Vaughan Foods, Inc. Reports Profitable 1st Quarter

            Gross Profit Margin Increases to 12.7% of Revenue

              Q1 EBITDA Increases $900,000 to $1.1 million

MOORE, Okla., May 11, 2010 (GLOBE NEWSWIRE) -- Vaughan Foods, Inc. (OTCBB:FOOD), a regional leader in fresh-cut vegetables and fruit products, and a broad line of refrigerated prepared salads, sauces, soups, and side-dishes, today announced its operating results for the first quarter ended March 31, 2010.

Vaughan recorded net income of $0.1 million, or $0.02 per share, compared to a net loss of $0.3 million or $0.06 per share in the comparable quarter of 2009. Gross profit increased to 12.7 percent in the first quarter of 2010 from 8.7 percent in the first quarter of 2009.

Revenues were lower by 2.8% in the first quarter compared to the year-earlier quarter. The Company has been focused on operational and margin improvement and less on top line revenues over the past year. However, Vaughan has a robust sales pipeline and will increase its emphasis on top line growth during 2010.

The improved results are attributable to several factors, including efficiencies in production labor and ingredient costs partially attributable to the benefits of the Company's implementation of its Enterprise Resource Planning ("ERP") system in the first quarter of 2010, continued stability in commodity raw material costs, and further stabilization of the Company's work force.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") improved to $1.1 million in the first quarter of 2010 compared with $0.2 million in the year-earlier quarter. The Company repaid long-term debt and capital leases of $0.2 million and reduced the amount outstanding on its revolving line of credit by $0.3 million to $2.0 million.

On February 24, 2010, the Company closed a private placement financing, wherein it raised $1.9 million consisting of a combination of restricted common stock and restricted warrants, strengthening its capital and liquidity position.