(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[   ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

New York
(State or Other Jurisdiction of
Incorporation or Organization)

16-0961040
(IRS Employer Identification Number)

Page No.

PART I -- FINANCIAL INFORMATION

Item 1.

Financial Statements

CPAC, Inc. and Subsidiaries Consolidated Balance Sheets -- June 30, 2000 (Unaudited), and March 31, 2000

 3

CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Three Months Ended June 30, 2000, and June 30, 1999 (Unaudited)

 4

CPAC, Inc. and Subsidiaries Consolidated Statements of Cash Flows -- Three Months Ended June 30, 2000, and June 30, 1999 (Unaudited)

 5

Notes to Consolidated Financial Statements

 6

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 8

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

11

PART II -- OTHER INFORMATION

Item 1.

Legal Proceedings

12

Item 2.

Changes in Securities and Use of Proceeds

12

Item 3.

Defaults Upon Senior Securities

12

Item 4.

Submission of Matters to a Vote of Security Holders

12

Item 5.

Other Information

12

Item 6.

Exhibits and Reports on Form 8-K

12

SIGNATURE PAGE

14

EXHIBIT INDEX

15

(Unaudited)

(Note)

ASSETS

Current assets:

Cash and cash equivalents

$      3,377,968

$      4,436,509

Accounts receivable (net of allowance for doubtful accounts
      of $716,000 and $696,000, respectively)

15,318,112

15,019,382

Inventory

19,445,165

18,862,740

Prepaid expenses and other current assets

        2,226,770

        2,204,016

   Total current assets

40,368,015

40,522,647

Property, plant and equipment, net

20,285,619

20,541,001

Goodwill and intangible assets (net of amortization of
   $2,270,919 and $2,127,495, respectively)

13,210,004

13,383,151

Other assets

        2,644,376

        2,650,796

$   76,508,014

$    77,097,595

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$     1,023,845

$      1,185,349

Accounts payable

4,870,612

5,533,850

Accrued payroll and related expenses

1,597,600

2,043,509

Accrued income taxes payable

1,098,881

380,843

Other accrued expenses and liabilities

        2,628,559

        2,696,680

   Total current liabilities

11,219,497

11,840,231

Long-term debt, net of current portion

7,910,464

8,306,831

Other long-term liabilities

5,259,455

5,168,173

Shareholders' equity:

Common stock, par value $0.01 per share;
   Authorized 30,000,000 shares;
   Issued 5,665,219 shares and 5,726,566 shares, respectively

56,653

57,265

Additional paid-in capital

13,578,786

13,988,163

Retained earnings

40,205,327

39,273,059

Accumulated other comprehensive income (loss)

       (1,131,980

)

          (945,939

)

52,708,786

52,372,548

Less: Treasury stock, at cost, 85,307 shares

          (590,188

)

          (590,188

)

Total shareholders' equity

      52,118,598

     51,782,360

$    76,508,014

$    77,097,595

2000

1999

Net sales

$   26,881,360

$   26,479,554

Costs and expenses:

Cost of sales

15,286,036

15,079,212

Selling, administrative and engineering expenses

9,085,487

9,088,242

Research and development expense

165,872

192,302

Interest expense, net

          207,850

          200,228

     24,745,245

     24,559,984

Income before income tax expense

2,136,115

1,919,570

Provision for income tax expense

          809,000

          784,000

   Net income

$     1,327,115

$     1,135,570

Income per common share:

Basic

$              0.24

$              0.18

Diluted

$              0.24

$              0.18

Average common shares outstanding:

Basic

       5,618,635

       6,253,972

Diluted

       5,643,517

       6,284,819

Comprehensive income:

Net income

$     1,327,115

$     1,135,570

Other comprehensive income (loss)

         (186,041

)

         (132,730

)

   Comprehensive income

$     1,141,074

$     1,002,840

2000

1999

Cash flows from operating activities:

Net income

$     1,327,115

$     1,135,570

Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:

   Depreciation and amortization

734,226

671,958

   Amortization of intangible assets

171,959

145,561

Changes in assets and liabilities, net of effects of business
    acquisitions:

   Accounts receivable

(320,972

)

1,749,392

   Inventory

(610,660

)

(111,392

)

   Accounts payable

(670,310

)

(51,007

)

   Accrued expenses & liabilities

197,871

(19,891

)

   Other changes, net

           (46,337

)

          132,624

      Total adjustments

         (544,223

)

       2,517,245

         Net cash provided by operating activities

          782,892

       3,652,815

Cash flows from investing activities:

Purchase of property, plant, and equipment, net

         (508,299

)

      (1,055,111

)

   Net cash used in investing activities

         (508,299

)

      (1,055,111

)

