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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q



|(Mark One)
|----------
|[X]       

For the quarterly period ended June 30, 2005



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

For the transition period from  to







|New York(State or other jurisdiction of
incorporation or organization)             |  | 16-0961040(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------------------- |  | ----------------------------------------------
|2364 Leicester Road Leicester, New York 14481                                     
|(Address of principal executive offices and Zip Code)                             
|(585) 382-3223                                                                    
|(Registrant's telephone number, including area code)                              
|Not Applicable                                                                    
|(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes [ X ]       No [    ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).       Yes [    ]      No [ X ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:



|Class                               | Number of Shares Outstanding at June 30, 2005                           
|----------------------------------- | ------------------------------------------------------------------------
|Common Stock, $.01 par value        | 4,946,774                                                               
|                                    |                                                                         
|Options Outstanding & Not Exercised | Shares to cover the options will not be issued until they are exercised.
|1,009,911                          



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1

CPAC, INC. AND SUBSIDIARIES

INDEX



|        |                                                                                                                                                                    | Page No.
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------
|        | PART I -- FINANCIAL INFORMATION                                                                                                                                    |         
|Item 1. | Financial Statements.                                                                                                                                              |         
|        | CPAC, Inc. and Subsidiaries Consolidated Balance Sheets -June 30, 2005 (Unaudited), and March 31, 2005                                                             | 3       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income (Loss) -- For the Three Months Ended June 30, 2005 and 2004 (Unaudited) | 4       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Cash Flows -- For the Three Months Ended June 30, 2005 and 2004 (Unaudited)                                 | 5       
|        | Notes to Consolidated Financial Statements                                                                                                                         | 6       
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations.                                                                             | 11      
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.                                                                                                        | 15      
|Item 4. | Controls and Procedures.                                                                                                                                           | 16      
|        | PART II -- OTHER INFORMATION                                                                                                                                       |         
|Item 1. | Legal Proceedings.                                                                                                                                                 | 17      
|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                                                       | 17      
|Item 3. | Defaults Upon Senior Securities.                                                                                                                                   | 17      
|Item 4. | Submission of Matters to a Vote of Security Holders.                                                                                                               | 17      
|Item 5. | Other Information.                                                                                                                                                 | 17      
|Item 6. | Exhibits.                                                                                                                                                          | 17      
|        | SIGNATURES PAGE                                                                                                                                                    | 19      
|        | EXHIBIT INDEX                                                                                                                                                      | 20      



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2

PART I -- FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS.

CPAC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



|ASSETS                                                                                                            |  | June 30, 2005
(Unaudited) |   | March 31, 2005 |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------------------- | - | -------------- | -
|Current assets:                                                                                                   |  |                           |   |                |  
|Cash and cash equivalents                                                                                         |  | $    7,525,389            |   | $    7,710,031 |  
|Accounts receivable (net of allowance for doubtful accounts of $1,625,000
          and $1,557,000, respectively) |  | 10,816,984                |   | 10,261,408     |  
|Inventory, net                                                                                                    |  | 18,968,425                |   | 18,757,863     |  
|Prepaid expenses and other current assets                                                                         |  | 2,088,197                 |   | 3,009,825      |  
|Deferred tax assets, current                                                                                      |  | 215,658                   |   | 243,658        |  
|Total current assets                                                                                              |  | 39,614,653                |   | 39,982,785     |  
|Property, plant and equipment, net                                                                                |  | 14,864,920                |   | 15,281,286     |  
|Goodwill                                                                                                          |  | 192,426                   |   | 192,426        |  
|Intangible assets (net of amortization of $1,581,843 and $1,544,446, respectively)                                |  | 736,541                   |   | 776,230        |  
|Deferred tax assets, net                                                                                          |  | 380,642                   |   | 417,018        |  
|Other assets                                                                                                      |  | 2,756,714                 |   | 2,771,547      |  
|                                                                                                                  |  | $ 58,545,896              |   | $ 59,421,292   |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                                              |  |                           |   |                |  
|Current liabilities:                                                                                              |  |                           |   |                |  
|Current portion of long-term debt                                                                                 |  | $      229,318            |   | $      263,772 |  
|Accounts payable                                                                                                  |  | 4,971,382                 |   | 4,648,639      |  
|Accrued payroll and related expenses                                                                              |  | 2,064,826                 |   | 1,970,780      |  
|Other accrued expenses and liabilities                                                                            |  | 2,377,215                 |   | 2,722,649      |  
|Total current liabilities                                                                                         |  | 9,642,741                 |   | 9,605,840      |  
|Long-term debt, net of current portion                                                                            |  | 6,787,179                 |   | 6,828,649      |  
|Deferred tax liabilities, net                                                                                     |  | 217,404                   |   | 245,404        |  
|Other long-term liabilities                                                                                       |  | 4,086,929                 |   | 4,134,351      |  
|Minority interests                                                                                                |  | 223,503                   |   | 219,020        |  
|Shareholders' equity:                                                                                             |  |                           |   |                |  
|Common stock, par value $0.01 per share;
        Authorized 30,000,000 shares;
        Issued 5,032,081 shares    |  | 50,321                    |   | 50,321         |  
|Additional paid-in capital                                                                                        |  | 9,613,906                 |   | 9,613,906      |  
|Retained earnings                                                                                                 |  | 27,656,339                |   | 28,141,791     |  
|Accumulated other comprehensive income                                                                            |  | 857,762                   |   | 1,172,198      |  
|                                                                                                                  |  | 38,178,328                |   | 38,978,216     |  
|Less:  Treasury stock, at cost, 85,307 shares                                                                     |  | (590,188                  | ) | (590,188       | )
|Total shareholders' equity                                                                                        |  | 37,588,140                |   | 38,388,028     |  
|                                                                                                                  |  | $ 58,545,896              |   | $ 59,421,292   |  



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



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3



CPAC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Loss)
FOR THE THREE MONTHS ENDED June 30, 2005 AND 2004UNAUDITED



|                                                                     |  | 2005              |   | 2004              |  
|-------------------------------------------------------------------- |  | ----------------- | - | ----------------- | -
|Net sales                                                            |  | $ 22,423,567      |   | $ 22,085,655      |  
|Costs and expenses:                                                  |  |                   |   |                   |  
|Cost of sales                                                        |  | 12,905,139        |   | 12,452,875        |  
|Selling, administrative and engineering expenses                     |  | 9,254,150         |   | 9,024,013         |  
|Research and development expense                                     |  | 232,752           |   | 189,898           |  
|Interest expense, net                                                |  | 99,113            |   | 100,538           |  
|                                                                     |  | 22,491,154        |   | 21,767,324        |  
|Income (loss) before non-operating income (expense) and income taxes |  | (67,587           | ) | 318,331           |  
|Non-operating items:                                                 |  |                   |   |                   |  
|Minority interests                                                   |  | (4,483            | ) | (52,837           | )
|Equity in loss of affiliate                                          |  | --                |   | (127,901          | )
|                                                                     |  | (4,483            | ) | (180,738          | )
|Income (loss) before income tax                                      |  | (72,070           | ) | 137,593           |  
|Provision for income tax                                             |  | 67,000            |   | 67,000            |  
|Net income (loss)                                                    |  | $     (139,070    | ) | $        70,593   |  
|Net income (loss) per common share:                                  |  |                   |   |                   |  
|Basic net income (loss) per share                                    |  | $           (0.03 | ) | $            0.01 |  
|Diluted net income (loss) per share                                  |  | $           (0.03 | ) | $            0.01 |  
|Average common shares outstanding:                                   |  |                   |   |                   |  
|Basic                                                                |  | 4,946,774         |   | 4,946,774         |  
|Diluted                                                              |  | 4,946,774         |   | 4,958,830         |  
|Comprehensive income (loss):                                         |  |                   |   |                   |  
|Net income (loss)                                                    |  | $     (139,070    | ) | $         70,593  |  
|Other comprehensive income (loss)                                    |  | (314,436          | ) | 30,172            |  
|Comprehensive income (loss)                                          |  | $     (453,506    | ) | $       100,765   |  



