---

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

FORM 10-Q



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

For the quarterly period ended September 30, 2002



|[   ] | 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

(585) 382-3223

Not Applicable

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 [    ]

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 September 30, 2002                      
|----------------------------------- | ------------------------------------------------------------------------
|Common Stock, $.01 par value        | 5,088,999                                                               
|                                    |                                                                         
|Options Outstanding & Not Exercised | Shares to cover the options will not be issued until they are exercised.
|1,004,213                          



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1



CPAC, INC. AND SUBSIDIARIES



|        |                                                                                                                                                                         | Page No.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|        | PART I -- FINANCIAL INFORMATION                                                                                                                                         |         
|Item 1. | Financial Statements.                                                                                                                                                   |         
|        | CPAC, Inc. and Subsidiaries Consolidated Balance Sheets -- September 30, 2002 (Unaudited), and March 31, 2002                                                           | 3       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Six Months Ended September 30, 2002, and September 30, 2001 (Unaudited)   | 4       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Three Months Ended September 30, 2002, and September 30, 2001 (Unaudited) | 5       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Cash Flows -- Six Months Ended September 30, 2002, and September 30, 2001 (Unaudited)                            | 6       
|        | Notes to Consolidated Financial Statements                                                                                                                              | 7       
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations.                                                                                  | 11      
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.                                                                                                             | 14      
|Item 4. | Controls and Procedures.                                                                                                                                                | 14      
|        |                                                                                                                                                                         |         
|        | PART II -- OTHER INFORMATION                                                                                                                                            |         
|Item 1. | Legal Proceedings.                                                                                                                                                      | 15      
|Item 2. | Changes in Securities and Use of Proceeds.                                                                                                                              | 15      
|Item 3. | Defaults Upon Senior Securities.                                                                                                                                        | 15      
|Item 4. | Submission of Matters to a Vote of Security Holders.                                                                                                                    | 15      
|Item 5. | Other Information.                                                                                                                                                      | 15      
|Item 6. | Exhibits and Reports on Form 8-K.                                                                                                                                       | 15      
|        | SIGNATURE PAGE                                                                                                                                                          | 17      
|        | CERTIFICATIONS                                                                                                                                                          | 18      
|        | EXHIBIT INDEX                                                                                                                                                           | 20      













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2

PART I -- FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS.

CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS



|                                                                                         |                                                                                                                       | September 30, 2002(Unaudited) |            | March 31, 2002(Note) |  
|---------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---------- | -------------------- | -
|ASSETS                                                                                   |                                                                                                                      
|Current assets:                                                                          |                                                                                                                       |                               |            |                     
|                                                                                         | Cash and cash equivalents                                                                                             | $      7,808,434              |            | $    7,991,834       |  
|                                                                                         | Accounts receivable (net of allowance for doubtful accounts of $1,235,000 and $868,000, respectively)                 | 13,501,340                    |            | 13,217,923           |  
|                                                                                         | Inventory, net                                                                                                        | 18,309,129                    |            | 17,555,303           |  
|                                                                                         | Prepaid expenses and other current assets                                                                             | 1,470,454                     |            | 1,208,274            |  
|                                                                                         | Deferred tax assets, current                                                                                          | 1,267,790                     |            | 1,251,000            |  
|                                                                                         | Total current assets                                                                                                  | 42,357,147                    |            | 41,224,334           |  
|Property, plant and equipment, net                                                       | 17,565,974                                                                                                            |                               | 17,690,540 |                     
|Goodwill                                                                                 | 192,426                                                                                                               |                               | 10,661,677 |                     
|Other intangible assets (net of amortization of $1,277,379 and $1,299,166, respectively) | 1,176,413                                                                                                             |                               | 1,436,943  |                     
|Deferred tax assets, long-term                                                           | 2,191,387                                                                                                             |                               | 190,000    |                     
|Other assets                                                                             | 4,731,549                                                                                                             |                               | 4,931,782  |                     
|                                                                                         |                                                                                                                       | $ 68,214,896                  |            | $ 76,135,276         |  
|                                                                                         |                                                                                                                      
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                     |                                                                                                                      
|Current liabilities:                                                                     |                                                                                                                       |                               |            |                     
|                                                                                         | Current portion of long-term debt                                                                                     | $      733,806                |            | $   1,061,175        |  
|                                                                                         | Accounts payable                                                                                                      | 5,433,750                     |            | 4,758,153            |  
|                                                                                         | Accrued payroll and related expenses                                                                                  | 1,668,168                     |            | 1,679,952            |  
|                                                                                         | Accrued income taxes payable                                                                                          | 245,472                       |            | 621,575              |  
|                                                                                         | Other accrued expenses and liabilities                                                                                | 2,667,679                     |            | 2,701,767            |  
|                                                                                         | Total current liabilities                                                                                             | 10,748,875                    |            | 10,822,622           |  
|Long-term debt, net of current portion                                                   | 7,428,229                                                                                                             |                               | 7,404,721  |                     
|Other long-term liabilities                                                              | 3,305,813                                                                                                             |                               | 5,875,703  |                     
|Shareholders' equity:                                                                    |                                                                                                                       |                               |            |                     
|                                                                                         | Common stock, par value $0.01 per share; 
    Authorized 30,000,000 shares;
    Issued 5,174,306 and 5,208,806 shares | 51,743                        |            | 52,088               |  
|                                                                                         | Additional paid-in capital                                                                                            | 10,342,506                    |            | 10,538,823           |  
|                                                                                         | Retained earnings                                                                                                     | 38,009,514                    |            | 43,774,842           |  
|                                                                                         | Accumulated other comprehensive income                                                                                | (1,081,596                    | )          | (1,743,335           | )
|                                                                                         |                                                                                                                       | 47,322,167                    |            | 52,622,418           |  
|Less: Treasury stock, at cost, 85,307 shares                                             | (590,188                                                                                                              | )                             | (590,188   | )                   
|                                                                                         | Total shareholders' equity                                                                                            | 46,731,979                    |            | 52,032,230           |  
|                                                                                         |                                                                                                                       | $ 68,214,896                  |            | $ 76,135,276         |  

