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LEICESTER, NY, August 13, 1999 - CPAC,
Inc. (Nasdaq: CPAK) management detailed its initiatives to increase shareholder value at
the Company's eighteenth annual shareholders' meeting held August 11th in Mt.
Morris, NY.
President and Chief Executive Officer, Thomas N.
Hendrickson, told those in attendance, "Although both fiscal 1999’s performance
and our first quarter fiscal 2000 results fell short of expectations, we have initiated
steps that we believe will make CPAC more profitable and a more competitive company."
Mr. Hendrickson commented that the main area of focus for
income improvement is the Cleaning Technologies Group (CTG), CPAC’s
commercial/janitorial cleaning division. "The CTG acquisition has been integrated
into Fuller Brush in Great Bend, Kansas, but not all the projected cost reduction
synergies have been realized. With the help of a review by an investment banking firm and
the focus of our turnaround specialist Bob Isaacs, who returned to CPAC as Chief Operating
Officer in March 1999, we understand the actions needed to generate significant returns
from CTG. The study focused on specific shareholder value creation and on the need to give
corporate management attention to Cleaning Technologies Group. We will review various
alternatives if CTG’s performance is not significantly improved within this fiscal
year."
Robert C. Isaacs, CPAC, Inc. Chief Operating Officer,
commented on revenue growth and cost reduction initiatives relative to CTG. "We
believe we will improve CTG’s profitability within six months. The steps we are
taking include investigating distribution alternatives, targeting large national accounts,
and pursuing alliances with facilities management companies to offer total labor/product
solutions."
Mr. Hendrickson also discussed key top-line initiatives
for CPAC. "In the Fuller Brands segment, sales will be driven by e-commerce, new
products, and niche marketing. Fuller Brands has already partnered with Internet buying
groups in its commercial business to reach targeted industry segments, and has expanded
online purchasing capabilities for its consumer business. In addition many new personal
care, niche market, and commercial cleaning products are being introduced to provide
‘solutions’ to meet specific needs and reach new customers." In
CPAC’s Imaging segment, Mr. Hendrickson said that expanding global presence, new
products, and value-adds will be integral to top-line growth. "Our
‘innovative solutions’ approach has served us well in domestic imaging, and we
will continue to use that strategy to expand overseas business, especially in Southeast
Asia, where our new plant – CPAC Asia in Bangkok, Thailand – just opened. New
products such as our patented TriPhase™ one-part developer for photo labs and unique
Slush™ graphic arts liquid-powder formula, will drive growth in CPAC’s Imaging
segment."
Mr. Hendrickson also commented on CPAC’s acquisition
strategy. "We believe that acquisitions have been and will continue to be a part of
our growth strategy, but we do not expect to complete an acquisition in our targeted
commercial cleaning area in the short-term because of the CTG results to date. We are,
however, aggressively seeking out strategic business partners in every business unit to
complement our long-term market strategies."
The Company also announced that the following proposals
were approved by shareholders with all receiving an affirmative majority vote of the
shares outstanding and eligible to vote at the annual meeting:
- Election of six directors to serve until the next annual
meeting;
- Ratification of the appointment by The Board of Directors
of PricewaterhouseCoopers LLP as independent auditors of the Company for its fiscal year
ending March 31, 2000;
- An increase in the number of shares of the Company's $.01
par value common stock reserved for grant under the Company's Executive Long Term Stock
Investment Plan;
- An amendment to the Company's Certificate of Incorporation
to increase the number of authorized $.01 par value common shares of the Company from
20,000,000 to 30,000,000 common shares; and
- An option to a new director of the Company, David P. Biehn,
to purchase 15,000 shares of the Company's $.01 par value common stock.
CPAC also announced that on August 9, 1999, its Board of
Directors declared a regular quarterly cash dividend of $0.065 per share, payable on
September 24, 1999 to shareholders of record at the close of business on August 27, 1999.
Celebrating its thirtieth year in business, CPAC, Inc. is
a specialty chemical manufacturer operating in two business segments: Cleaning and
Personal Care, under its brand name The Fuller Brush Company, and Imaging, with its
trademarks Trebla and Allied chemicals. 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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