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



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4



CPAC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                                      |  | 2005         |   | 2004           |  
|----------------------------------------------------------------------------------------------------- |  | ------------ | - | -------------- | -
|Cash flows from operating activities:                                                                 |  |              |   |                |  
|Net income (loss)                                                                                     |  | $   (139,070 | ) | $       70,593 |  
|Adjustments to reconcile net income (loss) to net cash provided
   by (used in) operating activities: |  |              |   |                |  
|Depreciation                                                                                          |  | 563,810      |   | 564,070        |  
|Amortization of intangible assets                                                                     |  | 38,542       |   | 38,542         |  
|Deferred income taxes                                                                                 |  | 4,000        |   | 66,000         |  
|Minority interest in consolidated foreign subsidiaries                                                |  | 4,483        |   | 52,837         |  
|Equity in loss of affiliate                                                                           |  | --           |   | 127,901        |  
|Changes in assets and liabilities:                                                                    |  |              |   |                |  
|Accounts receivable                                                                                   |  | (602,660     | ) | (83,055        | )
|Inventory                                                                                             |  | (293,128     | ) | (1,316,008     | )
|Income taxes, net                                                                                     |  | 1,085,628    |   | --             |  
|Accounts payable                                                                                      |  | 301,104      |   | (396,288       | )
|Accrued expenses and liabilities                                                                      |  | (270,724     | ) | (256,925       | )
|Other changes, net                                                                                    |  | (199,531     | ) | 140,421        |  
|Total adjustments                                                                                     |  | 631,524      |   | (1,062,505     | )
|Net cash provided by (used in) operating activities                                                   |  | 492,454      |   | (991,912       | )
|Cash flows from investing activities:                                                                 |  |              |   |                |  
|Purchase of property, plant and equipment                                                             |  | (212,148     | ) | (111,459       | )
|Net cash used in investing activities                                                                 |  | (212,148     | ) | (111,459       | )
|Cash flows from financing activities:                                                                 |  |              |   |                |  
|Repayment of long-term borrowings                                                                     |  | (113,901     | ) | (77,199        | )
|Payment of cash dividends                                                                             |  | (346,382     | ) | (346,382       | )
|Net cash used in financing activities                                                                 |  | (460,283     | ) | (423,581       | )
|Effect of exchange rate changes on cash                                                               |  | (4,665       | ) | 1,425          |  
|Net decrease in cash and cash equivalents                                                             |  | (184,642     | ) | (1,525,527     | )
|Cash and cash equivalents -- beginning of period                                                      |  | 7,710,031    |   | 7,747,481      |  
|Cash and cash equivalents -- end of period                                                            |  | $  7,525,389 |   | $  6,221,954   |  



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



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5

CPAC, Inc. And Subsidiaries

Notes to Consolidated Financial Statements

Unaudited







1 -- CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheets, the consolidated statements of operations and comprehensive income, and the consolidated statements of cash flows for the interim periods presented have been prepared by the Company without audit. In the opinion of management, all adjustments necessary to present fairly the financial position, results of operations, and changes in cash flows for the interim periods presented (which include only normal recurring adjustments), have been made. The balance sheet at March 31, 2005 has been taken from the audited financial statements as of that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These interim consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2005 Annual Report to Shareholders. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year.

2 -- INVENTORY

Inventory net of reserves is summarized as follows:



|                                  |  | June 30, 2005 |  | March 31, 2005 | 
|--------------------------------- |  | ------------- |  | -------------- | 
|Raw materials and purchased parts |  | $   7,515,490 |  | $   6,919,868  | 
|Work-in-process                   |  | 1,450,016     |  | 1,163,805      | 
|Finished Goods                    |  | 10,002,919    |  | 10,674,190     | 
|                                  |  | $ 18,968,425  |  | $ 18,757,863   | 

3 -- BUSINESS INVESTMENT

In September 2004, the Company acquired the remaining 20% ownership interest in its majority-owned subsidiary, CPAC Asia Imaging Products Limited (CPAC Asia) for $600,000; $300,000 in cash, and a three-year non-interest bearing promissory note for $300,000 (principal payments of $100,000 annually). The amount paid represents a discount to CPAC Asia's net asset fair market value, and as such, has resulted in a proportionate reduction in the subsidiaries' property, plant and equipment.

For the three months ended June 30, 2005, the Company has recognized 100% of the operating results of CPAC Asia in its consolidated statement of operations, as compared to 80% of the operating results of CPAC Asia for the three months ended June 30, 2004.

4 -- INVESTMENT IN AFFILIATE

The Company's ownership percentage in TURA AG (TURA) of Düren, West Germany, is 40% after equity investments in fiscal 2003 and 2004. The Company recorded its equity in the income or losses of TURA on a three-month lag and included its share of the TURA earnings and losses as "Equity in loss of affiliate" on the Consolidated Statement of Operations. In addition, the purchase price to acquire the cumulative 40% ownership exceeded the Company's proportionate share of TURA's net assets. A portion of this allocated excess purchase price was also amortized into equity earnings.

At the conclusion of the second quarter of fiscal 2005, the Company's investment in TURA had been reduced to zero, after a 2004 impairment charge and continued recognition of equity in losses of TURA, including amortization of the excess purchase price. Since the Company is not obligated to fund any future losses of TURA, it has not recorded its 40% share of TURA equity earnings or losses, since the second quarter of fiscal 2005, as TURA has not been profitable. Although TURA attempted to restructure its workforce and replaced management in an effort to reduce operating losses and improve cash flows, the current and future status of TURA is unknown, as they are operating under German government supervision, facing possible liquidation.

For the three months ended June 30, 2004, the Company recorded its 40% proportionate share of TURA's losses, plus amortization of the excess purchase price allocated to the supply contract, to its remaining investment balance, which had previously been written down after recognition of an impairment loss of approximately $2,320,000 or $0.47 a diluted share during the fourth quarter ended March 31, 2004. The impairment adjustment had reduced the Company's investment at the beginning of the Company's fiscal 2005 first quarter to an estimated fair market value of $250,000, a value the Company believed was largely attributable to the supply contracts between the Company and TURA.



