UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q


(Mark One)
         X          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934
               For the quarterly period ended September 30, 2001

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

                           For the transition from       to
                                                   -----     -----

                           Commission File No. 0-27222

                             CFC INTERNATIONAL, INC.

                  (Exact name of Registrant as specified in its charter)

                  DELAWARE                               36-3434526
                  ---------                              ----------
         (State or other jurisdiction of                 (I.R.S. Employer
          incorporation or organization)                  Identification No.)

                500 State Street, Chicago Heights, Illinois 60411
                    (Address of Principal Executive Offices)

         Registrant's telephone number, including
         area code:                                         (708) 891-3456


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                 YES  ( X )                                  NO  (     )

As of November 14, 2001,  the Registrant  had issued and  outstanding  3,928,870
shares of Common Stock,  par value $.01 per share, and 512,989 shares of Class B
Common Stock, par value $.01 per share.



<PAGE>



                             CFC INTERNATIONAL, INC.

                               INDEX TO FORM 10-Q



                                                                 Pages
                                                                 -----
Part I - Financial Information:

  Item 1. Financial Statements

    Consolidated Balance Sheets - September 30, 2001 and
     December 31, 2000.........................................      5

    Consolidated Statements of Operations for the three (3)
     months and for the nine (9) months ended
     September 30, 2001 and September 30, 2000.................      6

    Consolidated Statements of Cash Flows for the nine (9)
     months ended September 30, 2001 and September 30, 2000....      7

    Notes to Consolidated Financial Statements.................   8-10


  Item 2. Management's Discussion and Analysis of Financial
    Condition and Results of Operations........................  10-13

  Item 3. Quantitative and Qualitative Disclosures
    about Market Risks.........................................     14

Part II - Other Information:

  Item 6.  Exhibits and Report on Form 8-K.....................     14

  Signatures...................................................     15



<PAGE>




                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

The Company believes that certain statements contained in this report and in the
future filings by the Company with the Securities and Exchange Commission and in
the  Company's  written and oral  statements  made by or with the approval of an
authorized   executive   officer  that  are  not  historical   facts  constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and  Section 21E of the  Securities  Exchange  Act of 1934,  and the
Company  intends  that such  forward-looking  statements  be subject to the safe
harbors created thereby.

The words and phrases  "looking  ahead," "is  confident,"  "should  be," "will,"
"predicted,"  "believe," "plan," "intend,"  "estimates,"  "likely," "expect" and
"anticipate" and similar expressions identify forward-looking statements.

These  forward-looking  statements  reflect  the  Company's  current  views with
respect to future  events and  financial  performance,  but are  subject to many
uncertainties  and factors  relating to the  Company's  operations  and business
environment  which may affect the  accuracy of  forward-looking  statements  and
cause the actual  results of the  Company to be  materially  different  from any
future results  expressed or implied by such  forward-looking  statements.  As a
result,  in some future quarter the Company's  operating  results may fall below
the  expectations of securities  analysts and investors.  In such an event,  the
trading  price of the  Company's  common  stock would likely be  materially  and
adversely  affected.  Many  of  the  factors  that  will  determine  results  of
operations are beyond the Company's ability to control or predict.

Some of the factors that could cause or contribute to such differences include:

o    The effect of the continuing unfavorable economic conditions on market
     growth trends in general and on the Company's customers and the demand for
     the Company's products and services in particular;

o    Risks inherent in international operations, including possible economic,
     political or monetary instability and its impact on the level and
     profitability of foreign sales;

o    Uncertainties relating to the Company's ability to consummate its business
     strategy, including the unavailability of suitable acquisition candidates,
     or the Company's inability to finance future acquisitions or successfully
     realize synergies and cost savings from the integration of acquired
     businesses;

o    Changes in raw material costs and the Company's ability to adjust selling
     prices;

o    The Company's reliance on existing senior management and the impact of the
     loss of any of those persons or its inability to continue to identify, hire
     and retain qualified management personnel;

o    Uncertainties relating to the Company's ability to develop and distribute
     new proprietary products to respond to market needs in a timely manner and
     the Company's ability to continue to protect its proprietary product
     information and technology;


<PAGE>





o    The Company's ability to successfully implement productivity improvements
     and cost reduction initiatives;

o    The Company's reliance on a small number of significant customers;

o    Uncertainties relating to the Company's ability to continue to compete
     effectively with other producers of specialty transferable coatings and
     producers of alternative products with greater financial and management
     resources; and

o    Control of the Company by a principal stockholder.