Cash flows from financing activities:

Common stock repurchase

(409,989

)

(1,288,227

)

Issuance of common stock

24,438

Repayment of long-term borrowings

(527,544

)

(203,207

)

Payment of cash dividends

         (394,847

)

        (411,057 

)

   Net cash used in financing activities

      (1,332,380

)

      (1,878,053

)

Effect of exchange rate changes on cash

                (754

)

                  (72

)

   Net increase (decrease) in cash and cash equivalents

(1,058,541

)

719,579

Cash and cash equivalents -- beginning of period

       4,436,509

          412,123

Cash and cash equivalents -- end of period

$     3,377,968

$     1,131,702

June 30, 2000

March 31, 2000

         Raw materials and purchased parts

$   8,423,307

$   7,332,230

         Work-in-process

1,144,943

1,055,426

         Finished goods

     9,876,915

   10,475,084

$ 19,445,165

$ 18,862,740

Three Months Ended June 30,

2000

1999

Basic weighted average number of
   shares outstanding

5,618,635

6,253,972

Effect of dilutive stock options

     24,882

     30,847

Dilutive shares outstanding

5,643,517

6,284,819

Three Months Ended
June 30,

2000

1999

Net sales to customers:

   Fuller Brands

$   15,642,235

$   16,163,449

   Imaging

     11,239,125

     10,316,105

      Total net sales to customers

$   26,881,360

$   26,479,554

Operating income:

   Fuller Brands

$     1,510,864

$     1,319,788

   Imaging

          879,180

          859,828

2,390,044

2,179,616

   Corporate income (loss)

(46,079

)

(59,818

)

   Interest expense, net

         (207,850

)

         (200,228

)

      Consolidated pretax income

$     2,136,115

$     1,919,570

June 30, 2000

March 31, 2000

June 30, 1999

(1)  Receivables-days outstanding

51.4 days

54.3 days

57.3 days

(2)  Annual inventory turns

3.2 times

3.2 times

2.9 times

a.

general economic and competitive conditions in the markets and countries in which the Company operates, and the risks inherent in international operations;

b.

the Company's ability to continue to control and reduce its costs of production;

c.

the level of demand for the Company's Imaging products and impact of digital imaging;

d.

the level of competition and consolidation within the imaging industry;

e.

the effect of changes in the distribution channels for Fuller Brands;

f.

the level of demand for Fuller Brands' contract manufactured products;

g.

the level of competition and consolidation within the commercial cleaning supply industry; and

h.

the strength of the U.S. dollar against currencies of other countries where the Company operates, as well as cross-currencies between the Company's operations outside of the U.S. and other countries with whom they transact business.

Item 1.

Legal Proceedings
None

Item 2.

Changes in Securities and Use of Proceeds
None

Item 3.

Defaults Upon Senior Securities
None

Item 4.

Submission of Matters to a Vote of Security Holders
None

Item 5.

Other Information
None

Item 6.

Exhibits and Reports on Form 8-K

a.   Exhibits

The following Exhibits, as applicable, are attached to this Quarterly Report (Form 10-Q). The Exhibit Index is found on the page immediately succeeding the signature page and the Exhibits follow on the pages immediately succeeding the Exhibit Index.

(2)   Plan of acquisition, regarding organization, arrangement, liquidation, or succession
        Not applicable

(3)   Articles of Incorporation, By-laws

3.1

Certificate of Incorporation, as amended September 11, 1996, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1996, and further amended by Certificate of Amendment dated August  19, 1999, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1999

3.2

By-laws, as amended, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1998

(4)   Instruments defining the rights of security holders, including indentures

4.1

Loan Agreement dated February 9, 1994, and Letter of Commitment dated December 16, 1993, incorporated herein by reference to Form 10-K filed for period ended March 31, 1994, as amended by Exhibits 99.1 to 99.3 filed as Exhibits to the Form 10-Q for the quarter ended December 31, 1994, and amended by Letter of extension and increase dated October 29, 1996, filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1996, and further amended by First Amendment to Second Amended and Restated Loan Agreement dated October 31, 1996, filed as Exhibit 4.1 to Form 10-Q for the quarter ended December 31, 1996, and further amended by Agreement dated September 12, 1997 filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1997, and further amended by Second Amendment to Second Amended and Restated Loan Agreement dated July 10, 1998, filed as Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 1998, and further amended by Agreement dated April 27, 2000 filed as Exhibit 4.1 to Form 10-K for the period ended March 31, 2000

(10)  Material contracts

10.1

Employment Agreement between Thomas N. Hendrickson and CPAC, Inc. dated September 30, 1995, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1995, and amended by Extension of Employment Agreement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999

