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

     For the Fiscal Year Ended December 31, 1996

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

                   Commission File Number 0-27222
                        ____________________
                        
                         CFC INTERNATIONAL, INC.
                    (Exact name of Registrant as specified in
its charter)

               Delaware                      36-3434526
          (State or other jurisdiction of
(I.R.S. Employer 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) 891-3456
                     ____________________
                               
   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 S-K 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 10-K or
any amendment to this Form 10-K.       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
$17,429,263 at March 21, 1997 (based  on the  closing sale
price on the Nasdaq National Market on  March  22, 1997,  as
reported by The Wall Street Journal).  At March 21,  1997,
the  registrant had issued and outstanding an aggregate of
3,987,217 shares of 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 1997,
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 chemically-complex,
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 on
pharmaceutical  products such  as intravenous solution  bags;
security  products  such  as magnetic  stripes and signature
panels for credit cards;
holographic products  such as authentication seals.  The
Company utilizes  its patented computer-generated 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 use of
the Companys products, its 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 readyto-assemble   (RTA)  furniture,  kitchen
cabinets,  mobile home interiors,  value-  priced  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 39.3% of the Companys net
sales
in  1996. 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, environmentally-safe 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  21.2%  of  the Companys  net
sales  in 1996. See  Chemical  Coatings   Pigmented 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 multi-coercivity  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
Card, to enhance the security and processing speed of
transaction cards. Sales of products in this market
represented approximately 10.3% of the Companys net sales in
1996. 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 miscroprocessor.  Sales of  products in this
market represented approximately 11.6% of the  Companys net
sales in 1996. 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 ultra-
violet light degradation.

CFCs products are sold to more than 5,000 customers worldwide.
The Company  generated  approximately 32.3% of its  1996
revenues from sales  outside of the United States and has
sales, warehousing,  and finishing  operations in England 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  $7.0 million  in improved  equipment  and  employee
training.
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 zero-defect  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) 891-3456.  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.

Low-Cost  Producer.  The Company plans to maintain and
enhance its position as a low-cost 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 Gain-Sharing 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. For  example, in 1996
the Company reworked its metalizer so that  it more
accurately applied a wider layer of metal to the plastic  film
carrier.
As a  result, the metalizer produces a  more  consistent
product with
less waste.  In 1996, the Company purchased a 50  wide state-
of the-art printing press, enabling it to produce  more  rolls
of printed  coatings  in sizes needed by the  Companys
Engineered Board customers.  This printing press was delivered
in January, 1997 and  is  expected to be operational by the
beginning  of the third quarter of 1997.
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 zero-defect
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  know-how,  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,  pre-constructed housing interiors, value-
  priced 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 tamper-evident signature panels
  and high-abrasion  tipping foils for transaction  cards,  as
  well  as specialized multi-coercivity magnetic stripe products
  applied  to both  plastic transaction cards and disposable
  fibrous substrates, such  as  drivers licenses, student
  identification cards, airline tickets, mass-transit tickets,
  and telephone debit cards.
  
     Holographic  Products  include the  Companys  high-
technology
  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 launched a
  product called  HoloText. This product allows textile
  manufacturers to place holography on
  textiles without image degradation from washing and drying.
  The Company also has a patented, computer-generated dot-matrix
  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 state-of-the-art
ultra-violet 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      1996
Features
Printed        RTA furniture    Sauder            39.3%   Large
library
products       (bedroom,        Woodworking,             of
(Engineered    office,          Harden Mfg.,
patterns
Board,         entertainment    Phillips
Superior
lead
building       centers),        (Magnavox),              times
products,      promotional      Charleswood, GE
Scratch/mar
consumer       furniture        Electronics,
resistant
electronics,   (hotel and       Milford-Astor
finishes
home           office),         (Australia),
(Armorite
decorating,    cabinets,        Dallas                      Plus)
trophies/award mobile home      Woodcrafters,             Match
to
any
s)             interiors,       Ditta Manetti            pattern
               picture frames,  (Italy),                    or
color
               award plaques,   Regency Supply,
               trophy bases     Impact
                                Furniture,
                                Progressive
                            Furniture
                                
Pharmaceutical Intravenous      Baxter            21.2%   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

Security       Magnetic         Visa,             10.3%
Magnetic
Products       stripes,         MasterCard,              stripe
is
(transaction   signature        Diners Club,
durable
cards,         panels, and      Discover Card,           (exceeds
life
identification tipping foils    Eurocard                 of
cards)         for credit                                   card)
               cards, debit
Reliable,
few
               cards, ATM                                errors
               cards, access
Signature
               cards, drivers                            panels
are
               licenses,
tamper
               passports                                 evident

Holographic    Authentication   Intel,            11.6%   Fully
Products       seals,           Microsoft, Ivy
integrated
(product       trophies, point- Hill, 3M, JBL,           manu-
authentication of-purchase      Ingersol Rand,
facturing
, high-end     packaging,       PepsiCo, Coors           process
decorative     holography for   Brewing Co.
Authenticates
packaging)     textiles                                  products
                                                         
                                                         Patented
                                                         dot
                                                         matrix
                                                         
Other          Beverage cases,  Rubbermaid,       17.6%
Scratch/mar
Pigmented and  industrial       Delco,  Monroe,
resistant
Simulated      safety signs,    Johnson
Chemical
Metal Products battery cases,   Controls,
resistant
(injection     vent caps,       Fisher-Price,             Low-
cost
molded and     spark plugs,     Revlon, Hancor,
alternative
extruded       dashboard        AC Rochester              Variety
of
plastics)      inserts, tail                             colors
               lenses, toys,                              Non-
               toxic cosmetic
               containers
Chemical Coatings

The  manufacture of the Companys chemical functional coatings is
a multi-step  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, ultra-violet 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,  Harden, Hart, Regency, and Sauder.  These products
represented approximately 28.1%, 34.8% and 39.3% of the
Companys net sales in the three years ended  December  31,
1994,  1995, and 1996  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  post-forming 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  multi location  process  to  a  one-step
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 solvent-based
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 non-toxic
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 three year  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 23.0%, 22.3% and 21.2% of the
Companys net  sales  in the three years ended December 31,
1994, 1995 and
1996 respectively.
Security Products

Security  Products  are divided into three categories  within
CFCs core product line.  These are tamper-evident signature
panels, multicoercivity magnetic stripe, and high-abrasion
tipping foils.

Signature panels are formulated for credit and transaction
cards and are  designed  to  accept ball-point 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  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 tamper-
evident 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.

Multi-coercivity  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.  Multi-
coercivity 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,
mass-transit 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 solvent-based  printing
inks. They         are   an
attractive  alternative  for  disposable   product
applications.

High-abrasion 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.

Security products represented approximately 8.5%, 9.9% and
10.3% of the  Companys net sales in the three years ended
December 31,
1994, 1995 and 1996 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 majority-owned 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
capability of being able to produce holographic art origination
that involves a patented,  computer-generated 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 security
sensitive  products  for authentication and anti-counterfeiting
purposes, and  for  point-ofpurchase 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 three
dimensional 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
electromagnetically  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  threedimensional and to move as the viewing
angle changes.

Holographic products represented approximately 8.2%, 13.7% and
11.6%
of  the  Companys net sales in the three years ended  December
31, 1994, 1995 and 1996.


Holograms and Security or Product Authentication

Holograms,  which  cannot be color-copied 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 anti-counterfeiting and security devices.
Holograms are widely used as a security device by computer
software companies, micro-processor manufacturers, and
entertainment  event marketers,  in  addition to other
industries.  The Company supplied all   holograms  for
Microsofts  Windows  `95,  used
to         prevent
unauthorized  sales  of  this product.  The  Company  also
supplies holograms
used    to   authenticate   Intel    Corp.s
Pentium
microprocessor.

