CPAC, Inc. Reports Fiscal
Third Quarter and Nine Month Earnings
Company Declares Quarterly Dividend of $0.065 and
Responds to Unusual Share Price Volatility

Leicester, NY. . .February 1, 1999. . .In response to an unexplained drop in its stock price on limited trading volume on Friday, January 29, 1999, CPAC, Inc.’s Board of Directors moved to announce fiscal third quarter and nine month earnings earlier than scheduled. Management emphasized that it knew of no information that would cause the drop in share price to occur.

For the three-month period ended December 31, 1998, CPAC, Inc. sales were down slightly to $28.4 million versus $29.1 million last year. Net income for the quarter was $1.52 million or $0.22 per diluted share, versus $1.92 million or $0.27 per diluted share for the same period last year.

On a segment basis, Fuller Brands sales were off just under 2% for the quarter, at $17.2 million versus $17.5 million last year. Operating income was $1.69 million compared with $1.87 million one year ago.

In the Imaging segment, sales for the quarter were down just over 3% to $11.1 million versus $11.5 million last year. Operating income was $1.0 million compared with $1.4 million in the comparable quarter last year.

Year-to-date, CPAC sales were up nearly 7% to $84.3 million versus $78.9 million last year. Net income for the nine-month period was $4.4 million or $0.63 per diluted share compared with $5.6 million or $0.77 per diluted share last year.

Fuller Brand’s sales year-to-date were up 15% to $52.2 million, compared with $45.2 million last year. Operating income for the segment was $4.8 million versus $5.5 million one year ago.

In Imaging, sales for the nine-month period were down 5% to $32.1 million compared with $33.7 million last year. Operating income for the segment was $2.9 million versus $3.7 million in the same period last year.

On Saturday, January 30, 1999, CPAC, Inc.’s Board of Directors declared its second regular quarterly cash dividend of $0.065 per common share, to be payable on March 19, 1999, to shareholders of record at the close of business on February 19, 1999.

Thomas N. Hendrickson, CPAC Chief Executive Officer, reiterated that the Company plans to aggressively pursue its stock repurchase program, consistent with NASDAQ and SEC policies, up to the maximum approved shares. Mr. Hendrickson emphasized that for the last nine months he has consistently stated that the stock price is significantly undervalued. "With trading at $4.75 per share at the close of business on Friday, compared to its tangible book value of $6.11 on 9/30/98, the stock is grossly undervalued."

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, CPAC Equipment Division, 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.

(UNAUDITED)