other companies. Please see the last page of this release for
more information on EBITDA, as adjusted, and the reconciliation of this
financial measure to GAAP measures.
Any statement of future expectations in this press release, including
without limitation, as to future revenues, net sales, earnings and
profitability, plans and objectives for future operations, future economic
performance or expected operational developments, and all other statements
regarding the future are "forward looking" statements within the meaning of
the Private Securities Litigation Act of 1995. These forward looking
statements are based on the Company's strategic plans and involve risks and
uncertainties that may cause actual results to differ materially and adversely
from these forward looking statements. Such risks and uncertainties include,
without limitation: the Company's ability to execute its business strategy in
a very competitive service and pricing environment; risks associated with the
launch of new marketing campaigns; continued relations with and pricing
dependence on third party suppliers; and other risks referenced from time to
time in the Company's filings with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release any revisions to these forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect unanticipated events or developments.
(Financial statements follow)



GALAXY NUTRITIONAL FOODS, INC.
Balance Sheets

DECEMBER 31, MARCH 31,
2007 2007
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $1,442,261 $879,487
Trade receivables, net 2,581,702 2,652,845
Inventories, net 100,558 377,432
Prepaid expenses and other 264,700 261,693

Total current assets 4,389,221 4,171,457

PROPERTY AND EQUIPMENT, NET 70,706 90,181
OTHER ASSETS 74,823 102,980

TOTAL $4,534,750 $4,364,618

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Secured borrowings $-- $556,886
Accounts payable 1,409,884 1,718,088
Accrued and other current liabilities 878,888 823,258
Current portion of accrued employment
contracts 423,569 366,305
Related party note payable 2,685,104 --

Total current liabilities 5,397,445 3,464,537

ACCRUED EMPLOYMENT CONTRACTS, less
current portion 2,154 194,491
RELATED PARTY NOTE PAYABLE -- 2,677,144

Total liabilities 5,399,599 6,336,172

COMMITMENTS AND CONTINGENCIES -- --

STOCKHOLDERS' DEFICIT:
Common stock 171,100 171,100
Additional paid-in capital 70,167,149 70,167,149
Accumulated deficit (71,203,098) (72,309,803)

Total stockholders' deficit (864,849) (1,971,554)

TOTAL $4,534,750 $4,364,618



GALAXY NUTRITIONAL FOODS, INC.
Statements of Operations
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2007 2006 2007 2006

Net Sales $6,446,099 $6,110,619 $18,763,360 $20,670,958
Cost of Goods Sold 4,145,200 3,417,232 11,346,406 12,450,194
GROSS MARGIN 2,300,899 2,693,387 7,416,954 8,220,764

OPERATING EXPENSES:
Selling 871,797 775,043 2,702,038 2,621,845
Delivery 263,923 217,431 772,786 643,714
General and administrative,
including $0, $10,000,
$0 and $108,160
non-cash compensation
related to stock based
transactions 672,530 639,030 1,883,647 2,496,658
Employment contract
expense-general and
administrative -- -- 346,447 --
Research and development 86,511 47,345 249,506 134,128
Reserve on stockholder
note receivable -- -- -- 1,428,000
Cost of disposal
activities -- 134,744 -- 283,547
Loss on disposal of
assets 512 19,775 512 44,280
Total operating
expenses 1,895,273 1,833,368 5,954,936 7,652,172

INCOME FROM OPERATIONS 405,626 860,019 1,462,018 568,592

INTEREST EXPENSE (110,261) (133,835) (343,313) (623,273)

INCOME (LOSS) BEFORE
TAXES 295,365 726,184 1,118,705 (54,681)