UNITED STATES
                 SECURITIES AND EXCHANGE
                 COMMISSION
                      WASHINGTON, D.C.   20549
                        ____________________
                              FORM 10K
[  X   ]     ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
THE
SECURITIES EXCHANGE
     ACT OF 1934

     For the Fiscal Year Ended December 31, 1997

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

                   Commission File Number 027222
                        ____________________
                        
                         CFC INTERNATIONAL, INC.
                    (Exact name of Registrant as specified in its
charter)

               Delaware                      363434526
          (State or other jurisdiction of              (I.R.S.
Employer Identification
          incorporation or organization)               Number)

          500 STATE STREET, CHICAGO HEIGHTS, ILLINOIS   60411
               (Address of Principal Executive Offices)
(Zip Code)

          Registrants telephone number, including area code:
(708) 8913456
                       ____________________
                                 
  Securities registered pursuant to Section 12(b) of the Act:
     None Securities registered pursuant to Section 12(g) of the
     Act:
     
                        Title of Each Class
                                 
               Common Stock, par value $.01 per share
                        ____________________
                        
Indicate  by  check mark whether the registrant: (1) has  filed
all reports  required  to  be  filed by  Section  13  of  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

Indicate  by check mark if disclosure of delinquent filers
pursuant to  Item 405 of Regulation SK is not contained herein,
and will not be  contained, to the best of registrants knowledge,
in  definitive proxy  or information statements incorporated by
reference  in  Part III of this Form 10K or any amendment to this
Form 10K.         x

The  aggregate  market value of the voting stock of  the
registrant held  by  stockholders  who  were  not  affiliates  (as
defined  by regulations  of  the  Securities and  Exchange
Commission)  of  the registrant was approximately $26,519,465 at
March 20, 1998 (based on the  closing sale price on the Nasdaq
National Market on  March  20, 1998,  as reported by The Wall
Street Journal).  At March 20,  1998,
the  registrant had issued and outstanding an aggregate of
4,027,129 shares of common stock and 518,169 shares of Class B
common stock.
                 Documents Incorporated by Reference
Those  sections or portions of the registrants proxy statement
for the Annual Meeting of Stockholders to be held in 1998,
described  in Part III hereof, are incorporated by reference in
this report.

                              PART I
                                 
                                 
ITEM 1.  BUSINESS

General

CFC  International,  Inc.   (CFC  or  the  Company)  formulates,
manufactures, and sells chemicallycomplex, multilayered functional
coatings  which provide superior performance under a wide  range
of operating conditions.  The Company applies its proprietary
coatings to  rolls  of  plastic  film from which its customers
transfer  the coatings  to their products for protective and
informative purposes. The  Company  produces  five  primary  types
of  coating  products: printed  coatings  such  as  simulated wood
grains  for  furniture; pharmaceutical  pigmented coatings used as
heat  transfer  printing approved  by the FDA for pharmaceutical
products such as intravenous solution  bags;  security  products
such  as  magnetic  stripes  and signature panels for credit cards
and intaglio printing for  stocks, bonds  and  gift  certificates;
and holographic  products  such  as authentication  seals.  The
Company utilizes its patented  computergenerated  dot  matrix
process to create unique  and  costeffective holographic   art
origination  and  to  produce   holograms   used principally  to
certify and protect the authenticity of  proprietary products  and
documents susceptible to counterfeiting or  tampering. The  fifth
product  line  is other pigmented  and  simulated  metal coatings
used on products such as beverage cases and cosmetics.  CFC is a
leading supplier in many of the worldwide markets it serves.

The  Companys coatings are produced by milling pigments,
solvents, and  resins  into  proprietary formulations which
combine  multiple layers of custom inks designed to react with
each other to create  a composite solid coating that is applied to
customers products.  The coatings  are  produced with a wide range
of physical  and  chemical characteristics  and  in  a  broad
array of  colors,  patterns,  and surface  finishes  which  are
designed  to  meet  specific  customer functional  requirements.
The Companys research  and  development capabilities enable it to
create products specifically  tailored  to meet   customers
requirements,  such  as  resistance  to  specific chemicals or
abrasion, and to satisfy exacting design criteria, such as
sophisticated overt and covert (conspicuous and hidden) holograms
and  simulated woodgrain and other patterns.  By using the
Companys products,  customers also are able to address many of
the  problems manufacturers  confront  in complying with
increasingly  restrictive environmental  laws and regulations
because they avoid  the  use  of liquid solvents and adhesives
otherwise needed to apply coatings  to their products.

A  principal market which the Company serves is printed coatings
for engineered wood products (Engineered Board) used to produce
readytoassemble  (RTA) furniture, kitchen cabinets, manufactured
home interiors,   valuepriced  furniture,  and  picture   frames.
The
Companys  coatings  are  designed  to  match  or  improve  on
the
appearance,  texture, durability, and scratch, moisture,  and
stain resistance of natural or painted wood.  The Company is one
of  only two  significant  suppliers of printed coatings for  the
Engineered Board  market.  This market is growing rapidly
throughout the  world as  the environmental problems associated
with paints and stains and
the  cost  and  environmental consequences of using solid  wood
are becoming  more  significant.   Sales  of  products  in  this
market represented approximately 38.0% of the Companys net sales
in  1997. See  Chemical Coatings  Printed Products.
Another  significant  market  for the  Companys  products  is
heat transfer  printing for intravenous solution bags and  other
medical supplies.    The   Companys  products  provide  the
pharmaceutical industry  with a reliable, environmentallysafe
method of  conveying crucial  medical  information  on  surfaces
on  which  printing  is difficult.  The Companys coatings for this
market are used on  FDAapproved products and are able to survive
the sterilization  process without  degradation.   The Company is
one of the  most  significant suppliers to this stable and growing
market and is the sole supplier to  Baxter  Healthcare
Corporation for these  products.   Sales  of products  in  this
market represented approximately  19.1%  of  the Companys net
sales in 1997. See  Chemical Coatings  Pharmaceutical Products.
The  Company is also focusing its efforts on the market for
security products  for  transaction cards, which include credit
cards,  debit cards, identification cards and ATM cards.  The
Company manufactures chemically  reactive signature panels and
multicoercivity  magnetic stripes  for  transaction  cards and
other  documents  and  abrasion resistant tipping foils used to
highlight the embossed lettering  of transaction  cards.  The
Companys products are  used  by  customers such  as  MasterCard,
VISA and Diners Club International, to enhance the  security and
processing speed of transaction cards. The Company also  has
ability to manufacture intaglio printed documents such  as stock
certificates,  bonds, gift certificates and  certificates  of
authenticity.    Sales  of  products  in  this  market
represented approximately  16.0%  of the Companys net  sales  in
1997.  See   Chemical Coatings  Security Products.
The  Company  is  one  of  the leading designers  and  producers
of holograms,  which  are used to protect and authenticate  brand
name software  and  merchandise, transportation and  event
tickets,  and other similar applications requiring protection
against unauthorized copying  or  counterfeiting.  CFC, together
with its  joint  venture partner,  is one of only a few companies
worldwide with the  ability to  serve  all  stages of the
holographic production  process,  from design  to  manufacturing,
and  is  the  sole  supplier  to   Intel Corporation  (Intel) of
holograms used to authenticate  all  Intel products,  including
the Pentium microprocessor.  Sales of  products in this market
represented approximately 13.4% of the  Companys net sales in
1997. See  Holographic Products.
The  Company also serves a variety of other consumer and
industrial markets  which take advantage of the special functional
capabilities of  the  Companys coatings.  These markets include
the  automobile battery  and  cosmetics  markets, which  require
acid  and  solvent resistant  markings,  and  the consumer
electronics  and  appliances markets  which require special
surface durability and resistance  to ultraviolet  light
degradation.  Sales of products in  this  market represented
approximately 13.5% of the Companys net sales in  1997. See  Other
Pigmented and Simulated Products.
CFCs products are sold to more than 5,000 customers worldwide.
The Company  generated  approximately 30.7% of its  1997  revenues
from sales  outside of the United States and has sales,
warehousing,  and finishing operations in the United Kingdom and
Japan.  The Companys margins  and  operating income result from
the Companys proprietary technologies  and  from the Companys
focus  on  quality,  which  is exemplified by the Companys
investment during the past three  years of  more  than  $8.0
million in improved  equipment.   The  Company received  the
International  Standards  Organization  (ISO)  9001
registration in June 1995, which provides assurance to the
Companys customers  that  the  Companys  quality  systems  are
consistently capable of providing products that meet the customers
requirements. The  Company has demonstrated its commitment to
quality by providing zerodefect   products  to  its  largest
single  customer,   Baxter Healthcare  Corporation (Baxter), since
successful institution  by the  Company in 1989 of the Phillip
Crosby Total Quality  Management (TQM) Program. See  Manufacturing
and Production.
The  Companys  executive offices are located at 500  State
Street, Chicago  Heights, Illinois  60411 and its telephone number
is  (708) 8913456.  References in this report to the Company mean
the Company and  its  consolidated  subsidiaries, unless  the
context  requires otherwise.
Business Strategy
The Company plans to continue its Growth Performance Program.  The
objectives  of this program are to obtain a leading worldwide
share in  its  markets,  to  be the lowest cost producer,  to
continually improve efficiencies and quality, and to deliver
products that  meet customers  requirements.  The Company seeks to
attain  these  goals and  to  increase  its worldwide sales and
profitability  through  a strategy based on the following key
elements:
Globalization.   Because  the  Companys  existing   and
potential customers  have  expanded  the  geographic  markets  in
which  they manufacture  and sell their products, management of
the  Company  is increasing  its focus on the international demand
for the  Companys products.
Accordingly,  the  Company  intends  to  increase        its
worldwide   sales   distribution  and  manufacturing
capabilities,
including    through    alliances   with    foreign
manufacturing
organizations, in order to benefit from the increasing
globalization of the markets for the Companys products.

LowCost  Producer.  The Company plans to maintain and  enhance
its position as a lowcost producer of transferable coatings by
reducing and   limiting  its  manufacturing  costs  and  by
increasing  the
efficiency of the Companys operations.  In this regard, the
Company has an Employee GainSharing Program whereby employee units
are paid a  portion of the annual cost savings that the Company
realizes with respect  to  that  employee  unit.   The  Company
also  continually modifies  its manufacturing processes and
equipment to utilize  more efficiently the Companys production
facilities and limit waste.  In 1997,  the  Company  installed a
50 wide stateoftheart  printing press,  enabling  it to more
efficiently produce  rolls  of  printed coatings   in  sizes
needed  by  the  Companys  Engineered   Board customers.

Quality  Products.   One  of the Companys  goals  is  to  become
a preferred supplier for all of its customers, and management  of
the Company believes that maintaining the highest levels in
product  and service  quality are integral to the achievement of
that goal.  The
Company  strives to provide its customers with zerodefect
products. In  addition, the Company has obtained ISO 9001
registration from an approved  ISO 9001 accreditation firm which
permits the  Company  to offer  certification programs to its
customers, thereby  eliminating the  need  for  the  customers to
make incoming inspections  of  the Companys products.

Development  of New Technology.  Management of the Company
believes that  a  major factor contributing to the Companys growth
has  been continued
investment  in  research  and  development.    Continued
development of new products and processes will be critical  to
keep abreast  of  the  technologydriven changes  in  the  needs
of  the Companys customers and to maintain a competitive advantage
over the
Companys  competitors.   The  Companys  Research  and  Development
department   has  contributed  to  the  development   of   formulae,
proprietary  knowhow,  modifications  to  existing  equipment,  and
specifications  for  both  new  equipment  and  new  raw  materials.
Tangible results have included improved ease of coating application,
abrasion  resistance, functionality and the expansion of the  market
for the Companys holographic products.
Overview of Products

The Companys principal product types include the following:

     Printed Products include specialized functional coatings  used
  primarily as an alternative to painting or using liquid laminates
  on wood substitutes and plastics.  The most important markets for
  these products include Engineered Board products used in the RTA
  furniture market,   kitchen  and  bath  cabinets,  preconstructed
  housing interiors, valuepriced furniture, window trim and moldings,
  picture frames,  and  the consumer electronics, automotive  and
  appliance markets.
  
     Pharmaceutical  Products  consist  of  specialized  functional
  coatings for heat transfer printing on pharmaceutical products,
  such as intravenous solution bags, syringes, and other uses
  requiring nontoxic ingredients, adhesion during the sterilization
  process,  and FDA approval.
  
     Security Products include tamperevident signature panels  and
  highabrasion  tipping foils for transaction  cards,  as  well  as
  specialized multicoercivity magnetic stripe products  applied  to
  both  plastic transaction cards and disposable fibrous substrates,
  such  as  drivers licenses, student identification cards, airline
  tickets,  masstransit tickets, and telephone debit  cards.   This
  product line also includes intaglio printing used on documents such
  as stock certificates, bonds, gift certificates and certificates of
  authenticity.
  
     Holographic  Products  include the  Companys  hightechnology
  holograms  used as security markings on products such as  software
  packages  and  merchandise, transportation and event tickets,  and
  other products susceptible to counterfeiting or tampering, as well
  as holographic images for packaging and other visual markets.  The
  Company has recently received the largest order in its history from
  Coors  for holographic packaging for one of Coors beverage lines.
  The  Company  also  has a patented, computergenerated  dotmatrix
  process  which  produces  minute juxtaposed  holographic  gratings
  resulting  in  a  composite image with  up  to  60,000  individual
  holograms  per square inch and which can include overt and  covert
  data.
  
     Other Pigmented and Simulated Metal Products.  Other Pigmented

  Products   include  automobile  batteries,  cosmetics  containers,

  industrial  signage,  and other markets requiring  a  particularly

  durable  specialized functional coating.  Simulated Metal Products

  include bright simulated metal and reflective coatings used in the

  appliance, automotive, and cosmetic markets.  Most of these

  coatings are produced with the stateoftheart ultraviolet curing

  process, which results in higher abrasion and chemical resistance.

  

  

  


Markets

The  following table summarizes the Companys principal markets
and product applications:

                                                   % of
                                                   CFC
    Market       Application        Selected      Sales   Key Product
                                   Customers       1997     Features
Printed        RTA furniture    Sauder             38.0   Large
library
products       (bedroom,        Woodworking,             of
(Engineered    office,          Hart Furniture,             patterns
Board,         entertainment    Phillips                  Superior
lead
building       centers),        (Magnavox),              times
products,      promotional      Charleswood,              Scratch/mar
consumer       furniture        Cana, Inc.,              resistant
electronics,   (hotel and       MilfordAstor                finishes
home           office),         (Australia),             (Armorite
decorating,    cabinets,        Dallas                      Plus)
trophies/award manufactured     Woodcrafters,             Match to
any
s)             home interiors,  Ditta Manetti            pattern
               picture frames,  (Italy), Bush               or color
               award plaques,   Industries,
               trophy bases     Progressive
                                Furniture

Pharmaceutical Intravenous      Baxter             19.1   Used on
FDA
Products       solution bags,   Healthcare,
approved
               drainage bags,   Abbott Labs,             products
               syringes,        Sherwood                  Passes
               pipettes,        Medical, McGaw           stringent
               tubing           Labs, C.R.
                                Bard, Sterling
sterilization
                                Pharmaceutical,          process
                              Fresenius
                                  
Security       Magnetic         Visa,              16.0   Magnetic
Products       stripes,         MasterCard,              stripe is
(transaction   signature        Diners Club,                durable
cards,         panels, and      Discover Card,           (exceeds
life
identification tipping foils    Eurocard,                   of card)
cards)         for credit       American                  Reliable,
few
               cards, debit     Express                  errors
               cards, ATM                                 Signature
               cards, access                             panels are
               cards, drivers                               tamper
               licenses,                                 evident
               passports,                                 Intaglio
               intaglio                                  printed
stocks
               printed                                      and bonds
               security
               documents

Holographic    Authentication   Intel, Ivy         13.4   Fully
Products       seals,           Hill, 3M, JBL,           integrated
(product       trophies, point PepsiCo, Coors
authentication ofpurchase       Brewing Co.,
manufacturing
, highend      packaging,       AquaFresh,               process
decorative     holography for   Colgate
Authenticates
packaging)     textiles                                  products
                                                          Patented
                                                         dot matrix
                                                         
Other          Beverage cases,  Rubbermaid,        13.5
Scratch/mar
Pigmented and  industrial       Delco,  Monroe,          resistant
Simulated      safety signs,    Johnson                   Chemical
Metal Products battery cases,   Controls,                resistant
(injection     vent caps,       Mattel, Revlon,           Lowcost
molded and     spark plugs,     AC Rochester
alternative
extruded       dashboard                                  Variety
of
plastics)      inserts, tail                             colors
               lenses, toys,                              Nontoxic
               cosmetic
               containers



Chemical Coatings

The  manufacture of the Companys chemical functional coatings is  a
multistep  process  that involves pigments,  solvents,  and  resins
which   are   blended  into  one  of  more  than  2,500
proprietary formulations.  The first step in production is the
application of  a release agent to a roll of plastic film carrier.
The release  agent allows  the coating to separate from the plastic
film carrier during the  application  of the coating by the
customer to  the  customers product.   The  plastic film carrier is
then deposited  with  either pigments or dyes to achieve the
desired color, pattern, and physical characteristics.   These
characteristics  include   resistance   to general abrasion,
ultraviolet light exposure, contact with alcohol, exposure to
solvents and reactive household chemicals, contact  with acids,
size  of area to which the coating is applied,  overstamping and
adhesion characteristics, and the surface to which the specialty
coating  is  applied.  The number and type of coatings required
are determined by the functional and visual requirements of the
product. Woodgrain  products  undergo a more extensive
manufacturing  process because of the intricacies involved in
aligning the patterns  during the  coating  process.  Plated and
simulated metal coatings  require additional  treatment in a vacuum
deposition  chamber,  in  which  a microscopically thin coating of
aluminum is deposited on the coating to give it its reflective and
bright metallic appearance.

Printed Products

The  Companys  printed coatings are featured on  numerous  consumer
products manufactured by companies such as Ashley, Bush, Cana,
Hart, and  Sauder.  These products represented approximately
34.8%, 39.3%,
and  38.0%  of  the  Companys net sales in the  three  years  ended
December  31,  1995, 1996, and 1997 respectively.  Printed
Products include Engineered Board coatings for RTA and promotional
furniture, picture frames, manufactured housing and window
treatments.

Engineered Board Coatings.  Engineered Board coatings are
functional and  simulated patterned coatings including woodgrains,
marbles, and granites  used to coat particle board and medium
density fiberboard. A broad range of global consumer markets
utilize engineered wood for RTA  furniture and other products like
trophies, awards and plaques. RTA  furniture is designed to provide
an inexpensive alternative  to traditional   furniture  and  is  a
market  which  has  experienced especially strong growth in recent
years.  It is shipped unassembled from  the factory to the store
and is either assembled at the  store before  purchase  or later by
the consumer.  RTA furniture  products include home entertainment
centers, home theater systems, TV and VCR stands,  bookcases,  and
furniture  designed  to  hold  homeoffice equipment.

The  Companys  proprietary product Armorite Plus is  an  innovative
coating technology used in certain of the Companys printed products
that  provides exceptional scratch and mar resistance while
allowing
the   customer   greater  manufacturing  efficiency  by
increasing application  speeds.   In  addition,  Armorite  Plus
has
provided
customers with cost savings due to a reduction in shipping damage
to their products.

Plastic Substrate Coatings.  Plastic substrate coatings
manufactured by  the  Company are used for similar visual and
functional purposes as  its  Engineered  Board coatings on
appliances,  windows,  doors, vinyl sidings, and specialty window
coatings.

The  fastest  growing market for plastic substrate coatings  is
the plastic  building products market, which uses plastics for
windows, doors,  and vinyl siding.  Plastics can be more cost
effective  than wood,  especially in Asia and Europe, and plastic
exterior  building products do not shrink or warp to the degree
that wood does and they are  not susceptible to insect damage.
The two principle challenges facing coatings for the plastic
building products industry are  fade resistance and adequate
adhesion.  CFC utilizes an erosion resistant polyvinylidene
fluoride polymer (PVFP) system to produce  one  of the  most  fade
resistant coatings used in the industry.   The  PVFP system  also
produces flexible coatings, which  allows  for  vacuum forming  on
plastics  or  postforming on  metal  treated  surfaces without
visible  cracking of the coating.  CFC has  also  developed unique
adhesion characteristics which have improved  acceptance  of this
coating in the marketplace.

Argents are a substitute for paint that is most recognizable as
the metallic  black coating on many consumer electronics and  the
grill work  on  automobiles.  Although this market is expanding
worldwide, many  of  the  Companys  customers have moved  their
manufacturing operations of these products offshore.  The Company
intends to  take advantage of this trend by distributing these
products globally.

Specialty  window  treatment  coatings simulate  the  appearance
of fabric  rather than wood or plastic.  CFC offers a wide
variety  of solid  pigmented coatings and printed patterns used by
manufacturers of  window  treatments.  Use of the Companys
products  allows  the application of the specialty coating to be
made at the site  of  the plastic  extrusion  process,  thereby
reducing  the  manufacture  of specialty  blinds  from  a
multilocation  process  to  a  onestep process.    Use   of   the
Companys  coatings  also   allows                           the
manufacturers of window treatments to run their production
equipment at higher speeds and without the use of solventbased
paints.