Note: The balance sheet at March 31, 2002 has been taken from the audited financial statements as of that date.

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 SIX MONTHS ENDEDSEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001
UNAUDITED



|                                                                                         |                                                            | 2002              |              | 2001               |  
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------- | ------------ | ------------------ | -
|Net sales                                                                                | $ 48,408,124                                               |                   | $ 50,536,067 |                   
|Costs and expenses:                                                                      |                                                            |                   |              |                   
|                                                                                         | Cost of sales                                              | 26,511,132        |              | 28,134,082         |  
|                                                                                         | Selling, administrative and engineering expenses           | 19,315,819        |              | 19,006,319         |  
|                                                                                         | Research and development expense                           | 351,960           |              | 305,916            |  
|                                                                                         | Interest expense, net                                      | 260,784           |              | 279,610            |  
|                                                                                         |                                                            | 46,439,695        |              | 47,725,927         |  
|Income before income taxes and cumulative effect of change in
      accounting principle | 1,968,429                                                  |                   | 2,810,140    |                   
|Provision for income tax expense                                                         | 735,000                                                    |                   | 1,025,000    |                   
|Income before cumulative effect of change in accounting principle                        | 1,233,429                                                  |                   | 1,785,140    |                   
|Cumulative effect of change in accounting principle, net                                 | (6,281,251                                                 | )                 |              |                   
|                                                                                         | Net income (loss)                                          | $  (5,047,822     | )            | $   1,785,140      |  
|Net income (loss) per common share:                                                      |                                                            |                   |              |                   
|                                                                                         | Basic:                                                     |                   |              |                    |  
|                                                                                         | Before cumulative effect of change in accounting principle | $            0.24 |              | $             0.34 |  
|                                                                                         | Cumulative effect of change in accounting principle, net   | $           (1.23 | )            | $                  |  
|                                                                                         | Basic net income (loss) per share                          | $           (0.99 | )            | $             0.34 |  
|                                                                                         | Diluted:                                                   |                   |              |                    |  
|                                                                                         | Before cumulative effect of change in accounting principle | $            0.24 |              | $             0.34 |  
|                                                                                         | Cumulative effect of change in accounting principle, net   | $           (1.22 | )            | $                  |  
|                                                                                         | Diluted net income (loss) per share                        | $           (0.98 | )            | $             0.34 |  
|Average common shares outstanding:                                                       |                                                            |                   |              |                   
|                                                                                         | Basic                                                      | 5,122,429         |              | 5,269,481          |  
|                                                                                         | Diluted                                                    | 5,138,067         |              | 5,281,952          |  
|Comprehensive income (loss):                                                             |                                                            |                   |              |                   
|                                                                                         | Net income (loss)                                          | $  (5,047,822     | )            | $   1,785,140      |  
|                                                                                         | Other comprehensive income (loss)                          | 661,739           |              | (624,911           | )
|                                                                                         | Comprehensive income (loss)                                | $  (4,386,083     | )            | $   1,160,229      |  