The risks included here are not exhaustive. We operate in a very competitive and
rapidly changing  environment.  New risk factors emerge from time to time and it
is not possible for us to predict all such risk  factors,  nor can we assess the
impacts  of all such risk  factors  on our  business  or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any  forward-looking  statements.  Given these risks and
uncertainties,  investors  should not place undue  reliance  on  forward-looking
statements as a prediction of actual results. We have no obligation to revise or
update these forward-looking  statements to reflect events or circumstances that
arise  after  November  14,  2001 or to reflect the  occurrence  of  anticipated
events.

Investors should also be aware that while we do, from time to time,  communicate
with  securities  analysts,  it is against  our policy to  disclose  to them any
material non-public  information or other confidential  commercial  information.
Accordingly,  investors  should not assume that we agree with any  statement  or
report  issued by any analyst  irrespective  of the content of the  statement or
report.  Thus, to the extent that reports issued by securities  analysts contain
any projections, forecasts or opinions, such reports are not our responsibility.




<PAGE>


                                     Part I
                          Item 1. Financial Statements
                             CFC INTERNATIONAL, INC.
                         CONSOLIDATED BALANCE SHEETS AT
                    SEPTEMBER 30, 2001 AND DECEMBER 31, 2000

                                                  September 30     December 31,
                                                     2001              2000
                                                     ----              ----
                                                  (Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ..................       $ 1,536,796      $   298,871
Accounts receivable, less
  allowance for doubtful
  accounts of $668,000
  and $537,000 at
  September 30, 2001 and
  December 31, 2000 respectively ...........        11,013,627       10,522,503
Inventories:
  Raw materials ............................         3,543,715        3,379,534
  Work in process ..........................         1,661,282        1,442,497
  Finished goods ...........................         5,154,969        6,251,791
                                                   -----------      -----------
                                                    10,359,966       11,073,822
Prepaid expenses and other
  current assets ...........................           664,797          313,871
Deferred income tax asset ..................         2,335,064        2,806,060
                                                   -----------      -----------
  Total current assets .....................        25,910,250       25,015,127
                                                   -----------      -----------
Property, plant and equipment, net .........        25,087,355       26,402,365
Other assets ...............................         4,477,981        4,983,729
                                                   -----------      -----------
Total assets ...............................       $55,475,586      $56,401,221
                                                   ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt...........       $ 6,107,519      $ 3,384,173
Accounts payable............................         3,382,621        2,563,536
Accrued compensation and benefits...........         1,220,761        1,240,811
Other accrued expenses and
  current liabilities.......................         2,706,074        2,886,271
                                                   -----------      -----------
  Total current liabilities.................        13,416,975       10,074,791
                                                   -----------      -----------
Deferred income taxes.......................         1,963,346        2,197,160
Long-term debt..............................        17,767,396       21,033,717
                                                   -----------      -----------
  Total liabilities.........................        33,147,717       33,305,668
                                                   -----------      -----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value,
  10,000,000 shares authorized;
  4,437,308 and 4,423,595 shares issued
  at September 30, 2001 and
  December 31, 2000 respectively.............           44,373           44,236
Class B common stock, $.01 par value,
  750,000 shares authorized;
  512,989 shares issued and outstanding......            5,130            5,130
Additional paid-in capital...................       11,924,690       11,784,084
Retained earnings............................       13,906,398       14,547,001
Accumulated other comprehensive income.......       (1,384,293)      (1,513,407)
                                                   -----------      -----------
                                                    24,496,298       24,867,044
Less 461,754 and 374,746 treasury shares
  of common stock, at cost, at
  September 30, 2001 and December 31, 2000
  respectively...............................       (2,168,429)      (1,771,491)
                                                   -----------      -----------
                                                    22,327,869       23,095,553
                                                   -----------      -----------
 Total liabilities and stockholders' equity..     $ 55,475,586     $ 56,401,221
                                                  ============     ============


               The accompanying notes are an integral part of the
                       consolidated financial statements.