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6

Summarized, unaudited, financial information for TURA for the three months ended June 30, 2004 is shown below:



|                                   |  | Unaudited
For the Three Months Ended |  
|---------------------------------- |  | ------------------------------------ | -
|                                   |  | June 30, 2004                        |  
|Condensed Statement of Operations: |  |                                      |  
|Net revenue                        |  | $   3,797,000                        |  
|Cost of sales                      |  | 2,926,000                            |  
|Operating expenses                 |  | 1,045,000                            |  
|Operating loss                     |  | (174,000                             | )
|Interest expense                   |  | 68,000                               |  
|Net loss                           |  | $     (242,000                       | )
|Condensed Balance Sheet:           |  |                                      |  
|Current assets                     |  | $   8,709,000                        |  
|Non-current assets                 |  | 4,609,000                            |  
|                                   |  | $ 13,318,000                         |  
|                                   |  |                                      |  
|Current liabilities                |  | $ 12,063,000                         |  
|Non-current liabilities            |  | 525,000                              |  
|Shareholders' equity               |  | 730,000                              |  
|                                   |  | $ 13,318,000                         |  

5 -- GOODWILL AND INTANGIBLE ASSETS

The Company follows SFAS No. 142, "Goodwill and Other Intangible Assets," which requires an annual impairment test (comparison of estimated fair value to carrying value) in lieu of monthly amortization for goodwill. At June 30, 2005 and March 31, 2005, all of the recorded goodwill pertained to the Imaging Segment and amounted to $192,426.

At June 30, 2005, other intangible assets consisted primarily of a contractual license agreement allowing the Company to manufacture and distribute products through the use of the trademarks and formulas of Stanley Home Products. The license is being amortized over the contract period, which expires on March 31, 2010. The original cost pertaining to this intangible at June 30, 2005 and March 31, 2005 was $2,250,000, while accumulated amortization at June 30, 2005 and March 31, 2005 was $1,537,000 and $1,500,000, respectively. Annual amortization of the license is $150,000, which will continue until expiration date. Other amortizable, intangible assets and their related amortization expense are not material.

6 -- IMAGING RESTRUCTURING

As the final step of the Imaging Restructuring project started in fiscal 2004, during the first quarter of fiscal 2006, the Company negotiated a "termination of lease agreement" on its 35,000 square feet of warehouse space in St. Louis, Missouri, which it was renting under a ten-year lease obligation (with an option to terminate as of January 31, 2007, with 12 month's notification) that allowed the Company to pay a settlement amount of $150,000 to terminate the lease as of June 30, 2005. The lease termination fee was accrued at March 31, 2005. The Company vacated the leased warehouse premises, during the quarter ended June 30, 2005.

For the three months ended June 30, 2004, no additional expenses were recorded related to the Imaging Restructuring plan, as all employee termination costs and other costs associated with the move had been accrued. In the second quarter of fiscal 2005, the Company completed the sale of the St. Louis facility on September 27, 2004 and recorded a gain on the sale of approximately $63,000.

7 -- GUARANTEES

The Company guarantees the following debt and other obligations for some of its subsidiaries under agreements with banks: a standby letter of credit issued by Bank of America for $6.2 million is used by the Company to collateralize the Fuller Brands' Industrial Revenue Bonds.



---

7

The Company has warranty obligations in connection with sales of its Imaging equipment. The warranty period generally ranges from 6 to 12 months. The costs incurred to provide for these warranty obligations are estimated and recorded as an accrued liability at the time of sale. The Company estimates its warranty cost at the time of sale for a given product based on historical failure rates and related costs to repair. The change in the Company's accrued warranty obligations from March 31, 2005 to June 30, 2005 was as follows (in thousands):



|Accrued warranty obligations at March 31, 2005       |  | $  32
|---------------------------------------------------- |  | -----
|Accrued warranty experience April 1 to June 30, 2005 |  | (1)  
|April 1 to June 30, 2005 warranty provisions         |  |      
|Accrued warranty obligations at June 30, 2005        |  | $  31

8 -- STOCK-BASED COMPENSATION

The Company accounts for its stock option plans under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25. Accordingly, no expense is charged to net income as all options granted included an exercise price equal to the market value of the underlying common stock on the date of the grant. In accordance with SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure," the following table illustrates the effect on net income and earnings per share, as if the Company had applied the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," to stock-based, employee compensation.



| |                                                                              |  | Three Months Ended
June 30, |  
| | ---------------------------------------------------------------------------- |  | --------------------------- | -
| |                                                                              |  | 2005                        |  
| | Net income (loss) as reported                                                |  | $ (139,070                  | )
| | Total stock-based compensation:                                              |  |                             |  
| | Expense determined under fair value 
      method for all awards, net of tax |  | 25,000                      |  
| | Proforma net income (loss)                                                   |  | $ (164,070                  | )
| | Net income (loss) per common share:                                          |  |                             |  
| | Basic -- as reported                                                         |  | $ (0.03                     | )
| | Basic -- proforma                                                            |  | $ (0.03                     | )
| | Diluted -- as reported                                                       |  | $ (0.03                     | )
| | Diluted -- proforma                                                          |  | $ (0.03                     | )

The fair value of these options was estimated at grant date using the Black-Scholes option-pricing model. There have been no charges to income in any of the periods above in connection with these options other than incidental expenses related to options.

9 -- EARNINGS PER SHARE

Basic earnings per share are based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average common shares outstanding during the period plus the dilutive effect of shares issuable through stock options and warrants. The shares used in calculating basic and diluted earnings per share are reconciled as follows:



| |                                                        |  | Three Months Ended
June 30, | 
| | ------------------------------------------------------ |  | --------------------------- | 
| |                                                        |  | 2005                        | 
| | Basic weighted average number
   of shares outstanding |  | 4,946,774                   | 
| | Effect of dilutive stock options                       |  | --                          | 
| | Dilutive shares outstanding                            |  | 4,946,774                   | 

Unexercised stock options to purchase 783,936 shares of the Company's common stock as of June 30, 2004 were not included in the computations of diluted earnings per share because the exercise prices of these options were greater than the average market price of the Company's common stock during the respective periods. These options, issued at various dates from 1995 to 2004, are still outstanding at the end of the period. For the three months ended June 30, 2005, unexercised stock options to purchase 1,009,911 shares of the Company's stock were not included in the computation of EPS, because they would be anti-dilutive, due to the net loss incurred by the Company during the quarter.



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8

10 -- COMPREHENSIVE INCOME

Other comprehensive income includes foreign currency translation adjustments.

11 -- SEGMENT INFORMATION

The Company operates in two industry segments: the Fuller Brands Segment and the CPAC Imaging (Imaging) Segment. Information concerning the Company's business Segments' net sales and income before non-operating income (expense) and income taxes for the quarters and three months ended June 30, 2005 and 2004 are as follows:



| |                                                             |  | Three Months
Ended June 30, |  
| | ----------------------------------------------------------- |  | --------------------------- | -
| |                                                             |  | 2005                        |  
| | Net sales to customers:                                     |  |                             |  
| | Fuller Brands                                               |  | $ 14,494,155                |  
| | Imaging                                                     |  | 7,929,412                   |  
| | Total net sales to customers                                |  | $ 22,423,567                |  
| | Operating income (loss):                                    |  |                             |  
| | Fuller Brands                                               |  | $      356,814              |  
| | Imaging                                                     |  | (241,462                    | )
| |                                                             |  | 115,352                     |  
| | Corporate expense                                           |  | (83,826                     | )
| | Interest expense, net                                       |  | (99,113                     | )
| | Income (loss) before non-operating expense and income taxes |  | $      (67,587              | )

Sales between Segments are not material.

