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LEICESTER, N.Y., Feb. 18, 1998 -- CPAC,
Inc. (Nasdaq-NNM: CPAK) today announced, as part of its ongoing corporate-wide strategic
initiative to reduce costs and enhance manufacturing efficiencies, that it will close a
leased facility in Marion, Ohio. This facility was part of the July 1997 acquisition of
certain assets of IVAX Industries. In conjunction with this closing, all manufacturing and
distribution operations will be relocated to CPAC's company-owned Fuller Brush plant in
Great Bend, Kansas. The plant closing is anticipated to reduce operating costs in excess
of $1.5 million annually through lower overhead and improved margins.
Thomas N. Hendrickson, CPAC, Inc.'s President and Chief Executive Officer, commented,
"In July 1997, CPAC acquired the former IVAX chemicals business and formed the
Cleaning Technologies Group as a division of Fuller Brush. We immediately initiated an
assessment of the economic advantages of maintaining a manufacturing presence at the
leased facility in Marion versus our Great Bend facility. In the interim, we transferred
some functions to Kansas including human resources, accounting, research and development,
and aerosol manufacturing to eliminate redundancies. However, further cost and production
analysis, coupled with significant financial incentives offered by the city of Great Bend
and state of Kansas, led to our conclusion to close the Ohio plant."
CPAC plans to phase out production in the Marion, Ohio facility over the next six to eight
months, with first employment separation to occur as early as May. Sixty-five full time
and five temporary Marion employees will be affected by the plant closing.
"The business of CPAC has been and will continue to be the building of branded
leadership positions," said Norbert J. Schneider, President of The Fuller Brush
Company. "The size and strength of our positions today in the commercial cleaning
marketplace, coupled with rapidly advancing specialization, led us to consolidate
operations. This action will significantly reduce the capital demands on our company,
enhance our competitiveness, and let us focus even more on our mission of building the
largest single source supplier to the commercial janitorial market."
CPAC had previously announced that it would focus on reducing operating costs with expense
reduction initiatives. As part of the restructuring, management has created additional
cost savings by combining the sales and marketing activities for Fuller Brush commercial,
Franklin, and Masury-Columbia brands into an integrated, reorganized group located in Fort
Washington, Pennsylvania.
Founded in 1969, CPAC, Inc. is an acquirer, developer and licensee of brand names and a
manufacturer of specialty chemicals for the cleaning and personal care, and imaging
markets. CPAC owns The Fuller Brush Company and operates five imaging chemical facilities
in the U.S. and Europe. Shares are traded over the Nasdaq National Market System under the
ticker symbol "CPAK." Additional information is available on the Company's
website ( http://www.cpac-fuller.com
).
Except for the historical matters contained herein, statements in this press release are
forward looking and are made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. Investors are cautioned that forward looking statements
involve risks and uncertainties which may affect CPAC's business and prospects, including
economic, competitive, governmental, technological, and other factors discussed in CPAC's
filings with the Securities and Exchange Commission.
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