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













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4





CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS



|                                                                                         |                                                            | 2002               |               | 2001               |  
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------ | ------------- | ------------------ | -
|Net sales                                                                                | $  23,786,446                                              |                    | $  26,254,944 |                   
|Costs and expenses:                                                                      |                                                            |                    |               |                   
|                                                                                         | Cost of sales                                              | 13,140,487         |               | 14,868,432         |  
|                                                                                         | Selling, administrative and engineering expenses           | 9,440,089          |               | 9,406,464          |  
|                                                                                         | Research and development expense                           | 186,982            |               | 151,742            |  
|                                                                                         | Interest expense, net                                      | 135,186            |               | 143,105            |  
|                                                                                         |                                                            | 22,902,744         |               | 24,569,743         |  
|Income before income taxes and cumulative effect of change in
      accounting principle | 883,702                                                    |                    | 1,685,201     |                   
|Provision for income tax expense                                                         | 361,000                                                    |                    | 608,000       |                   
|Income before cumulative effect of change in accounting principle                        | 522,702                                                    |                    | 1,077,201     |                   
|Cumulative effect of change in accounting principle, net                                 |                                                            |                    |               |                   
|                                                                                         | Net income                                                 | $        522,702   |               | $    1,077,201     |  
|Net income (loss) per common share:                                                      |                                                            |                    |               |                   
|                                                                                         | Basic:                                                     |                    |               |                    |  
|                                                                                         | Before cumulative effect of change in accounting principle | $             0.10 |               | $             0.21 |  
|                                                                                         | Cumulative effect of change in accounting principle, net   | $                  |               | $                  |  
|                                                                                         | Basic net income per share                                 | $             0.10 |               | $             0.21 |  
|                                                                                         | Diluted:                                                   |                    |               |                    |  
|                                                                                         | Before cumulative effect of change in accounting principle | $             0.10 |               | $             0.21 |  
|                                                                                         | Cumulative effect of change in accounting principle, net   | $                  |               | $                  |  
|                                                                                         | Diluted net income per share                               | $             0.10 |               | $             0.21 |  
|Average common shares outstanding:                                                       |                                                            |                    |               |                   
|                                                                                         | Basic                                                      | 5,121,359          |               | 5,216,651          |  
|                                                                                         | Diluted                                                    | 5,132,626          |               | 5,230,298          |  
|Comprehensive income (loss):                                                             |                                                            |                    |               |                   
|                                                                                         | Net income                                                 | $       522,702    |               | $    1,077,201     |  
|                                                                                         | Other comprehensive income (loss)                          | 559,496            |               | (227,176           | )
|                                                                                         | Comprehensive income (loss)                                | $    1,082,198     |               | $       850,025    |  



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













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5



CPAC, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED
SEPTEMBER 30, 2002 AND SEPTEMBER 30, 2001
UNAUDITED



|                                                 |                                                                                   | 2002         |              | 2001         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ------------ | ------------ | ------------ | -
|Cash flows from operating activities:            |                                                                                   |              |              |             
|                                                 | Net income (loss)                                                                 | $ (5,047,822 | )            | $  1,785,140 |  
|                                                 | Adjustments to reconcile net income to net cash provided by operating activities: |              |              |              |  
|                                                 | Depreciation                                                                      | 1,254,681    |              | 1,513,762    |  
|                                                 | Amortization of intangible assets                                                 | 82,838       |              | 357,573      |  
|                                                 | Cumulative effect of accounting change                                            | 6,281,251    |              |              |  
|                                                 | Changes in assets and liabilities:                                                |              |              |              |  
|                                                 | Accounts receivable                                                               | (183,602     | )            | (352,654     | )
|                                                 | Inventory                                                                         | (618,467     | )            | (636,306     | )
|                                                 | Accounts payable                                                                  | 715,768      |              | (49,118      | )
|                                                 | Accrued expenses and liabilities                                                  | (375,554     | )            | 677,989      |  
|                                                 | Other changes, net                                                                | (244,141     | )            | (655,089     | )
|                                                 | Total adjustments                                                                 | 6,912,774    |              | 856,157      |  
|                                                 | Net cash provided by (used in) operating activities                               | 1,864,952    |              | 2,641,297    |  
|Cash flows from investing activities:            |                                                                                   |              |              |             
|                                                 | Purchase of property, plant, and equipment, net                                   | (1,000,250   | )            | (589,488     | )
|                                                 | Net cash used in investing activities                                             | (1,000,250   | )            | (589,488     | )
|Cash flows from financing activities:            |                                                                                   |              |              |             
|                                                 | Common stock repurchase                                                           | (196,662     | )            | (1,638,578   | )
|                                                 | Repayment of long-term borrowings                                                 | (139,520     | )            | (534,322     | )
|                                                 | Payment of cash dividends                                                         | (717,506     | )            | (735,844     | )
|                                                 | Net cash used in financing activities                                             | (1,053,688   | )            | (2,908,744   | )
|                                                 | Effect of exchange rate changes on cash                                           | 5,586        |              | (2,916       | )
|                                                 | Net decrease in cash and cash equivalents                                         | (183,400     | )            | (859,851     | )
|Cash and cash equivalents -- beginning of period | 7,991,834                                                                         |              | 8,859,885    |             
|Cash and cash equivalents -- end of period       | $  7,808,434                                                                      |              | $  8,000,034 |             



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













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6







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.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2002, 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 is summarized as follows:



|                                  | September 30, 2002 |  | March 31, 2002
|--------------------------------- | ------------------ |  | --------------
|Raw materials and purchased parts | $   7,269,752      |  | $   7,012,149 
|Work-in-process                   | 1,185,235          |  | 905,305       
|Finished goods                    | 9,854,142          |  | 9,637,849     
|                                  | $ 18,309,129       |  | $ 17,555,303  



3 -- 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 September 30, |  | Six Months
Ended September 30, | 
|------------------------------------------------------ | -------------------------------- |  | ------------------------------ | 
|                                                       | 2002                             |  | 2001                           | 
|Basic weighted average number
   of shares outstanding | 5,121,359                        |  | 5,216,651                      | 
|Effect of dilutive stock options                       | 11,267                           |  | 13,647                         | 
|Dilutive shares outstanding                            | 5,132,626                        |  | 5,230,298                      | 



Unexercised stock options to purchase 903,686 and 1,005,311 shares of the Company's common stock as of September 30, 2002 and 2001, respectively, were not included in the computations of diluted earnings per share because the options' exercise prices 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 2002, are still outstanding at the end of the period.