Pharmaceutical Products

A  significant  portion  of  the Companys  pigmented  coatings
are designed  for  use  on pharmaceutical products.  Pigmented
coatings used   in  the  pharmaceutical  industry  must  meet
rigid  quality specifications,  including  use of nontoxic
ingredients,  adhesion during  the sterilization process, and FDA
approval.  The  Companys attention  to  exacting standards,
technology,  industry  expertise, dedication  to  research  and
development  and  quality   assurance commitment  has  ensured
its  position  as  the  market  leader  of transferable
pharmaceutical coatings.

Typical applications for pharmaceutical coatings include
intravenous solution  bags,  blood bags, renal bags, drainage
bags,  tubing  and disposable   syringes.    CFC   currently   has
highly
detailed
certification programs in place with large pharmaceutical
companies which  provide the Company with their specific
substrates and  their exact  usage requirements.  CFC establishes
quality control  testing procedures to meet or exceed the
customers incoming quality control requirements,  and,  therefore,
saves its  pharmaceutical  customers considerable time and labor
costs on incoming inspections.

CFC  is  a  preferred  supplier to Baxter  Healthcare  Corporation
worldwide.   This  classification means that  CFC  is  one  of
only fifteen  of Baxters suppliers (out of 750 approved suppliers)
that meets  Baxters standards for such designation.  In order to
attain preferred supplier status with Baxter, the Company was
required to deliver  products  to Baxter for a threeyear  period
free  of  any defects in product quality, delivery procedures, and
paperwork.  The Company has an exclusive suppliers contract with
Baxter, and Baxter has  a  majority market share of the
intravenous solution bags  sold worldwide.   It  is  one of the
goals of CFC to  achieve  a  similar supplier  relationship  with
other  pharmaceutical  companies  that require  transferable
coatings.  In this regard,  the  Company  was named  a  certified
supplier  to  Abbott  Laboratories  Hospital Products  Division
(Abbott)  in 1994,  and  has  maintained  that distinction.
Other  manufacturers of  intravenous  solution  bags, blood bags,
drainage bags, tubing, and disposable syringes that  the Company
currently   supplies  include  C.R.  Bard,   Inc.,   McGaw
Laboratories, Sherwood Medical and Sterling Pharmaceutical.

Pigmented  coatings  used  on  pharmaceutical  products
represented approximately 22.3%, 21.2%, and 19.1% of the Companys
net sales  in the   three   years  ended  December  31,  1995,
1996,   and                                                  1997
respectively.


Security Products

Security Products are divided into four categories within CFCs
core product  line.   These are tamperevident signature  panels,
multicoercivity   magnetic  stripe,  highabrasion  tipping  foils,
and
intaglio printed documents.

Signature panels are formulated for credit and transaction cards
and are  designed  to  accept ballpoint ink directly on  the
signature panel.                                             If
tampering  with the signature  occurs,  either  through
erasure or chemical treatment, the coating will discolor.  This is
a security  feature  requested by companies such as American
Express, Diners Club, Eurocard, MasterCard, VISA and Discover
Card.

The  market for these products is strong and is expected to
continue to  experience growth.  The increasing use of promotional
cards  by VISA  and  MasterCard, including airline mileage  cards,
automobile discount  cards,  and  other  branded  cards,  is
contributing   to continued  growth  in the industry.  The Company
has  been  a  major producer of tamperevident signature panels
since this market  first emerged  and  has developed and maintains
its own library  of  print cylinders for the signature panels for
several companies.  CFC is  a specified supplier for VISA,
MasterCard, Discover Card, Diners  Club and other leading sponsors
of transaction cards.

Multicoercivity  magnetic stripe products are  applied  to
plastic transaction cards, either by the conventional heat
transfer process, or  by  a laminating process.  The Companys
magnetic stripe product offers improved ease of application and
multicoercivity (the amount of  energy  needed  to  encode
information onto  the  stripe).
The
coercivity  of  a magnetic stripe determines the resistance  of
the stripe  to  extraneous energy sources.  While 300  oersteds
is  the current market standard, the Companys magnetic stripe
product has a capacity  of  2,750 oersteds; thereby greatly
enhancing security  of the  stripe  and  also  expanding
potential  applications  for  the product,  such  as  entry cards.
Multicoercivity magnetic  stripes with  higher  oersted capacity
may result in magnetic  stripe  cards having  similar  security
features as  the  socalled  smart  chip cards, and would not
require a costly changeover in reading device technology  by
users.   Magnetic  stripes  may  also  be  used   in
combination with smart chips to further enhance card security.
Magnetic  stripes  are increasingly being used in  new
applications that  require  both  the  conveyance of  information
and  speed  of processing, such as airline tickets, masstransit
tickets,  building access  cards,  passports, drivers licenses,
and  telephone  debit cards.   Because  magnetic stripes are
relatively inexpensive,  they can   be   applied  to  paper
products  and  do  not  present                         the
environmental  issues associated with solventbased  printing
inks. They   are   an   attractive  alternative  for  disposable
product
applications.

Highabrasion tipping foils are used to provide contrast between
the embossed letters and the surface on plastic cards.  They are
offered in  both pigmented and metallized colors and enhance the
readability and general aesthetics of the card.

The  Company  acquired  substantially all  the  assets  and
assumed substantially  all  the liabilities of Northern  Bank
Note  Company (NBNC) on September 3, 1997.  NBNC is now called
CFCNorthern Bank Note  and is an intaglio printer of high security
documents such  as stock  certificates, bonds, gift certificates,
and  certificates  of authenticity.  In the intaglio printing
process, ink is  built  onto the  surface  upon which the printing
is applied,  and  the  ink  is evident to the touch.

Security  products represented approximately 9.9%, 10.3%, and
16.0%
of  the  Companys net sales in the three years ended  December
31, 1995, 1996, and 1997 respectively.


Holographic Products

In  early 1992, the Company entered into a joint venture
partnership with Applied Holographics PLC called CFC Applied
Holographics,  of which  the  Company  now  owns  75.0%,  to
manufacture  and  market holographic  products to customers based
in North America  and  such other  regions  as  Applied
Holographics PLC and the  Company  shall agree.   Pursuant to the
CFC Applied Holographics joint venture  and partnership
agreements, Applied Holographics PLC contributed to  the joint
venture all of its U.S. holographic operations and licensed to the
joint venture its U.S. holographic proprietary rights  and  CFC
contributed cash and agreed to fund and manage the operations of
the joint  venture.  A majorityowned subsidiary of the Company  is
the managing  partner  of  the  partnership.  CFC  Applied
Holographics allocates  to  the  Company all of its net losses
and  all  of  its profits  to  the  extent of previously allocated
cumulative  losses. Thereafter, 75% of its net income is allocated
to the Company.

CFC Applied Holographics has given the Company the unique ability
to produce  holographic  art  origination  that  involves  a
patented, computergenerated dot matrix technology.  In addition,
CFC  Applied Holographics has provided the Company with the
capability to develop and compete in a growing market for
holographic coatings, which is a specialized type of transferable
coating embossed with a holographic image.   These holographic
products are used primarily for securitysensitive   products   for
authentication  and  anticounterfeiting purposes, and for
pointofpurchase displays and packaging.

The  Company originates its holograms at its holographic
laboratory in  Oxnard, California, by creating a master image
through a process utilizing   laser  beams,  mirrors,  and
lenses.   To   produce   a holographic master image, the subject
of the hologram, which can  be either a live image, a
threedimensional model, or flat artwork,  is photographed  using
light  from a laser  beam  that  is  split  and refracted  at
differing  angles and  reunited  in  an  interference
pattern  on  a  photographic  plate.  The  Company  then  uses
this
photographic plate to create a metal plate or shim that is electro
magnetically  grown from the master image.  These metal  plates
are used to replicate the hologram by embossing the holographic
image on specially  formulated  transferable  coatings
manufactured  by  the Company.

When  a  hologram is viewed from different angles, features  of
the depicted  object  can  be  seen that  would  not  be  visible
in  a photograph.
Depending on the model and technique used to  make  the
master  image,  the holographic image can be made to  appear  three
dimensional and to move as the viewing angle changes.

Holographic  products represented approximately  13.7%,  11.6%,
and
13.4%  of  the Companys net sales in the three years ended December
31, 1995, 1996, and 1997 respectively.


Holograms and Security or Product Authentication

Holograms,  which  cannot be colorcopied and are not  readily  made
except  by  a  properly equipped holographic house, have
established themselves
as   a   premier  technology  for   defending
against
unauthorized  copying or counterfeiting of products.
Identification of  an  authentic  hologram, when used  as  a
security  device,  is convenient  and  inexpensive and can be done
by  sight  without  any special  machinery.  The Company is able to
produce  holograms  that contain  covert images that are visible
only with the aid of special devices and which are more difficult
to reproduce.  The high  degree of  technical  skill  and capital
investment required  to  replicate holograms  acts as an obstacle
to unauthorized duplication,  thereby making holograms useful as
anticounterfeiting and security devices. Holograms are widely used
as a security device by computer  software companies,
microprocessor manufacturers, and  entertainment  event marketers,
in  addition to other industries. The  Company  supplies holograms
used    to   authenticate   Intel    Corp.s
Pentium
microprocessor.


CFC  Applied  Holographics patented holographic  computergenerated
dot  matrix  origination process is capable of producing tiny  dot
holograms  at a coverage rate of up to 60,000 dots per square
inch. Each  individual  dot hologram can be oriented at  any  one
of  256 different  angles, thus creating juxtaposed holographic
cells  that change  when the viewing angle changes.  The Company
has  discovered how  to produce computerdeveloped overlapping
images so that  these images                                 appear
as  the  viewers  angleofview   changes.                     The
flexibility  created by the dot matrix process provides the
Company
with  stateoftheart  holographic products  that  are  both  cost
effective  and  extremely intricate and, as a result, difficult
for competitors to generate products of comparable quality and
security orientation.


Holographic Packaging Products

The  visual appeal and uniqueness of holograms make them  ideal
for applications on paperbased products and pointofpurchase
displays. These  include ribbons and paper for gift packaging, and
paper  and plastic  wrapping  for packaging of food and  other
products.  The
Companys dot matrix technology results in holograms with a brighter
appearance  and  an  enhanced  depth of  image.   In  addition,
the Companys  60  wide  coating and embossing  capabilities  give
the Company  a  lower  cost  structure,  making  holograms
economically practical  for  these  and  additional applications,
and  give  the Company  a  broader market for holographic products.
An example  of
this  type  of  product application is the Companys development
of holographic  promotional packaging for  PepsiCo, Coors  Brewing
Co. and,  on  a  continuing basis,  Aquafresh Whitening
Toothpaste  and Colgate.
HoloText

CFC  has  invented  a holographic product that  can  be  applied
to textiles,  providing a distinct decorative appearance.  The
product is  unique in that it has functional properties which
prevent  image and  brightness degradation caused by wear,
washing, and drying.   A number  of  textile manufacturers have
expressed  interest  in  this product,                  especially
promotional   and   name   brand   teeshirt
manufacturers,   bathing  suit  manufacturers  and   other
textile manufacturers   who  require  a  highquality,  bright,
decorative element.


Holographic Autostereoscopic Process

CFC Applied Holographics has granted a license to American
Propylaea Corporation  to use CFC Applied Holographics realtime
holographic autostereoscopic displays patent.  American Propylaea
is  currently developing  a  process which will allow automobile
manufacturers  to design  vehicles  using  a threedimensional
holographic  suspended image.   This  may  eliminate the need for
costly  clay  models  and revolutionize the design process,
resulting in reduced  design  time and  cost.   Management of the
Company believes that this technology may  also  provide  market
opportunities in other  industries  where costly  physical  models
are  used to  create  and  design  heavily manufactured
commercial and industrial products.  The  Company  has not
received any income from this license and cannot predict  when, if
ever, it will receive any such income.

CFC  Applied  Holographics also licensed certain of its
proprietary holographic designs to Van Leer Metalized Products
(U.S.A.) Ltd.  in January, 1994, for use by Van Leer in the
holographic paper  market. CFC  Applied Holographics receives a
5.0% royalty on gross sales  by Van  Leer  of products
incorporating such licensed materials,  which resulted in revenue
for CFC Applied Holographics of $150,000 in 1996 and $165,000 in
1997.


Other Pigmented and Simulated Metal Products

A   significant  factor  distinguishing  the  Company   from
other
manufacturers  of  pigmented  coatings  and  contributing   to
the
Companys  position as a leader in this market is that  the
Company makes  most of its own ink dispersions, which allows the
Company  to adjust a particular coating to suit a specific
customers needs with greater  accuracy  and  reduced  expense.
In  addition,  CFC                                      has
developed  a proprietary technology in acid resistance which
allows an  automobile  battery container to be submerged at  the
time  the container  is filled with acid without deteriorating the
appearance of the coating.

The  Company  manufactures simulated metal coatings which  are
used primarily on plastic substrates.  They are produced in a wide
array of  bright  metallic  and reflective colors such  as  gold,
silver, chrome,  bronze, copper, green and other colors.  The
production  of simulated metal coatings for plastics is a
specialty niche  business because  these  coatings  require
enhanced  abrasion  and  chemical resistance  characteristics.
CFC  has  developed  an  ultraviolet curing  process  for
simulated metal coatings that has  demonstrably improved
abrasion  and  chemical  resistance.   The  Company     has
developed  this  process to meet the increasing  demand  for
higher abrasion and chemical resistant simulated metal
applications.
Key  markets  for  the  Companys simulated metal  coatings
include appliances,  automotive, cosmetics, specialty advertising,
and  for use in improving pointofpurchase sales.  These coatings
are highly specialized  and must be specifically developed for the
product  or container on which they are to be used.  For example,
a coating used on  a  lipstick  container may not be usable on  a
perfume  bottle. Product  applications that utilize the Companys
pigmented  coatings include  credit  cards,  blow molded bottles,
automobile  batteries, automotive gauges, copier panels, garbage
cans, industrial  signage, golfing  accessories, housewares,
lipstick tubes, mud  flaps,  pens, personal care products, recycle
bins, squeeze tubes and toys.
Other  pigmented  and  simulated products represented
approximately 19.3%,  17.6%,  and 13.5% of the Companys net sales
in  the  three years  ended  December 31, 1995, 1996, and 1997
respectively.
The
market  for  simulated  metal  coatings,  particularly  for  use
in graphics,  is highly competitive and has been experiencing
generally declining gross margins.  Accordingly, the Company does
not actively pursue low margin graphics business in this market.

International Sales

The  Company  maintains  offices,  warehouse  space,  and
finishing operations  in the United Kingdom and Japan.  In
addition  to  sales made  directly to international customers by
the Companys  Regional Managers  covering  Europe,  Japan,  Latin
America  and  Asia,  the Company  makes sales to customers around
the world through a network of  thirty  distributors.  The
Companys markets  have  seen  a  new globalization, and the
Company plans to continue its emphasis on the worldwide
requirements  of  its customers  and  expanding  overseas demand.

During the three years ended December 31, 1995, 1996, and 1997,
net sales to Europe, the Pacific Rim, and other customers outside
of the United  States  were $9,446,000, $12,014,000, and
$13,327,000,  and represented  approximately 27.6%, 32.3%, and
31.5% respectively,  of the   Companys  net  sales.   See  Note  6
of  the  Notes  to  the Consolidated Financial Statements.

Research And Development

Management  believes that a major factor contributing to its
growth has  been  continued  investment in research and
development.
The
Companys Research and Development department has contributed to
the development  of  formulae,  proprietary knowhow,
modifications  to existing  equipment, and specifications for both
new  equipment  and new raw materials.  Tangible results have
included improved ease  of coating application, abrasion
resistance, and functionality and  the expansion of the market for
the Companys holographic products.  The Company  also  develops
original patterns, woodgrains, and  finishes that are engineered
to meet customerspecific requirements.

The  Company maintains a group of personnel that is dedicated to
the creation  of  new patterns, designs, colors, shades,  and
textures, including  holographic designs.  This includes  an
engineering  and chemistry  laboratory in Chicago Heights that
employs  nine  people. In  addition,  the  Company maintains an
art origination  studio  in Oxnard,  California,  that is
dedicated to  holographics  and  which employs   three  persons
who  perform  holographic   research
and
development.  In the years ended December 31, 1995, 1996, and
1997, the   Company   spent  approximately  $1,109,000,
$1,304,000,
and
$1,344,000,  respectively,  on Research and  Development,  of
which $433,000,  $502,000, and $462,000, respectively, was for
holographic
research.
All  of the customers in the markets served by CFC are in the
midst of  their  own  search  for  technological breakthroughs
that  will contribute  to low cost production and expanded markets
through  new products  and  at the same time meet environmental
standards. The
Company  is making substantial ongoing investments in research
and development in an effort to be a partner with its customers
in  the development  of  new  technology and products.   Examples
of  these partnerships include a joint research project for the
development of thermal transfer by photocopy for magnetic ink
character recognition on  toner  for  transaction documents, such
as checks  and  security documents,  and  the  joint  development
of  new  woodgrain  design cylinders for many of the major
furniture companies.

Marketing And Sales

As  of  December 31, 1997, the Company had 23 full time sales
people who  serve  over 5,000 existing customers.  Sales personnel
include the  Senior  Vice  President of Sales and Marketing,
three  Product Managers,  four  Regional Managers and twelve Field
Sales  Engineers who  are  compensated  on  a  salary  plus
commission  basis.                                         The
Companys  four Regional Managers are responsible for the
following geographic territories:  United States; European Union,
Middle East, and  Africa;  Japan; Pacific Rim (except Japan) and
Latin  America. The  majority  of  CFCs  products are  sold
directly  to  original equipment manufacturers who incorporate the
Companys products  into their  own products.  In addition, limited
use is made of a  network of  three  distributors  who service
small accounts  in  the  United States   and   thirtytwo
distributors  who  service  international markets.

The Company markets a combination of standard products and
specialty items on a minimum order basis, and most of the Companys
sales  are not  pursuant to longterm sales contracts.  Because
most  customers require  prompt turnaround from order to delivery,
the Company  does not  have  a material amount of backlog and
backlog comparisons  are not indicative of sales trends at any
given time.

The   Companys  three  largest  customers  in  1997   were
Baxter Healthcare,  Reynolds and Intel.  Sales made to Baxter are
pursuant to  a  threeyear, exclusive provider contract which was
renewed  in November  1994 and expired in January 1998 and is
currently  in  the process  of  being signed.  The agreement
requires  the  Company  to supply  all of Baxters needs for
transferable coatings at specified prices, which may be adjusted
to reflect changes in certain  of  the Companys costs.  Sales to
Baxter for each of 1995, 1996,  and  1997 were  $4,537,749,
$4,627,558, and $5,460,362  respectively.   Sales made  to
Reynolds for Aquafresh are on an individual purchase  order basis.
Sales  to Reynolds for each of 1995, 1996,  and  1997  were
$150,000,  $239,000, and $1,515,000, respectively.  Sales  to
Intel are  also on an individual purchase order basis, which is
consistent with Intels policies.  The Company does not have a
longterm supply or  exclusive provider arrangement with Intel.
Sales to  Intel  for each of 1995, 1996 and 1997 were $86,622,
$1,477,016, and $1,745,515 respectively.


Manufacturing And Production

Much  of  the  Companys machinery and equipment was engineered
and developed  by  the  Company.   Technical manufacturing
efficiencies allow the Company to maintain high quality standards
while producing products  efficiently.  The Companys introduction
of  a  60  wide holographic  embosser has given the Company a
competitive  advantage over  the  industry norm of 6 to 30 wide
capabilities.  Management
of  the  Company believes this significantly increases the
potential applications  for holographic coating.  In addition,
the  Companys 1997 installation of a 50 wide stateoftheart
printing press will enable it to access a broader market and
provide enhanced service to woodgrain markets and the markets for
Engineered Board. The  Company has also made investments in high
speed slitting equipment.
In  recent  years, the Company implemented the Phillip Crosby
Total Quality Management Process throughout its operations.  The
Companys top  managers  have all attended Quality College and  all
employees attend  intensive, formal quality classes taught by
Quality  College graduates.   The Company strives to incorporate a
focus  on  quality throughout  the entire manufacturing process
and not simply  inspect the quality of products afterthefact.
This is evidenced in that the  Quality  Assurance function reports
directly to  the  Companys Chief   Executive   Officer.
Regularly   scheduled
departmental
communications  and brainstorming meetings are  held  to  identify
improved  methods for production and quality.  Quality  is  a
never ending  process.  The Company is now beginning to implement
a  total quality  management process in connection with an  arm
of  Northern Illinois University.

The Company obtained ISO 9001 registration from an approved ISO
9001 accreditation firm in June 1995, which permits the Company to
offer certification  programs  to its customers, thereby
eliminating  the need for the customers to make incoming
inspections of the Companys products   and  also  providing
justintime  inventory,   reducing customers inventory carrying
costs.   The Company also successfully completed its third ISO
9001 surveillance audit in May 1997.