<PAGE>





                             CFC INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE THREE MONTHS AND NINE MONTHS ENDED
                           SEPTEMBER 30, 2001 AND 2000


                             Three Months Ended 09/30,  Nine Months Ended 09/30,
                             -------------------------  ------------------------
                                 2001         2000         2001        2000
                                 ----         ----         ----        ----
                                     (Unaudited)              (Unaudited)

Net sales .................. $14,620,865  $17,280,691  $45,544,836  $53,340,065
Cost of goods sold .........  10,470,490   11,178,610   30,580,939   32,632,329
Selling, general and
  administrative expenses ..   3,321,866    3,593,752   10,097,097   12,277,080
Research and development
  expenses..................     554,953      704,759    1,724,601    2,114,463
Depreciation and
  amortization expense .....     861,520    1,395,789    2,901,540    3,070,368

International consolidation
  expense...................           -      768,000            -      768,000
                              ----------   ----------  -----------  -----------
Total operating expenses....  15,208,829   17,640,910   45,304,177   50,862,240
                              ----------   ----------  -----------  -----------

Operating income (loss).....    (587,964)    (360,219)     240,659    2,477,825

  Interest..................     418,196      301,850    1,228,260      838,929
  Other expense.............           -            -       15,600            -
    Other income............      (7,319)      (8,705)     (21,960)     (25,900)
                              ----------   ----------  -----------  -----------
                                 410,877      293,145    1,221,900      813,029
                              ----------   ----------  -----------  -----------
Income (loss) before
  income taxes .............    (998,841)    (653,364)    (981,241)   1,664,796
Provision (benefit) for
  income taxes..............    (347,466)    (210,030)    (340,638)     565,799
                              ----------   ----------  -----------  -----------

Net income (loss)............  ($651,375)   ($443,334)   ($640,603) $ 1,098,997
                              ===========  ===========   ========== ===========

Basic earnings (loss)
  per share..................  ($   0.14)    ($  0.10)   ($   0.14) $      0.24

Diluted earnings (loss)
  per share..................  ($   0.14)    ($  0.10)   ($   0.14) $      0.24



               The accompanying notes are an integral part of the
                       consolidated financial statements.



<PAGE>







                             CFC INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE NINE MONTHS ENDED
                           SEPTEMBER 30, 2001 AND 2000

                                                    Nine Months Ended 09/ 30,
                                                  ----------------------------
                                                       2001          2000
                                                       ----          ----
                                                    (Unaudited)    (Unaudited)
Cash flow from operating activities:
  Net income (loss) ............................. ($  640,603)   $ 1,098,997
    Adjustments to reconcile net income
     (loss) to net cash provided by
     operating activities:
       Depreciation and amortization ............   2,901,540      3,070,368
       Deferred income tax provision ............     196,284              -
       Changes in assets and liabilities:
         Accounts receivable ....................    (418,031)      (457,951)
         Inventories ............................     395,680     (3,335,304)
         Other current assets ...................      21,584      1,283,848
         Accounts payable .......................     811,808         61,497
         Accrued compensation and benefits ......      44,220        607,289
         Accrued expenses and other
          current liabilities ...................      (6,213)      (860,242)
                                                   -----------    -----------
Net cash provided by operating activities .......  $3,306,269     $1,468,502
                                                   -----------    -----------

Cash flows from investing activities:
  Additions to property, plant and equipment.....  (1,545,823)    (2,852,217)
  Cash paid to acquire business rights...........           -     (3,888,206)
                                                   -----------    -----------
Net cash used in investing activities............  (1,545,823)    (6,740,423)
                                                   -----------    -----------

Cash flows from financing activities:
  Proceeds from term loans.......................   3,079,516              -
  Repayment of revolver..........................  (8,029,847)             -
  Proceeds from revolver.........................   5,093,304      4,400,000
  Repayments of term loans.......................    (409,418)      (984,314)
  Repayment of capital lease.....................     (10,426)      (201,105)
  Repurchase of shares...........................    (396,938)       (98,772)
  Proceeds from issuance of stock................      56,950         47,958
                                                   -----------    -----------
Net cash provided by (used in) financing
  activities.....................................    (616,859)     3,163,767
                                                   -----------    -----------
Effect of exchange rate changes on cash
  and cash equivalents...........................      94,338        737,761
                                                   -----------    -----------
Increase (decrease) in cash and
  cash equivalents...............................   1,237,925     (1,370,393)