CFC  Applied  Holographics patented holographic  computer
generated 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 computer-developed overlapping images so that  these
images  appear  at  different viewpoints  and  rotate  angles.
The flexibility  created by the dot matrix process provides
the Company with  state-of-the-art  holographic products  that
are both  costeffective  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 paper-based products and point-of-
purchase 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.


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   tee-shirt
manufacturers,   bathing  suit  manufacturers  and   other
textile
manufacturers   who  require  a  high-quality,  bright,
decorative
element.


Holographic Autostereoscopic Process
CFC Applied Holographics has granted a license to American
Propylaea Corporation  to use CFC Applied Holographics real-
time 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 $138,000 in 1995 and
$150,000 in 1996.


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 manufacturers 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  ultra-violet 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 point-of-purchase
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 20.4%,
19.3% and 17.6% of the Companys net sales in the three years
ended December 31, 1994, 1995 and 1996 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 England 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.
In 1996,  CFC invested in an extensive market research  study
in  the Pacific Rim  to hone its strategy.  The Company also
has  added  an experienced Sales and Marketing Manager to
oversee that region.

During  the three years ended December 31, 1994, 1995 and
1996, net sales to Europe, the Pacific Rim, and other
customers outside of the United  States  were  $7,600,000,
$9,446,000  and $12,014,000,  and represented  approximately
27.3%, 27.6% and 32.3%  respectively,  of the   Companys  net
sales.   See  Note 5  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 know-how,
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 customer-specific 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, 1994, 1995  and
1996, the   Company   spent  approximately  $1,062,000,
$1,109,000 and
$1,304,000  respectively  on  Research  and  Development,  of
which $401,000,  $433,000  and $502,000 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 on-going 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, 1996, the Company had 19 full time sales
people who  serve  over 5,000 existing customers.  Sales
personnel include the  Senior  Vice  President  of Sales and
Marketing, one  Product Manger, five Regional Managers and
twelve Field Sales Engineers  who are  compensated on a salary
plus commission basis. The  Companys five  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  four distributors  who  service small
accounts in the United  states  and thirty-five 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 long-term 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  1996   were
Baxter Healthcare, Graphic Packaging and Intel.  Sales made to
Baxter  are pursuant  to  a  three-year, exclusive provider
contract  which  was renewed in November 1994 and expires in
January 1998.  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  1994, 1995 and 1996 were
$4,088,188, $4,537,749  and $4,627,558 respectively.  Sales
made to Graphic Packaging are on  an individual  purchase
order basis.  In
1996, CFC  sales  to  Graphic Packaging  for  a  one-time
promotion for Coors Brewing,  aggregated $1,481,470.  Sales to
Intel are also on an individual purchase order basis, which is
consistent with Intels policies.  The Company  does not  have
a long-term supply or exclusive provider arrangement  with
Intel. Sales  to Intel for each of 1994, 1995 and  1996  were
$0, $86,622, and $1,477,016 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 1996 order of a 50 wide state-of-the-art printing
press will enable it  to access  a  broader market and provide
enhanced  service  to woodgrain  markets  and  the  markets
for  Engineered  Board. This machine was received in January
1997 and should be fully operational by the beginning of the
third quarter of 1997.  The Company has also made  investments
in specially made high-speed computerized slitting equipment,
horizontal mills and a solvent recovery system.
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 after-the-fact.  This is evidenced in
that the  Quality  Assurance function reports directly to  the
Companys Chief   Operating   Officer.    Regularly   scheduled
departmental communications  and brainstorming meetings are
held to  identify improved methods for production and quality.
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  just-in-time  inventory,
reducing
customers inventory carrying costs.   The Company also
successfully completed its first ISO 9001 surveillance audit
in May 1996.

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 know
how. 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  multi-national 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
long term procurement projections.
The  transferable  chemical  coatings  industry  not  only
requires specialized  knowledge  and technology, but  is
capital intensive, requiring  expensive difficult-to-
construct and difficult-to-operate 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, low cost 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  by  the  Illinois
EPA, resulted  in a  100%  capture and 99.2%  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, 1996, the Company had approximately 183
full time employees.   These  included  87  in manufacturing,
33  in support
services, 30 in marketing and sales, 17 in research and
development, and
16  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 134,000 square foot building at 500 State
Street in Chicago Heights, Illinois which houses its
corporate headquarters and  its  primary manufacturing
operations, which
currently utilizes approximately 55% of the buildings
capacity. In the Fall of  1996, the Company completed a
15,000 square foot addition to house its new state-of-the-art
50  wide  printing press.   The  Companys  other principal
properties are leased and include the following:  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 Fisher-
Calo Superfund Site in Kingsbury,  Indiana (the  Fisher-Calo
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 third-party defendant in the
litigation relating to the clean-up of the Fisher-Calo  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   Fisher-Calo   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  clean-up of  the  Fisher-
Calo 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, 1996 and,
although  the  actual  cost  of remediation  for the Fisher-
Calo 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, 1996. 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, 1996, the last reported sale price of the Common
Stock on  the  Nasdaq National Market was $11.25 per share.
At March  21, 1996,  there were approximately 1,312 record
holders of the  Common Stock.       The table below sets for
the high and low sales  prices  of
shares of Commons 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, 1995
          4th Quarter (1)                     10.25
8.625
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
10.000
____________________
(1)   The  price  range of Common Stock for this  period
begins on November 17, 1995.



The Company has not paid any dividends other than  (i)
dividends on its  Common  Stock  to permit stockholders to
pay  taxes  on their proportional  share of the Companys
income during  the period  the Company  was  an  S-Corporation
for federal  and state  income  tax purposes; (ii) a dividend
to permit repayment of loans made  by  the Company  to  its
stockholders in connection with their  purchase  of minority
interests in three of the Companys subsidiaries; and (iii) an
S-Corporation dividend to its then existing stockholders  of
an aggregate amount of $4,500,000 (the S-Corporation Dividend)
which SCorporation Dividend was paid immediately following the
closing of the  IPO using  a  portion of the net proceeds
of  the  IPO.
The
aggregate  amount  of  the  S-Corporation Dividend
represented the estimated undistributed earnings of the
Company through the closing date  of  the  IPO.  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
OperationsLiquidity 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 five-
year period ended December  31, 1996,
have  been  audited  by
Price  Waterhouse  LLP,  independent
accountants,  whose  report for the years ended December  31,
1994, 1995  and  1996  appears  elsewhere in this  report.
The selected financial  data at and for the fiscal year ended
December 31,  1992 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  C-Corporation 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, 1992   1993    1994    1995
                               1996
                                        (In  thousands,
                                        except per
share data)

Income Statement Data:
Net sales                   $22,394$25,328 $27,808
$34,177$37,227 Cost of sales                13,410 14,940
16,469  20,103 22,985 Gross profit                  8,984
10,388  11,339  14,074 14,242 Selling,  general and
administrative                               6,478     6,537
7,152
7,243                  7,863
Research and development         707  1,019  1,062   1,109
1,304
Operating income              1,799  2,832   3,125   5,722
5,075 Interest expense          575    572     669     705
229
Other (income) expense               -         -       (5)
(12)
17
Income  before taxes and minority interest    1,224
2,260 2,461
5,029                  4,829
Provision  (benefit) for income taxes (1)     (491)
155 162
1,669                  1,831
Minority interest in net income (loss)       (195)    (270)
(214)
210                       15
Income  from  continuing operations    1,910   2,375   2,513
3,150
2,983
Discontinued operations:
      Loss  from  discontinued  operations             -
(758)
-                          -         -
       Loss  on  disposal  of  discontinued  operations
-
(260)                      -          -          -
Net income                  $ 1,910$ 1,357 $ 2,513 $ 3,150$
2,983