4 -- COMPREHENSIVE INCOME

Other comprehensive income (loss) includes foreign currency translation adjustments.











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7

5 -- SEGMENT INFORMATION

The Company operates in two industry segments: the Fuller Brands segment and the CPAC Global Imaging Group (Imaging) segment. Information concerning the Company's business segments' net sales and income before income taxes and cumulative effect of change in accounting principle for the quarters and six months ended September 30, 2002 and 2001 are as follows:



|                                                                                              | Three Months
Ended September 30, |   | Six Months
Ended September 30, |  
|--------------------------------------------------------------------------------------------- | -------------------------------- | - | ------------------------------ | -
|                                                                                              | 2002                             |   | 2001                           |  
|Net sales to customers:                                                                       |                                  |   |                                |  
|Fuller Brands                                                                                 | $ 14,290,560                     |   | $ 15,409,465                   |  
|Imaging                                                                                       | 9,495,886                        |   | 10,845,479                     |  
|Total net sales to customers                                                                  | $ 23,786,446                     |   | $ 26,254,944                   |  
|Operating income:                                                                             |                                  |   |                                |  
|Fuller Brands                                                                                 | $      996,503                   |   | $      909,493                 |  
|Imaging                                                                                       | 121,942                          |   | 907,578                        |  
|                                                                                              | 1,118,445                        |   | 1,817,071                      |  
|Corporate income (loss)                                                                       | (99,557                          | ) | 11,235                         |  
|Interest expense, net                                                                         | (135,186                         | ) | (143,105                       | )
|Income before income taxes and cumulative effect of 
          change in accounting principle | $      883,702                   |   | $   1,685,201                  |  

Sales between segments are not material.

Information concerning the Company's business segments' identifiable assets at September 30, 2002 and March 31, 2002 are as follows:



|                                         | September 30, 2002 |  | March 31, 2002 | 
|---------------------------------------- | ------------------ |  | -------------- | 
|Identifiable assets:                     |                    |  |                | 
|Fuller Brands                            | $ 40,491,432       |  | $ 49,071,973   | 
|Imaging                                  | 16,947,652         |  | 18,356,404     | 
|Total identifiable assets of the segment | 57,439,084         |  | 67,428,377     | 
|General Corporate assets                 | 10,775,812         |  | 8,706,899      | 
|                                         | $ 68,214,896       |  | $ 76,135,276   | 

General Corporate assets include short-term investments held for future use amounting to $5,372,487 and $4,974,251 at September 30, 2002 and March 31, 2002, respectively.



6 -- ADOPTION OF SFAS NO. 142

On April 1, 2002, the Company adopted the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets." The pronouncement required an annual impairment test (comparison of estimated fair value to carrying value) in lieu of monthly amortization for goodwill. In connection with adoption of SFAS No. 142, the Company completed in the first quarter of fiscal 2003 the impairment test for goodwill. To determine potential impairment, fair value of the applicable business units was determined by computing the present value of expected future cash flows. The effect was to reduce the carrying value of goodwill by approximately $6.3 million, net of income tax benefit of $4.2 million, or $1.22 per diluted share. The impairment adjustment was related to the Fuller Brand's Cleaning Technologies Group (CTG) operation, acquired in fiscal 1998, and was a result of a combination of factors, including operating performance, as well as new measurement techniques and methodologies as prescribed by SFAS No. 142. The adjustment is shown as a cumulative effect of change in accounting principle in the consolidated statements of operations and comprehensive income for the six months ended September 30, 2002.





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8

7 -- GOODWILL AND AMORTIZABLE INTANGIBLES

A summary of changes in the Company's goodwill during the six months ended September 30, 2002, by segment is as follows (in thousands):



|                                                                                 | March 31, 2002 |  | Impairment |       | September 30, 2002
|-------------------------------------------------------------------------------- | -------------- |  | ---------- | ----- | ------------------
|Fuller Brands                                                                    | $  10,469      |  | $ (10,469  | ) (a) | $                 
|Imaging                                                                          | 193            |  |            |       | 193               
|Total                                                                            | $  10,662      |  | $  (10,469 | )     | $ 193             
|(a)  Actual impairment charge recorded was $6,281, net of tax benefit of $4,188.



The following table presents prior year earnings and earnings per share as if the non-amortization provisions of SFAS No. 142 had been applied in the prior year:



