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Lynn Casteel
Exec. VP and Managing Director
Collins & Co
716-842-2266

CPAC, Inc. Announces Increased Net Income
For Third Quarter
Declares Quarterly Cash Dividend

LEICESTER, NY, February 2, 2000 – CPAC, Inc. (Nasdaq: CPAK) a leading international manufacturer and marketer of cleaning chemicals and related accessories, personal care products, and prepackaged imaging chemical formulations, today reported third quarter and nine-month results for the period ended December 31, 1999.

Consolidated net sales were $27.1 million in the third quarter, compared to $28.4 million for the same period last year. Consolidated net income for the quarter was $1.6 million, an increase of 2.9 percent, versus $1.5 million last year. Earnings per share in the third quarter increased 13.6 percent to $0.25, from $0.22 per diluted share in the prior year.

Nine-month consolidated net sales were $81.6 million, down 3.2 percent, compared to $84.3 million for the nine months ended December 31, 1998. Net income for the current nine-month period was $4.0 million compared with $4.4 million for last year. Diluted earnings per share increased 1.6 percent to $0.64 from $0.63 per diluted share last year, due to less shares outstanding.

The Company also announced that on February 1, 2000, its Board of Directors declared a quarterly cash dividend in the amount of $0.065 per share, payable on March 24, 2000, to shareholders of record at the close of business on February 18, 2000.

"We are beginning to realize the benefits from a number of significant steps taken in the last six months to effect operational improvements in the Fuller Brands segment," said Thomas N. Hendrickson, CPAC President and Chief Executive Officer. "Selling, administrative and engineering expenses for Fuller Brands decreased by nearly 18 percent in the quarter, contributing to a 10 percent improvement in operating profit for this segment."

Fuller Brands

Fuller Brands segment sales for the third quarter were $15.6 million versus $17.2 million in the comparable quarter last year. Third quarter operating profit increased by 9.9 percent, to $1.9 million, compared with $1.7 million last year.

"Along with taking strong action to reduce overhead in the Fuller Brands business, we also focused on strengthening the competitive position and profitability of this segment in the third quarter and going forward," Mr. Hendrickson said. "In addition to realizing improved operating efficiencies in the Great Bend manufacturing facility, we completed the reorganization of Cleaning Technologies Group (CTG), which included a workforce reduction and the appointment of Glenn Jackling as President. CTG has improved its profitability in the third quarter, and we expect this to continue. We also announced a new partnership with Lagasse Bros., Inc., the largest wholesaler of sanitary maintenance products in North America and a subsidiary of United Stationers Inc. (Nasdaq NNM: USTR). This alliance will more efficiently meet the needs of some of CTG’s existing customers, and increase the brand exposure of Franklin Cleaning Technology™ products through Lagasse's 9,000 distributor customers in the janitorial, food service, industrial, paper and packaging, healthcare/safety, office, and educational supply markets."

"We also restructured the Stanley Home Products (SHP) direct selling business with the appointment of Wendy Clay as Chief Operating Officer," Mr. Hendrickson said. "These moves are intended to better position both CTG and SHP to leverage CPAC’s resources and accelerate sales and profit growth."

Nine-month sales for the Fuller Brands segment were $48.3 million, down 7.5 percent from last year’s sales of $52.2 million. Nine-month operating profit was $4.6 million compared with $4.8 million, a decline of 2.8 percent.

Imaging

Imaging segment sales remained strong, increasing 3.4 percent for the third quarter to $11.5 million, versus $11.1 million for the comparable period last year. Imaging segment operating profit increased by 8.1 percent to $1.1 million, compared with $1.0 million in last year’s third quarter.

"During the third quarter our imaging business continued to show strength, with Allied leveraging its market share position in high-quality chemical solutions for medical imaging," Mr. Hendrickson said. "Start-up costs for CPAC Asia negatively impacted profits for the segment during the quarter, but we continue to experience strong growth in the region. This enterprise will operate profitably going forward."

Year-to-date imaging segment sales were up 3.7 percent to $33.3 million compared with $32.1 million last year. Nine-month operating profits increased 5.2 percent to $3.1 million versus $2.9 million for the comparable period last year.

Outlook

"As with the two prior quarters, our Fuller Brands business experienced reduced demand from a large national sweepstakes customer. This significantly impacted segment revenue in the third quarter. Despite a high level of success in attracting new national accounts business in the Fuller Brands segment, we will continue to feel the effect of the reduced sweepstakes revenues through the end of the fiscal year and perhaps well into the next fiscal year," Mr. Hendrickson stated. "To offset the sweepstakes shortfall, the Company has stepped up its Internet programs to market Fuller Brush to new and previous customers. We now have twelve web sites for Fuller Brands product sales, and a merchant partner alliance with Quixtar."

Relative to the Imaging segment, Mr. Hendrickson said, "Although digital technologies are continuing to grow in world markets, consumer film sales are increasing, thus increasing the demand for imaging chemistry. Our strategy to expand our imaging chemical presence in international markets is paying off. Our sales are growing appreciably in Asia, Africa, and other developing regions."

"Finally," Mr. Hendrickson said, "we are back in the acquisitions market and will aggressively pursue opportunities in the cleaning and personal care industry, where there is strong brand presence in the U.S. and/or internationally."

CPAC, Inc. is a leading international manufacturer and marketer of industrial and household cleaning products and related accessories, personal care products, and prepackaged chemical formulations, supplies, and equipment systems to the imaging industry. The company operates in two business segments: Cleaning and Personal Care (Fuller Brands) and Imaging. The Fuller Brands segment includes The Fuller Brush Company (commercial and consumer), Stanley Home Products, and Cleaning Technologies Group. CPAC’s Imaging segment serves the global Imaging market and includes Trebla Chemical Company, Allied Diagnostic Imaging Resources, Inc., CPAC Equipment Division, and four international chemical manufacturing operations. CPAC, Inc. shares trade on 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)