Pro forma net income from continuing
      operations  (1996 actual)      $    785$ 1,425 $ 1,463$
3,252
$ 2,983
Pro forma net income from continuing
operations per share (1996 actual) (2)          -      -$
0.44
$
0.95                   $          0.66
                                         Year Ended December
                               31, 1992   1993    1994    1995
                             1996
                                        (In  thousands,  except
per share data)
Pro forma weighted average number of shares
     of common stock and equivalents outstanding
     (1996 actual)                -      -   3,302   3,432
4,517
Pro forma net income from continuing
      operations, as adjusted (1996 actual) (2)  (3)
-                    $ 1,694$ 3,522$ 2,983
Pro forma net income from continuing operations
      per share, as adjusted (1996 actual) (2) (3)           -
$ 0.38                   $   0.78   $    0.66
Pro forma weighted average number of shares
     of common stock and equivalents outstanding,
    as  adjusted (1996 actual) (3) (4)           -       -
4,502 4,501                  4,517
Other Data:
Capital expenditures        $ 1,900$ 1,937 $ 1,591 $ 1,092$
3,862 Depreciation  and amortization     869   1,107    1,249
1,423 1,535
EBITDA (5)                    2,668  2,831   4,379   7,157
6,593

Balance Sheet Data (at period end):
Working capital             $ 3,276$ 4,455 $ 5,973 $ 7,950$
10,635 Total assets                 16,112 17,718  19,937
23,269 28,206 Total debt (6)                7,985  8,793   9,252
2,110  5,932 Stockholders equity          3,714  4,152   5,785
11,953 15,078 ________________
(1)   The  Company became an S-Corporation for federal  and
certain
state income tax purposes as of June 1, 1992, and effective upon
  the consummation of the IPO, became a C-Corporation.
(2)  Pro forma net income from continuing operations for the
  periods 1992  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 S Corporation.   No  tax  benefit is
  reflected  for  losses  of  the Companys  holographics joint
  venture, which  resulted  in  a  net operating loss carry-
  forward which the Company started to  use  as profits were
  generated beginning in 1995.  The pro forma net income from
  continuing operations in 1992, 1993, and 1994 would have been
  $822,000, $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 long-term portions of debt.



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

Overview

The  Company formulates, manufactures, and sells chemically
complex, transferable  multi-layer  coatings  for  use  in  many
diversified markets  such  as  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 66.1% from $22.4  million in  1992  to $37.2 million
in 1996.  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  four-year period,
increased from $1.8 million, or                             8.0%
of net sales in 1992 to
$5.1 million, or 13.6% of net sales in 1996.
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 1992 to 1996,  printed  products sales  rose  from
19.6% to                       39.3% of  net  sales.
Pharmaceutical products sales
declined from 26.2% in 1992 to         21.2% of net sales  in
1996   due   to   the  growth  of  other  product   lines.
Actual pharmaceutical product sales increased from $5.9 million
in 1992  to $7.9  million  in 1996, or an increase of 35.5% over
that four-year period.   Security products sales increased from
6.9% in  1992  to 10.3% of net sales in 1996.  Holographic
products grew from 3.5%  in 1992 to 11.6% of net sales in 1996.

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  technicalpersonnel,   related
depreciation, and experimental materials.


Results of Operation

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,
                                         1994      1995
                                         1996
Net sales                                100.0%     100.0%
100.0%
Cost of sales                              59.2       58.8
61.7
Gross profit                               40.8       41.2
38.3
Selling, general and administrative        25.8       21.2
21.2
Research  and development                         3.8
3.3
3.5
Operating income                           11.2       16.7
13.6
Interest    expense   and    other
2.4
2.0                                     0.6
Income before taxes and minority interest
8.8
14.7                                    13.0
Provision for income taxes                   0.6        4.9
4.9
Minority interest                           (0.8)       0.6
0.1
Discontinued operations                         -          -
-
Net income                                   9.0%       9.2%
8.0%
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 .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 similarly-sized 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 start-up 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  start-up 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 start-up costs due to  new  technology introduced
to the manufactured housing industry in the third quarter and
an increase  in expenses resulting primarily from  a  one-time
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 S-Corporation for federal and
certain  state
income  tax  purposes  following the IPO.  The  termination
of the Companys  S-Corporation 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 pro-forma net income of $3.3 million assumes the Company
had been a C-Corporation throughout 1995.


1995 Compared to 1994

Net  sales for the year ended December 31, 1995 increased
22.9% to
$34.2  million  from $27.8 million for the year ended
December 31, 1994.   Printed product sales increased 52.0% to
$11.9 million
from $7.8  million  primarily due to an increase in the
Companys market share.  Pharmaceutical product sales increased
18.9% to $7.6 million from  $6.4 million, primarily due to
increased international  demand by  Baxter.   Security
product (magstripe, signature  panels,  and tipping  products
for credit cards) sales increased   43.3%  to  $3.4
million  from $2.4 million.  This increase is primarily  a
one time increase  due  to  enhanced product features
including covert  and additional  security  features  required
for MasterCard  signature panels.
MasterCard changed its specifications in order  to  permit
credit  cards  with three-year expiration dates as compared
to the previous card format with two-year expiration dates.
Sales of other pigmented  and  simulated  metal products
decreased 26.3% to  $6.6
million  from  $9.0 million, primarily due to the gross
margin for certain products declining below a level at which
the Company wants to  compete.  Holographic product sales
increased 107.7% to  $4.7
million  for  the  year  ended December 31, 1995  compared  to
$2.3 million for the year ended December 31, 1994, primarily
due to  the start  up  of  Microsofts  Windows  `95  being
delivered to       the
marketplace in August, 1995.
Gross profit for the year ended December 31, 1995 increased
24.1% to $14.1  million  from $11.3 million for the year ended
December 31, 1994.  The increase in gross profit was
attributable to the
growth in  sales  and reduced costs.  The gross profit margin
for the  year ended  December 31, 1995 increased to 41.2% from
40.8%
for the  year ended  December  31,  1994.  Although the
Company does  not  fully allocate  all  costs on a product
line basis, the Company  believes thatits  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, 1995 increased 1.3% to $7.3 million from
$7.2 million for  the  year  ended  December  31,  1994.
Selling, general  and administrative  expenses  for  the  year
ended December  31,  1995 decreased as a percentage of net
sales
to 21.2% from  25.7%  for  the
year  ended  December  31,  1994.   This  percentage  decrease
was
primarily due to the increase in net sales.

Research  and  development expenses for the year ended
December 31, 1995 increased 4.5% to $1,109,000 from $1,062,000
for the year ended
December  31, 1994.  Research and development expenses for the
year ended  December 31, 1995 decreased as a percentage of net
sales  to 3.3%  from  3.8%  for  the  year  ended  December
31, 1994.               This
percentage decrease was primarily due to the increase in net
sales.

Operating  income  for the year ended December  31,  1995
increased 83.1%  to $5.7 million from $3.1 million for the
year ended December 31,  1994.   Operating income for the year
ended December  31,  1995 increased as a percentage of net
sales to 16.7% from 11.2%  for  the year  ended December 31,
1994.  The increase was primarily a  result of lower costs and
economies of scale.

Interest expense for the year ended December 31, 1995
increased 5.4% to  $705,000  from  $669,000 for the year ended
December 31, 1994. This  increase was due to the average prime
rate increasing to 8.75%
during  the period from 6.75% in the prior year period.
However, a 6.95% swap on $2,000,000 of revolving debt which
expired in October, 1995  reduced interest expense
approximately $30,000 during the year ended  December  31,
1995.  Interest expense also increased  due  to increased
average borrowings to support additional working  capital of
$1.3 million.  This increase was used to support an increase
in inventory for European sales.  The Company used the
proceeds of  the IPO  to pay off its revolving loan in the
amount of $3.9 million and the machinery and equipment loan of
$1.6 million.

