FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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

For the Quarter Ended December 31, 2000
OR



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

For the transition period from  to Commission File No. 0-9600



|New York(State or Other Jurisdiction of
Incorporation or Organization) |  | 16-0961040(IRS Employer Identification Number)
|---------------------------------------------------------------------- |  | ----------------------------------------------

2364 Leicester Rd.
Leicester, New York 14481

Registrant's telephone number, including area code: (716) 382-3223

Securities registered under Sec. 12(g) of the Act:

$.01 Par Value Common Stock

The Registrant 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 and has been subject to such filing requirements for the
past 90 days.                       Yes [ X ]          No [  
  ]

As of December 31, 2000, there were outstanding 5,508,203 shares of the Company's Common Stock, $.01 Par Value. Options for 883,088 shares of the Company's Common Stock are outstanding but have not yet been exercised. Shares to cover the options
will not be issued until they are exercised.

<PAGE 1>

CPAC, INC. AND SUBSIDIARIES



|        |                                                                                                                                                                       | Page No.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|        | PART I -- FINANCIAL INFORMATION                                                                                                                                       |         
|Item 1. | Financial Statements                                                                                                                                                  |         
|        | CPAC, Inc. and Subsidiaries Consolidated Balance Sheets -- December 31, 2000 (Unaudited), and March 31, 2000                                                          | 3       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Nine Months Ended December 31, 2000, and December 31, 1999 (Unaudited)  | 4       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Three Months Ended December 31, 2000, and December 31, 1999 (Unaudited) | 5       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Cash Flows -- Nine Months Ended December 31, 2000, and December 31, 1999 (Unaudited)                           | 6       
|        | Notes to Consolidated Financial Statements                                                                                                                            | 7       
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                 | 9       
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk                                                                                                            | 12      
|        |                                                                                                                                                                       |         
|        | PART II -- OTHER INFORMATION                                                                                                                                          |         
|Item 1. | Legal Proceedings                                                                                                                                                     | 13      
|Item 2. | Changes in Securities and Use of Proceeds                                                                                                                             | 13      
|Item 3. | Defaults Upon Senior Securities                                                                                                                                       | 13      
|Item 4. | Submission of Matters to a Vote of Security Holders                                                                                                                   | 13      
|Item 5. | Other Information                                                                                                                                                     | 13      
|Item 6. | Exhibits and Reports on Form 8-K                                                                                                                                      | 13      
|        | SIGNATURE PAGE                                                                                                                                                        | 15      
|        | EXHIBIT INDEX                                                                                                                                                         | 16      