|                                                                                               | Three Months Ended |  | Six Months Ended 
|---------------------------------------------------------------------------------------------- | ------------------ |  | -----------------
|                                                                                               | September 30,2002  |  | September 30,2001
|Reported net income                                                                            | $     522,702      |  | $  1,077,201     
|Addback goodwill amortization, net of tax                                                      |                    |  | 70,000           
|Addback cumulative effect of change in accounting
    principle, net                           |                    |  |                  
|Adjusted net income                                                                            | $     522,702      |  | $  1,147,201     
|                                                                                               |                    |  |                  
|Basic earnings per common share before cumulative
effect of change in accounting principle:    |                    |  |                  
|Reported basic earnings per common share                                                       | $ 0.10             |  | $  0.21          
|Addback goodwill amortization, net of tax                                                      |                    |  | 0.01             
|Addback cumulative effect of change in accounting 
      principle, net                        |                    |  |                  
|Adjusted basic earnings per common share                                                       | $  0.10            |  | $  0.22          
|                                                                                               |                    |  |                  
|Diluted earnings per common share before cumulative 
effect of change in accounting principle: |                    |  |                  
|Reported diluted earnings per common share                                                     | $ 0.10             |  | $  0.21          
|Addback goodwill amortization, net of tax                                                      |                    |  | 0.01             
|Addback cumulative effect of change in accounting 
      principle, net                        |                    |  |                  
|Adjusted diluted earnings per common share                                                     | $  0.10            |  | $  0.22          
|                                                                                               |                    |  |                  
|Reported comprehensive income (loss)                                                           | $  1,082,198       |  | $ 850,025        
|Addback goodwill amortization, net of tax                                                      |                    |  | 70,000           
|Addback cumulative effect of change in accounting 
      principle, net                        |                    |  |                  
|Adjusted comprehensive income (loss)                                                           | $  1,082,198       |  | $     920,025    



At September 30, 2002 and March 31, 2002, amortizable intangibles 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 cost pertaining to this intangible at September 30, 2002 and March 31, 2002 was $2,250,000, while accumulated amortization at September 30, 2002 and March 31, 2002 were $1,125,000 and 1,050,000, respectively.









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9





8 -- ACCOUNTING PRONOUNCEMENTS

On April 1, 2002, SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" was effective for the Company. The adoption of this pronouncement did not have any effect on the Company's financial position, results of operations, or cash flows.

In April 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, amendment of FASB Statement No. 13, and Technical Corrections," was issued. SFAS No. 145 rescinds SFAS No. 4 and SFAS No. 64 related to classification of gains and losses on debt extinguishment and amends SFAS No. 13 with respect to sales-leaseback transactions. The pronouncement was effective for the Company April 1, 2002 and had no impact on the Company's reported results of operations and financial position.

In June 2002, SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" was issued. SFAS No. 146 nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity," and requires companies to recognize a liability for costs associated with an exit or disposal activity when the liability is incurred, as opposed to the date of an entity's commitment to an exit plan (as required under EITF No. 94-3). The pronouncement, effective for exit or disposal activities that are initiated after December 31, 2002, with earlier application allowed, is not expected to have any impact on the Company's reported results of operations and financial position.



9 -- 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.



10 -- RECLASSIFICATION

Certain March 31, 2002 financial statement and related footnote amounts have been reclassified to conform to the September 30, 2002 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, which is involved in developing, manufacturing, distributing, and marketing branded industrial and consumer cleaning and personal care products in North America and internationally, and the CPAC Global Imaging Group (Imaging) segment, which includes the Company's color photographic, health care, and graphic arts imaging operations in the United States, Belgium, Italy, South Africa, and Thailand. The products of each segment are manufactured and marketed both in the U.S. and in other parts of the world. Sales between segments are not material.

The Company's financial results for the six months ended September 30, 2002 reflect the adoption of SFAS No. 142 during the Company's first quarter of fiscal 2003. Adoption included the recording of a one-time, non-cash expense of $6,281,251, net of a tax benefit of $4,188,000, or $1.22 per diluted share. The adjustment related to the Fuller Brands segment's Cleaning Technologies Group (CTG) investment in fiscal 1998, whose goodwill was determined to be impaired, based on calculating the present value of future, discounted cash flows. CTG had been impacted by several factors, including continued, reduced operating performance, since it was acquired (see footnote 6).

The Company's net sales decreased 9.4% for the quarter ended September 30, 2002, as compared to the comparable quarter last year, and decreased 4.2% for the six months ended September 30, 2002, as compared to the six months ended September 30, 2001. For the Fuller Brands segment, net sales decreased 7.3% and 2.9% respectively, for the quarter and six months ended September 30, 2002, as compared to comparable periods last year. The decline was largely attributable to a decrease slightly in excess of $1,000,000, or 16%, in Cleaning Technologies Group sales during the second quarter, as well as a 5% falloff in Stanley Home Products' sales. The CTG decline is partially due to the reduction in sales to Kmart Corporation, which due to a restructuring of their business, has reduced purchases. This was mitigated by sales increases in the Fuller Brush division business, largely as the result of its successful entrance into the QVC home shopping network. In the Imaging segment, net sales decreased 12.4% and 6.1%, respectively, for the quarter and six months ended September 30, 2002, as compared to comparable periods last year. The declines were present in both worldwide photochemical sales and the domestic, medical imaging business. Worldwide slowdown in picture taking, coupled with recessionary pressures in many of the economies in which the segment operates (U.S., Japan, Italy, etc.), has hampered growth initiatives. In addition, healthcare cost pressures, as well as intensified competition in the Medical Imaging arena and the impact of digital imaging, have made business conditions difficult.