Income  taxes  for  the year ended December 31,  1995
increased to $1,669,000 from $162,000 for the year ended
December 31, 1994. This increase  was  primarily the result of
the Company no longer being treated as an S-Corporation 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, 1995 increased
25.4% to $3.2 million from $2.5 million for the year ended
December 31, 1994. The  increase  was  primarily  a result  of
higher net sales  and controlling  costs.   On a pro forma
basis as  if the Company  had always  been  a  C-Corporation
for income tax purpose,  net  income increased 122.3% to $3.3
million in 1995 from $1.5 million in 1994.

Quarterly Results of Operations
The following table presents unaudited financial results for
each of the eight quarters in the period ended December 31,
1996.  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
combined quarterly results when read in conjunction  with the
audited combined 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
1995
1995                     1995         1995          1996
1996
1996                   1996
Net sales
$7,758$8,233$9,027$9,160$9,540$9,886$8,282$9,519
Cost of sales        4,3844,8255,265 5,630   5,6345,703 5,555
6,093
     Gross profit     3,374 3,4083,762 3,530   3,9064,183
                          2,7273,426
Selling, general and administrative
   expense          1,953 2,0352,150 2,214   2,1612,239
2,6442,123 Operating income    1,421 1,3731,612 1,316
1,7451,944            831,303
Interest expense      187   201  177   141      60   62    59
48
Other (income) and expense               -      (8)       -
(4)
16                 1       -      -
Income before taxes and minority
   interest         1,234 1,1801,435 1,179   1,6691,881
241,255
Provision for income taxes        73    50      451,500
646705
18               462
Minority interest           -     70   129       11        -
69
(56)               2
    Net  income  (loss)      $1,161$1,060$1,261$
(332)$1,023$1,107$ 62
$
791

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
56.5 58.6 58.3 61.5              59.1   57.767.1        64.0
   Gross profit     43.5  41.4 41.7  38.5   40.9  42.3  32.9
36.0
Selling, general and administrative
    Expense             25.2   24.7   23.8   24.2  22.6  22.6
31.9
22.3
   Operating income 18.3  16.7 17.9  14.4   18.3  19.7   1.0
13.7
Interest expense     2.4   2.4  2.0   1.5    0.6   0.7   0.7
0.5
Other (income) and expense         - (.1)      -     (.0)  0.2
-
-                  -
Income before taxes and minority
   interest         15.9  14.3 15.9  12.9   17.5  19.0    .3
13.2
Provision for income taxes      0.9   0.6    0.5  16.4    6.8
7.1
 .3                 4.9
Minority  interest         -  0.9       1.4    0.1     -  0.7
(.7)
-
   Net income (loss)      15.0 12.9  14.0  (3.6)  10.7  11.2
 .7
8.3

The  fourth quarter sales for 1995 and 1996 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
start-up 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 one-
time 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 re-engineering of manufacturing functions. The
net loss  in  the  fourth quarter  of  1995  was  due  to  the
termination  of  the  Companys S-Corporation  tax  status  and
the resultant recording of deferred taxes of $1,148,247.




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 $1,716,000,  $5,193,000 and $2,451,000 for the
years ended  December 31,                     1994,  1995  and
1996 respectively.  The decline  in  net  cash
provided by operating activities in 1996 was largely
attributable to the   increase  in working capital from $7.9
million at December  31,
1995  to  $10.6  million  at December 31, 1996.   This
increase
is
primarily due to managements decision to increase inventory
levels
by approximately $734,000 to support anticipated demand from
certain key  customers  and  product  lines.  Other
components of  working capital  increased due primarily to a
net reduction in the  current liabilities relating to:  the
payment of a dividend of approximately $800,000  to  the pre-
IPO shareholders in 1996 for  their  share  of taxes on the
Companys SCorporation income and a $523,000 reduction in
accrued  bonus and  gain  share obligations  pursuant  to  the
Companys employee bonus plan and gain share plan.
The Companys capital expenditures totaled approximately
$1,591,000, $1,092,000,  and $3,862,000 for the years ended
December  31,  1994, 1995  and  1996  respectively,  and
included the  following:  the
acquisition  of  the 60 wide embosser for holographic
coatings in 1994;  the acquisition of high speed computerized
slitting equipment in  1995; and, progress payments for the
new 50 wide printing press in  1996.  To fund their income tax
liabilities on the Companys net income                 and
the
repayment  of  stockholder  loans,  the   Company previously
made S-Corporation 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
are being
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, 1996, $1.5 million of  this
borrowing had not been used.  This unused portion  of  the
borrowings  was classified as restricted cash and was
invested  in short-term investments. The Company incurred
$168,000  of  costs associated  with the issuance of the
bonds, which will be amortized over twelve years.

The  Companys revolving credit agreement with a bank  (the
Credit Facility) provides for borrowings under a revolving
credit loan  of specified percentages of eligible accounts
receivable and inventory, with  total  borrowings  not  to
exceed $5,500,000.   The  principal balance of the revolving
credit loan was zero at December 31,  1996. The revolving
credit loan expired February 1, 1997 and bore interest at  the
banks prime rate (8.25% at December 31, 1996) or,  at  the
Companys option,  at LIBOR (5 17/32% at December  31,  1996)
plus 2.5%. The Credit Facility was renewed as an unsecured
facility with total borrowings not to exceed $4,500,000,
expiring April 1, 1998, and bears  interest at the banks prime
rate or, at  the Companys option,  at  LIBOR plus 1%.  A .25%
fee applies for undrawn funds. The   Credit  Facility  also
provides  for  two term loans.   The
outstanding principal balance of term loan A was $1,742,000 as
of December  31,  1996 and was due April 1, 1997.  Term  loan
A was extended until February 1, 1999.  Interest on term loan
A accrues at  the  banks prime rate plus 0.25%, but not to
exceed 9.5%.  All
amounts  outstanding on the Companys term loan B were  repaid
in 1995.   The Credit Facility contains covenants which limit
aggregate annual  lease payments to $500,000 and capital
expenditures to  $2.5 million  and  prohibit the declaration
of dividends (other  than  SCorporation  dividends  and  the
1995 $4.5  million  S-Corporation 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  bank
waived  the  capital  expenditure  covenant  for  the
purposes of
acquisition  of the new 50 press and related property
developments in 1996.

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 FASB has issued Statement of Financial Account Standard
No. 123, 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 stock-based compensation.


Special Note on Forward-Looking Statements

The  statements  contained in this report that  are  not
historical facts  are  forward-looking 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 forward-looking
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.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                 INDEX TO FINANCIAL STATEMENTS
                               
                               
                               
                               
Page Report of Independent Accountants
23
Consolidated Balance Sheets at December 31, 1996 and 1995
24
Consolidated Statements of Income for the years ended December
31, 1996, 1995 and 1994
25
Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994
26

Consolidated Statements of Stockholders Equity for the
years ended December 31, 1996, 1995 and 1994
27

Notes to Consolidated Financial Statements at December 31,
1996 28



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, 1996 and 1995, and the
results of their  operations and their cash flows for each of
the three years in the period ended December  31, 1996, 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 7, 1997

                     CFC INTERNATIONAL, INC.
                  CONSOLIDATED BALANCE SHEETS
                               
                                                     December
                                                31, 1996
                                                1995
 ASSETS
 CURRENT ASSETS:
     Cash and cash equivalents                   $927,703  $
                            916,480
 Accounts receivable, less allowance for doubtful accounts of
     $565,000 and  $348,000  respectively    5,996,657
     5,915,409
 Employee receivable                         220,833
163,093
 Inventories (Notes 1 and 3):
     Raw materials                           837,307
1,159,340
     Work in process                         1,086,308
919,268
     Finished goods                          5,142,558
4,254,109
                                             7,066,173
6,332,717
  Prepaid expenses and other current assets          392,593
  357,257
      Deferred income taxes                       663,520
                              651
  ,141
         Total current assets                15,267,479
  14,336,097
 Property, plant and equipment, net (Notes 1, 3 and 4)
  10,866,717                                 8,479,597
   Other assets                               561,085
453,725
   Restricted cash (Note 3)                   1,510,827
-
         Total assets                        $28,206,108
  $23,269,419