Information concerning the identifiable assets of the Company's business Segments at June 30, 2005 and March 31, 2005 are as follows:



|                                         |  | June 30, 2005 |  | March 31, 2005 | 
|---------------------------------------- |  | ------------- |  | -------------- | 
|Identifiable assets:                     |  |               |  |                | 
|Fuller Brands                            |  | $ 29,774,317  |  | $ 28,862,451   | 
|Imaging                                  |  | 20,248,870    |  | 20,926,921     | 
|Total identifiable assets of the segment |  | 50,023,187    |  | 49,789,372     | 
|Corporate short-term investments         |  | 4,584,480     |  | 4,701,635      | 
|Other corporate assets                   |  | 3,938,229     |  | 4,930,285      | 
|Total consolidated assets                |  | $ 58,545,896  |  | $ 59,421,292   | 

12 -- RECENT ACCOUNTING PRONOUNCEMENTS

In November 2004, the FASB issued SFAS No. 151 "Inventory Costs, an amendment of ARB No. 43, Chapter 4." This statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to require the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) to be handled as a current period charge. The statement also requires that the allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted during fiscal years beginning after the date the statement was issued (November 2004). The Company is currently assessing the impact adoption of this pronouncement will have on the reported results of operations and financial position.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123(R)"). This statement is a revision of FASB Statement No. 123, "Accounting for Stock-Based Compensation," and will supercede APB Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. The revised statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. It requires entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, over the period during which an employee is required to provide service in exchange for the award. In addition, the adoption of SFAS 123(R) requires additional accounting and



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9

disclosure related to the income tax and cash flow effects, resulting from share-based payment arrangements. SFAS 123(R) is effective as of the first annual reporting period beginning after June 15, 2005. The Company is currently assessing the impact adoption of this pronouncement will have on the reported results of operations and financial position.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets-an amendment of APB Opinion No. 29." This statement amends APB Opinion No. 29 to eliminate the specific exception regarding the basic measurement principle (fair value) for exchanges of similar productive assets and replaces it with a general exception for exchange transactions that do not have commercial substance (i.e. -- are not expected to result in significant changes of the cash flows of the reporting entity). SFAS No. 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005, with earlier application permitted regarding non-monetary exchanges beginning after the statement was issued (December 2004). The Company is currently assessing the impact adoption of this pronouncement may have, if any, on the reported results of operations and financial position.

In May 2005 the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections." This Statement replaces APB Opinion No. 20, "Accounting Changes" and FASB Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements," and changes the requirements for the accounting and reporting of a change in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. Different from APB No. 20, this statement requires retrospective application to prior periods' financial statements of changes in accounting principle, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. The Statement defines retrospective application, as the application of a different accounting principle to prior accounting periods, as if that principle had always been used, or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. This Statement also redefines restatement, as the revising of previously issued financial statements to reflect the correction of an error, and requires that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimates effected by a change in accounting principle. This Statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, with early adoption permitted for accounting changes and corrections of errors made in fiscal years beginning after May 2005. The Company is currently reviewing the standard to determine upon adoption the impact, if any, on the reported results of operations and financial position.

In June 2005, the FASB ratified Emerging Issues Task Force (EITF) consensus on Issue No. 05-6, "Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination" ("EITF 05-06"). EITF 05-06 provides guidance regarding the amortization period for leasehold improvements acquired in a business combination and the amortization period of leasehold improvements that are placed in service significantly after and not contemplated at the beginning of the lease term. EITF 05-06 will be effective beginning with the Company's second quarter of fiscal 2006. The Company does not believe the adoption of EITF 05-6 will have a material impact on its financial statements.

13 -- LITIGATION

No material litigation is pending to which the Company and/or its subsidiaries are a party, or which property of the Company and/or its subsidiaries is the subject.

14 -- RECLASSIFICATION

Certain March 31, 2005 financial statement and related footnote amounts have been reclassified to conform to the June 30, 2005 presentation.



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

RESULTS OF OPERATIONS

The Company operates in two industry segments. The Fuller Brands Segment is involved in developing, manufacturing, distributing, and marketing branded industrial and consumer cleaning and personal care products in North America and internationally. The CPAC Imaging Segment includes the Company's color photographic, health care, and graphic arts imaging operations in the United States, Belgium, Italy, South Africa, and Thailand. Sales between Segments are not material.

Net Sales

The Company's net sales increased 1.5% for the three months ended June 30, 2005, as compared to the same period last year (increased 0.6%, excluding the impact of foreign currency exchange).

For the Fuller Brands Segment [consisting of The Fuller Brush Company, Inc. (Fuller Brush); Stanley Home Products (Stanley); and Cleaning Technologies Group (CTG)], net sales for the three months ended June 30, 2005, as compared to the same period last year increased 3.7%.

Fuller Brush sales increased 2.8% for the three months ended June 30, 2005, as compared to the same period last year, largely due to increases in its QVC home shopping business, offset by lower sales to the retail industry.

Stanley's net sales declined 2.9% for the quarter ended June 30, 2005, as compared to the same period last year, as it continues to seek new ways to attract recruits. Compensation changes rolled out to specific regions in fiscal 2005 appear to have been moderately successful in increasing recruits and their resulting sales, with the hope that this initiative, if introduced nationwide, will help slow or reverse declining sales trends.

CTG's net sales for the quarter ended June 30, 2005 increased 7.8%, primarily from an increase in distribution sales, partly due to the addition of new manufacturing representatives in the first quarter. While the Company continues to believe that significant opportunities exist within the commercial cleaning market, it has not been able to capitalize on these in any consistent manner and continues to experience fluctuating monthly results. In addition, significant material cost increases received from its vendors have been difficult to pass on to the end-user, thus depressing profitability, despite increased revenues. The Company is currently addressing the pricing of its products in the market and will continue to seek out appropriate business partners to strengthen its position in the commercial cleaning marketplace.

In the Imaging Segment, net sales decreased 2.3% for the three months ended June 30, 2005, as compared to the same period in fiscal 2005 (decreased 4.7%, excluding the impact of foreign currency exchange). As the imaging industry continues to evolve from traditional silver halide film to digital imaging, the Company's domestic and international operations have continued to experience sales declines in most markets. Domestically, revenue declines ranged from 3% to 13% in medical and photographic chemistry and equipment sales. Despite gaining efficiencies from the consolidation of domestic manufacturing facilities that started in 2004, continuing revenue declines could require additional cost-cutting initiatives to be considered. The Company believes that its pursuit of outsource manufacturing opportunities, as a competitive supplier for North America and the world, may provide an opportunity to reverse revenue declines and allow its Imaging operations to operate profitably in the future.

The Company's international operations experienced mixed results in the three months ended June 30, 2005. In the Company's Belgian and Asian operations, net sales declined, while at the Company's Italian operation, net sales increased. At CPAC Africa, the impact of foreign currency exchange contributed to its increase in net sales. (See Foreign Operations discussions for international operations' results).

As expressed previously, the Company's global Imaging Segment believes, due to the strategic locations of its worldwide manufacturing facilities, that it can position itself to become a competitive, outsource private-label imaging chemical supplier to major industry players, as they invest resources in digital technology. If efforts in this area are not successful in the short-term, the Company will engage in plans to further reduce fixed costs, to improve operational profitability.

Gross Margins

Consolidated gross margins were 42.4% for the three months ended June 30, 2005, as compared to 42.6% for the year ended March 31, 2005 and 43.6% for the quarter ended June 30, 2004, respectively.