Consolidated gross margins (net sales less cost of sales expressed as a percentage of net sales) were 44.8% for this quarter versus 44.7% for the year ended March 31, 2002, and 43.4% for the same quarter last year. Gross margins in the Fuller Brands segment were 49.9%, 49.3%, and 46.2% respectively, for the quarter ended September 30, 2002, the year ended March 31, 2002, and the quarter ended September 30, 2001. Improvements in gross margins were a function of product mix being sold. Fuller's QVC business resulted in higher gross margins, coupled with higher selling and marketing costs, while CTG blended margins have risen, due to less volume of competitively priced national accounts' business. Gross margins in the Imaging segment were 37.0%, 38.1%, and 39.3%, respectively, for the quarter ended September 30, 2002, the year ended March 31, 2002, and the quarter ended September 30, 2001. Worldwide economic slowdowns have made for an extremely competitive marketplace in both the photochemical and healthcare imaging marketplace, causing pressures on pricing. It appears that margins will continue to be in the 36%--37% range for the remainder of the fiscal year.

Consolidated selling, administrative, and engineering costs this quarter were 39.7% of net sales, versus 38.9% for the year ended March 31, 2002, versus 35.8% for the same quarter last year. For the Fuller Brands segment, selling, administrative, and engineering expenses for this quarter were 41.9% of net sales, as compared to 43.7% and 39.5%, respectively, for the year ended March 31, 2002 and the same quarter last year. While the quarter's percentage was lower than the entire, last fiscal year, it still is higher than the comparable quarter. The segment's strategy remains to continue to invest in various sales and marketing initiatives to gain increased business, once the domestic economy rebounds. In the Imaging segment, selling, administrative, and engineering costs for the quarter ended September 30, 2002 were 35.2% of net sales, as compared to 32.9% and 30.7% for the year ended March 31, 2002 and the quarter ended September 30, 2001. This increase was partially caused by a $.04 per diluted share charge the Company took in the second quarter related to a past due distributor receivable at the Company's Asian subsidiary (see foreign operations discussion below). This expense increased selling, general, and administrative expenses, as a percentage of net sales for the Imaging Segment and the Company by 2.0% and .8%, respectively. Expense levels, in light of currently depressed revenue levels, are currently being reviewed in the Imaging segment to determine if selling, general, and administrative expenses need to be reduced due to the expected, prolonged, U.S. economic slowdown in the photographic and medical imaging businesses.





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Net interest expense for the quarter and six months ended September 30, 2002 decreased, as compared to the second quarter and six months ended in fiscal 2002, primarily due to lower debt levels.

The provision for income taxes, as a percentage of pretax income, was 40.9% for the quarter ended September 30, 2002 as compared to 34.7% for the year ended March 31, 2002, as compared to 36.1% for the quarter ended September 30, 2001. The significant change was primarily attributed to CPAC Asia's $0.04 per diluted share increase to its allowance for doubtful accounts reserve. Since CPAC Asia continues to operate under a seven-year tax holiday in Thailand, the increase to the doubtful accounts reserve did not attract tax benefit in this jurisdiction, therefore, increasing the Company's overall effective tax rate. It is expected that the effective rate in future quarters will decline below 40%, absent any other unusual expenses or events.

Net income for the quarter ended September 30, 2002, as compared to the proforma net income for the corresponding quarter last year, declined $624,499 or 54%. Income before the cumulative effect of a change in accounting principle for the six months ended September 30, 2002, as compared to the proforma net income for the corresponding six months last year, declined $680,711 or 35.6%. The significant decline in sales in both segments, coupled with the CPAC Asia charge, contributed to these declines.

Foreign Operations

During the second quarter, CPAC Asia increased its allowance for doubtful accounts by approximately $242,000, due to financial difficulties experienced by one of its major distributors in Japan. This equated to a charge, net of minority interest impact, of approximately $.04 a diluted share recognized during the quarter.

Combined net sales for the Company's operations in Belgium, Italy, South Africa, and Thailand for the second quarter, as compared to the comparable quarter last year, had a net decline of 2.5%. Declines in both Asia and Italy were somewhat offset by revenue gains in Belgium, as a result of the Company's relationship with TURA AG (the German distributorship in which the Company has a 19% ownership interest). Combined net sales for the first six months of fiscal 2003, as compared to the corresponding period last year, increased 2.2%, again led by Belgian increases largely offsetting Italian sales decreases.

Combined pretax profits for the second quarter, as compared to the comparable period last year, exclusive of the CPAC Asia doubtful accounts provision, declined by almost 42%. One of the reasons for the decline was CPAC Italia, where due to start-up expenses related to its facility relocation and the current worldwide economic slowdown, pretax profits declined approximately $126,000. Combined pretax profits for the first six months in fiscal 2003, as compared to last year's first six months, exclusive of the CPAC Asia doubtful accounts provision, declined 30%, again led by CPAC Italia. Due to continued weakness in the worldwide photographic imaging markets, sales and pretax profits are not expected to increase substantially, as compared to last year, for the remainder of the fiscal year.



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 Six MonthsEnded September,
|---------------------------------------------------- | ----------------------------------
|                                                     | 2002                              
|Cash provided by (used in):                          |                                   
|Operating activities                                 | $ 1,865                           
|Investing activities                                 | (1,000                            
|Financing activities                                 | (1,054                            
|Currency impact on cash                              | 6                                 
|Net increase (decrease) in cash and cash equivalents | $    (183                         



Net cash provided by (used in) operating activities

Consolidated net cash provided by operating activities decreased for the six months ended September 30, 2002, versus the comparable period last year, due partially to lower net income (exclusive of the cumulative effect accounting change) and lower non-cash items such as depreciation and amortization expenses.