 LIABILITIES AND STOCKHOLDERS EQUITY
 CURRENT LIABILITIES:
          Current portion of long-term debt (Note 3)
                     .....................
  $                               368,124    $172,655
Accounts payable                            2,558,486
2,181,102
        Accrued environmental liability (Note 10)
                         244,937
  300,000
 Dividend payable                                  0
800,000
 Accrued bonus                               200,290
724,000
   Accrued vacation                           236,422
244,212
 Other accrued expenses and current liabilities
1,024,507
  1,964,512
         Total current liabilities
4,632,766
6,386,481
  Deferred income taxes
1,785,740
1,799,388
Long-term debt (Note 3)                     5,564,027
1,937,139
 Minority interest in CFC Applied Holographics (Note
  9) 1,145,240
  1,192,952
         Total liabilities
13,127,773
11,315,960
 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;
  4,132,605
     and 4,118,491 shares issued at December 31, 1996 and
     1995 respectively                             41,326
     41,184
 Class B common stock, $.01 par value, 750,000 shares
     authorized; 534,030 and 534,030 shares issued and
     outstanding at December
  31,
     1996 and 1995 respectively                5,340
5,340
 Additional paid-in capital                  10,139,248
  10,027,677
 Retained earnings                           5,110,647
2,127,177
 Cumulative translation adjustment           (27,891)
(57,584)
                                             15,268,670 12,143,794
 Less 156,142 treasury shares of common stock, at cost at December 31,
     1996 and 1995 respectively                (190,335)
  (190,335)
                                             15,078,335 11,953,459
 CONTINGENCIES (Note 10)
      Total liabilities and stockholders equity       $28,206,108 $
  23,269,419
  
  
    The accompanying notes are an integral part of the financial
                             statements.
                         CFC INTERNATIONAL, INC.

                    CONSOLIDATED STATEMENTS OF INCOME


                                                December 31,
1996    1995     1994 Net
sales                        $37,227,333     $
34,177,344                          $   27,808,314
Cost of goods sold                      22,984,895       20,103,407
16,469,036
Gross profit                            14,242,438       14,073,937
11,339,278
Marketing and selling expenses          4,082,588 3,746,807 3,270,938
General and administrative expenses     3,615,341 3,228,052 3,553,546
Research and development expenses       1,304,304 1,109,247 1,061,697
Patent litigation expenses              164,590   267,910   328,000
                                        9,166,823 8,352,016 8,214,181
Operating income                        5,075,615 5,721,921 3,125,097
Other (income) expenses:
     Interest                           228,909   705,250   669,018
     Miscellaneous                       16,962   (12,274)  (4,485)
                                        245,871   692,976   664,533
Income before income taxes and minority interest         4,829,744
5,028,945 2,460,564
Provision for income taxes (Note 2)     1,831,141 1,668,874 162,000
                                        2,998,603 3,360,071 2,298,564
Minority interest in (income) loss of CFC Applied Holographics
(15,133) (209,869)                              214,457
Net income                              $2,983,470      $3,150,202$
2,513,021

Unaudited pro forma data (Note 2):
   Income before income taxes and minority interest                 $
5,028,945 $
2,460,564
     Provision for income taxes                   1,567,000 1,212,000
                                                  3,461,945 1,248,564
     Minority interest in loss (income) of CFC Applied
          Holographics                            (209,869) 214,457
     Pro forma net income                         $3,252,076
$
1,463,021

Net Income and pro forma net income per share         $ 0.66
$
0.95                                $   0.44
Weighted average number of common stock and common stock
     equivalents used in the net income and pro forma net
     income
     per share calculation                 4,516,601
     3,431,618
3,301,736
Supplemental pro forma net income per share                $
0.78$0.38
Weighted average number of common stock and common stock
     equivalents used in the supplemental pro forma net
     income per share calculation
     4,501,183
4,501,736

   The accompanying notes are an integral part of the

                            financial statements.

                      CFC INTERNATIONAL, INC.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

















                                          
                                          December 31,
                                          1996
                                          1995
                                          1994
Cash flow from operating activities:
     Net income                         $2,983,470
$
3,150,202                           $   2,513,021
          Adjustments to reconcile net income to net
               cash provided by operating activities:
                    Depreciation and amortization
1,535,396                               1,423,043 1,249,087
                    Deferred income taxes         (26,027)  1,148,247
-
                    Minority interest in CFC Applied Holographics
15,133
209,869                                 (214,457)
                   Changes in assets and liabilities:
                         Accounts receivable      (81,248)  (1,681,651)
(635,988)
                         Inventories    (733,456) (325,623) (1,170,871)
                         Employee receivable      (57,740)  (163,093)
-
                         Prepaid expenses and other current assets
(35,336)
(113,016)                               405,173
                         Accounts payable         377,384   (64,483)
(398,687)
                         Accrued bonus            (523,710) 609,000
83,000
                         Accrued environmental liability    (55,063)       -
-
                   Accrued expenses and other current
liabilities                             (947,795) 1,000,520
(114,728)
                         Net cash provided by operating
activities 2,451,008
5,193,015                               1,715,550
Cash flows from investing activities:
     Additions to property, plant and equipment
(3,861,876)                             (1,091,993)
(1,590,720)
     Restricted cash                    (1,510,827)         -
-
     Increase in other assets             (87,900)          -
(180,025)
Net cash used in investing activities         (   5,460,603)
(1,091,993)
(1,770,745)

Cash flows from financing activities:
     Proceeds from revolving credit agreements    3,775,157
18,771,000
21,679,000
     Repayments of revolving credit agreements    (3,775,157)
(23,486,004)
(20,521,695)
     Borrowings under term loans              -         -
110,000
     Repayment of term loans            (111,504) (2,551,964)
(771,044)
     Borrowing under Illinois Revenue Bond, net
3,924,900                               -         -
     Repayment of capital lease         (71,139)  (31,665)
(48,237)
     Other borrowings                         -         -
10,985
     Minority interest contribution (payments)    (62,845)  (47,468)
311,771
     Proceeds from issuance of common stock       111,713   9,728,931      -
     Tax benefits from exercise of stock options            -
22,935
-
     Distributions to stockholders      (800,000) (5,755,197)
(971,200)
Net cash (used in) provided by financing activities         2,991,125
(3,349,432)
(200,420)
Effect of exchange rate changes on cash and cash equivalents
29,693
(6,159)                                 90,837
Increase (decrease) in cash and cash equivalents            11,223
745,431 (164,778)

Cash and cash equivalents:
     Beginning of period                916,480   171,049   335,827
     End of period                      $927,703  $916,480
$171,049


   The accompanying notes are an integral part of the financial
                            statements.
                      CFC INTERNATIONAL, INC.
                                 
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
                                 
                                 
                                 
                       Class BAdditional     Cumulative
Total
                  Commoncommonpaid-in  Retainedtranslation
                  Treasury
          stockholders
                  stock      stock      capital       earnings
adjustment
              stock         equity
Balance at December 31, 1993       $  27,141$ 6,408 $  239,515 $4,160,958
$ (142,262) $       (139,444) $4,152,316
Net income                            2,513,021
2,513,021
Distributions to stockholders
(971,200)                     (971,200)
Foreign currency translation
   adjustment                                  90,837           90,837
Balance at December 31, 1994       $  27,141$ 6,408 $  239,515 $5,702,779
$ (51,425) $        (139,444) $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
S-Corporation 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 S-Corporation
   earnings                   170,260 (170,260)
-
Balance at December 31, 1995       $  41,184$ 5,340 $  10,027,677    $
2,127,177
$ (57,584)               $ (190,335) $  11,953,459
Net income                            2,983,470
2,983,470
Employee Stock Purchases         142          111,571
111,713
Foreign currency translation
   adjustment                                  29,693           29,693
Balance at December 31, 1996       $  41,326$ 5,340 $  10,139,248
$ 5,110,647
$ (27,891)               $ (190,335) $  15,078,335






   The accompanying notes are an integral part of the 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 12, 13,
and 15 percent  of  net  sales during 1996, 1995 and  1994,
respectively. Additionally, a second customer in the
packaging business accounted for  approximately 4 percent of
net sales during 1996.  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 9)  and CFC  International Sales, Inc. to the
Companys stockholders at net book value, and elected S-
Corporation
status for federal income tax purposes.
The  financial statements include the accounts  of  the
Company and its subsidiaries as if they were wholly-owned 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.