Cash and cash equivalents:
Beginning of period..............................     298,871      1,908,989
                                                   -----------    -----------
End of period....................................  $1,536,796     $  538,596
                                                   ===========    ===========




               The accompanying notes are an integral part of the
                       consolidated financial statements.

<PAGE>



                             CFC INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2001 AND 2000
                                   (Unaudited)

Note 1.  Basis of Presentation

In the opinion of management,  the accompanying  interim unaudited  consolidated
financial  statements  contain  all  adjustments   (consisting  of  only  normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of September 30, 2001 and December 31, 2000 (audited), the results of
operations for the three (3) months and nine (9) months ended September 30, 2001
and 2000, and  statements of cash flows for the nine (9) months ended  September
30, 2001 and 2000.

The unaudited interim  consolidated  financial  statements  included herein have
been prepared  pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly,  certain information and footnote disclosures normally accompanying
the annual  consolidated  financial  statements  have been omitted.  The interim
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and notes thereto  included in the Company's
latest annual report on Form 10-K.

Results for an interim period are not necessarily  indicative of results for the
entire  year and  such  results  are  subject  to  year-end  adjustments  and an
independent audit.

Certain  prior  period  amounts  in  the  statements  of  operations  have  been
reclassified to conform to current period presentation.  These reclassifications
had no effect on the previously  reported amounts of income (loss) before income
taxes or net income (loss).

Note 2.  Comprehensive Income

The Company's total comprehensive income (loss) was as follows:

                                               Nine Months Ended Sept. 30,
                                               ---------------------------
                                                    2001         2000
                                                    ----         ----
Net income (loss)..............................  ($640,603)   $1,098,997
Foreign currency translation adjustment........    129,114      (407,241)
                                                 ----------   -----------
Total comprehensive income (loss)..............  ($511,489)   $  691,756
                                                 ==========   ===========

Note 3.  Earnings Per Share
                                            Nine Months Ended
                        ---------------------------  ---------------------------
                            September 30, 2001           September 30, 2000
                        ---------------------------  ---------------------------
                        Income                 Per    Income               Per
                        (Loss)      Shares    Share   (Loss)    Shares    Share
                        ------      ------    -----   ------    ------    -----
Basic earnings (loss)
  per share:
Income (loss)
  available to
  Common
  Stockholders......... ($640,603) 4,547,527  ($.14) $1,098,997  4,571,916  $.24
Effect of Dilutive
  Securities:
  Options exercisable..                  991                         4,345
  Convertible debt.....                                  42,000    111,111
Diluted earnings
  (loss) per share..... ($640,603) 4,548,518  ($.14) $1,140,997  4,687,372  $.24



<PAGE>



Note 4.  Business Segments and International Operations

The Company  operates a single  business  segment,  which is the formulating and
manufacturing of chemically  complex,  multi-layered  functional  coatings.  The
Company produces five primary types of coating  products.  Net sales for each of
these  products  (in  millions)  for the  three  months  and nine  months  ended
September 30, 2001 and 2000 were as follows:

                              Three Months Ended  Nine Months Ended
                                 September 30,       September 30,
                                 -------------       -------------

                                2001     2000     2001     2000
                                ----     ----     ----     ----

Printed Products ...........   $ 4.1    $ 4.6    $13.3    $14.0
Pharmaceutical Products ....     2.7      2.1      8.0      6.6
Security Products ..........     2.0      2.0      5.7      5.3
Holographic Products .......     2.7      3.9      7.4     10.8
Simulated Metal and
  Other Pigmented Products..     3.1      4.7     11.1     16.6
                                 ---      ---     ----     ----
Total ......................   $14.6    $17.3    $45.5    $53.3

The following is sales  information by geographic  area for the three months and
nine months ended September 30, 2001 and 2000, and long lived asset  information
as of September 30, 2001 and December 31, 2000:

                                  Three Months Ended        Nine Months Ended
                                    September 30,             September 30,
                                    -------------             -------------
Net Sales (In Thousands)          2001         2000         2001         2000
                                  ----         ----         ----         ----
United States                   $ 8,139      $ 9,378      $22,605      $27,629
Europe                            4,511        5,716       15,851       19,263
Other Foreign                     1,971        2,187        7,089        6,448
                                --------     --------     --------     --------
Total                           $14,621      $17,281      $45,545      $53,340

Net Fixed Assets
(In Thousands)                   September 30, 2001        December 31, 2000
                                 ------------------        -----------------
United States                          $15,366                   $16,209
Europe                                   9,721                    10,162
Other Foreign                                -                        31
                                      ----------                ----------
Total                                  $25,087                   $26,402

Europe and other foreign revenue are based on the country in which the customer
is domiciled.

Note 5. Contingencies

From time to time, the Company is subject to legal  proceedings  and claims that
arise in the normal course of business. In the opinion of management, the amount
of ultimate  liability  with  respect to these  actions will not have a material
adverse effect on the Company's  consolidated  financial  condition,  results of
operations or cash flows.


<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Overview
--------

The Company formulates, manufactures and sells chemically-complex, transferable,
multi-layer  coatings for use in many diversified  markets,  such as holographic
packaging  and   authentication   seals,   furniture   and  building   products,
pharmaceutical  products and transaction  cards (including  credit cards,  debit
cards, ATM cards and access cards), and intaglio printing.

The Company's  cost of goods sold  reflects all direct  product costs and direct
labor, quality control, shipping and receiving, maintenance, process engineering
and plant management. Selling, general and administrative expenses are primarily
composed of sales representatives' salaries and related expenses, commissions to
sales representatives, advertising costs, management compensation, and corporate
audit and legal expense.  Research and development  expenses include salaries of
technical personnel and experimental materials.

Results of Operations
---------------------

The following  table sets forth,  certain items from the Company's  consolidated
financial statements as a percentage of net sales for the periods presented:

                                          Three Months     Nine Months
                                             Ended            Ended
                                          September 30,    September 30,
                                         --------------    -------------
                                          2001     2000    2001     2000
                                          ----     ----    ----     ----
                                          (Unaudited)       (Unaudited)

Net sales ............................   100.0%   100.0%   100.0%   100.0%
Cost of goods sold ...................    71.6     64.7     67.1     61.2
Selling, general and administrative...    22.7     20.8     22.2     23.0
Research and development .............     3.8      4.1      3.8      4.0
Depreciation and amortization ........     5.9      8.1      6.4      5.8
International consolidation expense...       -      4.4        -      1.4
Operating income (loss) ..............    (4.0)    (2.1)     0.5      4.6
Interest expense .....................     2.9      1.8      2.7      1.6
Other expense ........................       -        -        -        -
Other income .........................    (0.1)    (0.1)       -     (0.1)
Income (loss) before taxes ...........    (6.8)    (3.8)    (2.2)     3.1
(Provision) benefit for income taxes..     2.4      1.2      0.8     (1.0)
Net income (loss) ....................    (4.4%)   (2.6%)   (1.4%)    2.1%



<PAGE>




Quarter Ended September 30, 2001 Compared to Quarter Ended September 30, 2000
-----------------------------------------------------------------------------

Net sales for the quarter  ended  September  30, 2001  decreased  15.4% to $14.6
million,   from  $17.3  million  for  the  quarter  ended  September  30,  2000.
Holographic products sales decreased 30.5% to $2.7 million for the quarter ended
September 30, 2001, compared to $3.9 million for the quarter ended September 30,
2000.  This  decrease  was  primarily  due  to  one  of  the  company's  largest
holographic  packaging  customers  working off excess  inventory from last year.
Printed products sales decreased 9.8% to $4.1 million,  compared to $4.6 million
for the same  quarter  in the  prior  year.  This  decrease  was a result of the
manufactured  housing  market  experiencing   negative  growth.   Pharmaceutical
products sales during these same periods  increased 30.7% to $2.7 million,  from
$2.1  million,  primarily  due  to  strong  European  sales.  Security  products
(magstripe,  signature  panels,  and  tipping  products  for  credit  cards  and
intaglio-printed  products) sales for these same periods decreased 3.0% to $1.98
million from $2.04  million.  This  decrease was  primarily  the result of lower
sales of  signature  panel and  magnetic  stripe  which  was  offset by sales of
intaglio-printed birth certificates for a foreign government. Sales of simulated
metal and other  pigmented  products for these periods  decreased  33.8% to $3.1
million, from $4.7 million, primarily due to the company de-emphasizing sales in
Europe of this product area because of many small orders and  associated  costs.
This strategy was part of the international consolidation announced in September
2000.