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Gross margins in the Fuller Brands Segment were 47.6% for the three months ended June 30, 2005, as compared to 48.5% for the year ended March 31, 2005 and 50.6% for the quarter ended June 30, 2004, respectively. Continued price increases during the quarter for raw materials used in many of its manufactured products helped to contribute to the gross margin decline. The Fuller Brand businesses have implemented selected price changes in certain of its product family, in an effort to improve overall product profitability, which it believes should stabilize or improve margins. Increased volume throughput in the Great Bend facility, however, is the key component for improving gross margins in the future.

Gross margins in the Imaging Segment were 33.0% for the three months ended June 30, 2005, as compared to 33.6% for the year ended March 31, 2005 and 31.7% for the three months ended June 30, 2004, respectively. While margins decreased slightly over March 31, 2005 levels, due to material cost increases, improvements for the first quarter of fiscal 2006, versus the comparable quarter last year, were attributable to manufacturing efficiencies experienced at the Segment's Norcross, Georgia, manufacturing facility. The Company believes, however, pressures on margins will continue, due to pricing dynamics and declining volumes both domestically and internationally.

Selling, Administrative, and Engineering Expenses

Consolidated selling, administrative, and engineering costs for the three months ended June 30, 2005 were 41.3% of net sales, versus 41.5% and 40.9% for the year ended March 31, 2005 and the quarter ended June 30, 2004, respectively.

For the Fuller Brands Segment, selling, administrative, and engineering expenses for the three months ended June 30, 2005 were 44.0% of net sales, as compared to 44.9% and 43.2% for the year ended March 31, 2005 and the three months ended June 30, 2004, respectively. The increase in selling, administrative, and engineering costs, as a percentage of net sales in the current quarter, as compared to the first quarter of fiscal 2005, is a function of increased business through the home shopping network, which have higher selling costs associated with this business channel. The decrease in the expense, as a percentage of net sales in the current quarter, as compared to March 31, 2005, is a function of certain non-recurring selling and marketing expenses incurred last year as the Company entered the retail marketplace.

In the Imaging Segment, selling, administrative, and engineering costs for the quarter ended June 30, 2005 were 35.2% of net sales versus 35.9% and 36.5% for the year ended March 31, 2005 and the quarter ended June 30, 2004, respectively. The decrease in the expense, as a percentage of net sales in the current quarter, as compared to previous periods, reflects cost-containment efforts in both domestic and international Imaging operations, due to reduced revenue levels. The Segment is continuing to analyze its fixed costs to better match anticipated revenues with expenses.

Research and Development Expenses

Research and development expenses, as a percentage of sales, stayed consistent at 1.0% of net sales for the quarter ended June 30, 2005, as compared to 1.0% of net sales for the year ended March 31, 2005 and 0.9% for the same quarter last year. Both Segments increased expenditures slightly in an effort to improve existing product capabilities, as well as to develop new innovative products to promote in the marketplaces in which they operate.

A key objective for 2006 for the Fuller Brands Segment's focus will be to continue developing new products to enhance its entry into the retail marketplace and growing television shopping business, stimulate recruitment efforts in its direct selling business, as well as continuing to enhance CTG's commercial cleaning product offerings to compete in the highly-competitive janitorial sanitation business. In the Imaging Segment, continued effort will be placed on developing easy-to-use prepackaged, chemical formulations and innovative wrap-around-programs, involving chemistry, paper, and equipment for use in domestic and overseas imaging markets. The Company stands committed to spend what is feasible to remain competitive in the mature markets they operate in.

Net Interest Expense



Income Taxes

The Company's consolidated tax provision for the three months ended June 30, 2005 reflects the impact of the valuation allowance against the Company's domestic net deferred tax assets. It also reflects the establishment of a valuation allowance to offset the deferred tax assets of the Company's Belgian operation. As a result of its losses for this quarter and the prior fiscal year, the Company was no longer able to assert that realization of its future tax benefits was "more likely than not." In addition, the consolidated tax provision includes the results attributable to the Company's Italian and African operations. The Company also recorded domestic state tax provisions, which reflect mostly minimum state tax liabilities in the states the Company files in. The consolidated provision continues to reflect the benefits of the CPAC Asia tax holiday in Thailand (a



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12

seven-year benefit expiring in August 2006), as well as the utilization of CPAC Africa's net operating loss carry forward to offset taxable income.

During the fourth quarter of fiscal year 2005, the cumulative domestic losses, under criteria established in SFAS No. 109, "Accounting for Income Taxes," necessitated the establishment of a valuation reserve, as the Company was no longer able to assert that realization of its future tax benefits was "more likely than not." The valuation allowance on the Company's domestic net deferred tax asset was increased to reflect the Company's domestic operations taxable loss in the first quarter, which for federal tax purposes are only available to offset future taxable income. As indicated above, the Company utilized this same standard for the first three months ended June 30, 2005 to determine that a valuation allowance was also necessary for the Belgian operations.

For the remainder of fiscal 2006, the Company expects to separately and independently maintain a valuation allowance on future tax benefits related to each of its domestic and Belgian operations, until an appropriate level of profitability is achieved and sustained; or it is able to develop additional tax planning strategies that would generate taxable income to utilize the deferred tax assets. Until then, the Company's tax provision will include the net tax expense or benefit attributable to domestic state taxes and certain foreign operations. The expense or benefit from the domestic federal and Belgian operations will be recorded, as an adjustment to the valuation allowance, as appropriate.

Net Income

The Company's net income decreased approximately $210,000 to a net loss of ($139,070) for the three months ended June 30, 2005, as compared to net income of $70,593. Decreased earnings at the Fuller Brand's Segment were mitigated by reduced domestic Imaging operation losses, no further recognition of equity in losses of TURA, and lower minority interest share of consolidated earnings, due to full ownership of CPAC Asia, all contributing to the first quarter results

Foreign Operations

The results of operations for the Company's foreign subsidiaries, including the impacts of currency exchange, are reported on a three-month lag. Inter-company sales between foreign operations have been eliminated in discussions of year-over-year fluctuations on a U.S. dollar basis, as well as disclosures concerning amounts and percentages, with foreign currency impacts excluded.

Combined net sales for the Company's operations in Thailand, South Africa, Belgium, and Italy in the first quarter of fiscal 2006, as compared to the same period of the first quarter of fiscal 2005, increased approximately $38,000 or 1.2% (or decreased approximately $163,000 or 5.1%, excluding the impact of currency exchange). For the first quarter of fiscal 2006, CPAC Europe and Italia net sales combined increased 4.1% and (decreased 4.5% after removing currency impact) as compared to same period in fiscal 2005. CPAC Asia's sales decreased 5.7% (decreased 7.2% after removing currency impact), for first quarter of fiscal 2006 as compared to the same period in fiscal 2005. CPAC Africa experienced growth, as net sales increased approximately 7.1% (decreased 2.5% after removing currency impact), respectively, for the first quarter of fiscal 2006 as compared to the same period in fiscal 2005.

Combined pretax profits for the first quarter of fiscal 2006, prior to minority interests and equity in losses of TURA, decreased approximately $40,000 or 33.1%, as compared to the previous year's quarter (decreased $39,000 or 31.8%, excluding impact of currency exchange). CPAC Europe and Italia's pretax profits combined in the first quarter of fiscal 2006 decreased approximately $28,000 or 18.4% (or decreased approximately $19,000 or 12.4% excluding impact of currency exchange), as compared to the previous year's quarter. CPAC Africa's fiscal 2006 pretax income increased approximately $13,000 (or increased approximately $9,000, after removing currency impact), while CPAC Asia's first quarter 2006 profits decreased approximately $25,000 (decreased approximately $29,000 after removing currency impact), respectively, over the three months ended June 30, 2004.