ISO  9001 registration requires continuing compliance with a
series of  generic  standards that provide quality management
direction  as well  as  quality  assurance  requirements  and
guidelines.    These
standards  were  originally published in 1987 by  the
International Standards Organization.  The same standards apply to
all service and manufacturing  companies.   To maintain  ISO  9001
registration,  a company must not only meet the registration
standards at the time of initial  registration, but also must meet
them on an  ongoing  basis during  annual inspections.
Registration to the standards  provides assurance  to  customers
that  a  companys  quality  systems   are consistently capable of
providing products that meet the  customers requirements.
Management of the Company believes that  registration to  one of
the ISO 9001 standards will be required in the future  to sell
products  in  the  European Union.  In addition,  many  United
States  customers,  including the Companys largest  client,
Baxter Healthcare Corporation, have acknowledged the value of
registration.


Product Protection

The  Companys  success is heavily dependent  upon  its
proprietary formulae  and  scientific and manufacturing knowhow.
Accordingly,
the   Company  relies  upon  trade  secrets  and  other
unpatented proprietary  information in its product development.
All  employees are parties to an employment agreement providing
for confidentiality and  the assignment of invention rights to
innovations developed  by them  while employed by the Company.
There can be no assurance that these types of agreements will
effectively prevent disclosure of the Companys  confidential
information.   In  addition,  CFC   Applied Holographics  owns  a
U.S.  patent  on  its  holographic  computergenerated dot matrix
origination process which was issued  on  March 1,  1994,  and  a
U.S.  patent  on  its  autostereoscopic  hologram production
process which was issued on January 24, 1989.


Competition

CFC competes with a number of companies in the transferable
chemical coatings  industry.   The Company is aware of  only  one
competitor which  competes  with the Company in most of the
Companys  markets. Customer  criteria for purchase of products
include product quality, innovation  and  engineering capability,
price,  availability,  and service.                     The
Company believes that it competes favorably on  these
factors.

Competitors   range   from  small  enterprises   to   divisions
or subsidiaries  of  large  multinational conglomerates  with
greater financial  and management resources than the Company.
CFC  uses  a
partnership  approach  in its relations with  its  major
customers. This  gives  partner  customers  preferential
scheduling,  priority research                          and
development,  and  personalized  customer   service.
Partner  customers  agree to purchase not less  than  80%  of
their requirements  from CFC and to furnish CFC with continuing
longterm procurement projections.

The  transferable  chemical  coatings  industry  not  only
requires specialized  knowledge  and technology, but  is  capital
intensive, requiring  expensive difficulttoconstruct and
difficulttooperate machinery  and  equipment.  A production
facility must  also  comply with  stringent  federal,  state and
local  environmental  laws  and regulations.

The Company competes with three significant producers of
holographic products  in the United  States, two of which have
greater financial and  management  resources than the Company.
The  Company  believes that  the  principal  factors affecting
competition  are  the  basic design  of  the  holograms,  quick
turnaround  on  art  origination, consistency  of embossing,
lowcost manufacturing, the  quality  and brightness  of  the
image, and competitive  pricing.                        The
Company
believes that it competes favorably on these factors.


Raw Materials And Supplies

The  Company is not dependent on any one supplier for any single
raw material.                                             The
Companys suppliers fall into three general  groups:
suppliers  of  plastic  film  that serve  as  the  carrier  for
the Companys  specialty coatings; suppliers of chemicals; and
suppliers of packaging materials.

The  Company purchases from suppliers on a purchase order basis,
and consequently,  has no long term supply contracts.  The
Company  has not  been  materially affected by increases in raw
material  prices. Management  believes that there are sufficient
suppliers of  plastic films, chemicals, and packaging materials in
the market to meet  its requirements.


Governmental Regulation

The  Companys  operations are subject to federal, state  and
local environmental  laws and regulations that impose limitations
on  the discharge  of  pollutants  into the  air  and  water  and
establish standards  for  the  treatment, storage and disposal  of
solid  and hazardous                                      wastes.
The  Company  has  installed   equipment                and
procedures   which   the  Company  believes   result   in
controls substantially  in excess of those required for full
compliance  with applicable state and federal environmental
requirements.  To  better control  airborne environmental
emissions, the Company  installed  a stack  and  afterburner in
1992, at a cost of $1,014,000,  which  is currently designated by
EPA standards as Maximum Achievable  Control Technology and which,
in tests observed as recently as December 1997
by   the  Illinois  EPA,  resulted  in  a  100%  capture  and
99.6%
destruction  rate  of  the  airborne  pollutants  generated  by
the Companys  manufacturing processes, greatly exceeding the 81.0%
EPA standard.    Because  both  technology  and  applicable   laws
and
regulations  are  evolutionary and subject to  change,  the
Company cannot  predict with any certainty the investments and
expenditures which it will be required to make to comply with
these changing laws and regulations.


Employees

As of December 31, 1997, the Company had approximately 252
fulltime employees.   These  included  127 in manufacturing,  56
in  support services, 39 in marketing and sales, 11 in research
and development, and
19  in  administration and management.  None of the  Companys
employees  is  covered  by  collective bargaining  agreements.
The
Company  has  never  experienced  a significant  work  stoppage
and considers its employee relations to be good.


ITEM 2.  PROPERTIES

The  Company owns a 150,000 square foot building at 500 State
Street in Chicago Heights, Illinois which houses its corporate
headquarters and  its  primary  manufacturing  operations,  and
which  currently utilizes   approximately  65%  of  the  buildings
capacity. The
Companys  other  principal properties are leased  and  include
the following:   a  28,000  square foot intaglio  printing
facility  in Countryside,  Illinois; a 10,000 square foot
warehouse  in  Chicago Heights;  the Companys 14,000 square foot
plant, office,  finishing and  warehouse facility in Oxnard,
California; a 10,000 square  foot warehouse,  finishing, and
office facility in a  suburb  of  London, England;  and  a 2,500
square foot warehouse, finishing  and  office facility  in Tokyo,
Japan.  The Company considers its properties  to be  adequate to
conduct its business for the foreseeable future  and believes
that  it  will  be  able to acquire  or  lease  additional
property, when needed, on terms acceptable to the Company.


ITEM 3.  LEGAL PROCEEDINGS

The  Companys former parent corporation, Morton International,
Inc. (Morton), has been named by government environmental agencies
as a potentially   responsible  party  with  respect  to
environmental liabilities at the FisherCalo Superfund Site in
Kingsbury,  Indiana (the  FisherCalo Site).  Morton and other
potentially responsible parties  entered into a consent agreement
in 1991 with such agencies that  provides for the remediation of
the site, currently  estimated to cost approximately $40 million,
and which allocates approximately 0.7% of the remediation costs to
Morton.  While the Company has been named a potentially
responsible party and a thirdparty defendant in the  litigation
relating to the cleanup of the  FisherCalo  Site, U.S.  v.  David
B.  Fisher, et al, which is  pending  in  the  U.S. District Court
for the Northern District of Indiana, Morton and  the Company
have  reached an agreement whereby Morton and  the  Company will
share  equally  in  the remediation cost  that  is  ultimately
determined  to  be attributable to waste produced by  the
Companys predecessor.  Based upon such agreement, the Company
estimates  that its  portion of the remediation costs will be
approximately                                               0.3%
of
the   total   cost   of   remediation  at  the   FisherCalo
Site.
Additionally, the Company and nineteen other parties were
defendants in a law suit which was also pending in the U. S.
District Court for the  Northern  District of Indiana, Akzo
Coatings et  al  v.  Aigner Corp.   et  al,  pursuant  to  which
the  plaintiffs  were  seeking reimbursement for some portion of
the $1 million spent for  cleanup
of  the  FisherCalo Site outside of the aforementioned
settlement. The  Company  paid $4,000 in full settlement of this
suit  in  1995. The  Company has an accrued liability of $245,000
related  to  these matters  at  December  31, 1997 and, although
the  actual  cost  of remediation for the total FisherCalo Site
may prove to be  more  or less  than  $40  million,  it is
managements  opinion,  based  upon investigation  of the
quantities and types of waste  and  the  other parties involved,
that the Companys share of any liability will not substantially
exceed the amount accrued at December 31,      1997.   The
adequacy of this reserve is reviewed periodically as more
definitive information becomes available.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                              PART II
                                 
                                 
                                 
                                 
ITEM   5.    MARKET  FOR  REGISTRANTS  COMMON  EQUITY  AND
RELATED STOCKHOLDER MATTERS


The  Companys  common  stock, par value  $.01  per  share  (Common
Stock), is traded in the Nasdaq National Market tier of The
Nasdaq Stock  Market (Nasdaq), under the symbol CFCI.  The Common
Stock began trading on Nasdaq on November 17, 1995 in connection
with  the Companys  initial public offering (IPO) of the Common
Stock.    On
December 31, 1997, the last reported sale price of the Common
Stock on  the  Nasdaq National Market was $11.75 per share.  At
March  20, 1997,  there  were approximately 127 record holders  of
the  Common Stock.  The table below sets forth the high and low
sales prices  of shares of Common Stock on the Nasdaq National
Market as reported  by Nasdaq for the periods indicated.



                        Market Information
                                 
                                 
                                               Price per Share of
                                                 Common Stock
                                               High         Low
Year Ended December 31, 1996
   1st Quarter                                12.00         8.875
   2nd Quarter                                18.00        11.750
   3rd Quarter                                17.00        11.750
          4th Quarter                         13.75        10.00
Year Ended December 31, 1997
   1st Quarter                                16.00        11.25
   2nd Quarter                                14.25         9.75
   3rd Quarter                                12.50         8.25
   4th Quarter                                13.87        11.00


The Company intends to retain its earnings to finance its growth
and for  general  corporate purposes and therefore does  not
anticipate paying   any   cash  dividends  in  the  foreseeable
future.    The declaration and payment of any future dividends
will be  subject  to the  discretion  of  the  Board of Directors
of  the  Company.        In
addition,  the Companys bank credit facility prohibits the
payment of  cash  dividends.   See  Item 7.   Managements
Discussion  and
Analysis of Financial Condition and Results of Operations
Liquidity and  Capital  Resources.  Any determination as to  the
payment  of dividends  in  the  future will depend upon results
of  operations, capital  requirements, restrictions in loan
agreements, if any,  and such  other  factors as the Board of
Directors may deem relevant  at the time.
ITEM 6.  SELECTED FINANCIAL DATA
The  selected  financial data set forth below has been derived
from the  financial statements of the Company.  The financial
statements for  each  of  the years in the fiveyear period ended
December  31, 1997,  have  been  audited  by  Price  Waterhouse
LLP,  independent accountants,  whose  report for the years ended
December  31,  1995, 1996,  and  1997  appears elsewhere in this
report.   The  selected financial  data at and for the fiscal year
ended December  31,  1993 are  derived  from  unaudited financial
statements  which,  in  the opinion  of management, include all
adjustments necessary to present fairly the data for such periods.
The unaudited pro forma data have been  derived  from  the
financial statements  of  the  Company  and adjusted  to reflect a
provision for income taxes as if the  Company had  been  a
CCorporation since inception and further adjusted  to reflect  the
sale by the Company of Common Stock in the  IPO.   This selected
financial  data  should  be  read  in  conjunction   with
Managements  Discussion and Analysis of  Financial  Condition  and
Results  of  Operations  and the financial statements  and
related notes thereto appearing elsewhere in this report.
                                         Year Ended December 31,
                               1993   1994    1995    1996   1997
                                        (In  thousands,  except
per share data)
Income Statement Data:
Net sales                   $25,328$27,808 $34,177 $37,227$42,319
Cost of sales                14,940 16,469  20,103  22,985 26,063
Gross profit                 10,388 11,339  14,074  14,242 16,256
Selling,  general and administrative          6,537    7,152
7,243
7,863                  8,846
Research and development      1,019  1,062   1,109   1,304
1,344
Operating income              2,832  3,125   5,722   5,075  6,066
Interest expense                572    669     705     229    413
Other (income) expense                       (5)     (12)
17
(65)
Income  before taxes and minority interest    2,260    2,461
5,029
4,829                  5,718
Provision  for income taxes (1)         155     162    1,669
1,831
2,207
Minority interest in net income (loss) of
       CFC  Applied  Holographics           (270)     (214)
210
15                       290
Income  from  continuing operations    2,375   2,513   3,150
2,983
3,221
Discontinued operations:
      Loss  from  discontinued  operations          (758)

       Loss  on  disposal  of  discontinued  operations
(260)

Net income                  $ 1,357$ 2,513 $ 3,150 $ 2,983 $3,221

Pro forma net income from continuing
      operations  (1996 and 1997 actual)     $ 1,425 $ 1,463$
3,252
$ 2,983              $ 3,221
Pro forma net income from continuing operations
     per share (basic and diluted) (1996 and 1997
      actual)  (2)             $  0.43$   0.44  $    0.95  $
0.66 $     0.71
Pro forma weighted average number of shares of
     common stock outstanding (1996 and
     1997 actual)             3,302  3,302   3,429   4,504
4,530 Pro forma weighted average number of shares of
     common stock and equivalents outstanding
   (1996 and 1997 actual)   3,302  3,302   3,432   4,517  4,612
Pro forma net income from continuing operations,
      as  adjusted (1996 and 1997 actual) (2) (3)    $ 1,635$
1,694 $   3,522              $ 2,983$ 3,221
Pro forma net income from continuing operations
     per share, as adjusted (basic and diluted)
     (1996 and 1997 actual) (2) (3)           $ 0.36 $   0.38$
0.78 $                                   0.66     $  0.71
Pro forma weighted average number of shares
     of common stock outstanding, as adjusted
      (1996  and 1997 actual) (3) (4)          4,502   4,502   4,499
4,504                  4,530
Pro forma weighted average number of shares
     of common stock and equivalents outstanding,
      as  adjusted (1996 and 1997 actual) (3) (4)      4,502   4,502
4,501                  4,517  4,612

Other Data:
Capital expenditures        $ 1,937$ 1,591 $ 1,092 $ 3,862$ 3,319
Depreciation  and amortization        1,107   1,249    1,423   1,535
2,093
EBITDA (5)                    2,831  4,379   7,157   6,578  7,934

Balance Sheet Data (at period end):
Working capital             $ 4,455$ 5,973 $ 7,950$ 10,635$ 12,993
Total assets                 17,718 19,937  23,269  28,206 35,498
Total debt (6)                8,793  9,252   2,110   5,932  8,585
Stockholders equity          4,152  5,785  11,953  15,078 18,567

________________

(1)   The  Company became an SCorporation for federal  and  certain
  state income tax purposes as of June 1, 1992, and effective upon
  the consummation of the IPO, became a CCorporation.
(2)  Pro forma net income from continuing operations for the periods
  1993 through 1995 reflects an adjustment to show assumed federal
  and state income taxes based on statutory (federal and state) tax
  rates for  the  periods during which the Company was treated  as
  an  SCorporation.   No  tax  benefit is reflected  for  losses  of
  the Companys  holographics joint venture, which  resulted  in  a
  net operating loss carryforward which the Company started to  use
  as profits were generated beginning in 1995.  The pro forma net
  income from  continuing  operations in 1993  and  1994  would
  have  been $1,554,000 and $1,625,000 if the tax benefits of these
  losses were reflected at the assumed tax rates.
(3)   Adjusted to give effect to the sale by the Company  of  Common
  Stock in the IPO as of the beginning of the period and the use  of
  the proceeds therefrom.
(4)  Adjusted to give effect to the issuance of 34,736 shares of
Common Stock in exchange for the minority interest in the Companys
subsidiaries.
(5)  EBITDA as used herein means earnings before interest expense,
interest income, taxes, depreciation, and amortization and excludes
minority interests.
(6)  Includes current and longterm portions of debt.




ITEM   7.     MANAGEMENTS  DISCUSSION  AND  ANALYSIS  OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Overview

The  Company formulates, manufactures, and sells
chemicallycomplex, transferable  multilayer  coatings  for  use
in  many  diversified markets  such  as  furniture and building
products,  pharmaceutical products,  transaction cards (including
credit cards,  debit  cards, ATM  cards,  and  access  cards), and
on holographic  authentication seals.  The Companys net sales
increased from 25.3 million in  1993 to  $42.3 million in 1997.
During that period, the Company realized sales  dollar  growth  in
all  of its  major  product  lines.
The
Companys  operating  income more than doubled over  this  fouryear
period, increasing from $2.8 million, or 11.2% of net sales in
1993 to  $6.1  million, or 14.3% of net sales in 1997.  The
Company  has experienced,  and expects to continue experiencing,
shifts  in  the relative  sales and growth of its various products
over  time.
The
Company  believes  that such shifts are in the  ordinary  course
of
business  and are indicative of its focus on specific niche
markets. During  the  period from 1993 to 1997, printed products
sales  rose from  22.9%  to  38.0% of net sales.  Pharmaceutical
products  sales declined from 25.6% in 1993 to 19.1% of net sales
in 1997 due to the growth of other product lines.  Actual
pharmaceutical product  sales increased from $6.5 million in 1993
to $8.1 million in 1997,  or                                    an
increase  of  24.9%  over that fouryear period.  Security
products sales  increased from 6.7% in 1993 to 16.0% of net  sales
in  1997. The  Northern Bank Note Company acquisition represented
$2.1 million of  that  growth, or 41.0%.  Holographic products
grew from 8.5%                                                  in
1993  to 13.4% of net sales in 1997, primarily due to
authentication sales and consumer products packaging.

The  Companys  gross profit reflects all direct product  costs
and direct  labor, quality control, shipping and receiving,
maintenance, process engineering, plant management, and a
substantial portion                                             of
the   Companys   depreciation  expense.    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,   related depreciation, and experimental
materials.




Results of Operations

The following table sets forth, for the periods indicated, certain
items from the Companys financial statements as a percentage of
net sales for such periods:

December 31,
                                         1995      1996      1997
Net sales                                100.0%     100.0%
100.0%
Cost of sales                              58.8       61.7    61.6
Gross profit                               41.2       38.3    38.4
Selling, general and administrative        21.2       21.2    20.9
Research  and development                         3.3
3.5
3.2
Operating income                           16.7       13.6    14.3
Interest    expense   and    other
2.0
0.6                                     0.8
Income before taxes and minority interest
14.7
13.0                                    13.5
Provision for income taxes                   4.9        4.9    5.2
Minority interest                            0.6        0.1    0.7
Net income                                   9.2%       8.0%
7.6%


1997 Compared to 1996

Net  sales for the year ended December 31, 1997 increased  13.7%
to $42.3  million  from $37.2 million for the year ended  December
31, 1996.  Printed products sales increased 10.3% to $16.1 million
from $14.6  million  primarily due to an increase in the  growth
of  the Companys customers.  Pharmaceutical product sales
increased 2.5% to $8.1  million  from  $7.9  million.  Security
products  (magstripe, signature panels, and tipping products for
credit cards and intaglio printed  security documents) sales
increased 78.9% to  $6.8  million from  $3.8 million.  This
increase is primarily due to the Companys enhanced  magstripe
products and $2.1 million of  intaglio  printed document  sales
as  a  result  of the Northern  Bank  Note  Company acquisition
in  September of 1997.  Sales of  other  pigmented  and simulated
metal products decreased 12.3% to $5.7 million from  $6.5 million,
primarily due to the Company choosing not to  produce  low margin
products.  Holographic product sales increased 32.6% to  $5.7
million  for  the  year  ended December 31, 1997  compared  to
$4.3 million for the year ended December 31, 1996, primarily due
to  the increase in eyecatching packaging jobs for consumer
products.

Gross profit for the year ended December 31, 1997 increased 14.8%
to $16.3  million  from $14.2 million for the year ended  December
31, 1996.   The increase in gross profit was attributable to the
growth in  sales,  partially offset by increased printed products
startup costs  due  to  debugging the new printing press.  The
gross  profit margin for the year ended December 31, 1997
increased to 38.4%  from 38.3% for the year ended December 31,
1996.  This increase in margin is   primarily   due  to  growth
in  sales,  offset  by   increased manufacturing costs discussed
above.  Although the Company does  not fully  allocate  all  costs
on a product  line  basis,  the  Company believes that its gross
profit margin typically is not substantially different for any of
its major product categories.

Selling,  general  and administrative expenses for  the  year
ended December 31, 1997 increased 11.4% to $8.8 million from $7.9
million for  the  year ended December 31, 1996.  This increase is
primarily due  to the increase in selling, general and
administrative expenses in  connection  with  the  Northern Bank
Note  Company  acquisition. Selling,  general  and administrative
expenses for  the  year  ended December  31, 1997 decreased as a
percentage of net sales  to  20.9% from                21.1% for
the year ended December 31, 1996.
Research  and  development expenses for the year ended December
31, 1997 increased 3.1% to $1,344,000 from $1,304,000 for the year
ended December  31, 1996.  Research and development expenses for
the  year ended  December 31, 1997 decreased as a percentage of
net  sales  to 3.2%  from  3.5%  for  the  year  ended  December
31,  1996.                                           This
percentage  decrease  was primarily due to  the  increase  in
sales volume.

Operating  income  for the year ended December  31,  1997
increased 19.6%  to $6.1 million from $5.1 million for the year
ended December 31,  1996.   Operating income for the year ended
December  31,  1997 increased as a percentage of net sales to
14.3% from 13.6%  for  the year  ended December 31, 1996.  The
increase was due to an  increase in  sales volume, partially
offset by increased manufacturing  costs discussed above.