Cost of goods sold for the quarter ended  September 30, 2001  decreased  6.3% to
$10.5 million, from $11.2 million for the quarter ended September 30, 2000. This
decrease was primarily  due to the decrease in sales  volume.  The cost of goods
sold as a  percentage  of net sales for the  quarter  ended  September  30, 2001
increased to 71.6% from 64.7% for the quarter  ended  September  30, 2000 due to
increases in material costs, scrap and under utilization of plant capacity.

Selling, general and administrative expenses for the quarter ended September 30,
2001  decreased  7.6% to $3.3  million,  from $3.6 million for the quarter ended
September 30, 2000,  primarily due to continued reduction in personnel expenses.
Selling, general and administrative expenses for the quarter ended September 30,
2001  increased as a percentage of net sales to 22.7% from 20.8% for the quarter
ended  September 30, 2000.  This increase in percentage was primarily due to the
impact of lower sales.

Research and  development  expenses  for the quarter  ended  September  30, 2001
decreased  21.3%  to $0.6  million  from  $0.7  million  for the  quarter  ended
September  30, 2000.  This  decrease was  primarily due to decrease in personnel
costs. Research and development expense for the quarter ended September 30, 2001
decreased as a percentage  of net sales to 3.8% from 4.1% for the quarter  ended
September  30,  2000 and was  primarily  caused by the impact of lower sales and
lower staff costs.

Depreciation and amortization  expenses for the quarter ended September 30, 2001
decreased  38.3%  to $0.9  million  from  $1.4  million  for the  quarter  ended
September  30, 2000.  This  decrease was  primarily due to a decrease in capital
spending. Depreciation and amortization expense as a percentage of net sales for
the quarter ended September 30, 2001 decreased to 5.9% from 8.1% for the quarter
ended September 30, 2000 and was for the same reasons.

International consolidation expense was $768,000 for the quarter ended September
30, 2000.  This  non-recurring  charge was incurred  for  activities  undertaken
during the third  quarter of 2000 to  consolidate  the  Company's  international
operations.  The charge  primarily  includes  costs  attributable  to head count
reductions and related severance of $578,000; lease terminations of $100,000 and
asset dispositions of $90,000.  With regard to the accruals associated with this
expense, there was no amount outstanding as of September 30, 2001 and the entire
amount was outstanding September 30, 2000.

<PAGE>



The operating  loss for the quarter  ended  September 30, 2001 was $0.6 million,
compared to operating  loss of $0.4 million for the quarter ended  September 30,
2000.  The loss was  primarily  a result of the lower  sales  volume  and higher
material costs, which were partially offset by lower personnel costs.

Interest  expense for the quarter ended  September 30, 2001  increased  38.5% to
$418,000,  from $302,000 for the quarter ended  September 30, 2000. The increase
in interest  expense is primarily due to higher debt levels related to financing
the acquisition of certain worldwide holographic technology rights.

Nine months Ended September 30, 2001 Compared to
Nine months Ended September 30, 2000
------------------------------------