Inventories.    Inventories are stated at  the  lower  of
cost or market,  cost  being determined on the first-in,
first-out (FIFO) basis.

Property,  plant and equipment.  Property, plant and
equipment are recorded  at  cost.  The straight-line 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 charged to
income as incurred.

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 year-end 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.  Earnings per share are computed  by
dividing net income by the weighted average of common stock
and common stock equivalents outstanding during the period,
using the
treasury stock method.   Pro  forma  earnings  per share
have been  computed  by dividing  pro  forma net income by
the weighted average  of  common stock  and common stock
equivalents outstanding during the  period. The  computation
was performed after giving retroactive  effect  to the
1.2565385-for-1 stock split and stock dividend (Note  7),
and assuming those shares necessary to be issued to re-
acquire the 21% interests  in  its subsidiary companies were
outstanding from  the beginning  of the  period  presented.
Common  stock equivalents include stock  options  to  certain
officers aggregating  62,828. 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 and common stock equivalents used in
the supplemental  pro  forma earnings per  share  calculation
assumes the retroactive effect of the 1.2565385-for-1 stock
split, stock dividend (Note 7), 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.
FAS  123.   Effective  January 1, 1996,  the  Company
adopted the disclosure method provisions of Statement of
Financial
Accounting Standards (SFAS 123) Accounting for Stock-Based
Compensation.  As permitted  by  SFAS 123, the Company
continues to recognize  stockbased  compensation costs under
the intrinsic value base method  of accounting  prescribed by
Accounting Principles Board  Opinion  No. 25, Accounting for
Stock Issued to Employees.
Cash and cash equivalents.  The Company considers all highly
liquid investments  readily convertible into cash to be cash
equivalents. Cash  equivalents at December 31, 1996 and 1995
included a $800,000 and  $400,000 certificate of deposit with
an original  maturity  of less than three months.
Fair  value of financial instruments.  As of December 31,
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,
and affect  the reported  amounts  of revenues and expenses
during the reporting period.  Actual  results could differ
from these estimates.

Statement of cash flows.
                  SUPPLEMENTAL DISCLOSURES
                              
                                        For Year Ended
                                         December 31, 1996
                                         1995  1994
Cash paid during the year for:
     Interest paid                      $209,063  $722,805
$680,000
     Income taxes paid                  2,026,090 101,000
150,000
Non-cash investing and financing activities:
    Lease assets and obligations capitalized           -
156,116 -



Note 2.  Income Taxes
The income tax (benefit) provision consists of the following:

                                        For Year Ended
                                          December 31, 1996
                                          1995 1994
Current Payable:
     Federal                            $1,488,424      $
241,644
$                                   -
     State                              340,784   103,125
25,000
     Foreign                             27,960   175,858
137,000
Deferred                                (26,027)  1,148,247
-
                                             $1,831,141
$
1,668,874                               $162,000



The Company elected, beginning June 1, 1992, to be treated as
an SCorporation  for  federal and certain state  income  tax
purposes. Coinciding with the Companys initial public offering
in 1995,  the Company  terminated its S-Corporation 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 pro-forma
basis for 1995 and 1994, are as follows:

                                              For Year Ended
                                                December 31,
                                                1995 1994
Current:
     Federal                                  $1,369,000
$837,000
     State                                    330,000
206,000
     Foreign                                  176,000
137,000
Deferred                                      (308,000)
32,000
                                              $1,567,000
$1,212,000
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:
                                              1996  1995   1994
                                             Actual   Proforma
Statutory  U.S. tax rates                     34.0%
34.0%
34.0%
Increase (decrease) in rates resulting from:
     State and local taxes                    4.7%    3.1%
5.7%
      Increase (decrease) in valuation allowance
-
(6.5%)                            5.6%
     Minority interest in operating loss (income) of
          CFC Management, Inc.               (0.1%)  (1.4%)
3.0%
     AMT credit                              (1.5%)    -     -
     Other, net                               0.8%   2.0%
0.9%
Effective  tax rate                                   37.9%
31.2%
49.2%


Deferred tax liabilities (assets) are as follows:

                                        For Year Ended December
                                          31, 1996  1995
                                          1994
                                               Actual
Proforma
Depreciation                                 $1,785,740
$
1,799,388                           $   1,587,000
Net operating loss carry-forwards             -   (65,095)
(328,000)
Valuation reserves                            -         -
328,000
Other, net                              (663,520) (586,046)
(230,000)
                                             $1,122,220

$ 1,148,247                               $1,357,000





Note 3.  Long-Term Debt

Long-term debt consists of the following:

                                                   December 31,
                                               1996        1995
Illinois Revenue Bonds                     $4,005,000   $     -
Revolving Credit Agreement                        -           -
Term Loan A                                1,741,648
1,853,152
Other                                       185,503     256,642
                                           5,932,151
2,109,794 Less  -  Amounts  included in current liabilities
368,124
172,655
                                           $5,564,027
$1,937,139


Illinois  Industrial Development Revenue Bonds (IRB).  The
Company received  $4,005,000 of proceeds from the issuance of
the  IRB  in June  1996.   At  December 31, 1996, the Company
had $1,510,827  of restricted cash as a result of $4,005,000 of
proceeds received from the  issuance of Illinois Revenue Bonds
on June 20,  1996. The bonds
mature  on June 1, 2008. Issuance cost of $168,000 were
capitalized and  are  being amortized over the life of the
bonds utilizing  the straight   line  method.   The  remaining
proceeds  are  currently invested  in short term cash
equivalents and will be 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.

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 at December
31, 1996 was 3.65%.
The Company will make annual principal payments of $200,250
during 1997 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  payment  of  $1,713,722  due  April,
1997. Interest  is payable quarterly at prime plus 0.25%, with
a maximum rate  of 9.50%.  This term loan was renewed in March,
1997 for  two years and is now due in April,
1999. Revolving  Credit  Arrangements.  The Company and its
subsidiaries have various revolving credit arrangements that
provide for maximum borrowings of approximately $7,228,000.
Any outstanding borrowings bear  interest  at  various rates
averaging the  respective  banks prime  rate  (8.25% and 8.5%
at December 31, 1996  and  1995)  plus   2.5%.   All  of the
revolving
credit arrangements were  renewed  on March  3,  1997  and
expire on April 1,  1998.   No  amounts  were outstanding  at
December 31, 1996.  Charges on undrawn balances  on certain
arrangements is .25% per annum.
The  bank  agreements contain covenants which, among other
things, restrict  new indebtedness, limit capital asset
additions, restrict dividend declarations, and prohibit net
losses.  The borrowings are secured by substantially all of
the Companys assets.  For 1996 and 1995,  the  bank has
waived the covenant that limits capital  asset additions, in
order to enable the Company to exceed the  limits  in these
periods. Aggregate minimum principal payments for all long-
term debt  as of December 31, 1996 are as follows:
1997
$368,124
1998
440,387
1999
1,718,640
2000
200,250
2001
200,250
Thereafter
3,004,500


$5,932,151 Note 4.  Property, Plant and Equipment

Property, plant and equipment consist of the following:

                                         Estimated December
                                         31, Useful
Life
                                     1996       1995
Land                               $105,670   $105,670
Building                           3,041,914  2,643,714
30
years
Machinery and Equipment            12,596,064
11,748,946
20
years
Furniture and Equipment            1,612,736  1,495,026
10
years
Construction in Process            2,498,849        -
                                   19,855,233
15,993,356 Less    -    Accumulated   Depreciation
(8,988,516) (7,513,759)
                                   $10,866,717      $
8,479,597




Note 5.  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:
                                           1996     1995 1994
Assets                                       $1,141,614
$
1,018,271                           $   1,186,642 Liabilities
70,726   141,804 377,273
Net Sales                               4,819,567 4,280,554
3,386,148
Net Income                               73,332    64,942
102,105

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:
                                           1996     1995
1994
Assets                                  $636,896  $853,412
$838,646
Liabilities                              37,204   185,798
257,712
Net Sales                               1,414,216 1,806,150
1,544,648
Net Income/(Loss)                       (11,526)  110,296
69,856

Export   sales   from  U.S.  operations  amounted  to
$5,780,161,
$3,358,892, and $2,670,000 in 1996, 1995 and 1994,
respectively.