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Net cash provided by (used in) investing activities

Consolidated net cash used in investing activities increased for the six months ended September 30, 2002, versus the comparable period last year, due primarily to increased capital expenditures at CPAC Italia's new, leased manufacturing facility.

Net cash provided by (used in) financing activities

Consolidated cash used in financing activities decreased for the six months ended September 30, 2002, versus the comparable period last year due to a reduction in common stock repurchased.

The following table presents working capital information at September 30, 2002, March 31, 2002 and September 30, 2001:



|                               | September 30, 2002 | March 31, 2002 | September 30, 2001
|------------------------------ | ------------------ | -------------- | ------------------
|Working capital (in thousands) | $ 31,608           | $ 30,402       | $ 31,755          
|Working capital ratio          | 3.94 to 1          | 3.80 to 1      | 3.77 to 1         
|Receivable days outstanding    | 50.5 days          | 51.4 days      | 52.4 days         
|Annual inventory turns         | 3.0 times          | 3.1 times      | 3.2 times         

In the second quarter, the Company finalized its line of credit agreement with Bank of America, which extended its maturity date until October 31, 2004. The agreement provides for a $20,000,000 maximum borrowing capacity, interest at LIBOR plus 1.25% to 2% based on a ratio of funded debt to EBITDA parameters and various financial covenants to be met. The Company was in compliance with all covenants as of September 30, 2002. The Agreement also contains a $6.2 million letter of credit facility, which the Company uses to collateralize the Fuller Brands' Industrial Revenue Bonds.

The Company's majority owned subsidiary, CPAC Asia Imaging Products Limited has a line of credit with an international bank of 20 million baht (approximately $481,000 based on the second-quarter conversion rate in Thailand). Interest is payable at prime (prime rate in Thailand was 5% at the end of the second quarter) with the line collateralized by a standby letter of credit (LOC) guaranteed by CPAC, Inc. At September 30, 2002, CPAC Asia Imaging Products Limited had reduced the line of credit borrowings to zero.

Management believes that its existing available lines of credit and cash flows from operations should be adequate to meet normal working capital needs, based on operations as of September 30, 2002. It is expected that additional financing may be necessary to allow the Company to pursue additional acquisitions.

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, and the risks inherent in international operations;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|b. | the level of competition and consolidation within the commercial cleaning supply industry;                                                                 
|c. | the impact of Kmart Corporation's Chapter 11 filings and the nature of its future reorganization on Cleaning Technologies Group's business;                
|d. | the effect of changes in the distribution channels for Fuller Brands;                                                                                      
|e. | the level of demand for the Company's Imaging products and the impact of digital imaging;                                                                  
|f. | the ability to increase volume through the Great Bend manufacturing plant to absorb fixed overhead;                                                        





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|g. | 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 they transact business;        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|h. | 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;                                                                   
|i. | changes in accounting standards promulgated by the Financial Accounting Standards Board, the Securities and Exchange Commission or the American Institute of Certified Public Accountants, which may require adjustments to financial statements.

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.



Item 4.     CONTROLS AND PROCEDURES.

Within the 90 days prior to the date of this Form 10-Q, an evaluation was performed under the supervision and with the participation of the Company's management, including the CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2002. There have been no significant changes in the Company's internal control or in other factors that could significantly affect internal controls subsequent to September 30, 2002.











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PART II -- OTHER INFORMATION



|Item 1. | Legal Proceedings.
None                                                                                                                                                                                                                                                                                  
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2. | Changes in Securities and Use of Proceeds.
None                                                                                                                                                                                                                                                          
|Item 3. | Defaults Upon Senior Securities.
None                                                                                                                                                                                                                                                                    
|Item 4. | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                      
|        | 1.  The Annual Meeting of the Shareholders of the Registrant was held on August 7, 2002. At such Annual Meeting, the following individuals were elected as Directors of the Registrant, to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified:
|        |                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                          
|        | 2.  In addition, at such Annual Meeting, the Shareholders:
(a)  ratified the appointment of PricewaterhouseCoopers LLP by the Board of Directors, as independent auditors of the Registrant for the fiscal year ending March 31, 2003, with votes cast as follows:                                       
|        | For
4,370,098                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                          
|Item 5. | Other Information.
None                                                                                                                                                                                                                                                                                  
|Item 6. | Exhibits and Reports on Form 8-K.                                                                                                                                                                                                                                                                        
|        | a.   Exhibits
The following Exhibits, as applicable, are attached to this Quarterly Report (Form 10-Q). The Exhibit Index is found on the page immediately succeeding the signature page and the Exhibits follow on the pages immediately succeeding the Exhibit Index.                                  
|        | (2)   Plan of acquisition, regarding organization, arrangement, liquidation, or succession -- Not applicable                                                                                                                                                                                             
|        | (3)   Articles of Incorporation, By-laws                                                                                                                                                                                                                                                                 
|        | 3.1                                                                                                                                                                                                                                                                                                      
|        | 3.2                                                                                                                                                                                                                                                                                                      
|        | (4)   Instruments defining the rights of security holders, including indentures                                                                                                                                                                                                                          
|        | 4.1                                                                                                                                                                                                                                                                                                      