Net sales for the nine months ended  September 30, 2001 decreased 14.6% to $45.5
million,  from $53.3  million  for the nine months  ended  September  30,  2000.
Holographic  product sales  decreased  31.2% to $7.4 million for the nine months
ended  September  30, 2001,  compared to $10.8 million for the nine months ended
September 30, 2000,  primarily  due to a major  customer's  inventory  overstock
position at the end of 2000.  Printed product sales for these periods  decreased
5.3% to $13.3  million,  from  $14.0  million,  primarily  due to the  continued
softness in the manufactured  housing market.  Pharmaceutical  product sales for
this period increased 21.2% to $8.0 million from $6.6 million,  primarily due to
increased sales in Europe.  Security product (magnetic stripe,  signature panels
and tipping products for transaction cards and intaglio-printed  products) sales
for these  periods  increased  6.9% to $5.7  million,  from $5.3  million.  This
increase comes primarily from sales of intaglio-printed birth certificates for a
foreign  government.  Sales of simulated metal and other pigmented  products for
these periods decreased 33.0% to $11.1 million,  from $16.6 million in the first
nine  months of 2001.  This  decrease  is  primarily  due to the  impact of weak
European  currencies in 2001 and the company  de-emphasizing  sales in Europe of
this  product  area  because of many small  orders and  associated  costs.  This
strategy  was part of the  international  consolidation  announced  in September
2000.

Cost of goods sold for the nine months ended  September 30, 2001  decreased 6.3%
to $30.6  million,  from $32.6  million for the nine months ended  September 30,
2000.  This decrease was  primarily  due to a decrease in sales volume.  Cost of
goods  sold  for the  nine  months  ended  September  30,  2001  increased  as a
percentage of net sales to 67.1% from 61.2% for the nine months ended  September
30, 2000. This increase was primarily  driven by higher material costs and under
utilization of plant capacity.

Selling, general and administrative expenses for the nine months ended September
30, 2001 decreased 17.8% to $10.1 million from $12.3 million for the nine months
ended  September  30, 2000.  This  decrease in expenses was  primarily  due to a
reduction of personnel costs. Selling,  general and administrative  expenses for
the nine months ended  September 30, 2001 decreased as a percentage of net sales
to 22.2% from 23.0% for the nine months ended September 30, 2000,  primarily for
the same reason.

Research and  development  expenses for the nine months ended September 30, 2001
decreased  18.4% to $1.7  million,  from $2.1  million for the nine months ended
September  30, 2000.  This decrease in expenses was primarily due to the closing
of the Ventura,  California  laboratory,  and a reduction  in  personnel  costs.
Research and  development  expense for the nine months ended  September 30, 2001
decreased  as a percentage  of net sales,  to 3.8% from 4.0% for the nine months
ended September 30, 2000, because of lower sales volume and lower head count.

Depreciation and  amortization  expenses for the nine months ended September 30,
2001  decreased  5.5% to $2.9 million  from $3.1  million for the quarter  ended
September  30, 2000.  This  decrease was  primarily due to a decrease in capital
spending. Depreciation and amortization expense as a percentage of net sales for
the nine months ended  September 30, 2001  increased 6.4% from 5.8% for the nine
months ended September 30, 2000 primarily due to lower sales.

International consolidation expense for the nine months ended September 30, 2001
was zero compared to $768,000 for the nine months ended September 30, 2000. This
non-recurring  charge is  related  to  activities  undertaken  during  the third
quarter of 2000 to  consolidate  the  Company's  international  operations.  The
primary costs include head count  reductions and related  severance of $578,000;
lease terminations of $100,000 and asset dispositions of $90,000. With regard to
the accruals associated with this expense, there was no amount outstanding as of
September 30, 2001 and the entire amount was outstanding September 30, 2000.

Operating income for the nine months ended September 30, 2001 decreased 90.3% to
$0.2  million,  from $2.5 million for the nine months ended  September 30, 2000.
The  decrease in  operating  income is  primarily  due to a  reduction  in sales
volume,  higher material costs and under utilization of plant capacity which was
partially  offset by a reduction in personnel  costs.  Operating  income for the
nine months ended September 30, 2001 as a percentage of net sales decreased 0.5%
from 4.6% for the nine  months  ended  September  30,  2000.  This  decrease  is
primarily due to the reasons described above.

Interest expense for the nine months ended September 30, 2001 increased 46.4% to
$1.2 million,  from $839,000 for the nine months ended  September 30, 2000. This
increase was  primarily  due to higher debt levels  related to the financing the
acquisition of certain worldwide holographic technology rights.