Note 6.  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  $81,000, $69,000,  and
$65,000 of 401(K) matching expense during 1996,  1995 and
1994, respectively.

Note 7.  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  anti-dilution
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  re-acquisition 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 combined financial statements
have been adjusted to  give  retroactive  effect  to the
1.2565385-for-1 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  up  to  $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 re-
capitalization 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 1995,
106,805 shares  of Class B common stock were converted into
an equal number of shares of common stock.



Note 8.  Stock Options

Stock  Option  Plan.  The Companys stockholders approved  a
Stock Option  Plan  (the Plan) in August 1995, which provides
for  the grant of non-qualified 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 anti-dilution 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.  At December 31,  1996 and 1995, options (with an
exercise price equal  to  the fair market  value at the date
the option was granted),  had  been granted under the Plan as
follows:

Shares Outstanding at December 31, 1995
-
Granted
77,673
Outstanding at December 31, 1996
77,673
Options generally vest over a period of four years. At
December 31, 1996,  4,973 options were exercisable.  The
range of exercise prices for  options  granted in 1996
pursuant to the Plan,  is $10.88  to $15.25, with a weighted
average remaining contractual
life  of  9.2 years at December 31, 1996.  At December 31,
1996, 172,327 options, respectively, were available for grant
under the plan.
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 non-employee directors  of  the Company.  A total of
50,000 shares of common stock are reserved for issuance
under  the  DSOP,  subject  to anti-dilution  and  other
adjustment provisions.  An option to purchase 10,000 shares
of  the Companys  stock  was  granted to each of  the  three
non-employee 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.  At December 31,
1996, 7,500 options were exercisable  under the DSOP at a
weighted average exercise price of $9.50 per share.

The  following  data  related  to stock  option  grants
under the Director and Employee Stock Option Plans:

                                               1996
1995 1995 Director Stock Option Plan              -
30,000
1995 Employee Stock Option Plan              77,673
The  fair value of each option granted is estimated at the
date of the  grant  using the Black-Scholes option-pricing
model utilizing expected  volatility  calculations  based  on
historical  data  of companies with similar structure and
volatility from December  1991 (26%  to 25%); 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 and no dividends are assumed.
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 123,
the Companys net earnings per share would have  been reduced
to the pro-forma amounts indicated below:

                                               1996
1995

Proforma net income                        $2,927,986
$3,249,996 Proforma earnings per share          $.65
$.95

The affects of applying SFAS 123 on the above pro-forma
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
five year period commencing January 1, 1996.  During 1996,
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 full-
time 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. 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 9.  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  $460,000  cost  of  the  Companys
increase  in ownership  interest  from 50.01% to 75% was
recorded as  goodwill. Accumulated amortization of this
goodwill approximated $102,000 and $58,000 at December 31,
1996 and 1995, respectively.



Note 10.  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 the 0.7% 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  clean-up 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  $55,000  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, 1996.  The adequacy of this  reserve is reviewed
periodically  as  more  definitive  information becomes
available.



Note  11.   Selected  quarterly  financial  data
(unaudited), in
thousands

                                        Quarter Ended
                      Dec.  31      Sept. 30     June 30
Mar. 31
Dec. 31              Sept. 30    June 30      Mar. 31
                         1996         1996          1996
1996
1995                   1995        1995         1995
Revenues
$9,519$8,282$9,886$9,540$9,160$9,027$8,233$7,758
Gross Profit        3,426 2,7274,183 3,906   3,5303,762
3,408
3,374
Operating Income    1,303    831,944 1,745   1,3161,612
1,373 1,421
Net Income (Loss)     791    621,107 1,023  (332)*1,261
1,060
1,161
_________________________
*   Includes C-Corporation tax provision incorporating
provision of $1,148 for cumulative deferred taxes.
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 1997 (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,
1996, 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             61   Chairman of the Board of
Directors and Chief Executive
                                Officer

Robert  J. DuPriest         55   President, Chief Operating
Officer and Director

Dennis  W.  Lakomy           51   Vice President,  Chief
Financial
Officer, Secretary,
                                Treasurer and Director

David C. Beeching          56   Vice President of Sales &
Marketing
- Holographics

Glenn L. Ford              51   Vice President of
Manufacturing

William A. Herring         49   Senior Vice President of
Operations

Robert  E. Jurgens          54   Senior Vice President of
Sales
& Marketing

Craig  D.  Newswanger         42    Vice President  of
Research
&
Development -
                                Holographics

David M. Plomin            31   Director of Research &
Development

Jeffrey E. Norby           40   Controller
Peter  C. McGillivray       51   Managing Director - United
Kingdom Operations
Masayoshi   Yozu               54    Managing  Director
Japan
Operations

Roger  F. Hruby, Chairman of the Board and Chief Executive
Officer, was  the  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 start-up 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.
Robert  J.  DuPriest,  President, Chief  Operating  Officer
and a director  of  the  Company, joined the  Company  in
1990 as Vice President and Chief Operating Officer, was named
President in June, 1995,  and  was elected a director of the
Company in August,  1995. Prior  to  joining the Company, Mr.
DuPriest served  from  1985  in successive  management
positions  with Rank  Video  Services   of America,  where  he
was responsible for worldwide  operations  and joint
ventures. Mr.  DuPriest earned  a  bachelors  degree  from
American University.
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 co-founding 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.
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.
Masayoshi Yozu joined Admiral Coated Products in Japan in
1968 to set  up  their branch office.  In 1988 Admiral Coated
Products was acquired  by  the Company and Mr. Yozu became
Managing Director  of CFCs Japanese Operations.  Mr. Yozu
earned a business degree  from Ritsumeikan University.


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 8-K

(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.
     
     10.7 Stock Option Plan of the Company
     10.8 Director Stock Option Plan of the Company
      10.9 Employee Stock Purchase Plan of the Company

(b)  Reports on Form 8-K
   The  Company did not file any reports on Form 8-K
     during the fourth quarter of 1996.
(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
S 1,
          Registration No. 33-96110).
          3.2
          Amended and Restated Bylaws of the Company
          (incorporated by   reference   to   Exhibit  3.2
          to the   Companys registration statement on Form S-
          1, 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
S 1,
          Registration No. 33-96110).
          10.1a
          Amended  and Restated Credit Agreement, dated
          March 31, 1992, between the Company and LaSalle
          Northwest National Bank,  as  amended,  (the
          Credit Agreement)
including related  documents (incorporated by reference to
Exhibit 10.1 to the Companys registration statement on Form
S1, Registration No. 33-96110).
          10.1b
          Amended and Restated Credit Agreement, dated
          February 1, 1997, between the Company and LaSalle
          Northwest National Bank, as amended (the Credit
          Agreement).
      10.1c
Tenth
Amendment  to the Credit Agreement, dated as of June 1, 1996,
and related documents
          10.1d
          Eleventh Amendment to the Credit Agreement, dated
          as of February 1, 1997, and related documents
          10.1e
          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 S-1, 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 S-1,
          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    S-1,
          Registration No. 33-96110).
          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 S-1,
          Registration No. 33-96110). 10.6
          Stock
          Option  Agreement,  dated August 30, 1993,
          between the Company   andRobert  J.  DuPriest
          (incorporated   by reference to Exhibit 10.11 to
          the Companys registration statement on Form S-1,
          Registration No. 33-96110). 10.7
          Stock
          Option  Agreement,  dated August 30, 1993,
          between the Company and Robert E. Jurgens
(incorporated by reference to Exhibit 10.12 to the
Companys registration statement on Form S-1, Registration
No. 33-96110).
          10.8
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
S-
1,
          Registration No. 33-96110).
          10.9
          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 S
          1, Registration No. 3396110).
          10.10
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 S-1,
          Registration No. 33-96110).
    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