10.2

CPAC, Inc. Executive Long-Term Stock Investment Plan, incorporated herein by reference to Form S-8 Registration Statement filed on October 29, 1994, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 3, 1996 and September 24, 1999

10.3

CPAC, Inc. 1996 Nonemployee Directors Stock Option Plan, incorporated herein by reference to Form S-8 Registration Statement filed October 3, 1996, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 14, 1997, November 24, 1998 and September 24, 1999

10.4

Deferred Compensation Arrangement between Thomas N. Hendrickson and CPAC, Inc. dated October 13, 1992, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1992, and amended by Amendment to Deferred Compensation Arrangement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999

10.5

CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 30, 1999, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1999

(11)  Statement regarding computation of per share earnings (loss)
        Not applicable

(15)  Letter regarding unaudited interim financial information
        Not applicable

(18)  Letter regarding change in accounting principles
        Not applicable

(19)  Report furnished to security holders
        Not applicable

(22)  Published report regarding matters submitted to vote of security holders
        Not applicable

(23)  Consents of experts and counsel
        Not applicable

(24)  Power of attorney
        Not applicable

(27)  Financial data schedule

(99)  Additional exhibits
        Not applicable

b.   Reports Filed on Form 8-K

1. On April 13, 2000, the Company filed a Current Report (Form 8-K) with respect to the April 5, 2000 appointment of Jerold L. Zimmerman, Ph.D., by the Registrant to its Board of Directors, increasing the Board's size to seven members.

CPAC, INC.

Date            August 10, 2000           

By

/s/ Thomas N. Hendrickson                                    
Thomas N. Hendrickson,
President, Chief Executive Officer, Treasurer

Date            August 10, 2000           

By

/s/ Thomas J. Weldgen                                            
Thomas J. Weldgen,
Vice President Finance and Chief Financial Officer

Date            August 10, 2000           

By

/s/ James W. Pembroke                                           
James W. Pembroke,
Chief Accounting Officer

Exhibit

Page

 2.

Plan of acquisition, regarding organization, arrangement, liquidation, or succession

N/A

 3.

Articles of incorporation, By-laws

3.1

Certificate of Incorporation, as amended September 11, 1996, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1996, and further amended by Certificate of Amendment dated August  19, 1999, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1999

N/A

3.2

By-laws, as amended, incorporated herein by reference to Form 10-Q, filed for the period ended September 30, 1998

N/A

4.

Instruments defining the rights of security holders, including indentures

4.1

Loan Agreement dated February 9, 1994, and Letter of Commitment dated December 16, 1993, incorporated herein by reference to Form 10-K filed for period ended March 31, 1994, as amended by Exhibits 99.1 to 99.3 filed as Exhibits to the Form 10-Q for the quarter ended December 31, 1994, and amended by Letter of extension and increase dated October 29, 1996, filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1996, and further amended by First Amendment to Second Amended and Restated Loan Agreement dated October 31, 1996, filed as Exhibit 4.1 to Form 10-Q for the quarter ended December 31, 1996, and further amended by Agreement dated September 12, 1997 filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1997, and further amended by Second Amendment to Second Amended and Restated Loan Agreement dated July 10, 1998, filed as Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 1998, and further amended by Agreement dated April 27, 2000 filed as Exhibit 4.1 to Form 10-K for the period ended March 31, 2000

N/A

10.

Material contracts

10.1

Employment Agreement between Thomas N. Hendrickson and CPAC, Inc. dated September 30, 1995, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1995, and amended by Extension of Employment Agreement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999

N/A

10.2

CPAC, Inc. Executive Long-Term Stock Investment Plan, incorporated herein by reference to Form S-8 Registration Statement filed on October 29, 1994, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 3, 1996 and September 24, 1999

N/A

10.3

CPAC, Inc. 1996 Nonemployee Directors Stock Option Plan, incorporated herein by reference to Form S-8 Registration Statement filed October 3, 1996, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 14, 1997, November 24, 1998 and September 24, 1999

N/A

 PAGE 15 

10.4

Deferred Compensation Arrangement between Thomas N. Hendrickson and CPAC, Inc. dated October 13, 1992, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1992, and amended by Amendment to Deferred Compensation Arrangement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999

N/A

10.5

CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 30, 1999, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1999

N/A

11.

Statement regarding computation of per share earnings (loss)

N/A

15.

Letter regarding unaudited interim financial information

N/A

18.

Letter regarding change in accounting principles

N/A

19.

Report furnished to security holders

N/A

22.

Published report regarding matters submitted to vote of security holders

N/A

23.

Consents of experts and counsel

N/A

24.

Power of attorney

N/A

27.

Financial data schedule

17

99.

Additional exhibits

N/A