Liquidity and Capital Resources
-------------------------------

Working  capital has  decreased by  $2,400,000  since  December  31, 2000.  This
decrease is primarily  due to a  $2,700,000  increase in  short-term  borrowing.
During the first nine months of 2001,  the Company  borrowed a net of $1,200,000
against its revolving  line of credit  agreement  maintained  with the Company's
primary bank. This agreement with  availability  of up to $6.5 million,  expires
April 1, 2003, and provides for unsecured borrowings.  The Company believes that
it will have sufficient  capital  resources from funds generated from operations
as well as available  borrowing  facilities to support its future capital needs.
The Company  believes it will be profitable  in the fourth  quarter 2001. If the
Company does not return to  profitable  operations  in the fourth  quarter,  the
Company will consider exploring other avenues to improve  profitability and cash
flows such as changes in  operations.  The  Company  does not have any  material
commitments to purchase capital assets as of September 30, 2001.

Recent Accounting Pronouncements
--------------------------------

In 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No. 133,
"Accounting for Derivative  Instruments and Hedging  Activities"  which requires
recognition of all derivative instruments in the statement of financial position
as either assets or liabilities,  measured at fair value,  and was effective for
all fiscal years  beginning  after June 15, 1998. In June 2000,  the FASB issued
SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities"  which amended SFAS No. 133 for all fiscal  quarters of fiscal years
beginning after June 15, 2000. These statements additionally required changes in
the fair value of derivatives to be recorded each period in current  earnings or
comprehensive  income  depending  on the intended  use of the  derivatives.  The
Company adopted SFAS No. 133 and 138 effective January 1, 2001. The adoption had
no impact on the Company's  results of  operations,  financial  position or cash
flows.


<PAGE>




In June 2001 the  Financial  Accounting  Standards  Board  issued  Statement  of
Financial Accounting Standards No. 142 (SFAS 142) "Goodwill and Other Intangible
Assets".  The statement  addresses  accounting  and reporting for (i) intangible
assets at acquisition and (ii) for intangible assets and goodwill  subsequent to
their acquisition. As it relates to the Company's goodwill and intangible assets
in existence at September  30, 2001,  the  statement  requires  that  management
reassess the useful lives and amortization period of such assets. For those with
an indefinite  useful life,  periodic  amortization is to be discontinued and an
annual  impairment test,  beginning  January 1, 2002, is to be established.  The
Company's  Management does not feel as if this  pronouncement will have material
impact on its  statement of financial  condition or cash flows at the  effective
date and is currently  assessing the impact that the  pronouncement  may have on
its results of operations in fiscal 2002 and thereafter.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company does not use derivative  financial  instruments to address  interest
rate,   currency,   or  commodity  pricing  risks.  The  following  methods  and
assumptions  were used to  estimate  the fair value of each  class of  financial
instruments  held by the Company for which it is  practicable  to estimate  that
value.  The carrying amount of cash  equivalents  approximates  their fair value
because of the short maturity of those instruments.  The estimated fair value of
the Company's  long-term debt  approximated  its carrying value at September 30,
2001 and  December 31,  2000,  based upon market  prices for the same or similar
type of financial  instrument.  The Company minimizes its exposure to the impact
of  fluctuation  in foreign  exchange  rates in situations for certain sales for
products  sold in Europe but  manufactured  in the U.S.  through the movement of
production  of those  products to Europe.  There are no other  activities of the
Company where  management  believes  exchange rates have a material  impact with
respect  to the  underlying  transactions.  The  Company  does not  believe  its
exposure to changes in interest rates is  significant  due to the Company's debt
consisting primarily of fixed rates and terms.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Report on Form 8-K

         Other than as previously reported, no reports on Form 8-K were filed
         during the three months ended September 30, 2001.




<PAGE>









                                   SIGNATURES



     Pursuant to the requirements of the Securities Exchange Act of 1934, the
     registrant has duly caused this report to be signed on its behalf by the
     undersigned; thereunto duly authorized, on November 14, 2001.


                                        CFC INTERNATIONAL, INC.


                                        /s/ Dennis W. Lakomy
                                        --------------------
                                        Dennis W. Lakomy
                                        Executive Vice President,
                                        Chief Financial Officer,
                                        Secretary, and Treasurer
                                        (Principal Financial Officer)