As disclosed in Note 4 to the Consolidated Financial Statements, the Company accounts for its 40% investment in TURA under the equity method. However, the Company's recognition of the 40% share of the losses of TURA during the first six months of fiscal 2005 effectively reduced the basis of its investment to zero. Since the Company has no obligation to fund any future losses experienced by TURA, it has not recorded its 40% share of TURA's equity earnings, since the second quarter of fiscal 2005, as TURA has not been profitable. This compares to the quarter ended June 30, 2004, in which the Company recognized 40% of the proportionate share of TURA's net losses, plus amortization of the excess purchase price related to the Company's investment. Although TURA attempted to restructure its workforce and replaced management in an effort to reduce operating losses and improve cash flows, the current and future status of TURA is unknown, as they are operating under German government supervision, facing possible liquidation.

The Company has exposure to currency fluctuations and occasionally has utilized hedging programs (primarily forward foreign currency exchange contracts) to help minimize the impact of these fluctuations on results of operations. At June 30,



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13

2005, no forward foreign currency exchange contracts were outstanding. The Company does not hold or issue derivatives for trading purposes and is not a party to leveraged derivative transactions. On a consolidated basis, foreign currency exchange losses are included in income or expense as incurred and are not material to the results of operations.

Imaging Restructuring

As the final step of the Imaging Restructuring project started in fiscal 2004, during the first quarter of fiscal 2006, the Company negotiated a "termination of lease agreement" on its 35,000 square feet of warehouse space in St. Louis, Missouri, which it was renting under a ten-year lease obligation (with an option to terminate as of January 31, 2007, with 12 month's notification) that allowed the Company to pay a settlement amount of $150,000 to terminate the lease as of June 30, 2005. The lease termination fee was accrued at March 31, 2005. The Company vacated the leased warehouse premises, during the quarter ended June 30, 2005.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations and acquisitions with internally generated cash flows, supplemented with outside borrowings. The following table summarizes CPAC, Inc.'s consolidated cash flow information (in thousands):



| |                                           |  | For  the Three MonthsEnded June 30, |  
| | ----------------------------------------- |  | ----------------------------------- | -
| |                                           |  | 2005                                |  
| | Cash provided by (used in):               |  |                                     |  
| | Operating activities                      |  | $  492                              |  
| | Investing activities                      |  | (212                                | )
| | Financing activities                      |  | (460                                | )
| | Currency impact on cash                   |  | (5                                  | )
| | Net decrease in cash and cash equivalents |  | $ (185                              | )

Net cash provided by (used in) operating activities

Consolidated net cash provided by operating activities increased for the three months ended June 30, 2005, as compared to the three months ended June 30, 2004, due to federal tax refunds being received during the quarter, offset by lower inventory increases. In fiscal 2005, the increase in inventory was attributable to Fuller Brush, which was increasing levels, as a result of its retail initiative.

Net cash provided by (used in) investing activities

Consolidated net cash used in investing activities increased for the three months ended June 30, 2005, as compared to the three months ended June 30, 2004, due to higher capital expenditures.

Net cash provided by (used in) financing activities

Consolidated net cash used in financing activities increased in the first quarter of 2006 over 2005, due to higher debt repayments in fiscal 2006, as compared to fiscal 2005.

The following table presents working capital information at June 30, 2005, March 31, 2005, and June 30, 2004:



|                                |  | June 30, 2005 | March 31, 2005 | June 30, 2004
|------------------------------- |  | ------------- | -------------- | -------------
|Working  capital (in thousands) |  | $29,972       | $30,377        | $ 30,502     
|Working capital ratio           |  | 4.11 to 1     | 4.16 to 1      | 4.34 to 1    
|Receivable days outstanding     |  | 42.8 days     | 45.6 days      | 47.7 days    
|Annual inventory turns          |  | 2.7 times     | 2.8 times      | 2.8 times    

On June 10, 2005, the Company amended its line of credit agreement (Agreement) with Bank of America, N.A. (BOA), extending its maturity date to October 31, 2007. The Agreement includes a maximum borrowing capability of $3,000,000 with interest at the 30-day LIBOR rate plus 1.25% to 2.00% based on funded debt to EBITDA parameters. The Company also renewed its $6.2 million letter of credit facility, which collateralizes the Fuller Brands' Industrial Revenue Bonds to October 31, 2007. At March 31, 2005, the Company had not accessed its line of credit.

The amended Agreement requires the Company to meet various quarterly and annual debt covenants, including minimum deposit liquidity, minimum net worth, debt service coverage, funded debt to EBITDA, as well as limitations on capital expenditures, and amounts spent on acquisitions. At June 30, 2005, the Company was in compliance with its various loan covenants or received appropriate waivers.



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In addition, the Company's Asian subsidiary, CPAC Asia Imaging Products Limited has a line of credit with an international bank of 20 million baht (approximately $511,000 based on the first quarter conversion rate in Thailand). Interest is payable at the bank's announced prime rate in Thailand, which was 7.75% at June 30, 2005. CPAC Asia Imaging Products Limited had no outstanding borrowings against the line of credit at the end of its first quarter.

Critical Accounting Policies and Estimates

The accompanying unaudited interim financial statements and footnotes presented have been prepared by the Company and contain information that is pertinent to management's discussion and analysis of financial condition and results of operations. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results may differ from these estimates and assumptions.

The Company continues to follow the critical accounting policies and estimates as disclosed in the Company's March 31, 2005 Annual Report to Shareholders in preparing the interim financial statements for the three months ended June 30, 2005. Management's assumptions and judgements have not changed significantly from that previously disclosed.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements that are based on current expectations, estimates, and projections about the industries in which the Company operates, as well as management's beliefs and assumptions. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions ("Future Factors") that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

The Future Factors that may affect the operations, performance, and results of the Company's business include the following:

| | a. | general economic and competitive conditions in the markets and countries in which the Company operates;                                                                                                                                 
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | risk inherent in international operations including, but not limited to, safeguarding of assets such as cash, inventories, and property, plant and equipment, as well as protection of other intellectual properties;                   
| | c. | the level of competition and consolidation within the commercial cleaning supply industry;                                                                                                                                              
| | d. | the success of Fuller Brands' entry into the retail marketplace;                                                                                                                                                                        
| | e. | the effect of changes in the distribution channels for Fuller Brands;                                                                                                                                                                   
| | f. | the ability to increase volume through the Great Bend manufacturing plant to absorb fixed overhead;                                                                                                                                     
| | g. | the success of Stanley Home Products' new direct sales strategy that involves changes to its compensation plan, product focus, and recruiting methods to attract new independent representatives;                                       
| | h. | the level of demand for the Company's Imaging products and the impact of digital imaging;                                                                                                                                               
| | i. | the ability of the CPAC Imaging Segment to become a provider of worldwide manufacturing services for other companies in the traditional imaging markets;                                                                                
| | j. | the strength of the U.S. dollar against currencies of other countries where the Company operates, as well as cross-currencies between the Company's operations outside of the U.S. and other countries with which it transacts business;
| | k. | changes in business, political and economic conditions, and the threat of future terrorist activity in the U.S. and other parts of the world and related U.S. military action; and                                                      
| | l. | costs associated with meeting the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.                                                                                                                                        

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company does not intend to update forward-looking statements.