Interest  expenses  for the year ended December 31,  1997
increased
80.3%  to  $413,000  from $229,000 for the year ended  December
31, 1996.   The increase in interest expense resulted from an
additional six  months  of interest on funds outstanding under a
revenue  bond originated in June 1996 to fund the purchase of a
roto gravure press for  the  Companys  Printed Products line and
the  funding  of  the Northern Bank Note acquisition.
Income taxes for the year ended December 31, 1997 increased 22.2%
to $2.2 million from $1.8 million for the year ended December 31,
1996. This  was  primarily  the  result of an increase  in  the
Companys operating income.
Net  income for the year ended December 31, 1997 increased  6.7%
to
$3.2 million from $3.0 million for the year ended December 31,
1996. This  increase  was primarily due to an increase  in  sales
volume, offset by increased manufacturing costs.


1996 Compared to 1995

Net  sales  for the year ended December 31, 1996 increased  8.9%
to
$37.2  million  from $34.2 million for the year ended  December
31, 1995.  Printed products sales increased 23.0% to $14.6 million
from $11.9  million primarily due to an increase in the Companys
market share.   Pharmaceutical product sales increased 3.8% to
$7.9 million from  $7.6 million.  Security products (magstripe,
signature panels, and tipping products for credit cards) sales
increased 13.7% to $3.8 million  from $3.4 million.  This increase
is primarily due  to  the Companys enhanced magstripe products.
Sales of other pigmented and simulated  metal products decreased
0.9% to $6.5 million  from  $6.6 million,  primarily due to the
Company choosing not to  produce  low margin  products.
Holographic product sales decreased 8.0% to  $4.3 million  for
the  year  ended December 31, 1996  compared  to  $4.7 million
for  the  year ended December 31, 1995,  primarily  due         to
Microsofts Windows `95 being delivered to the marketplace  in
1995 with no similarlysized sales during 1996.

Gross profit for the year ended December 31, 1996 increased 1.2%
to
$14.2  million  from $14.1 million for the year ended  December
31, 1995.   The increase in gross profit was attributable to the
growth in  sales,  offset by increased product startup costs  due
to  new technology  relating to the introduction by the  Company
of  a  new product  for the manufactured housing industry in the
third quarter. The  gross  profit  margin  for the year  ended
December  31,  1996 decreased to 38.3% from 41.2% for the year
ended December 31,  1995. This  decrease  in  margin is primarily
due to the product  startup costs  in  the third quarter of 1996
discussed above.  Although  the Company  does not fully allocate
all costs on a product line  basis, the  Company believes that its
gross profit margin typically is  not substantially different for
any of its major product categories.

Selling,  general  and administrative expenses for  the  year
ended December  31, 1996 increased to $7.9 million from $7.2
million  for the year ended December 31, 1995.  This increase is
primarily due to the  onetime investment by the Company to engage
the services of  a consulting firm to develop a marketing strategy
for the Pacific  Rim and  also due to the addition of  sales and
marketing resources  for the  Pacific Rim.  Selling, general and
administrative expenses  for the  year ended December 31, 1996 did
not change as a percentage                                      of
net sales at 21.1%.

Research  and  development expenses for the year ended December
31, 1996  increased  17.6% to $1,304,000 from $1,109,000  for  the
year ended December 31, 1995.  Research and development expenses
for  the year  ended December 31, 1996 increased as a percentage
of net sales to                                             3.5%
from  3.3%  for the year ended December  31,  1995.      This
percentage increase was primarily due to the increase in
holographic research and development.
Operating  income  for the year ended December  31,  1996
decreased 11.3%  to $5.1 million from $5.7 million for the year
ended December 31,  1995.   Operating income for the year ended
December  31,  1996 decreased as a percentage of net sales to
13.6% from 16.7%  for  the year  ended December 31, 1995.  The
decrease was primarily a  result of  an  increase  in  product
startup costs due to  new  technology introduced to the
manufactured housing industry in the third quarter and  an
increase  in expenses resulting primarily from  a  onetime
investment  whereby the Company engaged the services of a
consulting firm to develop the Companys marketing strategy for the
Pacific Rim and  the addition of sales and marketing resources for
that area  of the world.
Interest  expenses  for the year ended December 31,  1996
decreased 67.5%  to  $229,000  from $705,000 for the year ended
December  31, 1995.   The  decrease in interest expense resulted
from the  Company paying  off its revolving loan in the amount of
$3.6 million  and  a machinery  and equipment loan of $1.6 million
on November  22,  1995 with the proceeds of the IPO.
Income taxes for the year ended December 31, 1996 increased 9.7%
to
$1,831,000  from  $1,669,000 for the year ended December  31,
1995. This  increase  was  primarily the result of the Company  no
longer being  treated  as  an SCorporation for federal and
certain  state income  tax  purposes  following the IPO.  The
termination  of  the Companys  SCorporation status on November 22,
1995  required  the Company  to  establish  a  provision of
$1,148,247  for  cumulative deferred taxes.

Net  income for the year ended December 31, 1996 decreased  5.3%
to
$3.0 million from $3.2 million for the year ended December 31,
1995. This  decrease was primarily due to increased product
startup costs related  to  new technology introduced to the
manufacturing  housing industry  in  the third quarter of 1996 and
an increase in  selling, general and administrative expenses which
were the result of a  onetime  investment  whereby the Company
engaged a consulting  firm  to develop a marketing strategy for
the Pacific Rim and the addition of sales  and marketing resources
for that region.  Net income for  the year ended December 31, 1996
decreased  8.3% to $3.0 million from pro
forma  $3.3  million  for  the year ended  December  31,  1995,
due primarily to the product startup costs and costs incurred to
develop a  marketing strategy for the Pacific Rim as discussed
above.     The
proforma net income of $3.3 million assumes the Company had been
a CCorporation throughout 1995.



Quarterly Results of Operations

The following table presents unaudited financial results for each
of the eight quarters in the period ended December 31, 1997.  This
data has  been  prepared on a basis consistent with the audited
financial statements appearing elsewhere in this report, and in
the opinion of management, includes all necessary adjustments
(consisting  only  of normal  recurring  adjustments)  required
to  present  fairly                  the
unaudited  consolidated quarterly results when read  in
conjunction with  the  audited consolidated financial statements
of the  Company and  notes thereto appearing elsewhere in this
report.  The  results of  operations  for  any quarter are not
necessarily  indicative  of results to be expected for any future
period.


                                        Quarter Ended
                      Mar.  31     June 30      Sept. 30    Dec.
31
Mar.  31               June  30     Sept. 30     Dec.  31
1996
1996                     1996         1996          1997
1997
1997                   1997
Net  sales
$9,540$9,886$8,282$9,519$9,810$9,999$10,927$11
,583
Cost of sales        5,6345,7035,555 6,093   5,7816,237 6,7677,278
   Gross profit     3,906 4,1832,727 3,426   4,0293,762 4,1604,305
Selling, general and administrative
   expense          2,161 2,2392,644 2,123   2,2292,568 2,4922,901
Operating income    1,745 1,944   83 1,303   1,8001,194 1,6681,404
Interest expense       60    62   59    48      76   88   125  124
Other expense (income)            16       1
(73)
36                 9    (37)
Income before taxes and minority
   interest         1,669 1,881   24 1,255   1,7971,070 1,5341,317
Provision for income taxes       646   705      18  462
688393
601              524
Minority  interest in income (loss)                  69   (56)
2
78                10   102  101
    Net income       $1,023$1,107$   62$ 791 $1,031$  667$   831
$
692

Percentage of Net Sales
Net sales           100.0%100.0%100.0%100.0%
100.0%100.0%100.0%100.0
%
Cost of sales          59.1 57.7 67.1 64.0    58.9   62.4 61.9
62
 .8
   Gross profit      40.9  42.3 32.9  36.0    41.1 37.6  38.1
37.2
Selling, general and administrative
    expense             22.6   22.6   31.9   22.3  22.7 25.7
22.8
25.1
Operating income     18.3  19.7  1.0  13.7    18.4 11.9  15.3
12.1
Interest expense      0.6   0.7  0.7   0.5     0.8  1.2   1.3
1.1
Other  expense (income)      0.2
(0.7)
                      (0.3)
Income before taxes and minority
   interest          17.5  19.0  0.3  13.2    18.3 10.7  14.0
11.3
Provision for income taxes       6.8   7.1     0.3  4.9   7.0
3.9
5.5                4.5
Minority  interest  in  income  (loss)         0.7         (0.7)
                   0.8   0.1  0.9   0.8
    Net income        10.7  11.2   0.7   8.3    10.5      6.7
7.6
6.0


The  fourth quarter sales for 1996 and 1997 have been stronger
than the  third  quarter  sales, primarily due to the growth  in
printed coating  products.  Offsetting this increase, however, is
a seasonal decrease in pharmaceutical product sales, as people
typically  defer elective   surgeries  between  Thanksgiving  and
New  Years.            In
addition,  many of the Companys customers attempt to  reduce
their inventories  prior  to the calendar year end.  Consequently,
first
quarter  sales  are  typically stronger than  the  preceding
fourth quarter.   The gross profit in the third quarter of 1996
was  lower due  to unusually high startup costs due to new
technology relating to  the  introduction  by  the Company of  a
new  product  for  the manufactured  housing  industry and lower
sales  volume  (spreading fixed  costs over fewer units).
Selling, general and administrative expense  increased as a result
of a onetime investment whereby  the Company  engaged  the
services of a consulting  firm  to  develop  a marketing strategy
for the Pacific Rim and approximately $100,000 of service  costs
due to the reengineering of manufacturing functions. The  selling,
general and administrative expenses increase  in  the fourth
quarter of 1997 represented an increase in expenses  due  to the
Northern Bank Note Company acquisition in September, 1997.

Liquidity and Capital Resources
The  Companys primary sources of working capital have been net
cash provided  by  operating activities and net borrowings under
various loan  agreements.   Net  cash provided by operating
activities  was $5,193,000,  $2,451,000 and $4,690,000 for the
years ended  December 31, 1995, 1996 and 1997 respectively.  This
is a $2,239,000 increase over  1996 and resulted in a $913,000
increase in cash for the  year ended December 31, 1997.  The cash
increase was primarily the result of            four   factors:
(1)  depreciation  and  amortization  expense
increased  by  $558,000  to $2,093,000 as a result  of  placing
the Companys  new  press  in service during 1997;  (2)  trade
payables increased  by $260,000 due to both better terms and cash
management; (3) accrued expenses, including amounts owed to the
minority partner in  Applied  Holographics and employee bonus
increased by  $354,000; and  (4)  restricted  cash used to fund
the new press  decreased  by $1,511,000.   Offsetting  these
increases  to  cash,  the   Company invested $1,758,000 in the
acquisition of Northern Bank Note Company and   $3,319,000   in
new  plant  and  equipment.                     Additionally,
inventories  increased  by $1,134,000 due in  part  to
managements decision  to support key markets and customers with
higher inventory levels.  Trade receivables were up by $277,000
solely as a result of the increased sales levels in 1997.

The Companys capital expenditures totaled approximately
$1,092,000, $3,862,000,  and $3,319,000 for the years ended
December  31,  1995, 1996  and  1997 respectively, and included
the acquisition  of  high speed  computerized slitting equipment
in 1995 and payments for  the new  50 wide printing press in 1996
and 1997.  To fund their income tax  liabilities  on the Companys
net income and the  repayment  of stockholder   loans,  the
Company  previously  made                       SCorporation
dividends to its existing stockholders of $5,775,000 and $800,000
in the  years  ended  December 31, 1995 and 1996,  respectively,
which included        a  special  $4.5  million  SCorporation
dividend   paid
immediately prior to the closing of the IPO in 1995.

In  June  1996,  the  Company  received  proceeds  of
approximately $4,005,000  pursuant  to an Illinois Revenue Bond
financing,  which matures   in  2008.           These  proceeds
were  used  to  finance   the
acquisition  of  the new 50 wide printing press and  related
plant additions  to  ensure  capacity for  the  continued  growth
of  the Companys  printed products line.  At December 31, 1997,
the  entire amount had been drawn upon.  The Company incurred
$172,391 of  costs associated with the issuance of the bonds,
which are being amortized over twelve years.

On  September  3,  1997, the Company also issued to  the  seller
of Northern Bank Note Company, a nineyear, 6% Subordinated Note in
the principal amount of $3.0 million, which is convertible in
whole  or in  part,  at  the  option of the holder beginning after
the  first anniversary  of  the  Note, into the Companys  Common
Stock  at  a conversion price of $14.00 per share.

The  Companys revolving credit agreement with a bank  (the  Credit
Facility)  provides  for borrowings under  an  unsecured
revolving credit  loan,  with total borrowings not to exceed
$4,500,000.   The principal balance of the revolving credit loan
was zero at  December 31, 1997.  The revolving credit loan expires
April 1, 1998 and bears interest  at the banks prime rate (8.50%
at December 31, 1997)  or, at the Companys option, at LIBOR
(5.625% at December 31, 1997) plus 1.0%.  A .25% fee is applied
for undrawn funds.  The Credit Facility also provides for two term
loans.  The outstanding principal balance of  term loan A was
$1,655,000 as of December 31, 1997 and is  due April  1,  1999.
Interest on term loan A accrues  at  the  banks
prime  rate plus 0.25%, but not to exceed 9.5%. The Credit
Facility contains  covenants which limit aggregate annual lease
payments  to $500,000  and prohibit the declaration of dividends
(other  than  SCorporation  dividends  and  the  1995  $4.5
million  SCorporation Dividend)  and transactions between the
Company and its  affiliates. It  is  also  an event of default
under the Credit Facility  if  the Company incurs any net losses
for any fiscal period.
The  Company  believes  that  the net  cash  provided  by
operating activities  and  amounts  available under the  Credit
Facility  are sufficient to finance the Companys growth.


Seasonality and Impact of Inflation

Historically,  the Company has experienced lower  net  sales
levels during the fourth quarter and increased net sales levels
during  the following  first quarter.  This is due to typical
yearend depletion of  inventories by the Companys customers.  It
is also due in large part  to  the  holidays  at the end of the
year,  as  the  Companys customers  have an increased number of
holiday plant  closings.   In addition, fourth quarter
pharmaceutical product sales generally  are lower  as a result of
the postponement of elective surgeries  during holiday  periods.
However, due to the  strong  growth  of  printed products, the
fourth quarter sales have been greater than the  third quarter
sales in each of the last two years.

Inflation  has not had a material impact on the Companys net
sales or  income  to  date.  However, there can be no assurance
that  the Companys business will not be affected by inflation in
the future.


Recently Issued Accounting Standards

The  Financial Accounting Standards Board (FASB) issued  Statement
of  Financial Accounting Standards No. 123 (SFAS), Accounting for
Stock  Based  Compensation, which became effective in  1996.
This Statement establishes an alternative to the Companys current
method of  accounting  for  compensation associated with  stock
issued  to employees.  Management did not adopt the alternative
method  allowed by  SFAS  No. 123.  Accordingly, adoption of this
Statement required additional financial statement footnote
disclosures to describe  the Companys stockbased compensation.

In February 1997, the FASB issued SFAS No. 128, Earnings Per Share
(EPS).   The statement replaces primary EPS with basic EPS,  which
excludes  dilution,  and requires presentation  of  both  basic
and diluted  EPS  on  the  face of the income  statement.   The
Company adopted  this  Statement  in the fourth  quarter  of  1997
and  has calculated  and  disclosed basic and diluted  EPS  for
all  periods presented.

In June 1997, the FASB issued SFAS No. 130, Reporting
Comprehensive Income.   The  statement  requires the  addition  of
comprehensive income  and  its  components  in the primary
financial  statements. Comprehensive   income   includes
cumulative   foreign    currency translation which is not included
in income under current accounting principles.   The statement is
effective for fiscal years  beginning after  December  15,  1997,
and  requires  comparative  amounts  in financial statements for
earlier periods presented.

In  June  1997,  the  FASB issued SFAS No. 131,  Disclosures
about Segments  of an Enterprise and Related Information.  The
statement requires the Company to report financial and descriptive
information about  its  reportable  segments, determined  using
the  management approach (i.e., internal management reporting), in
interim and year
end  financial  statements.  The statement is effective  for
fiscal years beginning after December 15, 1997.
The  Company has not yet determined the impact that SFAS No. 130
and No. 131 will have on its financial statements.


Special Note on ForwardLooking Statements

The  statements  contained in this report that  are  not
historical facts  are  forwardlooking statements within  the
meaning  of  the Private  Securities  Litigation Reform Act of
1995.   A  number  of important  factors  could  cause the
Companys  actual  results  for future  periods  to differ
materially from those  expressed  in  any forwardlooking
statements made by, or on behalf of,  the  Company. These  factors
include, among other things:  continuation of  market growth
trends; reliance on a single manufacturing facility; reliance on
key  personnel;  control  by  the  principal  shareholder;  the
Companys reliance on significant customers;  the Companys  ability
to  develop  new products and protect the proprietary  formulae
and technology  related  to its products; the Companys  ability
to  be competitive with other producers of specialty transferable
coatings and  alternative products; fluctuations in foreign
currency exchange rates  and  their impact on the level and
profitability  of  foreign sales;  and  general  economic
conditions as  they  may  impact  the Companys customers.


Year 2000 Issue

All  work  necessary to upgrade the Companys computer  systems
for Year 2000 compliance is expected to be completed in a timely
fashion and  should  not  involve  a significant  amount  of  the
Companys resources.   The Company is not able to determine,
however,  whether any  of  its suppliers, lenders, or service
providers will  need  to make  any  software  modifications or
replacements  or  whether  the failure  to  make software
corrections will have an  effect  on  the Companys operations or
financial condition.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                   INDEX TO FINANCIAL STATEMENTS

                                 

                                                             Page

Report of Independent Accountants                              22

Consolidated Balance Sheets at December 31, 1997 and 1996      23

Consolidated Statements of Income for the years ended December 31,
1997, 1996 and 1995                                            24


Consolidated Statements of Cash Flows for the years ended December
31, 1997, 1996 and 1995                                        25


Consolidated Statements of Stockholders Equity for the years ended
December 31, 1997, 1996 and 1995                               26


Notes to Consolidated Financial Statements at December 31, 1997
27


Financial Statement Schedules


     Schedule II  Valuation and Qualifying Accounts
All  other  schedules for which provision is made in the



applicable accounting  regulations  of the Securities and



Exchange  Commission have  been  omitted because they are not



required under the  related instructions,  are  not  applicable,



or  the  information  has  been provided in the Financial



Statements or the notes thereto.























                 REPORT OF INDEPENDENT ACCOUNTANTS
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
To the Board of Directors of
CFC International, Inc.



In  our opinion, the consolidated financial statements listed in
the accompanying  index  present fairly, in all material
respects,  the financial  position of CFC International, Inc., and
its subsidiaries at  December 31, 1997 and 1996, and the results
of their  operations and their cash flows for each of the three
years in the period ended December  31, 1997, in conformity with
generally accepted accounting principles.   These  financial
statements are the responsibility  of the  Companys  management;
our responsibility  is  to  express  an opinion  on  these
financial statements based on  our  audits.   We conducted  our
audits  of  these  statements  in  accordance   with generally
accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether  the
financial  statements are free of material misstatement.   An
audit includes examining, on a test basis, evidence supporting the
amounts and   disclosures  in  the  financial  statements,
assessing   the accounting  principles  used  and  significant
estimates  made   by management,   and   evaluating  the  overall
financial   statement presentation.  We believe that our audits
provide a reasonable basis for the opinion expressed above.



PRICE WATERHOUSE LLP





Chicago, Illinois
February 6, 1998

                       CFC INTERNATIONAL, INC.
                     CONSOLIDATED BALANCE
                     SHEETS
                                                     December 31,
                                                1997       1996
 ASSETS
 CURRENT ASSETS:
     Cash and cash equivalents                   $1,841,070
                                $
  927,703
  Accounts receivable, less allowance for doubtful accounts of
  $612,000 and
     $565,000 respectively                   6,631,516 5,996,657
 Employee receivable                         253,928     220,833
 Inventories (Notes 1 and 4):
     Raw materials                           1,358,258   837,307
     Work in process                         1,825,356 1,086,308
     Finished goods                          5,447,990
5,142,558
                                             8,631,604  7,066,173
 Prepaid expenses and other current assets          644,578
  392,593
 Deferred income taxes                       641,977         663
  ,520
     Total current assets                      18,644,673
  15,267,479
 Property, plant and equipment, net (Notes 1, 3, and 4)
  15,095,897                                 10,866,717
   Other assets                               1,758,269   561,085
   Restricted cash (Note 4)
1,510,827
     Total assets                            $35,498,839
  $28,206,108

 LIABILITIES AND STOCKHOLDERS EQUITY
 CURRENT LIABILITIES:
  Current portion of longterm debt (Note 4) .....................
  $                               716,079    $368,124
 Accounts payable                            3,122,580 2,558,486
 Accrued environmental liability (Note 12)          244,937
  244,937
 Accrued bonus                                76,065     200,290
    Accrued vacation                          304,730     236,422
 Other accrued expenses and current liabilities         1,187,390
  1,024,507
     Total current liabilities               5,651,781  4,632,766
 Deferred income taxes                       1,974,942 1,785,740
 Longterm debt (Note 4)                      7,869,419 5,564,027
 Minority interest in CFC Applied Holographics (Note 11)
  1,435,371                                  1,145,240
     Total liabilities                       16,931,513
13,127,773
 STOCKHOLDERS EQUITY:
  Voting Preferred Stock, par value $.01 per share, 750 shares
  authorized,
     no shares issued and outstanding
 Common stock, $.01 par value, 10,000,000 shares authorized;
  4,218,226
     and 4,175,650 shares issued at December 31, 1997 and 1996
     respectively                             42,182      41,757
 Class B common stock, $.01 par value, 750,000 shares
     authorized; 518,169 and 528,689 shares issued and
     outstanding at December
  31,
     1997 and 1996 respectively                5,182       5,287
 Additional paidin capital                   10,464,985
  10,139,248
 Retained earnings                           8,331,850 5,110,647
 Cumulative foreign currency translation adjustment     (86,160)
  (27,891)
                                             18,758,039
  15,269,048
 Less 193,837 treasury shares of common stock, at cost at
     December 31, 1997 and 1996 respectively        (190,713)
  (190,713)
                                             18,567,326  15,078,335
 CONTINGENCIES (Note 12)
    Total liabilities and stockholders equity       $35,498,839
  $   28,206,108


   The accompanying notes are an integral part of the consolidated
                        financial statements.
                      CFC INTERNATIONAL, INC.
                                 