<PAGE 2>



CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS



|                                                                                                   |                                                                                                                                         | December 31, 2000(Unaudited) |            | March 31,
2000(Note) |  
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ---------- | -------------------- | -
|ASSETS                                                                                             |                                                                                                                                        
|Current assets:                                                                                    |                                                                                                                                         |                              |            |                     
|                                                                                                   | Cash and cash equivalents                                                                                                               | $     6,527,757              |            | $      4,436,509     |  
|                                                                                                   | Accounts receivable (net of allowance for doubtful accounts
      of $707,000 and $696,000, respectively)                               | 13,712,938                   |            | 15,019,382           |  
|                                                                                                   | Inventory                                                                                                                               | 18,655,172                   |            | 18,862,740           |  
|                                                                                                   | Prepaid expenses and other current assets                                                                                               | 2,590,423                    |            | 2,204,016            |  
|                                                                                                   | Total current assets                                                                                                                    | 41,486,290                   |            | 40,522,647           |  
|Property, plant and equipment, net                                                                 | 19,200,527                                                                                                                              |                              | 20,541,001 |                     
|Goodwill and intangible assets (net of amortization of
   $2,529,177 and $2,127,495, respectively) | 12,866,890                                                                                                                              |                              | 13,383,151 |                     
|Other assets                                                                                       | 2,750,129                                                                                                                               |                              | 2,650,796  |                     
|                                                                                                   |                                                                                                                                         | $    76,303,836              |            | $    77,097,595      |  
|                                                                                                   |                                                                                                                                        
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                               |                                                                                                                                        
|Current liabilities:                                                                               |                                                                                                                                         |                              |            |                     
|                                                                                                   | Current portion of long-term debt                                                                                                       | $      1,133,070             |            | $      1,185,349     |  
|                                                                                                   | Accounts payable                                                                                                                        | 4,342,769                    |            | 5,533,850            |  
|                                                                                                   | Accrued payroll and related expenses                                                                                                    | 1,409,498                    |            | 2,043,509            |  
|                                                                                                   | Accrued income taxes payable                                                                                                            | 576,786                      |            | 380,843              |  
|                                                                                                   | Other accrued expenses and liabilities                                                                                                  | 2,559,330                    |            | 2,696,680            |  
|                                                                                                   | Total current liabilities                                                                                                               | 10,021,453                   |            | 11,840,231           |  
|                                                                                                   |                                                                                                                                         |                              |            |                      |  
|Long-term debt, net of current portion                                                             | 7,928,625                                                                                                                               |                              | 8,306,831  |                     
|Other long-term liabilities                                                                        | 5,470,289                                                                                                                               |                              | 5,168,173  |                     
|Shareholders' equity:                                                                              |                                                                                                                                         |                              |            |                     
|                                                                                                   | Common stock, par value $0.01 per share;
   Authorized 30,000,000 shares;
   Issued 5,593,510 shares and 5,726,566 shares, respectively | 55,936                       |            | 57,265               |  
|                                                                                                   | Additional paid-in capital                                                                                                              | 13,029,382                   |            | 13,988,163           |  
|                                                                                                   | Retained earnings                                                                                                                       | 41,957,729                   |            | 39,273,059           |  
|                                                                                                   | Accumulated other comprehensive income (loss)                                                                                           | (1,569,390                   | )          | (945,939             | )
|                                                                                                   |                                                                                                                                         | 53,473,657                   |            | 52,372,548           |  
|Less: Treasury stock, at cost, 85,307 shares                                                       | (590,188                                                                                                                                | )                            | (590,188   | )                   
|                                                                                                   | Total shareholders' equity                                                                                                              | 52,883,469                   |            | 51,782,360           |  
|                                                                                                   |                                                                                                                                         | $    76,303,836              |            | $    77,097,595      |  

Note: The balance sheet at March 31, 2000 has been taken from the audited financial statements as of that date.

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

<PAGE 3>

CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED



|                                   |                                                  | 2000                |                | 1999                |  
|---------------------------------- | ------------------------------------------------ | ------------------- | -------------- | ------------------- | -
|                                   |                                                  |                     |                |                     |  
|Net sales                          | $   77,295,838                                   |                     | $   81,599,609 |                    
|                                   |                                                  |                     |                |                     |  
|Costs and expenses:                |                                                  |                     |                |                    
|                                   | Cost of sales                                    | 43,309,515          |                | 46,593,793          |  
|                                   | Selling, administrative and engineering expenses | 26,580,465          |                | 27,179,081          |  
|                                   | Research and development expense                 | 478,177             |                | 549,968             |  
|                                   | Interest expense, net                            | 632,231             |                | 512,625             |  
|                                   |                                                  |                     |                |                     |  
|                                   |                                                  | 71,000,388          |                | 74,835,467          |  
|Income before income tax expense   | 6,295,450                                        |                     | 6,764,142      |                    
|                                   |                                                  |                     |                |                     |  
|Provision for income tax expense   | 2,435,000                                        |                     | 2,774,000      |                    
|                                   |                                                  |                     |                |                     |  
|                                   | Net income                                       | $     3,860,450     |                | $     3,990,142     |  
|                                   |                                                  |                     |                |                     |  
|Income per common share:           |                                                  |                     |                |                    
|                                   | Basic                                            | $              0.69 |                | $              0.64 |  
|                                   | Diluted                                          | $              0.69 |                | $              0.64 |  
|Average common shares outstanding: |                                                  |                     |                |                    
|                                   | Basic                                            | 5,562,822           |                | 6,204,987           |  
|                                   | Diluted                                          | 5,591,798           |                | 6,232,778           |  
|                                   |                                                  |                     |                |                     |  
|Comprehensive income:              |                                                  |                     |                |                    
|                                   | Net income                                       | $     3,860,450     |                | $     3,990,142     |  
|                                   | Other comprehensive income (loss)                | (623,451            | )              | (520,793            | )
|                                   |                                                  |                     |                |                     |  
|                                   | Comprehensive income                             | $     3,236,999     |                | $     3,469,349     |  



