CPAC, Inc. Reports Record Sales
in Third Quarter and Nine Months

LEICESTER, New York, February 3, 1998 – CPAC, Inc. (Nasdaq NNM: CPAK) today reported record sales for both the third quarter and nine-month period ended December 31, 1997.

Sales for the quarter were up 25% to $29.1 million, versus $23.2 million last year. Net income was $1.9 million, compared to $2.0 million last year. Diluted earnings per share for the quarter were even with last year at $0.27.

On a per segment basis, sales in Cleaning and Personal Care for the third quarter were up 49% to $17.5 million, versus $11.8 million for the same quarter last year. This is mostly attributable to the previously announced July acquisition, now operating as a division of CPAC’s Fuller Brush subsidiary. Operating income was $1.9 million, up 4% from the same period last year.

Sales in CPAC’s Imaging segment increased slightly for the quarter to $11.5 million versus $11.4 million last year. Operating income for the segment was $1.4 million compared to $1.5 million last year. This reflects pricing pressures in the U.S. market, as well as negative foreign currency translation effects that reduced sales and profit gains in Europe.

Year-to-date, CPAC, Inc. sales were up 12% to $78.9 million versus $70.6 million last year. Net income was $5.57 million or $0.77 per share, compared to $6.04 million or $0.82 per share last year.

Cleaning and Personal Care segment sales increased 25% over the nine-month period to $45.2 million from $36.2 million last year, with most of the additional sales from the recent acquisition. Operating income was $5.5 million versus $6.2 million last year, as a result of both the recent acquisition and the previously announced impact from the UPS strike.

Imaging segment sales for the nine-month period were $33.7 million versus last year’s sales of $34.5 million. Operating income was $3.7 million compared to $4.3 million last year.

Thomas N. Hendrickson CPAC, Inc.’s Chairman, President, and Chief Executive Officer, commented, "We are pleased with our 25% increase in revenues in the third quarter and our 12% increase in revenues year-to-date, which reflect both the recent acquisition of the Cleaning Technologies Group (CTG) and the improved performance from the international imaging chemical companies." Mr. Hendrickson continued, "Although our immediate expectations of a smooth transition were stalled as we reorganized and refocused the CTG marketing group, we believe we are now on track. The Cleaning Technologies Group marketing team is only now beginning to leverage the opportunity of selling the Fuller Brush hard goods product line with its high-quality commercial cleaning chemicals."

Commenting on the Imaging segment, Mr. Hendrickson stated, "Although North American imaging chemical sales were down, they were outweighed by increased revenue from our European subsidiaries and solid growth in the Pacific Rim. The net result was a slight increase in sales for the quarter, which offset the decline in year-to-date segment sales. Our strategic plan continues to emphasize international expansion in order to take advantage of growth opportunities. Our goal of manufacturing products in South Africa by the end of our first quarter of fiscal 1999 remains on schedule, and we still expect to establish a chemical production facility in the Pacific Rim."

Mr. Hendrickson stated, "CPAC’s plan to revitalize internal growth with new products and marketing initiatives is steadily progressing. We have new Imaging segment contracts in Eastern Europe, Europe, and Asia that give us great potential for growth internationally, while we wait for the market disruption caused by friction between Kodak and Fuji in the U.S. to be resolved."

Relative to the Company’s cost structure, Mr. Hendrickson commented, "To date we are satisfied with the progress of our cost reduction initiatives. We have recently consolidated our California manufacturing facility and we remain focused on improving CPAC’s overall operating efficiency."

Mr. Hendrickson stated, "With CPAC’s market capitalization at 4.2 times EBITDA, 1.2 times book value, and stock trading at 10 times trailing earnings, we see CPAC stock as a good use of our cash. We have purchased nearly 200,000 shares at an average price of $10.50. We expect to continue purchasing shares at least to the 350,000 shares previously approved by the CPAC Board of Directors."

Founded in 1969, CPAC, Inc. owns The Fuller Brush Company in Great Bend, Kansas, as well as five imaging chemical facilities in the U.S. and Europe. In July 1997, the Company acquired a segment of IVAX Industries with nearly $25 million in sales, and formed the Cleaning Technologies Group as a division of Fuller Brush. CPAC has over 250 registered trademarks for chemical and non-chemical products in the cleaning and personal care industry and imaging market. Shares are traded over the Nasdaq National Market System under the ticker symbol "CPAK." Additional information is available on the Company's website (www.cpac-fuller.com).

(UNAUDITED)