                 CONSOLIDATED STATEMENTS OF INCOME
                                 
                                 
                                 
                                                December 31,
                                          1997      1996     1995
Net sales                               $42,319,147     $
37,227,333                          $   34,177,344
Cost of goods sold                      26,063,431       22,984,895
20,103,407
Gross profit                            16,255,716       14,242,438
14,073,937
Marketing and selling expenses          4,813,880 4,082,588
3,746,807
General and administrative expenses     4,032,066 3,615,341
3,228,052
Research and development expenses       1,343,678 1,304,304
1,109,247
Patent litigation expenses                       164,590    267,910
                                        10,189,624       9,166,823
8,352,016 Operating income                      6,066,092 5,075,615 5,721,921
Other expenses (income):
     Interest                           412,920   228,909   705,250
     Miscellaneous                      (65,183)   16,962   (12,274)
                                        347,737   245,871   692,976
Income before income taxes and minority interest         5,718,355    4,829,744
5,028,945
Provision for income taxes (Note 5)     2,207,021 1,831,141 1,668,874
                                        3,511,334 2,998,603 3,360,071
Minority interest in income of CFC Applied Holographics     (290,131)
(15,133)
(209,869)
Net income                              3,221,203 $2,983,470      $   3,150,202

Unaudited pro forma data (Note 5):
     Income before income taxes and minority interest      $5,028,945
     Provision for income taxes                             1,567,000
                                                            3,461,945
     Minority interest in income of CFC Applied Holographics (209,869)
     Pro forma net income                                  $3,252,076

Basic earnings per share (Note 10):
     Net Income and pro forma net income per share         $0.71$0.66$0.95
Diluted earnings per share (Note 10):
    Net Income and pro forma net income per share         $0.71$0.66$0.95
Supplemental pro forma net income per share (Note 10):
     Basic earnings per share           $         $        $0.78
     Diluted earnings per share         $         $        $0.78




  The accompanying notes are an integral part of the

                       consolidated financial statements.

                      CFC INTERNATIONAL, INC.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

                                

                                

                                                December 31,
                                          1997      1996
                                          1995
Cash flow from operating activities:
     Net income                         $3,221,203      $
2,983,470                           $   3,150,202
          Adjustments to reconcile net income to net cash
               provided by operating activities:
      Depreciation and amortization 2,092,937    1,535,396 1,423,043
      Deferred income taxes    210,745   (26,027)  1,148,247  
      Minority interest in CFC Applied Holographics   290,131 15,133  209,869
         Changes in assets and liabilities:
         Accounts receivable (277,186) (81,248) (1,681,651)
         Inventories    (1,134,997) (733,456)         (325,623)
         Employee receivable      (33,095)  (57,740)       (163,093)
         Prepaid expenses and other current assets  (3,104) (35,336) (113,016)
         Accounts payable         259,602   377,384        (64,483)
         Accrued bonus            (124,225) (523,710)      609,000
         Accrued environmental liability                   (55,063)
 Accrued expenses and other current liabilities 187,839   (947,795) 1,000,520
 Net cash provided by operating activities  4,689,850 2,451,008    5,193,015

Cash flows from investing activities:
     Additions to property, plant and equipment
(3,318,819)                             (3,861,876)
(1,091,993)
     Restricted cash                    1,510,827
(1,510,827)
     Increase in other assets
(87,900)
     Cash invested in acquired business
(1,758,327)
Net cash used in investing activities             (3,566,319)     (   5,460,603)
(1,091,993)

Cash flows from financing activities:
     Proceeds from revolving credit agreements    1,600,000 3,775,157
18,771,000
     Repayments of revolving credit agreements    (1,600,000)        (3,775,157)
(23,486,004)
     Repayment of term loans            (111,504) (111,504) (2,551,964)
     Borrowing under Illinois Revenue Bond, net
     3,924,900 Repayment of IRB                   (200,250)
     Repayment of capital lease         (49,521)  (71,139)  (31,665)
     Minority interest payments                   (62,845)  (47,468)
     Proceeds from issuance of common stock       147,556   111,713  9,728,931
     Tax benefits from exercise of stock options
22,935
     Distributions to stockholders                (800,000) (5,755,197)
Net cash (used in) provided by financing activities  (213,719)      2,991,125
(3,349,432)
Effect of exchange rate changes on cash and cash equivalents               3,555
29,693                                  (6,159)
Increase in cash and cash equivalents         913,367    11,223        745,431
Cash and cash equivalents:
     Beginning of period                927,703   916,480   171,049
     End of period                      $1,841,070      $   927,703
$                             916,480


  The accompanying notes are an integral part of the consolidated
                       financial statements.
                      CFC INTERNATIONAL, INC.

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



                                             Cumulative
                                              foreign
                       Class BAdditional      currency          Total
                  Commoncommonpaidin  Retainedtranslation     Treasury
          stockholders
                  stock      stock      capital       earnings
adjustment
              stock         equity
Balance at December 31, 1994       $  27,519$ 6,408 $  239,515 $5,702,779  $
(51,425) $               (139,822) $5,784,974
Net income                            3,150,202                        3,150,202
Distributions to  stockholders                                 (2,055,197)
(2,055,197)
Exercise of options, including
   tax benefit     628        124,089              (50,891)            73,826
Net proceeds from initial public
   offering      12,000               9,493,813
9,505,813
SCorporation dividend                                 (4,500,000)
(4,500,000)
Repurchase of 21% interest
   in subsidiaries       347                    (347)
Foreign currency translation
   adjustment                                 (6,159)          (6,159)
Conversion of Class B common
   stock to common stock       1,068  (1,068)
Undistributed SCorporation
   earnings                   170,260 (170,260)
Balance at December 31, 1995   $  41,562$ 5,340 $  10,027,677    $  2,127,177 $
(57,584)       $ (190,713) $  11,953,459
Net income                            2,983,470                     2,983,470
Employee stock purchases         142          111,571
111,713
Reclassify shares         53    (53)
Foreign currency translation
   adjustment                                  29,693           29,693
Balance at December 31, 1996  $  41,757$ 5,287 $  10,139,248    $     5,110,647
$
(27,891)       $ (190,713) $  15,078,335

Net income                            3,221,203                      3,221,203
Foreign currency translation
    adjustment                                (58,269)         (58,269)
Employee stock purchases         147          144,691
144,838
Exercise of options        3            2,716
2,719
Reclassify shares        105   (105)
Shares issued (Note 2)        170             178,330
178,500
Balance at December 31, 1997   $  42,182$ 5,182 $  10,464,985    $     8,331,850
$ (86,160)               $ (190,713) $  18,567,326
  The accompanying notes are an integral part of the consolidated
                       financial statements. CFC INTERNATIONAL,
                      INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.  Nature of Business and Significant Accounting Policies
Nature   of   business   and  principles  of  consolidation.
CFC
International, Inc. (the Company) manufactures and  sells  coated
film products and holograms.  Its customers are primarily
companies in  the  consumer  products  and medical  supply
industries. One
pharmaceutical customer accounted for approximately 13, 12, and
13 percent of net sales during 1997, 1996 and 1995, respectively.
The Company has no significant concentrations of credit risk.

During 1992, the Company sold 21% interests in its subsidiaries
CFC International, Ltd. (U.K.), CFC Management, Inc. (see Note
11)  and CFC  International Sales, Inc. to the Companys
stockholders at net book value, and elected SCorporation status
for federal income tax purposes.
The  financial statements include the accounts  of  the
Company  and its subsidiaries as if they were whollyowned for
all periods  presented because of the common ownership of  the
Company and its subsidiaries.  The Company reacquired the 21%
interests in its  subsidiaries  prior  to  the closing  of  the
initial  public offering of 1,200,000 shares of its common stock
at $9.50 per share in  November 1995.  All significant
intercompany transactions have been  eliminated.   For  purposes
of  description,  all  financial statements  are referred to as
consolidated.  Certain prior  year amounts   have  been
reclassified  to  conform  to  current   year presentation.

Cash and cash equivalents.  The Company considers all highly
liquid investments with an original maturity of three months or
less which are readily convertible into cash to be cash
equivalents.

Inventories.    Inventories are stated at  the  lower  of  cost
or market,  cost  being determined on the firstin,  firstout
(FIFO) basis.         Inventory  cost includes cost of raw
material,  labor  and
overhead.

Property,  plant and equipment.  Property, plant and equipment
are recorded  at  cost.  The straightline method is  used  to
compute depreciation  for financial reporting purposes.  Major
improvements and  betterments are capitalized while maintenance
and repairs that do not extend the useful life of the applicable
assets are expensed as  incurred.   If  the  carrying  value  of
an  asset,  including associated  intangibles, exceeds the sum of
estimated  undiscounted future  cash flows, then an impairment
loss is recognized  for  the difference between the estimated
fair value and carrying value.

Research and development costs.  All research and development
costs are expensed as incurred.

Revenue  recognition.   Revenue  is recognized  when  products
are shipped.

Foreign  currency  translation.  The functional currencies  of
CFC International,  Ltd. (U.K.) and the Companys division
located  in Japan  are  their  local currencies.  The balance
sheets  of  these entities  are  translated at yearend rates of
exchange  and  their results of operations at weighted average
rates of exchange for the year.  Translation  adjustments
resulting  from  this  process  are recorded  directly in
stockholders equity and will be included  in the  determination
of net income only upon sale or  liquidation  of the entities,
which is not contemplated at this time.

Earnings  per  share.  See  Note 10 for computation  of  basic
and diluted earnings per share.  Pro forma earnings per share
have been computed  after  giving retroactive effect to  the
1.2565385for1 stock  split and stock dividend (Note 8), and
assuming those shares necessary  to  be  issued to reacquire the
21%  interests  in  its subsidiary  companies were outstanding
from the  beginning  of  the period  presented.  Supplemental pro
forma net income  assumes  the repayment of certain of the
Companys debt at the beginning of  the period  presented  and the
resulting reduction in interest  expense net  of tax benefits.
Weighted average number of common shares and common  stock
equivalents  used  in  the  supplemental  pro  forma earnings
per share calculation assumes the retroactive  effect  of the
1.2565385for1 stock split, stock dividend, the 34,736 shares
issued  to reacquire the 21% interests in the subsidiary
companies and  the  1,200,000 shares of the Companys common stock
issued  in the  initial  public offering, were outstanding during
the  entire period.

SFAS  No. 123.  Effective January 1, 1996, the Company adopted
the disclosure method provisions of Statement of Financial
Accounting Standards (SFAS No. 123) Accounting for StockBased
Compensation. As  permitted  by SFAS No. 123, the Company
continues to  recognize stockbased  compensation  costs under
the  intrinsic  value  base method  prescribed by Accounting
Principles Board Opinion  No.  25, Accounting   for   Stock
Issued  to  Employees,   and   related Interpretations.

Fair value of financial instruments.  As of December 31, 1997,
1996 and   1995,   the  carrying  amount  of  the  Companys
financial instruments  approximates their estimated  fair  value
based  upon market prices for the same or similar type of
financial instrument.

Pervasiveness   of   estimates.   The  preparation   of
financial statements   in  conformity  with  generally  accepted
accounting principles  requires management to make estimates  and
assumptions that  affect  the  reported amount of assets  and
liabilities  and disclosure of contingent assets and liabilities
as of the  date  of the  financial  statements,  as well as  the
reported  amounts  of revenues and expenses during the reporting
period.  Actual  results could differ from these estimates.

Intangibles.   The excess of cost over the fair value  of  the
net
assets  of  businesses  acquired was  $1,758,269  and  $561,085
at December  31, 1997 and 1996 respectively.  Accumulated
amortization amounted  to  $210,000 and $87,000 at December 31,
1997  and  1996, respectively.   Amortization  expense  was
$123,000,  $57,000  and $49,000  in  1997, 1996, and 1995,
respectively.   Intangibles  are amortized on a straightline
basis over periods of up to 15  years. The  increase  in 1997 was
due to the acquisition of Northern  Bank Note Company (NBNC).


Statement of cash flows.
                     SUPPLEMENTAL DISCLOSURES
                                 
                                        For Year Ended December
                                         31, 1997          1996
                                         1995
Cash paid during the year for:
     Interest paid                      $357,909  $209,063
$722,805
     Income taxes paid                  2,269,636 2,026,090
101,000
Noncash investing and financing activities:
     Lease assets and obligations capitalized
156,116
Note 2.  Acquisition

On September 3, 1997, the Company acquired substantially all of the
assets  and assumed substantially all of the liabilities  of
NBNC. NBNC  is  a  financial security printer of stock
certificates  and other  intaglio printed documents.  The Company
intends to  operate NBNC  substantially in its present form.  In
consideration of  this acquisition, the Company issued 17,000
shares of its common  stock, par  value $.01 per share (the
Common Stock); delivered  a  nineyear,  6%  subordinated note in
the principal amount of  $3,000,000 (the  Note), convertible, in
whole or in part, at the  option  of the  holder beginning after
the first anniversary of the Note, into Common Stock at a
conversion price of $14.00 per share; delivered a shortterm  note
in the principal amount of $1,500,000  which  was paid in full on
September 4, 1997; and paid $258,300 in cash.   The Company has
agreed to register for resale under the Securities  Act of  1933,
as amended, all shares of Common Stock to be issued  upon
conversion of the Note.  The Company also agreed to pay the
seller $25,000  for  consulting  services  during  the  next
year.    The acquisition  was  accounted  for  using  the
purchase  method   of accounting.   Approximately $1,500,000 of
the cash  purchase  price was  obtained by the Company through
borrowings under the Companys revolving credit facility.


Note 3.  Property, Plant and Equipment

Property, plant and equipment consist of the following:
                                         
                                         Estimated December  31,
                                         Useful
Life
                                     1997       1996
Land                               $105,670   $105,670
Building                           3,468,697  3,041,914   25
years
Machinery  and manufacturing equipment         20,704,707
12,596,
064                   10 years
Furniture and office equipment                1,768,051
1,612,736
10 years
Construction in process                       2,498,849
                                   26,047,125 19,855,233
Less       Accumulated   depreciation
(10,951,228)
(8,988,516)
                                   $15,095,897      $
10,866,717


Note 4.  LongTerm Debt

Longterm debt consists of the following:
                                                   December 31,
                                               1997        1996
Illinois Revenue Bonds                     $3,804,750
$4,005,000
Term Loan A                                1,655,304    1,741,648
Convertible Subordinated Note              3,000,000
Other                                       125,444     185,503
                                           8,585,498    5,932,151
Less    Amounts  included in current liabilities
716,079
368,124
                                           $7,869,419
$5,564,027

Illinois   Industrial  Development  Revenue  Bonds.   The
Company
received  $4,005,000 of proceeds from the issuance of the bonds
on June  20, 1996. The proceeds were used to fund the Companys
15,000 square  foot  addition to its primary production facility
and  the purchase of a new printing press for printed products.
At December 31, 1996, the Company had $1,510,827 of restricted
cash as a result of  this issuance. The restriction on this cash
was released during 1997 to fund costs associated with the
printing press.  Capitalized issuance costs of $172,391 are being
amortized over the life of the bonds utilizing the straightline
method.

The bonds bear interest at rates which are determined by the
market and  are reset weekly by the Remarketing Agent for the
bonds.  The
maximum  annual rate of interest that the bonds will bear  is
12%. The  annual  rate of interest was 3.65% at December  31,
1997  and December  31,  1996,  respectively.  Annual principle
payments  of $200,250 began in 1997 and will continue through
2007.  The balance of  $1,802,250 is due and payable when the
bonds mature on June  1, 2008.

Term  Loan.   Term  Loan A is payable in monthly installments  of
$9,292  with  a  final  principal  payment  of  $1,516,000  due
at maturity.   Interest  is payable monthly at a  rate  equal  to
the banks  prime rate plus 0.25%, with a maximum rate of 9.50%.
This term loan was renewed on March 3, 1997 and now matures on
April  1, 1999.

Convertible  Subordinated Debt.  On September 3, 1997, the
Company issued  a  nine  year,  6%  convertible subordinated
note  in  the principal  amount  of  $3,000,000 with  annual
principal  payments commencing in 1998 of $333,333.  The Note was
issued to the  seller in  the  Companys acquisition of Northern
Bank Note  Company  (see Note  2).   The  Note is convertible, in
whole or in part,  at  the option  of the holder beginning after
the first anniversary of  the Note,  into  Common Stock of the
Company at a conversion  price  of $14.00  per  share.  The Note
is noncallable for three years  from the date of issuance.
Thereafter, the Note is callable at premiums starting  at 102% of
face value and declining in subsequent  years. In addition, the
Note is callable by the Company ten days after the first
anniversary of the Note if the Companys stock price exceeds 110%
of the conversion price for twenty consecutive days. The Note
bears  interest  at  6% per year, which is payable  quarterly,
and matures September 3, 2006.

The   Note  agreement  contains  covenants  that  include
certain
financial tests, including restrictions on indebtedness.

Revolving  Credit  Arrangements.  The Company and its
subsidiaries have various revolving credit arrangements that
provide for maximum borrowings  of  approximately $5,830,000.
Under  these  revolving credit  arrangements, interest is payable
at either the  respective banks  prime rate (8.50% and 8.25% at
December 31, 1997 and  1996) or 2% over the Bank of Englands
sterling base rate (7.25% and              6.0%
at  December 31, 1997 and 1996).  The revolving credit
arrangements expire  at  various dates in 1998.  No amounts were
outstanding  at December  31,  1997  and 1996.  The Company is
required  to  pay  a quarterly fee for the unused portion on one
of its facilities at an amount equal to .25% times the daily
average of the unused portion. Such payments in 1997, 1996 and
1995 were not significant.

The  bank  agreements contain covenants which, among other  things,
restrict  new indebtedness and dividend declarations, and  prohibit
net losses.  The borrowings are secured by substantially all of the
Companys assets.
Aggregate  minimum  principal  payments  for  all  longterm  debt,
excluding capital lease obligations, as of December 31, 1997 are as
follows:
1998                                                     $644,837
1999                                                     2,051,973
2000                                                      533,583
2001                                                      533,581
2002                                                      533,581
Thereafter                                               4,216,697
                                                         $8,514,252


Note 5.  Income Taxes

The income tax provision (benefit) consists of the following:

                                        For Year Ended December 31,
                                          1997      1996     1995
Current Payable:
         Federal                               $1,805,870         $
1,488,424                           $   241,644
     State                              337,215   340,784   103,125
     Foreign                            (146,809)  27,960   175,858
Deferred                                210,745   (26,027)
1,148,247
                                             $2,207,021           $
1,831,141                               $1,668,874


The Company elected, beginning June 1, 1992, to be treated as an S
Corporation  for  federal and certain state  income  tax  purposes.
Coinciding with the Companys initial public offering in 1995,  the
Company  terminated its SCorporation status for federal and  state
income  taxes  on  November 22, 1995.  Accordingly,  at  that  time
deferred taxes were provided for temporary differences between  the
financial reporting basis and the tax basis of the Companys assets
and   liabilities,  in  accordance  with  Statement  of   Financial
Accounting Standards (SFAS) No. 109 Accounting for Income  Taxes.
All income that was earned during the subsequent CCorporation time
period was taxable at the current federal and state tax rates.   In
order to present amounts in a comparable format, the statements  of
income  for  1995  and  1994  include a pro  forma  adjustment  for
additional  income  taxes which would have  been  recorded  if  the
Company  had been a CCorporation for all periods presented,  based
on  the  tax  laws in effect during those periods.   The  Companys
interests in the net operating losses of CFC Management, Inc.  have
not  been  utilized  in the period in which they  arose  to  offset
taxable  income in the pro forma provisions because  their  use  is
limited  by  the taxable income of CFC Management, Inc.   This  net
operating loss carryforward was fully utilized in 1996.