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| | 4.2                                                                                              | Bank Letter of Commitment dated May 24, 2002, incorporated herein by reference to Form 10-K filed for the period ended March 31, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (10)  Material contracts                                                                        
| | 10.1                                                                                             | Employment Agreement between Thomas N. Hendrickson and CPAC, Inc. dated September 30, 1995, incorporated herein by reference to Form 10-Q filed for the period ended September 30, 1995, and amended by Extension of Employment Agreement dated July 20, 1998, incorporated herein by reference to Form 10-K filed for the period ended March 31, 1999                                                                                                                                                                                                                  
| | 10.2                                                                                             | CPAC, Inc. Executive Long-Term Stock Investment Plan, incorporated herein by reference to Form S-8 Registration Statement filed on October 29, 1994, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 3, 1996 and September 24, 1999                                                                                                                                                                                                                                                                                       
| | 10.3                                                                                             | CPAC, Inc. 1996 Nonemployee Directors Stock Option Plan, incorporated herein by reference to Form S-8 Registration Statement filed October 3, 1996, as amended and incorporated by reference to Form S-8 Registration Statements filed on October 14, 1997, November 24, 1998, September 24, 1999, September 29, 2000, September 7, 2001 and November 8, 2002                                                                                                                                                                                                           
| | 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
| | 10.5                                                                                             | CPAC, Inc. Nonqualified Deferred Compensation Plan dated December 30, 1999, incorporated herein by reference to Form 10-Q filed for the period ended December 31, 1999                                                                                                                                                                                                                                                                                                                                                                                                  
| | (11)  Statement regarding computation of per share earnings (loss) -- Not applicable            
| | (15)  Letter regarding unaudited interim financial information -- Not applicable                
| | (18)  Letter regarding change in accounting principles -- Not applicable                        
| | (19)  Report furnished to security holders -- Not applicable                                    
| | (22)  Published report regarding matters submitted to vote of security holders -- Not applicable
| | (23)  Consents of experts and counsel -- Not applicable                                         
| | (24)  Power of attorney -- Not applicable                                                       
| | (27)  Financial data schedule -- Not applicable                                                 
| | (99)  Additional exhibits                                                                       
| | 99.1                                                                                             | CPAC, Inc.'s Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 99.2                                                                                             | CPAC, Inc.'s Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | b.   Reports Filed on Form 8-K
None                                                             





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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   November 12, 2002 | By | /s/ Thomas N. Hendrickson
Thomas N. Hendrickson,
President, Chief Executive Officer, Treasurer
|                         |    |                                                                                               
|Date   November 12, 2002 | By | /s/ Thomas J. Weldgen
Thomas J. Weldgen,
Vice President Finance and Chief Financial Officer   
|                         |    |                                                                                               
|Date   November 12, 2002 | By | /s/ James W. Pembroke
James W. Pembroke,
Chief Accounting Officer                             



















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CERTIFICATIONS



I, Thomas N. Hendrickson, Chief Executive Officer of CPAC, Inc. hereby certify that:

1.     I have reviewed this quarterly report on Form 10-Q of CPAC, Inc.

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluations as of the Evaluation Date;

5.      The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.      The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequently to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



|Date: November 12, 2002 | /s/ Thomas N. Hendrickson
Thomas N. Hendrickson
Chief Executive Officer
|----------------------- | -----------------------------------------------------------------------
|                        |                                                                        









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I, Thomas J. Weldgen, Chief Financial Officer of CPAC, Inc. hereby certify that:

1.     I have reviewed this quarterly report on Form 10-Q of CPAC, Inc.

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)  presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluations as of the Evaluation Date;

5.      The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.      The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequently to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.





|Date: November 12, 2002 | /s/ Thomas J. Weldgen
Thomas J. Weldgen
Chief Financial Officer
|----------------------- | ---------------------------------------------------------------
|                        |                                                                











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EXHIBIT INDEX



|Exhibit | Page                                                                                
|------- | ------------------------------------------------------------------------------------
|2.      | Plan of acquisition, regarding organization, arrangement, liquidation, or succession
|3.      | Articles of incorporation, By-laws                                                  
|        | 3.1                                                                                 
|        | 3.2                                                                                 
|4.      | Instruments defining the rights of security holders, including indentures           
|        | 4.1                                                                                 
|        | 4.2                                                                                 
|10.     | Material contracts                                                                  
|        | 10.1                                                                                
|        | 10.2                                                                                
|        | 10.3                                                                                
|        | 10.4                                                                                
|        | 10.5                                                                                
|11.     | Statement regarding computation of per share earnings (loss)                        
|15.     | Letter regarding unaudited interim financial information                            
|18.     | Letter regarding change in accounting principles                                    
|19.     | Report furnished to security holders                                                
|22.     | Published report regarding matters submitted to vote of security holders            
|23.     | Consents of experts and counsel                                                     
|24.     | Power of attorney                                                                   
|27.     | Financial data schedule                                                             
|99.     | Additional exhibits                                                                 
|        | 99.1                                                                                
|        | 99.2                                                                                





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