CPAC, INC. REPORTS OPERATING RESULTS FOR FISCAL FOURTH QUARTER AND YEAR ENDED MARCH 31, 1998
Sales Reach Record Levels for Both Periods

LEICESTER, New York, June 4, 1998 – CPAC, Inc. (Nasdaq NNM: CPAK) today reported financial results for the fourth quarter and fiscal year ended March 31, 1998.

For the fiscal fourth quarter, sales advanced 22% to a record $27.2 million compared to $22.3 million for last year’s fourth quarter. Net income for the quarter was $1.25 million, or $0.18 per diluted share, compared to $1.49 million, or $0.20 per diluted share, for the same period last year.

In the fiscal fourth quarter, sales for CPAC’s Cleaning and Personal Care segment grew 51% to $16.6 million compared to $11.0 million for the same period last year. Operating income for the segment was up 34% to $1.96 million compared to $1.46 million for the same period last year. For the quarter just concluded, Imaging segment sales were $10.6 million versus $11.3 million last year. Fourth quarter operating profits for the Imaging segment were $663,600 compared with $991,700 for the same period a year ago.

Commenting on the fourth quarter, Thomas N. Hendrickson, President and Chief Executive Officer of CPAC, Inc., said, "We are quite pleased with the performance of our Cleaning and Personal Care operation, which has benefited from a number of initiatives we put in place last year. These included our expanded programs to develop national accounts within industry sectors such as food service and hospital supply. Profitability in our Imaging segment was adversely impacted by additional non-recurring costs related to a plant consolidation, and a delay in the signing of a major contract for black-and-white chemicals. This contract was subsequently finalized at the end of March. We are committed to improving the performance of our Imaging segment. To remain competitive on the domestic front, we have initiated a number of cost control programs. Additionally, to accommodate the growth we are experiencing on the international front, we are expanding in selected markets such as Belgium and Italy."

For its fiscal year ended March 31, 1998, CPAC, Inc.’s sales reached record levels with a 14% increase to $106.0 million from $92.9 million last year. Contributing to the improvement in sales was the acquisition of certain assets of IVAX Industries on July 23, 1997. These assets now constitute the Cleaning Technologies Group, which operates as a division of Fuller Brush. Net income for the year was $6.82 million, or $0.95 per diluted share, compared to $7.52 million, or $1.02 per diluted share, for the same period last year. A number of non-recurring events affected net earnings for the year. These included certain one-time expenses associated with the acquisition of the assets from IVAX and the impact of the UPS strike on the Cleaning & Personal Care segment. Earnings were also impacted by the margin erosion experienced by the Imaging business.

On a segment basis, sales in Cleaning and Personal Care, which now account for 60% of the company’s sales, were up 31% for the fiscal year to $61.8 million, versus $47.2 million last fiscal year. Operating income for the segment was $7.48 million compared to $7.61 million last year. For the year, sales in the Imaging segment were $44.3 million versus $45.8 million for last fiscal year. Operating income for the Imaging segment for the fiscal year just closed was $4.38 million compared to $5.24 million last year.

In reviewing the results for the fiscal year, Mr. Hendrickson said, "We added to our infrastructure with the strategic acquisition of certain assets from IVAX. The acquisition of these assets -- which now constitute our Cleaning Technologies Group -- position our company in the commercial/janitorial market. This is a niche we had targeted and one that is demonstrating a strong annual growth rate in the 7% range. Through this acquisition, we obtained very stable, nationally recognizable brands and possess the marketing power to move those products through new distribution channels. The development of national accounts is a top priority for this group where our extensive product line and low-cost manufacturing are attractive to large distribution companies. We began moving manufacturing into the Fuller Brush plant at the end of the fourth quarter, and expect to benefit from the projected $1.5 million savings from plant consolidation in the second quarter of fiscal 1999."

Mr. Hendrickson continued, "In the Imaging segment, the domestic side has been marked by a pricing war among the major competitors, which resulted in margin erosion in both the color and black-and-white chemical markets. In addition, foreign currency translation adjustments impacted profits from the European subsidiaries. To improve profitability, we focused on widespread cost reduction initiatives, including the consolidation of our Irwindale, California facility into our Georgia operation to reduce expenses and gain benefit through the economies of scale."

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 portion of IVAX Industries with $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).

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.

(UNAUDITED)