Income  tax provisions (benefits), calculated on a proforma  basis
for the year ended December 31,1995 are as follows:
                                                1995
Current:
     Federal                                  $1,369,000
     State                                    330,000
     Foreign                                  176,000
Deferred                                      (308,000)
                                              $1,567,000

The  provisions for income taxes differ from the amount  of
income tax  determined  by applying the applicable U.S. statutory
federal income  tax rate to income from continuing operations
before income taxes   and   minority  interest  as  a  result  of
the  following differences:
                                              1997  1996   1995
                                                 Actual
                                                 Actual
Proforma
Statutory  U.S. tax rates                     34.0%
34.0%
34.0%
Decrease in rates resulting from:
     State and local taxes                    4.7%   4.7%    3.1%
     Decrease in valuation allowance
(6.5%)
     AMT credit                                      (1.5%)
      Other,  net                                      2.0%    0.7%
0.6%
Effective tax rate                            40.7%  37.9%  31.2%


Deferred tax liabilities (assets) are as follows:
                                                   December 31,
                                                1997        1996
Depreciation                                  $2,067,985 $1,785,740
Other, net                                    (735,020)  (663,520)
                                              $1,332,965 $1,122,220

Note 6.  International Operations and Export Sales

CFC  International, Ltd. (U.K.) is engaged in selling the Companys
products  throughout the United Kingdom and Europe.  The  following
data  in  U.S. dollars, relative to the subsidiary, is included  in
the  accompanying financial statements as of and for the year ended
December 31:
                                           1997     1996     1995
Assets                                       $1,469,032           $
1,141,614                           $   1,018,271
Liabilities                             255,975    70,726   141,804
Net Sales                               6,673,591 4,819,567
4,280,554
Net Income                              134,736    73,332    64,942

The  Company  has  a  division engaged  in  selling  the  Companys
products throughout Japan and the Pacific Rim.  The following  data
in  U.S.  dollars,  relative to the division, is  included  in  the
accompanying  financial statements as of and  for  the  year  ended
December 31:
                                           1997     1996      1995
Assets                                  $422,353  $636,896
$853,412
Liabilities                             110,615    37,204   185,798
Net Sales                               1,197,662 1,414,216
1,806,150
Net Income/(Loss)                       (222,254) (11,526)  110,296

Export   sales   from  U.S.  operations  amounted  to   $5,455,923,
$5,780,161, and $3,358,892 in 1997, 1996 and 1995, respectively.
Note 7.  Profit Sharing Plan

The  Company maintains a profit sharing/401(K) plan for the benefit
of  all  eligible  employees, as defined under the plan  agreement.
Annual profit sharing contributions are discretionary as determined
by  the  Board  of  Directors and are funded as accrued.   Eligible
employees  may  also contribute up to 18% of their compensation  to
the plan subject to the maximum deferral limitations established by
the  IRS.  Employee contributions are matched by the Company at the
rate  of 50% on the first 4% of the employees compensation.    The
Company  had no discretionary profit sharing expense for the  three
years  presented.   The  Company  incurred  approximately  $86,000,
$81,000,  and $69,000 of 401(K) matching expense during 1997,
1996 and 1995, respectively.
Note 8.  Stockholders Equity

The  Company  has authorized 750 shares of Voting Preferred
Stock, par  value  $.01  per  share, which has no preemptive,
conversion, redemption,                                    or
exchange  rights.   Dividends  and   liquidation
preference  shall be applied to the purchase price per share.
The
Companys  principal stockholder holds an option  to  purchase  534
shares   of   voting  preferred  stock,  subject  to  antidilution
adjustments, par value $.01 per share, which voting preferred
stock is  entitled  to 1,000 votes per share, quarterly dividends
at  an annual  rate  equal to the prime rate in effect  as  of
the  prior December  31  applied to the $500 per share exercise
price  and  a liquidation  preference of $500 per share plus any
accumulated  and unpaid dividends.  The option is currently
exercisable, and is  not transferable.
The  reacquisition of the 21% interest in the Companys subsidiary
companies  held  by minority stockholders was effected
immediately prior to the closing of the initial public offering in
1995.   This
transaction  was executed through an exchange of 34,736  shares
of the  Companys  common stock for the shares held  by  the
minority stockholders in the Companys subsidiaries.  The fair
market  value of  these  shares  was  $330,000  (which  the  Board
of  Directors determined  was the fair market value of the
minority  interest  in the Companys subsidiaries).

All common stock and Class B common stock and per share amounts
in the   accompanying  consolidated  financial  statements  have
been adjusted  to  give retroactive effect to the 1.2565385for1
stock split  (which was authorized and effected in August, 1995)
for  all periods  presented.  In 1995, the Board of Directors
declared  and paid  a  cash  dividend  of $4,500,000 representing
the  estimated undistributed taxable income during the period in
which it was an SCorporation to those stockholders who held shares
of the  Companys stock immediately prior to the recapitalization
and the closing of the  initial public offering.  The distribution
was funded with the net  proceeds  received by the Company from
the  Companys  initial public  offering.  Additionally on November
15, 1995, the Board  of Directors  declared  a  cash  distribution
of  $800,000  to                                           the
stockholders to permit payment of federal and state income taxes
on the  Companys  income  through  the  date  of  termination  of
SCorporation status.  This dividend was paid in January1996.
Common  stock  and Class B common stock have identical  rights
and privileges except for voting and conversion rights.  Class B
common stock  is  nonvoting, and is convertible at any time into
an  equal number  of shares of common stock except that the
conversion option is  not available to any Class B common
stockholder affiliated with the  Companys principal common
stockholder. During 1997, 1996  and 1995,  10,520, 5,340 and
106,805 shares, respectively, of  Class  B common  stock  were
converted into an equal number  of  shares  of common stock.


Note 9.  Stock Plans

Stock  Option  Plan.  The Companys stockholders approved  a  Stock
Option  Plan  (the Plan) in August 1995, which provides  for  the
grant of nonqualified stock options to employees and directors  of
the  Company  and its subsidiaries.  A total of 250,000  shares
of common  stock are reserved for issuance under the Plan, subject
to antidilution and adjustment provisions.  No options may be
granted under  the Plan after August 15, 2005.  If an option
expires or  is
terminated  or  canceled unexercised, the shares  related  to
such options  are  returned to the total shares reserved  for
issuance. The  Plan is administered by a committee appointed by
the board  of directors, which determines the term of each
option, option  price, and number of shares for which each option
is granted.
All options have terms of ten years, and employee options
generally vest  over  a period of four years.  Options granted in
connection with  the 1997 Executive Performance Plan (Performance
Plan) vest over  a  period  of  9.5 years unless certain  Company
performance criteria  are achieved, in which case vesting of a
portion  of  the total  options  for each executive employee
under  the  Performance Plan is accelerated to a period of two
years, upon the election  of each  executive.  Based on 1997
Company performance  and  executive elections, executives under
the Performance Plan will vest in 6,660 shares  over  the two
year period ending December  31,     1999.   The
range of exercise prices for options under the Plan at December
31, 1997  is  $10.88  to  $15.25,  with a  weighted  average
remaining contractual life of 8.8 years.

Stock  option activity in 1997 and 1996 for the Plan is
summarized below:

                                     1997               1996
                                       Average            Average
                              Shares    Option  PriceShares
Option
Price
Beginning balance             76,673 $10.78
Granted                       99,610 $12.69      77,673  $10.78
Forfeited                     (1,250)$11.52     (1,000)  $10.88
Exercised                     (250)  $10.88
Ending Balance                174,783$11.86       76,673   $10.78

Options  exercisable at year end       18,918        $10.77

Average fair value of options granted during
     the year                       $  6.07                $4.67


Director   Stock  Option  Plan.   In  August  1995,  the
Companys stockholders  approved a Director Stock Option Plan
(the  DSOP), which  is administered by the board of directors.
Options  may  be granted  under  the  DSOP  only to nonemployee
directors  of  the Company.  A total of 50,000 shares of common
stock are reserved for issuance  under  the  DSOP,  subject  to
antidilution  and  other adjustment provisions.  An option to
purchase 10,000 shares of  the Companys  stock  was  granted to
each of  the  three  nonemployee directors of the Company
effective upon the closing of the  initial public  offering at an
exercise price equal to the  initial  public offering  price  of
$9.50 per share. Each additional  nonemployee director  elected
to  the Companys board  of  directors  will  be granted  an
option to purchase 10,000 shares of common stock  upon election,
at the fair market value at the date of such grant.   The term of
each option is ten years subject to earlier termination  if the
optionees  service  as a director  terminates.   Each  option
becomes  exercisable  with  respect  to  25%  of  the  shares
upon expiration of each successive twelve month period after the
date of grant.  The range of exercise prices for options under
the DSOP  at December  31,  1997  is  $8.75 to $9.50, with  a
weighted  average remaining contractual life of 8.3 years.

Stock  option  activity in 1997, 1996 and  1995  for  the  DSOP
is summarized below:


                            1997          1996           1995
                            Average        Average        Average
                      Shares  Option Price   Shares   Option
Price Shares               Option Price
Beginning balance    30,000   $9.50  30,000  $9.50
Granted              10,000   8.75                30,000  $9.50
Ending balance       40,000   $9.31  30,000  $9.50  30,000  $9.50

Options  exercisable at year end      15,000  $9.50  7,500
$9.50

Average fair value of options
      granted during the year            $    4.22            $
$               3.68


All  options granted under the Plan and the DSOP have had
exercise prices equal to the fair market value of the shares on
the date  of grant.

The  fair value of each option granted is estimated at the date
of the  grant  using the BlackScholes optionpricing model
utilizing expected  volatility  calculations  based  on
historical  data  of companies  with  similar  structure and
volatility  over  a  period commensurate to the expected term of
the options (25% to  40%)  and risk free rated based on U.S.
government strip bonds on the date of the  grant with maturities
equal to the expected option term (5.56% to               6.68%).
The expected lives were determined to be six years for
employee  options and 9.5 years for options under  the
Performance Plan (see above) and dividends are assumed to be
zero.

The   Company  applies  APB  25  and  related  Interpretations
in
accounting  for  the aforementioned stock plans.   Accordingly,
no compensation  cost has been recognized for its stock option
plans. Had  compensation cost for the Companys fixed stock
option  plans been  determined based upon the fair value based
method, as defined in  SFAS  No. 123, the Companys net earnings
per share would  have been reduced to the proforma amounts
indicated below:

                                         1997      1996      1995
Proforma net income (dollars in thousands)        $3,031
$2,928
$                               3,519
Proforma earnings per share (basic and diluted)     $       0.67
$
0.65                                $  0.78

The effects of applying SFAS 123 on the above proforma
information are not indicative of future amounts, as such amounts
are likely to be affected by the number of grants awarded.


Employee  Stock  Purchase  Plan.  In  August  1995,  the
Companys stockholders approved an Employee Stock Purchase Plan
(the  Stock Purchase  Plan) which is administered by a committee
appointed  by the  board  of  directors.  Pursuant to the  Stock
Purchase  Plan, 100,000 shares of common stock are reserved for
issuance, which may be  offered  for  sale to employees through
annual  options  to  be granted in the fiveyear period commencing
January 1,            1996.  During
1997  and  1996  respectively, 14,816 and 14,114 shares  of
common stock  were issued pursuant to the Stock Purchase Plan.
The  Stock Purchase Plan is intended to qualify as an employee
stock purchase plan  under Section 423 of the Internal Revenue
Code.   Generally, all  persons  who have been employed by the
Company on a  fulltime basis  for at least six months, except
holders of more than  5%  of the  Companys  common stock, are
eligible to  participate  in  the Stock  Purchase  Plan.   The
Stock Purchase Plan  permits  eligible employees to purchase
common stock (which may not exceed the lesser of  $10,000  or 10%
of an employees compensation), at 95%  of  the fair market value
of the common stock at the grant date or exercise
date, whichever is less.  The shares are purchased automatically
at the end of the quarter for such number as may be purchased
with the accumulated  payroll  deductions of  the  employee  on
that  date. Employees  may terminate their participation in the
Stock  Purchase Plan   at  any  time  and  participation
automatically  ends  upon termination  of  employment with the
Company.  The  Stock  Purchase Plan will terminate at any time
upon the discretion of the board of directors  or when the
participating employees become  entitled  to purchase  a  number
of  shares  equal  to  the  number  of  shares remaining.
Note 10.  Earnings per Share

                        1997                1996
1995
                               Per                Per
Per
                 Income SharesShareIncome SharesShare Income
SharesShare Basic Earnings per Share:
Income available to Common
     Stockholders $3,221,2034,529,562    $0.71$2,983,4704,504,067 $0.66
$3,252,076
3,429,089       $0.95

Effect of Dilutive Securities:
     Options exercisable             11,001            12,534              2,529
     Convertible debt   $36,00071,428
Diluted Earnings per Share    $3,257,2034,611,991 $0.71$2,983,4704,516,601 $0.66
$3,252,0763,431,618   $0.95



                                1995
                                   Per
                        Income Shares  Share
Supplemental proforma net income per share:
Basic Earnings per Share:
Income available to Common
     Stockholders       $3,522,0004,498,654    $0.78

Effect of Dilutive Securities:
     Options exercisable                    2,529
Diluted Earnings per Share    $3,522,0004,501,183
$0.78


Note 11.  CFC Applied Holographics

Effective  October  1,  1994,  CFC Management,  Inc.  holds  a  75%
ownership  interest  in  CFC  Applied Holographics,  a  partnership
formed  to manufacture and market holograms.  CFC Management,  Inc.
had  agreed  to  guarantee  loans,  leases,  or  other  contractual
commitments as may be required by the partnership, and is  required
to  finance all working capital requirements. All losses have  been
allocated  to  CFC  Management, Inc., and  the  partners  share  in
profits  in  proportion  to their respective  ownership  interests,
except  that CFC Management, Inc. has allocated all profits to  the
extent  of  previously  allocated  cumulative  losses.   Prior   to
October 1, 1994, CFC Management, Inc.s share of profits and losses
was  50.01%.  The  $510,000  cost  of  the  Companys  increase  in
ownership  interest  from 50.01% to 75% was recorded  as  goodwill.
Accumulated amortization of this goodwill approximated $159,000 and
$110,000 at December 31, 1997 and 1996, respectively.


Note 12.  Contingencies

The   Companys   former  parent  has  been  named  by   government
environmental  agencies as a potentially responsible  party  with
respect  to  a  waste disposal site.  The former parent  and  other
potentially  responsible  parties have entered  into  a  settlement
agreement  with such agencies that provides for the remediation  of
the  site, estimated to cost approximately $40 million, based  upon
currently  available facts.  While the Company  has  been  named  a
potentially  responsible party, the former parent and  the  Company
have reached an agreement whereby the former parent and the Company
will  share  equally in 0.7% (or .35% each) of the  total  cost  of
remediation that is ultimately determined to be attributed to waste
produced by the Companys former parent.  Additionally, the Company
and  nineteen other parties were defendants in litigation filed  by
another  party  at  the  same site seeking reimbursement  for  some
portion  of  the  $1  million spent for  cleanup  outside  of  the
aforementioned  settlement.   The  Company  paid  $4,000  in   full
settlement  of this suit in 1995.  In 1992, the Company recorded  a
liability   of  $300,000  related  to  these  matters,   of   which
approximately  $50,000  was  paid  in  1996.   It  is  managements
opinion,  based upon investigation of the quantities and  types  of
waste  and the other parties involved, that the Companys share  of
any  liability  will   not  substantially  exceed  the  accrual  of
$245,000  at  December 31, 1997.  The adequacy of this  reserve  is
reviewed  periodically  as  more  definitive  information   becomes
available.


Note  13.   Selected  quarterly  financial  data  (unaudited),   in
thousands, except per share data

                                        Quarter Ended
                      Dec.  31      Sept. 30     June 30      Mar.
31 Dec. 31           Sept. 30    June 30      Mar. 31
                         1997         1997          1997
1997
1996                   1996        1996         1996
Revenues
$11,584$10,927$9,999$9,810$9,519$8,282$9,886$9,540
Gross Profit        4,305 4,1603,762 4,029   3,4262,727  4,183 3,906
Operating Income    1,404 1,6681,194 1,800   1,303   83  1,944 1,745
Net Income            692   831  667 1,031     791   62  1,107 1,023
Basic  earnings per share           .15  .18      .15   .23     .18
 .01                 .24      .23
Diluted  earnings per share         .15  .18      .15   .23     .18
 .01                 .24      .23

ITEM   9.   CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS   ON
ACCOUNTING
               AND FINANCIAL DISCLOSURE

None.





                              PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

The   information  appearing  under  the  captions   Election    of
Directors  and  Section  16(a)  Beneficial  Ownership   Reporting
Compliance in the Companys Proxy Statement for the Annual Meeting of
Stockholders  to  be held in 1998 (the Proxy  Statement),  is
incorporated herein by reference.

Executive Officers

Set  forth  below  are the names of the executive officers  of  the
Company and its subsidiaries, their ages at December 31, 1997,  the
positions  they  hold  with the Company or  its  subsidiaries,
and summaries of their business experience.  Executive officers
of  the Company are elected by and serve at the discretion of the
Board  of Directors of the Company.
          Name            Age                Position
Roger F. Hruby             63   Chairman of the Board of
Directors,
Chief Executive
                                Officer, and President

Dennis  W.  Lakomy           53   Vice President,  Chief
Financial
Officer, Secretary,
                                Treasurer and Director

David C. Beeching          58   Vice President of Sales &
Marketing
 Holographics

Glenn L. Ford              53   Vice President of Manufacturing

Mark  A. Lamb               46   Vice President and General
Manager
 Security Printing

William A. Herring         51   Senior Vice President of
Operations

Robert  E. Jurgens          56   Senior Vice President of  Sales
&
Marketing

Craig  D.  Newswanger         44    Vice President  of  Research
&
Development
                                Holographics

David M. Plomin            33   Director of Research &
Development

Jeffrey E. Norby           42   Controller

Peter  C. McGillivray       53   Managing Director  United
Kingdom
Operations

Shigemitsu   Takashima        63    Managing   Director
Japan
Operations



Roger F. Hruby, Chairman of the Board, Chief Executive Officer,
and President and Chief Operating Officer of the Companys
predecessor, Bee  Chemical, from 1977 until the sale of that
company  to  Morton Thiokol,  Inc.,  in 1985, at which time Mr.
Hruby also  became  its Chief Executive Officer.  Mr. Hruby also
organized the formation of Bee  Chemicals  Japanese joint venture
in 1970 and supervised  its growth  from  a  startup  venture to
a  significant  manufacturing company  with sales in excess of
$40 million.  In 1986,  Mr.  Hruby formed  the  Company,  which
purchased  Bee  Chemicals  specialty transferable  solid coatings
division from Morton Thiokol  and  has been Chairman of the
Board, Chief Executive Officer, and until June 1995, President of
the Company since the date of its incorporation. Mr.  Hruby  has
been involved in the specialty  chemical  industry since    1958.
Mr. Hruby earned a bachelors degree in chemistry  from
North Central College and a Masters of Business Administration
from the University of Chicago.

Dennis   W.  Lakomy,  Vice  President,  Chief  Financial
Officer, Secretary,  Treasurer  and a director of the  Company,
joined  Bee Chemical  in  1975 and served as Vice President and
Controller  of that  company  from 1982 until cofounding CFC with
Mr.  Hruby  in 1986.   Mr. Lakomy was elected a director of the
Company in August,
1995.   Mr.  Lakomy  earned a bachelors degree in  accounting
from Loyola   University   of  Chicago  and  a   Masters  of
Business
Administration from the University of Chicago.

William  A.  Herring, Senior Vice President of  Operations  of
the Company,  joined the Company in June, 1996.  Prior to
joining  the Company,  Mr.  Herring  served  from  1992  as  Vice
President   Manufacturing  and Technology with Central Products
Company,  where he  was  responsible  for three manufacturing
locations  and  five distribution centers.  Mr. Herring earned a
bachelors and a masters degree from the University of Missouri in
Chemical Engineering.

Robert  E.  Jurgens, Senior Vice President of Sales and
Marketing, joined  the  Company in June, 1987.  Prior to joining
the  Company, Mr.  Jurgens served in successive senior management
positions  with White  Graphic  Systems.  Mr. Jurgens began his
career  with  White Graphics Systems in 1966 in sales and design.
Mr. Jurgens earned a bachelors degree from Indiana University.

Glenn  L.  Ford,  Vice President, joined the  Company  in  1990
as Director  of Operations and since 1992 has served as Vice
President of  Operations.  Prior to that time, Mr. Ford had
various positions in  manufacturing with Tandy Magnetics, serving
as General  Manager of  Tandy Magnetics from 1987 to 1990.  Mr.
Ford earned a  B.S.  in Management from San Jose State
University.

Mark  A.  Lamb, Vice President and General Manager of
CFCNorthern Bank  Note joined Northern Bank Note in 1977, and has
held  various positions   in  production,  sales  and  marketing
and    executive
management   before  assuming  the  General  Manager  position
in
September,  1997.   Mr.  Lamb  holds a B.S.  Degree  from
Northern Illinois  University  and graduated from the Printing
Industry  of Americas Executive Development Program.

David C. Beeching joined CFC Applied Holographics as Vice
President of  Sales  and  Marketing  in 1992.  Prior  thereto,
he  served  a Director  of  Marketing and Vice President of The
Rank Organization PLC.

Craig  D. Newswanger formed Advanced Dimensional Displays in
1984, which  was merged into Applied Holographics PLC in 1989.
In  1992, following  the formation of CFC Applied Holographics,
he was  named Vice  President,  Research and Development
Holographics,  of  the Company.

