Galaxy Cleans House

Galaxy Cleans House

ORLANDO, Fla.Galaxy Nutritional Foods (AMEX:GXY) entered June 2003with quite a few achievements on its plate. First, it announced having enteredinto a master distribution and licensing agreement with European companyFromageries Bel to distribute certain Galaxy products to approximately 35countries overseas. Galaxy also appointed Patrice Videlier, senior vicepresident of marketing for Fromageries, to its board of directors.

And, in transactions that closed May 30, the company completed privateplacements of its common stock for $3.9 million, which had been sold at apurchase price of $1.80 per share. The largest investor was Fromageries, with a$2 million investment. Another $1.85 million was provided by several investors,including Subways founder and chairman, Fred DeLuca. Of these placements, $2million was used to repay a portion of the companys $4 million subordinateddebt with Finoza Mezzanine Capital. The remaining proceeds will be used forworking capital, primarily for restocking inventory levels and promotingmarketing initiatives. According to Christopher New, Galaxy chief executiveofficer, these monies will help the company operate more effectively andefficiently.

In addition, the company replaced its Finova lender with Textron FinancialCorp. The new revolving line of credit from Textron Financial is as much as $7.5million, with an interest rate 2.25-percent lower than that charged by Finova.