                      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, 1994 Allowance
for Doubtful Accounts         $ 281     $1,010    $(881)
$
410

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


_________________________
*  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 1997.




                                   CFC INTERNATIONAL, INC.
                                   By:     /s/  ROGER F.
                                   HRUBY
                                        Roger F. Hruby
                                         Chairman of the
                                         Board
of Directors
                                           and   Chief
Executive Officer


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            1997.
            Signature                            Title
  Principal Executive Officer:
            /s/  ROGER  F.  HRUBY       Chairman of the
Board of
 .                                            Directors and
          Roger F. Hruby                 Chief Executive
Officer




  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 J. DU PRIEST
Director .
          Robert J. Du Priest

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

            /s/   RICHARD  PIERCE
Director .
          Richard Pierce




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




                        Exhibit 10.1a



                    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

                                   ________________________

                                   

                                   

                         Exhibit 10.1a

                    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 360day  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 one-
quarter 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  (9-1/2%) 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 10.1b

                      REVOLVING CREDIT NOTE

$1,000,000.00                             Dated: February 1,
1997
     For value received, the undersigned (the Maker)
promises to pay  to  the order of LASALLE NORTHWEST NATIONAL
BANK (the Bank) Chicago, Illinois, the lesser of principal
sum of One Million  and 00/100  Dollars ($1,000,000.00) or
the aggregate unpaid  principal amount  outstanding  under
the Loan Agreement (as  defined  below) made  available to
the Maker at the maturity or maturities and  in the  amount
or  amounts as stated on the  records  of  the  Bank,
together  with interest on  the  principal  amounts
outstanding hereunder from time to
time from the date hereof until  maturity. Interest shall be
payable at the rate of interest and at the times set  forth
in the Revolving Credit and Term Loan Agreement  dated
September 30,  1992  (as  from time to time  amended,  the
Loan Agreement).  In  no  event  shall any  principal
amount have a maturity later than March 3,     1997.
       This  Revolving Credit Note (the Note) shall be
available for direct advances.
      Principal  and  interest shall be paid to the  Bank
at its office  at 4747 W. Irving Park Road, Chicago,
Illinois or at such other place as the holder of this Note
may designate in writing to the  Maker.   This  Note may be
prepaid in whole or in  part  as provided in the Loan
Agreement.
   This  Note  evidences indebtedness incurred under  the
Loan Agreement,  to which reference is hereby made for a
statement  of the  terms and conditions under which the due
date of the Note  or any  payment thereon may be
accelerated. The holder of this  Note is  entitled to all of
the benefits and security provided  for  in the Loan
Agreement.
     The Maker irrevocably authorizes any attorney of any
court of record to appear for it in term time or vacation,
at any time and
from  time  to  time  after  payment is  due  hereon,
whether
by acceleration or otherwise, and confess judgment, without
process, in  favor of the holder hereof, for such sum as may
appear  to  be due  and  unpaid  thereon,  together  with
interest,  costs,  and reasonable  attorneys fees, and to
waive and release  all  errors which  may  intervene in such
proceeding and consents to immediate execution upon such
judgment, hereby ratifying and confirming  all that said
attorney may do by virtue hereof.
     This Note is in substitution for and not in repayment
of
that certain Revolving Credit Note dated February 1, 1996
in the amount of $1,000,000.00 from Maker in favor of
Bank.
      The Maker agrees that in any action or proceeding
instituted to collect or enforce collection of this Note,
the amount endorsed by  the Bank on the reverse side of
this Note or otherwise in  the records  of  the Bank shall
be prima facie evidence of the  unpaid principal balance of
this Note
                              CFC    APPLIED
HOLOGRAPHICS, an
                              Illinois general partnership
                                   CFC     International,
                                   Inc., General Partner
                            By:
                              _________________________
                              Its:
                              _________________________
                              
                              
                                   Applied   Holographics,
                                   PLC, General Partner
                                   
                            By:
                              _________________________
                              Its:
                              _________________________
                          Exhibit 10.1c

                     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 year-end),  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:
                                   _________________________
                                   __ __ __
                                                            T
                                                            i
                                                            t
                                                            l
                                                            e
                                                            :
                                                            
______________________________

                              LASALLE NORTHWEST NATIONAL
BANK




                                   By:
                                   _________________________
                                   __ __ __
                                                            T

                                                            i

                                                            t

                                                            l

                                                            e

                                                            :

______________________________





                        Exhibit 10.1d

                              

                              

                       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 10.1e

                       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  then-current
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 then-current 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  then-current
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 I-1.  Exhibits A
and
I-1  attached  to  and  made a part of the  Agreement  are
hereby deleted in their entireties and Exhibits A and I-1
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  I-1 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:
__________________________




                           Exhibit 11.1




                      CFC INTERNATIONAL, INC.



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




                                                 Year Ended
                                        12/31/94 12/31/95
                                        12/31/96
(Actual) Pro forma net income per share from continuing
operations:
Pro forma net income from continuing operations
1,463,021                                3,252,076
2,983,470
Pro forma weighted average common shares outstanding:
   Shares attributable to common stock outstanding          2,563,338
2,800,024
3,885,007
Shares attributable to Class B common stock outstanding            640,834
534,030 534,030
Shares attributable to common stock equivalents outstanding             62,828
62,828                                  62,828
Shares issued to reacquire 21% interest in subsidiary companies
34,736 34,736                                         34,736
                                        3,301,736 3,431,618 4,516,601
   Pro forma net income per share from continuing operations
0.44                                    0.95      0.66


Supplemental pro forma net income per share from continuing
operations:
Pro forma net income from continuing operations
1,463,021                                3,252,076
Interest paid on debt to be retired     385,140
450,523
   Less tax effect (40%)                   (154,056)
(180,209)
                                        1,694,105
3,522,390

Supplemental pro forma weighted average common shares outstanding:
   Shares attributable to common stock outstanding
   2,563,338
2,667,929
Shares attributable to Class B common stock outstanding            640,834
534,030 Shares attributable to common stock equivalents outstanding
62,828 62,828
Shares issued to reacquire 21% interest in subsidiary companies
34,736 34,736
Shares issued through the initial public offering        1,200,000
                                        1,200,000 4,501,736 4,499,523
   Supplemental pro forma net income per share from continuing
         operations
0.38
0.78




                            Exhibit 21.1
                       CFC INTERNATIONAL, INC.
                            SUBSIDIARIES
                            
                            
     CFC Management, Inc.
     CFC International, Ltd. (U.K.)


                            Exhibit 23.1



                 CONSENT OF INDEPENDENT


ACCOUNTANTS






























































We  hereby  consent  to  the
incorporation  by  reference  in  the
Registration  Statement  on  Form  S-8
(No.  333-2978)   of   CFC
International, Inc. of our report
dated February 7, 1997 appearing on
page 23 of the CFC International, Inc.
Annual Report on Form 10K for the year
ended December 31, 1996.
Price Waterhouse LLP
Chicago, Illinois
March 24, 1997