David  M.  Plomin joined the Company in 1988 and has  held
several managerial  positions,  including manager  of  technical
services, quality  assurance,  production, and embossing,  and
in  1995  was promoted  to  Director  of  Research and
Development.   Mr.  Plomin earned  a  bachelors  degree from Knox
College  and  a  Masters  of Business Administration from
Governors State University.

Jeffrey  E. Norby joined the Company in 1995 as Controller.
Prior to that time he held several managerial positions in
administration and  accounting with Newell, Inc. and Chicago
Bullet Proof Company. He  is  a  Certified  Public Accountant and
earned  a  Masters  of Business Administration from the
University of Illinois.

Peter  C.  McGillivray has been Managing Director of  CFCs
United Kingdom  Operations  since  1988.  Prior thereto,  Mr.
McGillivray served  as  a sales representative for British
Cellulose  Lacquers, which  was  acquired by Bee Chemical Company
and later included  as part of the ongoing business purchased by
the Company.

Shigemitsu Takashima joined the Company in 1997.  Prior to
joining the   Company,  Mr.  Takashima  served  from  1973  in
successive
management  positions  with Nippon Bee  Chemical  Company  and
was responsible  for worldwide operations.  Mr. Takashima had
been  in the  position  as President since 1985.  Mr. Takashima
earned  his Industrial Chemist Degree from Ritsumeikan University
in Japan.
ITEM 11.  EXECUTIVE COMPENSATION

Information  appearing under the caption Management  Compensation
in the Proxy Statement is incorporated herein by reference.


ITEM  12.   SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS
AND MANAGEMENT

Information appearing under the caption Principal Stockholders in
the Proxy Statement is incorporated herein by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  appearing under the caption Certain Transactions  in
the Proxy Statement is incorporated herein by reference.



                             PART IV
                                
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8K

(a) (1)   Financial Statements
     Reference  is made to the information set forth  in  Part
     II, Item  8  of  this  Report, which information  is
     incorporated herein by reference.
     
(a) (2)   Financial Statement Schedules
     Reference  is made to the information set forth  in  Part
     II, Item  8  of  this  Report, which information  is
     incorporated herein by reference.
     
(a) (3)   Exhibits
     The  exhibits  to this report are listed in the Exhibit
     Index included  elsewhere herein.  Included in the  exhibits
     listed therein are the following exhibits which constitute
     management contracts or compensatory plans or arrangements.
     
     10.2 Stock Option Plan of the Company
     10.3 Director Stock Option Plan of the Company
     10.4 Employee Stock Purchase Plan of the Company

(b)  Reports on Form 8K
     The  Company did not file any reports on Form 8K  during
     the fourth quarter of 1997.
(c)  Exhibits


   Exhibit
   Number                    Description of Exhibit

          3.1
          Restated  Certificate of Incorporation  of  the
          Company (incorporated  by  reference  to  Exhibit  3.1
          to   the Companys   registration   statement   on
          Form    S1, Registration No. 3396110).
          3.2
          Amended and Restated Bylaws of the Company
          (incorporated by   reference   to   Exhibit  3.2  to
          the   Companys registration statement on Form S1,
          Registration No. 3396110).
          4.1
          Specimen Certificate Representing Shares of Common
          Stock (incorporated  by  reference  to  Exhibit   4.1
          to   the
          Companys   registration   statement   on    Form
S1,
          Registration No. 3396110).
          10.1(a)
          Amendment and Restated Credit Agreement, dated March
          18, 1992, between the Company and LaSalle Northwest
          National Bank,  as amended (the Credit Agreement)
          (incorporated by   reference   to  Exhibit  10.1  to
          the   Companys Registration Statement on Form S1,
          Registration No. 3396110.
          10.1(b)
Tenth
          Amendment to the Credit Agreement, dated as of  June
          1, 1996, and related documents.
          10.1(c)
          Eleventh Amendment to the Credit Agreement, dated as
          of February 1, 1997, and related documents.
          10.1(d)
          Twelfth Amendment to the Credit Agreement, dated  as
          of March 3, 1997, and related documents.
          10.2
          Stock  Option  Plan  of  the  Company  (incorporated
          by reference  to Exhibit 10.7 to the Companys
          registration statement on Form S1, Registration No.
          3396110). 10.3
          Director  Stock Option Plan of the Company
          (incorporated by   reference   to  Exhibit  10.8  to
          the   Companys registration statement on Form S1,
          Registration No. 3396110).
          10.4
          Employee   Stock   Purchase   Plan   of   the
          Company (incorporated  by  reference  to  Exhibit
          10.9  to  the Companys   registration   statement   on
          Form    S1,
          Registration No. 3396110).
          10.5
Stock
          Option  Agreement,  dated August 18, 1995,  between
          the Company and Roger F. Hruby, as amended
          (incorporated  by reference to Exhibit 10.10 to the
          Companys registration statement on Form S1,
          Registration No. 3396110). 10.6
          CFC
          Applied Holographics Joint Venture Agreement dated
          April 1,  1992,  among  the  Company,  CFC
          Management,  Inc., Applied  Holographics  PLC,  and
          Applied  Holographics, Inc.,  as  amended,  and
          related Partnership  Agreement, Representation
          Agreement,   and   License    Agreement (incorporated
          by  reference to  Exhibit                 10.13  to
          the
          Companys   registration   statement   on    Form
S1,
          Registration No. 3396110).
          10.7
          Purchase Agreement, dated November 18, 1994, between
          the Company  and Baxter Healthcare Corporation
          (incorporated by   reference   to  Exhibit  10.14  to
          the   Companys registration statement on Form S1,
          Registration No. 3396110).
          10.8
Form
          of  Indemnification Agreement between  the  Company
          and each  of  its  Officers and Directors
          (incorporated  by reference to Exhibit 10.15 to the
          Companys registration statement on Form S1,
          Registration No. 3396110).
      11.1  Statement  re  Computation of  Net  Income  Per
Share (unaudited)
   21.1 List of Subsidiaries of the Company
      23.1 Consent of Experts and Counsel
     27.1 Financial Data Schedule







                      CFC INTERNATIONAL, INC.
                   FINANCIAL STATEMENT
                   SCHEDULES
         SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS
                                        Additions
                              Balance at          Charged To
Balance
                              Beginning Costs and           at
          end Description               Of Year   Expenses
          Deductions*
Of Year
                                            (in thousands)

Year Ended December 31, 1995 Allowance
for Doubtful Accounts         $ 410     $ 681     $(743)    $
348

Year Ended December 31, 1996 Allowance
for Doubtful Accounts         $ 348     $1,244    $(1,027)  $
565

Year Ended December 31, 1997 Allowance
for Doubtful Accounts         $ 565     $1,275    $(1,228)  $
612


_________________________
*  Deductions represent amounts written off.























                           SIGNATURES
                                
                                
                                
                                
                                
                                
                                
                                
Pursuant to the requirements Section 13 or 15(d) 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 March 20, 1997.
                                   CFC INTERNATIONAL, INC.
                                   By:     /s/  ROGER F. HRUBY
                                        Roger F. Hruby
                                         Chairman of the Board
of Directors,
                                         Chief  Executive
Officer, and President


Pursuant  to  the requirements of the Securities Exchange  Act
of 1934,  this report has been signed below by the following
persons on  behalf                      of  the registrant and in
the capacities indicated  on
March 20, 1998.

            Signature                            Title
  Principal Executive Officer:


            /s/  ROGER  F.  HRUBY       Chairman of the Board of
 .                                              Directors,
          Roger F. Hruby              Chief Executive Officer,
and
                                               President




  Principal Financial Officer:


           /s/  DENNIS W.  LAKOMY   Vice President, Chief
Financial .                                              Officer,
Secretary
          Dennis W. Lakomy              Treasurer, and Director




  Principal Accounting Officer:


           /s/  JEFFREY E.  NORBY              Controller
 .
          Jeffrey E. Norby











            Signature                            Title



  A Majority of the Directors:




            /s/  ROGER  F.  HRUBY
Director
 .
          Roger F. Hruby




           /s/  WILLIAM G.  BROWN
Director
 .
          William G. Brown




           /s/  ROBERT B.  COVALT
Director
 .
          Robert B. Covalt




           /s/  DENNIS W.  LAKOMY
Director
 .
          Dennis W. Lakomy




            /s/   RICHARD  PIERCE
Director
 .
          Richard Pierce




           /s/ DAVID D. WESSELINK
Director
 .
          David D. Wesselink











                          Exhibit 10.1(b)


                     TENTH AMENDMENT TO
           AMENDED AND RESTATED CREDIT AGREEMENT


           This  Tenth  Amendment dated as of  June  1,  1996,
is entered into  between  CFC  INTERNATIONAL,  INC.,   a
Delaware
corporation (the Company) and LASALLE NORTHWEST NATIONAL BANK, a
national banking association (the Bank).

           WHEREAS,  the  Company and the  Bank  entered  into
an Amended  and  Restated Credit Agreement dated March 31,
1992,  as amended  (as  heretofore  amended,  the  Agreement,
with  terms defined  therein  being used herein as therein
defined)  providing
for borrowings by the Company from the Bank; and
           WHEREAS,  the  Company and the Bank  desire  to
modify certain covenants of the Agreement.
          NOW, THEREFORE, in consideration of the premises, and
of the  mutual agreements hereinafter set forth, it is agreed by
the parties hereto as follows:
                Section 6.A. is hereby amended to delete the
word and  immediately  preceding (iv)  and  to  add  the
following immediately  following  the  dollar  figure  $750,000
where  it appears therein:
               ; and (v) indebtedness to the Illinois
Development Finance Authority (IDFA) in connection with the
bonds issued  by IDFA  secured by a Loan Agreement dated as of
June 1, 1996 between Company and IDFA.
                Section 6.H. is hereby deleted in its entirety
and the following is hereby substituted therefor:
                6.H.      [This  Section  is  left
intentionally blank.]
               A new Section 7.K. is added to read as follows;
                As  of the end of each fiscal year of the
Company (beginning  with  the  1995 fiscal yearend),  the
Company  shall maintain  a  Tangible Net Worth of not less than
$8,000,000.   As used  herein,  Tangible Net Worth means the
Net  Worth  of  the Company (defined as the total of all assets
which, under generally accepted  accounting  principles in the
United  States  (GAAP), would  appear as assets on the balance
sheet of the Company,  less the  total of all liabilities,
which, under GAAP, would appear  as liabilities on the balance
sheet of the Company) LESS all  of  the following of the
Company: (i) all prepaid expenses, (ii) the  book value  of all
assets which would be treated as general intangibles under
GAAP,  including, without limitation, goodwill, trademarks,
tradenames,   brands,  copyrights,  patents,  licenses,
deferred charges and covenants not to compete, (iii) all
deposits and  (iv) accounts,  notes  and  other  receivables
and  amounts  due  from shareholders, Affiliates and/or
employees of the Company.
                 Except   as  specifically  amended  hereby,
all
provisions  of  the  Agreement and the Loan  Supporting
Documents shall  remain  in  full force and effect.  Any
reference  to  the Agreement  shall refer to the Agreement as
amended by  this  Tenth Amendment.

                To  induce  the  Bank to amend the Agreement,
the Company represents and warrants to the Bank that:


                              a.   On the date hereof, the
                    Company is  in  compliance with all of the
                    terms  and provisions  set  forth in  the
                    Agreement  (as modified by this Tenth
                    Amendment) on its  part to  be observed or
                    performed, and no event  of default
                    specified  in  Section  8   of
                    the
                    Agreement, nor any event which, upon notice
                    or lapse of time, or both, would constitute
                    such an event of default, has occurred.
                    
                                b.     On  the  date  hereof,
                    the representations and warranties  set
                    forth  in
                    Section  5  of the Agreement (as  modified
                    by this  Tenth  Amendment) are true  and
                    correct with    the   same   effect   as
                    if    such representations and warranties
                    had  been  made on                      the
                    date    hereof,    except    such
                    representations and warranties which
                    expressly relate to an earlier date.
                    
                              c.   On the date hereof, the
Company
                    has   complied  with  and  kept  all  of
the
                    covenants   (as   modified   by   this
                    Tenth Amendment) set forth in Section 6 and
                    7 of the Agreement.
                    
                 The  Company  hereby  affirms  that  all  of
its obligations to Bank under the Reimbursement Agreement dated
as  of June  1,  1996 between Bank and the Company are secured
by  Banks lien on the Collateral.

                 The   Tenth  Amendment  shall  be  construed
in
accordance with and governed by the laws, but not the conflict
of laws rules, of the State of Illinois.

                The  Company  will deliver to the  Bank
certified copies  of  Resolutions of its Board of Directors
authorizing  the Company to enter into this Tenth Amendment and
make the additional borrowings referred to herein.

                The Company agrees to pay on demand all costs
and expenses of the Bank, excluding its reasonable attorneys
fees,  in connection with the execution and delivery of this
Amendment.

          IN WITNESS WHEREOF, the parties have executed this
Tenth Amendment as of the date set forth above.

                              CFC INTERNATIONAL, INC.



                                   
                                   By:
                                   _____________________________
                                   __
                                                            Titl
                                                            e:

_______________________________

                              
                              LASALLE NORTHWEST NATIONAL BANK
                              
                              
                              
                                   
                                   By:
                                   _____________________________
                                   __
                                                            Titl
                                                            e:

_______________________________




                         Exhibit 10.1(c)

                       ELEVENTH AMENDMENT TO
               AMENDED AND RESTATED CREDIT AGREEMENT


      This  Eleventh Amendment dated as of February  1,  1997,
is entered
into  between  CFC  INTERNATIONAL,  INC.,   a   Delaware
corporation (the Company) and LASALLE NORTHWEST NATIONAL BANK, a
national banking association (the Bank).

     WHEREAS, the Company and the Bank entered into an Amended
and Restated  Credit Agreement dated March 31, 1992, as  amended
from time  to time (as heretofore amended, the Agreement, with
terms defined  therein  being used herein as therein defined)
providing for borrowings by the Company from the Bank; and

      WHEREAS,  the  Company and the Bank  desire  to  extend
the maturity  of  the  Revolving  Note and  to  otherwise
modify  the Agreement.

      NOW, THEREFORE, in consideration of the premises, and of
the mutual  agreements  hereinafter set forth, it  is  agreed
by  the parties hereto as follows:

      1.    The  date, February 1, 1997, set forth in the  third
line  of  the  first sentence of Section 1.A. of the Agreement
is deleted  and  the date March 3, 1997 shall be inserted  in
lieu thereof.

      2.   The promissory note which is Exhibit A to the
Agreement is  hereby amended and restated in its entirety to
read as Exhibit A attached hereto.

      3.   All references in the Agreement and the Loan
Supporting Documents  to  the  Revolving Note and the Revolving
Credit  Loan shall  be  deemed to be references to,
respectively, the Revolving Credit Note executed and delivered
by the Company pursuant to this Eleventh  Amendment,  and  the
Revolving  Credit  Loan  evidenced thereby.

     4.   Except as specifically amended hereby, all provisions
of
the  Agreement and the Loan Supporting Documents shall  remain
in full force and effect.  Any reference to the Agreement shall
refer to the Agreement as amended by this Eleventh Amendment.

      5.    To induce the Bank to amend the Agreement, the
Company represents and warrants to the Bank that:

          a.    On  the  date hereof, the Company is in
          compliance with  all of the terms and provisions set
          forth  in  the Agreement  (as  modified by this
          Eleventh Amendment)  on its  part  to be observed or
          performed, and no event  of default specified in
          Section 8 of the Agreement, nor any event  which,
          upon notice or lapse of  time,  or  both, would
          constitute such an event of default, has occurred.
          
          b.     On  the  date  hereof,  the  representations
          and warranties  set forth in Section 5 of the
          Agreement  (as modified  by  this  Eleventh
          Amendment)  are  true  and correct  with the same
          effect as if such representations and  warranties had
          been made on the date hereof, except such
          representations  and  warranties  which  expressly
          relate to an earlier date.
          
          c.    On the date hereof, the Company has complied
          with and  kept  all of the covenants set forth in
          Sections  6 and 7 of the Agreement.
          
      6.   The Eleventh Amendment shall be construed in
accordance with and governed by the laws of the State of
Illinois.

     7.   The Company will deliver to the Bank certified copies
of
Resolutions of its Board of Directors authorizing the  Company
to enter  into  this  Amendment  and make the  additional
borrowings referred to herein.

      8.    The  Company  agrees to pay on demand  all  costs
and expenses of the Bank, including its reasonable attorneys
fees,  in connection with the execution and delivery of this
Amendment.
                              CFC INTERNATIONAL, INC.
                              By:
_______________________________


Title: _______________________________
                              LASALLE NORTHWEST NATIONAL BANK


                              By:
_______________________________




Title: _______________________________





























                         Exhibit 10.1(d)


                       TWELFTH AMENDMENT TO
              AMENDED AND RESTATED CREDIT AGREEMENT
                                
                                
      THIS  TWELFTH  AMENDMENT  TO  AMENDED  AND  RESTATED
CREDIT
AGREEMENT dated as of March 3, 1997, is between CFC
INTERNATIONAL, INC., a Delaware corporation (the Company) and
LASALLE NORTHWEST NATIONAL BANK, a national banking association
(the Bank).
     WHEREAS, the Company and the Bank entered into an Amended
and Restated  Credit Agreement dated March 31, 1992 (as  amended
from time to time, the Agreement); and
      WHEREAS,  the Company and the Bank have agreed to amend
the Agreement as more particularly set forth herein,
      NOW, THEREFORE, in consideration of the premises, and of
the mutual agreements hereinafter set forth, the parties hereto
agree as follows:
      1.    DEFINITIONS.   Capitalized terms used  herein
without definition shall have the respective meanings given
thereto in the Agreement;
     2.   AMENDMENTS TO THE AGREEMENT.
           2.1   Amendment  to Section 1.A.  Section  1.A  of
the
Agreement  is  hereby  amended and restated  in  its  entirety
as follows:

                Revolving Credit Loans.  Subject to the terms
     and conditions  of this Agreement, the Bank agrees to  make
     such revolving
     loans  (each  a  Revolving  Credit  Loan   and,
     collectively,  the  Revolving Credit Loans)  and  to  issue
     Letters  of Credit (hereinafter defined) at such  times  as
     the  Company  may  from time to time request  until  but
     not including  April 1, 1998 in such amounts as the
     Company  may from  time  to  time  request, provided  that
     the  aggregate outstanding  principal amount of such
     Revolving Credit  Loans shall  not exceed $4,500,000 less
     the undrawn face amount  of Letter(s)  of Credit.  Each
     Revolving Credit Loan  after  the initial Revolving Credit
     Loan shall equal at least $10,000 or multiples  of  $1,000
     in excess thereof.   Revolving  Credit Loans  may be repaid
     and, subject to the terms and conditions hereof,
     reborrowed  unless the Revolving  Credit  Loans  are
     otherwise  terminated  or  extended  as  provided   in
     this Agreement.  The  Company shall pay to the Bank
     quarterly  in arrears  a  fee  equal to one quarter of one
     percent  (1/4%) times  the daily average of the unused
     portion of the  Banks commitment   hereunder  to  make
     Revolving   Credit   Loans. Revolving Credit Loans shall be
     used by the Company  for  the purpose  of working capital.
     Revolving Credit Loans and  the Term  Loan(s) hereinafter
     referred to are collectively called Loans and each a Loan.
     
           2.2   Deletion  of  Section 1.D.  Section  1.D  of
the
Agreement is hereby deleted in its entirety.  The Tokyo Letter
of Credit therein defined shall hereafter be deemed to be a
Letter of Credit for all purposes under the Agreement.

          2.3  Amendments to Section 3.A.  (a) The first
paragraph of  Section 3.A of the Agreement is hereby amended and
restated in its entirety as follows:

                Revolving Note.  All Revolving Credit  Loans
     and Letters  of  Credit shall be evidenced by a single
     promissory note  (the Revolving Note and, together with the
     Term Notes hereinabove  referred to, the Notes and each a
     Note)  in the  form of Exhibit A attached hereto, duly
     executed by  the Company,  as  said Exhibit A may be
     amended or replaced  from time  to time.  At the time of
     the initial disbursement of  a
     Revolving   Credit  Loan  and  at  each  time  an
     additional Revolving  Credit  Loan  shall be requested
     hereunder  or  a repayment  made  in whole or in part
     thereon, an  appropriate notation  thereof shall be made on
     the books and  records  of the Bank.  All amounts recorded
     shall be, absent demonstrable error,  conclusive and
     binding evidence of (i) the  principal amount  of the
     Revolving Credit Loans advanced hereunder  and the amount
     of all Letters of Credit, (ii) any unpaid interest owing
     on  the Revolving Credit Loans, and (iii) all  amounts
     repaid  on  the  Revolving Credit Loans and  the  Letters
     of Credit.                                        The Banks
     failure to record any such amount or  any
     error in recording such amounts shall not, however, limit
     or otherwise affect the obligations of the Company
     hereunder  or under the Note to repay the principal amount
     of the Revolving Credit Loans, together with all interest
     accruing thereon.
     