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There has been no material change in the Company's assessment of its sensitivity to interest rate or foreign currency risks since its disclosure in Item 7(a) of the Company's Form 10-K for the year ended March 31, 2005.



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Item 4.     CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

CPAC, Inc. (the Company) maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported on a timely basis and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Previously, as described in Item 9A. of the Company's Form 10-K for the year ended March 31, 2005, the Company's chief executive officer and chief financial officer, respectively, informed the Board of Directors that, based upon their evaluations of the Company's disclosure controls and procedures as of the end of the period covered by its annual report (Form 10-K), such disclosure controls and procedures were not effective, as a result of the material weakness described below, to ensure that information required to be disclosed by the Company in the reports it submits under the Securities Exchange Act of 1934 is accumulated and communicated to management (including the chief executive officer and chief financial officer) as appropriate to allow timely decisions regarding required disclosure.

On June 28, 2005, management of CPAC, Inc. concluded that the Company's previously filed unaudited consolidated financial statements for the periods ended June 30, 2004, September 30, 2004 and December 31, 2004 included in its respective Forms 10-Q should: (1) no longer be relied upon because of an error in such financial statements as addressed in Accounting Principles Board Opinion No. 20, and (2) be restated to reflect the accounting adjustments necessary to correct the error. The Company and the Audit Committee discussed this matter with the Company's independent registered public accounting firm.

The adjustments, which relate to inventory, should have been recorded in earlier quarterly periods within the same fiscal year. The adjustments impacted inventory value, cost of sales, and income tax benefit for each quarter, resulting in a net additional expense of $.02 per share in the Quarter ended June 30, 2004, $.01 per share in the Quarter ended September 30, 2004, and $.01 per share in the Quarter ended December 31, 2004. Management believes that no annual or quarterly financial statements for any period prior thereto require adjustment.

The misstatements were caused by a computational error in valuation of a component of inventory and related reliance on a spreadsheet for completion of such valuation. The spreadsheet was affected by the input of data that resulted in the computation of incorrect inventory values. Such error was not detected timely by management in their review of the calculations. Management has determined that the error was caused by a material weakness in internal control over financial reporting, described below, relating to the review of the inventory valuation calculation and the spreadsheet used in the calculation.

A material weakness is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In connection with the adjustments and restatement described above, the Company's management has identified a control deficiency in the Company's internal control over financial reporting as of June 30, September 30, and December 31, 2004 and March 31, 2005. The control deficiency is the lack of appropriate senior management review of the inventory valuation calculations and spreadsheets used in such calculations. As a result of this control deficiency, the Company misstated inventory and cost of sales, resulting in the restatement of the interim financial statements for fiscal 2005 and audit adjustments to the annual financial statements. In addition, this control deficiency could result in a misstatement of the aforementioned accounts that could result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, management has concluded that this control deficiency represents a material weakness in the Company's internal control over financial reporting.

Since June 28, 2005, management has been reviewing and evaluating the internal control over financial reporting related to inventory valuation calculations and spreadsheets used in such calculations with the intent of strengthening such controls and procedures. Remediation actions have included development of a new spreadsheet and manual recomputation of the new spreadsheet for each of the three quarters in the year ended March 31, 2005, as well as for the three months ended June 30, 2005, and future interim reporting periods. Additionally, management is in the process of applying manual controls over the computation of the valuation on a quarterly basis for all future periods and will document security control over the spreadsheet to ensure that it is not adjusted without appropriate review and written approval by senior accounting management. In addition, management has increased the levels of senior management review over interim financial information processed at the subsidiary locations, in an effort to prevent or detect misstatement of inventory or other accounts that could result in a material misstatement to the annual or interim financial statements. On July 20, 2005 the Company completed the filing of its restated interim results for the quarters ended June 30, 2004, September 30, 2004, and December 31, 2004.



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Despite the on-going remediation procedures being implemented as described above, the chief executive officer and chief financial officer concluded, that as of and for the three months ended June 30, 2005, the period covered by this Quarterly Report on Form 10-Q, that the Company's disclosure controls and procedures were not effective for the reasons described above related to the unremediated material weakness in the Company's internal control over financial reporting identified during the Company's annual audit of the year ended March 31, 2005. Management believes it must further evaluate and test the operational effectiveness of its disclosure controls and procedures and further evaluate whether additional enhancements to disclosure controls and procedures may be required prior to reaching further conclusions regarding the effectiveness of our disclosure controls and procedures. While management's efforts to evaluate, test, and enhance disclosure controls and procedures are ongoing, management believes that the consolidated, condensed financial statements included in this report present fairly in all material respects the financial condition, results of operations, and cash flows of CPAC, Inc. for the periods presented.

Changes in Internal Controls

Except as indicated above, management, with the participation of the Company's chief executive and chief financial officers, has concluded that there were no changes in the Company's internal control over financial reporting that occurred during the Company's first quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Although there were no changes to the Company's internal control over financial reporting that occurred during the period covered by this report, the Company has subsequently implemented changes and is planning additional changes to remediate the material weaknesses identified, which we expect will materially affect such controls.

PART II -- OTHER INFORMATION

|Item 1. | Legal Proceedings.
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|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
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|Item 3. | Defaults Upon Senior Securities.
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|Item 4. | Submission of Matters to a Vote of Security Holders.
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|Item 5. | Other Information.
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|Item 6. | Exhibits.                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | Exhibits as required by Item 601 of Regulation S-K, as applicable, are attached to this Quarterly Report (Form 10-Q). The Exhibit Index is found on the page immediately succeeding the signatures page, and the Exhibits follow on the pages immediately succeeding the Exhibit Index. |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | (2)   Plan of acquisition, reorganization, arrangement, liquidation, or succession -- Not applicable                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | (3)   (i)  Articles of incorporation                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 3.1                                                                                                                                                                                                                                                                                     | Certificate of Incorporation, as amended September 11, 1996, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1996, and further amended by Certificate of Amendment dated August 19, 1999, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | (3)   (ii)  By-laws                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 3.2                                                                                                                                                                                                                                                                                     | By-laws, as amended, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1998, as further amended, effective October 12, 2004, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | (4)   Instruments defining the rights of security holders, including indentures                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 4.1                                                                                                                                                                                                                                                                                     | Loan Agreement dated February 9, 1994, and Letter of Commitment dated December 16, 1993, incorporated herein by reference to Form 10-K filed for period ended March 31, 1994, as amended, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1994, and amended by Letter of Extension and Increase dated October 29, 1996, incorporated herein by reference to Form 10-Q for the period ended September 30, 1996, and further amended by First Amendment to Second Amended and Restated Loan Agreement dated October 31, 1996, incorporated herein by reference to Form 10-Q for the period ended December 31, 1996, and further amended by Agreement dated September 12, 1997, incorporated herein by reference to Form 10-Q for the period ended September 30, 1997, and further amended by Second Amendment to Second Amended and Restated Loan Agreement dated July 10, 1998, incorporated herein by reference to Form 10-Q for the period ended June 30, 1998, and further amended by Agreement dated April 27,



