Date: Thu, 18 Dec 1997 06:30:29 GMT Server: Apache/1.1.3 Content-type: text/html Monthly Insight Report:

 

Monthly Insight - December 1997

This is not a solicitation to buy or sell Galaxy securities and does not purport to be a complete analysis of Galaxy's financial position.

SBARRO CUSTOMERS GIVE FORMAGG MOZZARELLA MAJOR THUMBS UP…

Recently, several hundred person-to-person interviews were conducted at 15 Sbarro’s restaurants located throughout the U.S. to evaluate customers’ reactions to their new pizza made with low fat formagg mozzarella. The interviews were part of a controlled survey conducted by the highly reputable firm of Meyers Research.

The results indicated that the vast majority approved of the overall taste of the pizza (86%), as well as the flavor (83%) and texture (83%) of formagg mozzarella! Additionally, most purchasers (80%) indicated that pizza topped with formagg was as good or better than regular Sbarro pizza. The formagg pizza fared particularly well with consumers over the age of 50, with 26% of those tested stating the pizza was BETTER than regular Sbarro pizza and 24% stating it was MUCH BETTER than regular Sbarro pizza.

These results are so compelling that Meyers Research concluded in their report that "the addition of this new item to the Sbarro menu is likely to increase customer traffic. A substantial number of those who tried pizza with formagg (44%) indicated they would visit Sbarro more frequently now that this item was being offered."

Needless to say, we are very pleased with the results of the Sbarro customer survey which indicate the opportunity for an amazing increase in sales. Our goal is to make this nutritious and popular product available in all Sbarro restaurants in the very near future. Hopefully, Sbarro will agree.

FINANCIALLY SPEAKING…

We have reviewed our projections for the year ended March 31, 1997 and determined our revised sales forecasts to be between $23 million and $25 million. This adjustment in our initial estimates is the result of delays in the delivery and installation of ancillary equipment for our new Pullman/Ribbon loaf machine.

These unforeseen delays have caused first shipments of ribbon slices to foodservice customers to be postponed until the end of the third quarter (December 30), as opposed to the end of the second quarter as originally projected (September 30). Therefore, Pullman/Ribbon loaf sales will have little impact on third quarter sales but are expected to have a significant impact on fourth quarter sales (March 31, 1998). As mentioned in previous publications, this machine has the capacity to generate $100 million in sales annually and completes our array of foodservice products.

GALAXY’S GOALS FOR SHAREHOLDER VALUE…

As previously mentioned in the November edition, we are committed to a common objective: increasing shareholder value for our investors. We have set certain corporate goals for the Company to achieve improved margins, net profits and an increased stock price within the near future. These figures represent GOALS for the company, NOT FORECASTS OR PROJECTIONS.

Our goal for sales is to reach a run rate of $1 million per week by the quarter ended June 30, 1998. At this sales level, we hope to achieve a blended gross margin of 26% and to drop 17% to net income. With the attainment of these goals, we believe we can achieve a profit to earnings multiple of 35, which would yield a stock price of approximately $5.00 per share.

ON THE SHELVES...

Galaxy’s Soyco line of products scored high marks in a recent Spence Information Services (SPINS) report for the Natural Foods Industry. The report reflected that sales of Soyco products increased a remarkable 95.4% over the prior year!! In addition, Soyco products accounted for an outstanding 29.3% of sales for the entire cheese alternative market. With the rate at which sales of Soyco products are growing, our goal is to reach a 40% share of the market by this time next year.

Winn Dixie, the popular Southeast supermarket chain with approximately 1,200 stores, is now testing twelve of our Veggie products in a vegetarian display within the produce section of one of their Orlando locations. This test will gauge consumer reaction to their new marketing strategy for healthier products. If the test is successful, the plan is to expand the concept into Winn Dixie stores across the Southeast. The concept has worked exceptionally well for Kroger as they continue to expand their Vegetarian Markets, which showcase our Veggie and Rice products, into stores across the United States.

AROUND THE WORLD…

International sales continue to climb with several large retailers increasing the number of Galaxy products in their stores. South of the border, a large Mexican retail chain has approved seven of our products including Veggie Slices and the new Galaxy Foods brand product line. Our neighbors to the north can't seem to get enough of our products. Canadian consumers can soon purchase "Freedom", a private label line of formagg-type products at their local supermarkets. The Freedom line will be exclusive to the Canadian market where demand for our healthy products has been steadily increasing over the last year.

ITS SHOW TIME…

Once again our Veggie line of products received rave reviews at the Produce Marketing Association show held last month in Anaheim, California. Galaxy was expertly represented by John Jackson, Chick Goodman, Bob Peterson, Jim Anderson, and Amy Adams. Produce buyers and brokers from across the country lined up to sample our delectable Veggie line which included spreads, chunks, sour cream, butter, parmesan, herb parmesan, Swiss slices and cheddar slices. As a result of the show, we have hired major produce brokers in key markets and have gained new distribution. Congratulations to everyone who helped make this show such a success!

WHERE TO BUY…

As consumer awareness of the benefits of eating healthier products increases, so does distribution of Galaxy’s products throughout the world. Formagg, Galaxy and our Veggie products line are now found in the dairy or produce section of many supermarkets nationwide. Our Veggie line has all the benefits of formagg (no sat. fat, no cholesterol and no lactose) plus the added benefit of healthy soy protein. Galaxy Sandwich Slices contain no cholesterol.

Soyco and Soymage products can be found in most health food stores in the U.S., Canada, the United Kingdom, and in several other countries throughout the world. Under the Soyco name, ask for our Veggy Singles and Veggy chunks made with organic tofu as well as our Rice line of slices, chunks, parmesan, butter, sour cream and cream cheese made with organic brown rice. If you are a vegan or are allergic to dairy products, ask for Soymage dairy-free products.

Although we cannot ship to you directly, you can obtain a list of retailers and distributors in your area by calling our consumer information line at (407)855-5500, ext. 322. If you do not find the products you are looking for, please have your store contact the distributor.

DID YOU KNOW...

Soy Products, including tofu, tempeh, soy milk and soy cheese, can help reduce the risk of cancer and reduce symptoms of menopause? Soybeans contain powerful phytochemicals (plant compounds that can act therapeutically when eaten) that have been, and still are the subject of much research. Isoflavones, are just one set of compounds discovered in soy. Isoflavones are phytoestrogens (plant estrogens) that have an inhibiting effect on hormone-related cancers such as prostate and breast cancers. These compounds may also have a positive effect on menopause by mimicking estrogen, which may reduce some of those difficult symptoms such as hot flashes. Our Soymage line of products are a good source of these important nutrients.

QUOTE FOR THE MONTH...

Kites rise highest against the wind, not with it. – Winston Churchill

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