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Leicester, NY. . .January 25, 1999, CPAC, Inc. (Nasdaq NNM: CPAK) today announced
that it expects earnings for its fiscal third quarter ended December 31, 1998, to be off
compared with last year, due to a decline in sales in both segments of its business. Third
quarter earnings are expected to be in the range of $0.21 - $0.23 per share versus $0.27
per share for the same period last year. CPAC consolidated net sales for the period is
expected to be flat to down slightly. The Company will release final numbers on February
3, 1999.
Management stated that sales in the imaging side of its business are expected to be
down about 5%, with the majority of the shortfall coming from the domestic color chemical
business. This market continues to be negatively impacted by competitive pricing among the
leading imaging suppliers. In the Fuller Brands segment, sales are anticipated to be down
approximately 2%, due to an unexpected decline in sales in the commercial cleaning portion
of the business. The commercial cleaning industry as a whole experienced soft sales of
floor care products due to unseasonably mild weather in the Company’s fiscal third
quarter.
Thomas N. Hendrickson, Chief Executive Officer for CPAC, Inc. said although
disappointed in this quarter’s performance, he continues to be optimistic about
growth opportunities in both segments of the business. "Our imaging chemical sales in
the Asian market continue to grow significantly, increasing 150% year-to-date compared to
the same period last year. Our new chemical plant construction in Thailand is on schedule,
and we plan on shipping selected products by April, 1999 and to be in full production by
September, 1999."
Relative to the Fuller Brands side of the business, Mr. Hendrickson stated, "We
are beginning to benefit from operational efficiencies at our Great Bend manufacturing
location that were not reflected this quarter because of the shortfall in sales. New
distributor programs have been initiated to drive top line growth. We recently extended a
significant contract with a leading national retail account for janitorial cleaning
products. In addition, we have restructured our executive marketing team to focus on
value-add packages for national accounts that reduce labor costs – the most
significant expense in the commercial cleaning industry."
CPAC, Inc. is a chemical manufacturer in two different industries – Cleaning and
Personal Care (Fuller Brands) and Imaging. Its Fuller Brands segment is comprised of The
Fuller Brush Company, Stanley Home Products, and Cleaning Technologies Group. The Imaging
segment, serving the worldwide Imaging market, is comprised of Allied Diagnostic Imaging
Resources, Inc., Trebla Chemical Company, and three international chemical manufacturing
subsidiaries. CPAC Inc. shares are traded over the Nasdaq National Market System under the
ticker symbol, ‘CPAK’.
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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