                (b)  The second paragraph of Section 3.A is
hereby amended  by  deleting from the first sentence therein
the  phrase and shall deliver to the Bank a Borrowing Base
Certificate in the form attached hereto as Exhibit E,.
           2.4   Amendments to Section 3.B.  Section  3.B  of
the
Agreement  is  hereby  amended  by deleting  the  first
paragraph thereof in its entirety.

           2.5   Amendment to Sections 3.C and 3.D.  Sections
3.C
and  3.D  are  hereby amended and restated in their entireties
as follows:

                3.C.   Interest Rates.  The outstanding
     principal amount  of  the  Loans shall bear interest, at
     the  Companys option,
     at the Prime Rate or at Adjusted LIBOR (as  such
     terms are hereinafter defined).

                     3.C.1.  Prime Rate means the rate in effect
     from  time  to time as set by the Bank and called  its
     Prime Rate.
     The  effective date of any change in the  Prime  Rate
     shall for purposes hereof be the date the rate is changed
     by the Bank.  The Bank shall not be obligated to give
     notice  of any  change  in the Prime Rate.  Interest shall
     be calculated on  the
     basis of a year consisting of 360 days and shall  be
     paid for the actual number of days elapsed.  Interest on
     the portion
     of the unpaid principal balance bearing interest  at
     the Prime Rate shall be payable monthly on the first
     business day  of
     each month and at maturity.  Any amount of principal
     or  interest on advances bearing interest at the  Prime
     Rate which  is  not paid when due, whether at the stated
     maturity, by  acceleration or otherwise, shall bear
     interest payable on demand at a fluctuating interest rate
     per annum equal at  all times  to  the  Prime Rate plus
     three percent  (the  Default Rate).
     Loans  bearing  interest  at  the  Prime  Rate  are
     referred to herein as Prime Rate Loans.

                    3.C.2.  At any time and from time to time
     the Company
     may identify one or more portions of the outstanding
     principal  balance of the Loans (each, a LIBOR Loan)  which
     will bear interest at Adjusted LIBOR (hereinafter defined).
     Each  LIBOR Loan must equal $500,000 or multiples of
     $50,000 in excess thereof.  Adjusted LIBOR means a rate of
     interest equal  to  one per cent (1%) per annum in excess
     of  the  per annum  rate of interest at which U.S. dollar
     deposits  in  an amount  comparable to the amount of the
     relevant  LIBOR  Loan and  for  a  period  equal to the
     relevant Interest  Period (hereinafter  defined)  are
     offered  generally  to  the  Bank (rounded  upward if
     necessary, to the nearest 1/16 of  1.00%) in  the
     London  Interbank Eurodollar market  at  11:00  a.m.
(London  time) two banking days prior to the commencement  of
each  Interest  Period, such rate to remain  fixed  for  such
Interest  Period.   Interest Period shall  mean  successive
one, two or three month periods as selected from time to time
by  the Company by notice given to the Bank not less than two
banking  days  prior  to  the first day  of  each  respective
Interest  Period; provided that: (i) each such  one,  two  or
three  month period occurring after such initial period shall
commence  on  the  day  on which the  next  preceding  period
expires;  (ii) the final Interest Period shall be  such  that
its  expiration occurs on or before the stated maturity  date
set  forth  in Section 1.A; and (iii) if for any  reason  the
Company  shall fail to select timely a period, then it  shall
be  deemed to have selected a Prime Rate Loan; provided that,
at  any time any Interest Period expires less than one  month
before  the  stated  maturity  date,  then,  for  the  period
commencing on such expiration date and ending on the maturity
date  such  LIBOR  Loan shall convert to a Prime  Rate  Loan.
Interest  on  each LIBOR Loan shall be payable  on  the  last
banking  day  of  each Interest Period with respect  thereto,
commencing  on  the first such date to occur after  the  date
hereof,  at  maturity, after maturity on demand, and  on  the
date  of  any payment hereon on the amount paid.  The Company
hereby  further promises to pay to the order of the Bank,  on
demand, interest on the unpaid principal amount hereof  after
maturity  (whether  by  acceleration  or  otherwise)  at  the
Default Rate.
          3.D. Provisions Applicable to All LIBOR Loans.
                3.D.1.   The Banks determination of Adjusted
LIBOR  as provided above shall be conclusive, absent manifest
error.   Furthermore, if the Bank determines, in  good  faith
(which  determination  shall be conclusive,  absent  manifest
error), prior to the commencement of any Interest Period that
(a)  U.S.  dollar deposits of sufficient amount and  maturity
for  funding any LIBOR Loan are not available to the Bank  in
the London Interbank Eurodollar market in the ordinary course
of  business, or (b) by reason of circumstances affecting the
London  Interbank Eurodollar market, adequate and fair  means
do  not  exist  for ascertaining the rate of interest  to  be
applicable  to  the  relevant  LIBOR  Loan,  the  Bank  shall
promptly  notify  the  Company  and  such  LIBOR  Loan  shall
automatically  convert on the last day  of  its  thencurrent
Interest Period to a Prime Rate Loan.

                 3.D.2.   If,  after  the  date  hereof,  the
introduction of, or any change in any applicable law, treaty,
rule,  regulation  or guideline or in the  interpretation  or
administration thereof by any governmental authority  or  any
central  bank  or  other fiscal, monetary or other  authority
having  jurisdiction over the Bank or its lending  office  (a
Regulatory Change), shall, in the opinion of counsel to the
Bank, makes it unlawful for the Bank to make or maintain  any
LIBOR  Loan  evidenced hereby, then the Bank  shall  promptly
notify  the  Company and such LIBOR Loan shall  automatically
convert  on the last day of its thencurrent Interest  Period
to a Prime Rate Loan.

                3.D.3.  If, for any reason, any LIBOR Loan is
paid  prior  to  the  last banking day  of  its  thencurrent
Interest  Period,  the Company agrees to indemnify  the  Bank
against any loss (including any loss on redeployment  of  the
funds  repaid), cost or expense incurred by  the  Bank  as  a
result of such prepayment.

                     3.D.4.  If any Regulatory Change (whether  or
     not having the force of law) shall (a) impose, modify or deem
     applicable  any  assessment,  reserve,  special  deposit   or
     similar requirement against assets held by, or deposits in or
     for  the account of or loans by, or any other acquisition  of
     funds or disbursements by, the Bank; (b) subject the Bank  or
     any LIBOR Loan to any tax, duty, charge, stamp tax or fee  or
     change  the  basis of taxation of payments  to  the  Bank  of
     principal  or  interest  due from the  Company  to  the  Bank
     hereunder (other than a change in the taxation of the overall
     net  income of the Bank); or (c) impose on the Bank any other
     condition  regarding such LIBOR Loan or  the  Banks  funding
     thereof,  and  the Bank shall determine (which  determination
     shall  be conclusive, absent manifest error) that the  result
     of  the  foregoing is to increase the cost  to  the  Bank  of
     making or maintaining such LIBOR Loan or to reduce the amount
     of principal or interest received by the Bank hereunder, then
     the Company shall pay to the Bank, on demand, such additional
     amounts  as the Bank shall, from time to time, determine  are
     sufficient  to  compensate and indemnify the  Bank  for  such
     increased cost or reduced amount.
           2.6   Amendments to Section 7.A.  Section  7.A  of  the
Agreement  is hereby amended (i) by deleting from the fourth  line
in  paragraph  (i)  therein  the word Company  and  substituting
therefor  the  phrase Company and its consolidated subsidiaries,
(ii) by deleting from paragraph (i) therein clause (z) at the  end
thereof,  and (iii) by deleting from the fourth line in  paragraph
(ii)  therein  the  word Company and substituting  therefor  the
phrase Company and its consolidated subsidiaries.

          2.7  Additions to Section 7.  The following new Sections
7.L and 7.M are hereby added to the Agreement:

                7.L At lease once prior to the expiration of  the
     Banks  commitment to make Revolving Credit Loans  hereunder,
     reduce  for  a  period  of  at least  thirty  (30)  days  the
     aggregate  outstanding principal amount of  Revolving  Credit
     Loans to zero.
     
                7.M  At all times, maintain a ratio of Liabilities
     to  Tangible  Net Worth for the Company and its  consolidated
     subsidiaries which shall not exceed 2.0 to 1.0.
     
           2.8   Deletion  of  Section 8.M.  Section  8.M  of  the
Agreement  is  hereby  deleted in its  entirety,  and  the  phrase
Intentionally deleted is hereby substituted therefor.

          2.9  Amendment to Section 9.  The introductory statement
in  Section 9.A of the Agreement is hereby amended and restated in
its entirety as follows:

                To secure its obligations in connection with  any
     Letter  of  Credit issued pursuant hereto, including  without
     limitation, any applicable therefor:

           2.10  Deletion  of Sections 11.A.2 and 11.M.   Sections
11.A.2  and  11.M  of the Agreement are hereby  deleted  in  their
entireties.

           2.11 Replacement of Exhibits A and I1.  Exhibits A and
I1  attached  to  and  made a part of the  Agreement  are  hereby
deleted in their entireties and Exhibits A and I1 attached hereto
are hereby substituted therefor.

      3.    WARRANTIES.   To induce the Bank to  enter  into  this
Amendment, the Company warrants that:

           3.1   No  Default.  As of the date hereof, no Event  of
Default  under  Section 8 of the Agreement,  as  amended  by  this
Amendment, or event or condition which, with the giving of  notice
or  the passage of time, shall constitute an Event of Default, has
occurred or is continuing.

            3.2    Warranties.   As  of  the  date   hereof,   the
representations and warranties in Section 5 of the  Agreement  are
true  and  correct as though made on such date,  except  for  such
changes as are specifically permitted under the Agreement.

      4.    CONDITIONS  PRECEDENT.  This  Amendment  shall  become
effective as of the date above first written after receipt by  the
Bank of the following documents:

                     (a)   This  Amendment duly  executed  by  the
               Company;
                    (b)  Replacement Revolving Note in the form of
               Exhibit  A  attached hereto duly  executed  by  the
               Company;
                     (c)   Replacement A Term Note in the form  of
               Exhibit  I1 attached hereto duly executed  by  the
               Company; and
                      (d)    such  other  documents  as  the  Bank
               reasonably may request.
     5.   GENERAL.
           5.1   Law.  This Amendment shall be construed in  accor
dance with and governed by the laws of the State of Illinois.

           5.2   Successors.  This Amendment shall be binding upon
the  Company  and  the  Bank and their respective  successors  and
assigns,  and  shall inure to the benefit of the Company  and  the
Bank and their respective successors and assigns.

           5.3   Confirmation of the Agreement.  Except as amended
hereby, the Agreement shall remain in full force and effect and is
hereby ratified and confirmed in all respects.


CFC INTERNATIONAL, INC.                 LASALLE NORTHWEST NATIONAL
BANK

By:          __________________________                        By:
___________________________________
Its:           __________________________                     Its:
___________________________________












                    REPLACEMENT REVOLVING NOTE
                                 
$4,500,000                              Dated as of March 3, 1997
                                              Due:  April 1, 1998
       CFC   INTERNATIONAL,  INC.,  a  Delaware  corporation  (the
Maker), for value received, hereby promises to pay to the  order of
LASALLE NORTHWEST NATIONAL BANK, a national banking association
(the  Bank), on April 1, 1998, the principal sum of FOUR MILLION
FIVE  HUNDRED  THOUSAND  DOLLARS ($4,500,000),  or  the  aggregate
principal amount of all then outstanding advances made by the Bank
to  the Maker hereof pursuant to Section 1.A of the Loan Agreement
(as herein defined), if less than said principal sum together with
interest  at  the  rates  and payable  as  provided  in  the  Loan
Agreement  referred  to  below.  In no event  shall  the  interest
payable hereunder exceed the highest rate permitted by law.

      All payments hereunder shall be applied first to interest on
the  unpaid  balance  at  the rate herein specified  and  then  to
principal.   All payments of principal and interest on  this  Note
shall  be payable in lawful money of the United States of America.
Principal and interest shall be paid to the Bank at its office  at
4747  Irving Park Road, Chicago, Illinois 60641, or at such  other
place  as the holder of this Note may designate in writing to  the
undersigned.   This Note may be prepaid only as provided  in  said
Loan Agreement and must be prepaid in the amounts and at the times
set forth in said Loan Agreement.

     This Note is the Revolving Note referred to in, and evidences
certain  indebtedness  incurred under, the  Amended  and  Restated
Credit Agreement, between the Maker and the Bank, dated March  31,
1992   (together  with  any  and  all  amendments,  modifications,
extensions,  renewals and restatements thereof  or  therefor,  the
Loan  Agreement),  to  which reference  is  hereby  made  for  a
statement of the terms and conditions under which the due date  of
this  Note  or  any  payment  thereon may  be  accelerated  or  is
automatically accelerated.  The holder of this Note is entitled to
all  of  the benefits and security provided in said Loan Agreement
and  the Loan Supporting Documents referred to therein.  The Maker
agrees   to  pay  all  costs  of  collection  and  all  reasonable
attorneys  fees paid or incurred in enforcing any of  the  Banks
rights hereunder promptly on demand of the Bank.
      The  principal  amount  of this Note evidences  the  maximum
amount  of  Revolving Credit Loans available to the Maker  by  the
Bank   pursuant   to   Section  1.A   of   the   Loan   Agreement.
Notwithstanding  the stated principal amount  of  this  Note,  the
Makers liability hereunder at any time hereafter shall be limited
to  the then unpaid principal amount of all Revolving Credit Loans
made  by  the Bank to or for the account of the Maker pursuant  to
Section  1.A of the Loan Agreement, together with accrued interest
thereon, and all other costs and expenses as provided in the  Loan
Agreement.   In  determining the Makers  liability  to  the  Bank
hereunder, the books and records of the Bank shall be controlling.

      This  Note is a substitute and replacement for,  but  not  a
repayment  of,  that  certain  $5,500,000  Amended  and   Restated
Revolving  Note  of  the  Borrower payable  to  LaSalle  Northwest
National Bank dated February 1, 1997 and does not and shall not be
deemed to constitute a novation therefor.


                                   CFC INTERNATIONAL, INC.
                                   By: ________________________ Its
                                   ________________________
                    REPLACEMENT A TERM NOTE

$1,748,224                                    Dated March 3, 1997
                                              Due:  April 1, 1999

       CFC   INTERNATIONAL,  INC.,  a  Delaware  corporation  (the
Maker), for value received, hereby promises to pay to the  order of
LaSalle Northwest National Bank, a national banking association
(the Bank), the principal sum of ONE MILLION SEVEN HUNDRED FORTY
EIGHT   THOUSAND  TWO  HUNDRED  TWENTY  FOUR  AND  00/100  DOLLARS
($1,748,224),  payable  in  consecutive  monthly  installments  of
$9,292  each  on  a monthly basis, commencing April  1,  1997  and
continuing  on  the first day of each and every month  thereafter,
with  a  final  installment of the then unpaid  principal  balance
outstanding   hereunder  on  April  1,   1999.    Said   principal
indebtedness shall bear interest (computed on the basis of a  360
day  year)  on  any and all unpaid principal amounts hereof  until
maturity, which interest shall be payable monthly on the principal
payment  dates provided above, at an interest rate  equal  at  all
times  to  onequarter of one percent (1/4%) above the fluctuating
Prime Rate of the Bank from time to time; provided, however,  that
such  fluctuating interest rate shall not exceed nine and onehalf
of  one  percent  (91/2%) per annum, except that  any  amount  of
interest  or principal hereof which is not paid when due,  whether
at  stated  maturity,  by acceleration or  otherwise,  shall  bear
interest payable on demand at an interest rate equal at all  times
to three percent (3%) per annum above the then applicable interest
rate  hereunder.  In no event shall the interest payable hereunder
exceed the highest rate permitted by law.

      For  purposes hereof, Prime Rate shall mean  the  interest
rate  referred to by the Bank from time to time as its prime  rate
as  fixed  by the management of the Bank for the guidance  of  its
loan officers, whether such rate is otherwise published, with each
change  in  such Prime Rate to take effect on the  same  day  such
change  is  made  by the Bank.  The use of the term  Prime  Rate
herein  is  not  intended  nor does it imply  that  said  rate  of
interest  is a preferred rate of interest or one which is  offered
by the Bank to its most creditworthy customers.

      All payments hereunder shall be applied first to interest on
the  unpaid  balance  at  the rate herein specified  and  then  to
installments  of  principal in the inverse order of  the  maturity
thereof.   All payments of principal and interest on this  A  Term
Note  shall  be  payable in lawful money of the United  States  of
America.  Principal and interest shall be paid to the Bank at  its
office at 4747 Irving Park Road, Chicago, Illinois  60641,  or  at
such  other  place  as the holder of this Note  may  designate  in
writing  to  the undersigned.  This A Term Note may be prepaid  in
the amounts and at the times set forth in the Amended and Restated
Credit Agreement between the Maker and the Bank, dated  March  31,
1992   (together  with  any  and  all  amendments,  modifications,
extensions,  renewals and restatements thereof or  therefor  Loan
Agreement).

      This A Term Note is secured by the Mortgage  referred to  in
the Loan Agreement, to which agreements references are hereby made
for  a  statement of the terms and conditions under which the  due
date of this Term Note or any payment hereon may be accelerated or
is automatically accelerated.  The holder of this Note is entitled
to  all  of  the benefits provided in said agreements.  The  Maker
agrees   to  pay  all  costs  of  collection  and  all  reasonable
attorneys  fees paid or incurred in enforcing any of  the  Banks
rights hereunder promptly on demand of the Bank.

     This A Term Note is a replacement and substitute for, but not
a  repayment  of, that certain $2,230,000 Amended and  Restated  A
Term  Note dated on or about August 30, 1992 of the Maker  payable
to  the order of the Bank and does not and shall not be deemed  to
constitute a novation therefor.


                                CFC INTERNATIONAL, INC.
                                                               By:
_______________________________
                                                              Its:
_______________________________



                           Exhibit 11.1

                      CFC INTERNATIONAL, INC.

  STATEMENT RE:  COMPUTATION OF NET INCOME PER SHARE (UNAUDITED)





                                                 Year Ended
                                                  12/31/95

Pro forma net income per share from continuing operations:
Pro forma net income from continuing operations                   $    3,252,076
Pro forma weighted average common shares outstanding:
   Shares attributable to common stock outstanding                     2,800,024
   Shares attributable to Class B common stock outstanding             534,030
   Shares attributable to common stock equivalents outstanding
62,828
   Shares issued to reacquire 21% interest in subsidiary
companies                                                  34,736
                                                  3,431,618
   Pro forma net income per share from continuing operations
0.95


Supplemental pro forma net income per share from continuing
operations:
Pro forma net income from continuing operations                   $    3,252,076
Interest paid on debt to be retired               450,523
   Less tax effect (40%)                             (180,209)
                                                  $3,522,390

Supplemental pro forma weighted average common shares outstanding:

   Shares attributable to common stock outstanding                   2,667,929
   Shares attributable to Class B common stock outstanding           534,030
   Shares attributable to common stock equivalents outstanding
62,828
   Shares issued to reacquire 21% interest in subsidiary
companies                                          34,736
Shares issued through the initial public offering                  1,200,000
                                                  4,499,523

   Supplemental pro forma net income per share from continuing
         operations                               $   0.78





                           Exhibit 21.1

                      CFC INTERNATIONAL, INC. SUBSIDIARIES
                           
                           
     CFC Management, Inc.

     CFC International, Ltd. (U.K.)

     CFC Northern Bank Note Company, LLC






















                           Exhibit 23.1



                CONSENT OF INDEPENDENT ACCOUNTANTS
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
We  hereby  consent  to  the incorporation  by  reference  in  the
Registration  Statements on Form S8 (No. 3332978 and  33332481) of
CFC  International, Inc. of our report dated February 6,  1998
appearing  on page 22 of this Form 10K.  In addition,  we  hereby
consent  to  the  incorporation by  reference  in  the  Prospectus
constituting part of the Registration Statements on Form S3  (No.
33347719) of CFC International, Inc. of our report dated February
6, 1998 appearing on page 22 of this Form 10K.






Price Waterhouse LLP
Chicago, Illinois
March 25, 1998























                           Exhibit 27.1
                                 
                                 
                                 
                                 

                      CFC INTERNATIONAL, INC.
                      FINANCIAL DATA SCHEDULE
                      
                      
                      
                                                 Year Ended
                                                  12/31/97
Cash                                              $1,841,070
Securities                                              0
Accounts receivable                               7,243,516
Allowances                                        (612,000)
Inventory                                         8,631,604
Current assets                                    18,644,673
Property plant and equipment                      26,047,125
Accumulated depreciation                          (10,951,228)
Total Assets                                      $35,498,839

Current liabilities                               $5,651,781
Bonds                                                   0
Preferred  mandatory                                    0
Preferred                                               0
Common                                             47,364
Other SE                                          18,519,962
Total liabilities and equity                      $35,498,839

Sales                                             $42,319,147
Total revenues                                    42,319,147
Cost of goods sold                                26,063,431
Total costs                                       26,063,431
Other expenses                                          0
Loss  provision                                   1,275,000
Interest expense                                  412,920
Income pretax                                     5,428,224
Income taxes                                      2,207,021
Income continuing                                 3,221,203
Discontinued                                            0
Extra ordinary                                          0
Changes                                                 0
Net income                                        3,221,203

Earnings per share  basic                             0.71
Earnings per share  diluted                           0.71