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17

| |                                                                                                  | 2000, incorporated herein by reference to Form 10-K for the period ended March 31, 2000, and further amended by Third Amendment to Third Amended and Restated Loan Agreement dated August 29, 2002, incorporated herein by reference to Form 10-Q for the period ended September 30, 2002, and further amended by Second Amendment to Restated Loan and Security Agreement and Note dated September 27, 2004, incorporated herein by reference to Form 10-Q for the period ended September 30, 2004                                                                                                                                                                                                                                                    | 
| | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | 4.2                                                                                              | Bank Letter dated June 10, 2005 in connection with the Second Amendment to Restated Loan and Security Agreement and Note dated September 27, 2004, incorporated herein by reference to Form 10-K filed for the period ended March 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | (10)  Material contracts                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 10.1                                                                                             | Employment Agreement between Thomas N. Hendrickson and CPAC, Inc. dated September 30, 1995, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1995, and amended by Extension of Employment Agreement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | 10.2                                                                                             | CPAC, Inc. Executive Long-Term Stock Investment Plan, incorporated herein by reference to Form S-8 Registration Statement filed on October 29, 1994, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 3, 1996 and September 24, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
| | 10.3                                                                                             | CPAC, Inc. 1996 Nonemployee Directors Stock Option Plan, incorporated herein by reference to Form S-8 Registration Statement filed October 3, 1996, as amended and incorporated by reference to Form S-8 Registration Statements filed on November 5, 1997, November 24, 1998, September 24, 1999, September 29, 2000, September 7, 2001, November 8, 2002, November 17, 2003 and November 23, 2004                                                                                                                                                                                                                                                                                                                                                    | 
| | 10.4                                                                                             | Deferred Compensation Arrangement between Thomas N. Hendrickson and CPAC, Inc. dated October 13, 1992, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1992, and amended by Amendment to Deferred Compensation Arrangement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999, and further amended by Amendment to Deferred Compensation Arrangement dated October 25, 2001, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 2001, and further amended by Third Amendment to Deferred Compensation Arrangement dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004 | 
| | 10.5                                                                                             | CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 30, 1999, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1999, and amended by CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 10.6                                                                                             | Severance Compensation Agreement between Thomas J. Weldgen and CPAC, Inc. dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | (11)  Statement regarding computation of per share earnings -- Not applicable                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (15)  Letter regarding unaudited interim financial information -- Not applicable                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (18)  Letter regarding change in accounting principles -- Not applicable                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (19)  Report furnished to security holders -- Not applicable                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (22)  Published report regarding matters submitted to vote of security holders -- Not applicable |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (23)  Consent of experts and counsel -- Not applicable                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (24)  Power of attorney -- Not applicable                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (31)  Rule 13a-14(a)/15d-14(a) Certifications                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 31.1                                                                                             | Rule 13a-14(a)/15d-14(a) Certification of CPAC, Inc.'s Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | 31.2                                                                                             | Rule 13a-14(a)/15d-14(a) Certification of CPAC, Inc.'s Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 
| | (32)  Section 1350 Certifications                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (99)  Additional exhibits-- Not applicable                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



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18

SIGNATURES

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



|                       |    | CPAC, INC.                                                                                    
|---------------------- | -- | ----------------------------------------------------------------------------------------------
|                       |    | (Registrant)                                                                                  
|                       |    |                                                                                               
|Date   August 12, 2005 | By | /s/ Thomas N. Hendrickson
Thomas N. Hendrickson,
President, Chief Executive Officer, Treasurer
|                       |    |                                                                                               
|Date   August 12, 2005 | By | /s/ Thomas J. Weldgen
Thomas J. Weldgen,
Vice President Finance and Chief Financial Officer   
|                       |    |                                                                                               
|Date   August 12, 2005 | By | /s/ James W. Pembroke
James W. Pembroke,
Corporate Secretary and Chief Accounting Officer     



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19

EXHIBIT INDEX



|Exhibit |                                                                           | Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.      | (i)  Articles of incorporation, By-laws                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 3.1                                                                       | Certificate of Incorporation, as amended September 11, 1996, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1996, and further amended by Certificate of Amendment dated August 19, 1999, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3.      | (ii)  By-laws                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 3.2                                                                       | By-laws, as amended, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1998, as further amended, effective October 12, 2004, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4.      | Instruments defining the rights of security holders, including indentures |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 4.1                                                                       | Loan Agreement dated February 9, 1994, and Letter of Commitment dated December 16, 1993, incorporated herein by reference to Form 10-K filed for period ended March 31, 1994, as amended, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1994, and amended by Letter of Extension and Increase dated October 29, 1996, incorporated herein by reference to Form 10-Q for the period ended September 30, 1996, and further amended by First Amendment to Second Amended and Restated Loan Agreement dated October 31, 1996, incorporated herein by reference to Form 10-Q for the period ended December 31, 1996, and further amended by Agreement dated September 12, 1997, incorporated herein by reference to Form 10-Q for the period ended September 30, 1997, and further amended by Second Amendment to Second Amended and Restated Loan Agreement dated July 10, 1998, incorporated herein by reference to Form 10-Q for the period ended June 30, 1998, and further amended by Agreement dated April 27, 2000, incorporated herein by reference to Form 10-K for the period ended March 31, 2000, and further amended by Third Amendment to Third Amended and Restated Loan Agreement dated August 29, 2002, incorporated herein by reference to Form 10-Q for the period ended September 30, 2002, and further amended by Second Amendment to Restated Loan and Security Agreement and Note dated September 27, 2004, incorporated herein by reference to Form 10-Q for the period ended September 30, 2004
|        | 4.2                                                                       | Bank Letter dated June 10, 2005 in connection with the Second Amendment to Restated Loan and Security Agreement and Note dated September 27, 2004, incorporated herein by reference to Form 10-K filed for the period ended March 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.     | Material contracts                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 10.1                                                                      | Employment Agreement between Thomas N. Hendrickson and CPAC, Inc. dated September 30, 1995, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1995, and amended by Extension of Employment Agreement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.2                                                                      | CPAC, Inc. Executive Long-Term Stock Investment Plan, incorporated herein by reference to Form S-8 Registration Statement filed on October 29, 1994, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 3, 1996 and September 24, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 10.3                                                                      | CPAC, Inc. 1996 Nonemployee Directors Stock Option Plan, incorporated herein by reference to Form S-8 Registration Statement filed October 3, 1996, as amended and incorporated by reference to Form S-8 Registration Statements filed on November 5, 1997, November 24, 1998, September 24, 1999, September 29, 2000, September 7, 2001, November 8, 2002, November 17, 2003 and November 23, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 10.4                                                                      | Deferred Compensation Arrangement between Thomas N. Hendrickson and CPAC, Inc. dated October 13, 1992, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1992, and amended by Amendment to Deferred Compensation Arrangement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999, and further amended by Amendment to Deferred Compensation Arrangement dated October 25, 2001, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 2001, and further amended by Third Amendment to Deferred Compensation Arrangement dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10.5                                                                      | CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 30, 1999, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1999, and amended by CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 10.6                                                                      | Severance Compensation Agreement between Thomas J. Weldgen and CPAC, Inc. dated December 22, 2004, incorporated herein by reference to Form 8-K filed on December 22, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|31.     | Rule 13a-14(a)/15d-14(a) Certifications                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 31.1                                                                      | Rule 13a-14(a)/15d-14(a) Certification of CPAC, Inc.'s Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 31.2                                                                      | Rule 13a-14(a)/15d-14(a) Certification of CPAC, Inc.'s Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|32.     | Section 1350 Certifications                                               | 23                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



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20