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



<PAGE 4>



CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDEDDECEMBER 31, 2000 AND DECEMBER 31, 1999
UNAUDITED



|                                   |                                                  | 2000                |                | 1999                |  
|---------------------------------- | ------------------------------------------------ | ------------------- | -------------- | ------------------- | -
|                                   |                                                  |                     |                |                     |  
|Net sales                          | $   24,056,830                                   |                     | $   27,135,706 |                    
|                                   |                                                  |                     |                |                     |  
|Costs and expenses:                |                                                  |                     |                |                    
|                                   | Cost of sales                                    | 13,581,265          |                | 15,435,444          |  
|                                   | Selling, administrative and engineering expenses | 8,446,053           |                | 8,723,719           |  
|                                   | Research and development expense                 | 150,614             |                | 181,332             |  
|                                   | Interest expense, net                            | 162,862             |                | 141,016             |  
|                                   |                                                  |                     |                |                     |  
|                                   |                                                  | 22,340,794          |                | 24,481,511          |  
|Income before income tax expense   | 1,716,036                                        |                     | 2,654,195      |                    
|                                   |                                                  |                     |                |                     |  
|Provision for income tax expense   | 660,000                                          |                     | 1,089,000      |                    
|                                   |                                                  |                     |                |                     |  
|                                   | Net income                                       | $     1,056,036     |                | $     1,565,195     |  
|                                   |                                                  |                     |                |                     |  
|Income per common share:           |                                                  |                     |                |                    
|                                   | Basic                                            | $              0.19 |                | $              0.25 |  
|                                   | Diluted                                          | $              0.19 |                | $              0.25 |  
|Average common shares outstanding: |                                                  |                     |                |                    
|                                   | Basic                                            | 5,514,810           |                | 6,163,527           |  
|                                   | Diluted                                          | 5,530,351           |                | 6,183,572           |  
|                                   |                                                  |                     |                |                     |  
|Comprehensive income:              |                                                  |                     |                |                    
|                                   | Net income                                       | $     1,056,036     |                | $     1,565,195     |  
|                                   | Other comprehensive income (loss)                | (412,877            | )              | (158,316            | )
|                                   |                                                  |                     |                |                     |  
|                                   | Comprehensive income                             | $        643,159    |                | $     1,406,879     |  



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



<PAGE 5>

CPAC, INC. AND SUBSIDIARIES



|                                                 |                                                                                                 | 2000            |                 | 1999            |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------------- | --------------- | --------------- | --------------- | -
|                                                 |                                                                                                 |                 |                 |                 |  
|Cash flows from operating activities:            |                                                                                                 |                 |                 |                
|                                                 | Net income                                                                                      | $     3,860,450 |                 | $     3,990,142 |  
|                                                 | Adjustments to reconcile net income to net cash provided
    by (used in) operating activities: |                 |                 |                 |  
|                                                 | Depreciation and amortization                                                                   | 2,174,284       |                 | 2,112,462       |  
|                                                 | Amortization of intangible assets                                                               | 511,234         |                 | 439,810         |  
|                                                 | Changes in assets and liabilities, net of effects of business 
    acquisitions:                |                 |                 |                 |  
|                                                 | Accounts receivable                                                                             | 1,238,981       |                 | 3,154,138       |  
|                                                 | Inventory                                                                                       | 115,790         |                 | 901,994         |  
|                                                 | Accounts payable                                                                                | (1,212,446      | )               | (1,103,931      | )
|                                                 | Accrued expenses & liabilities                                                                  | (582,352        | )               | (50,321         | )
|                                                 | Other changes, net                                                                              | (261,878        | )               | 84,562          |  
|                                                 | Total adjustments                                                                               | 1,983,613       |                 | 5,538,714       |  
|                                                 | Net cash provided by operating activities                                                       | 5,844,063       |                 | 9,528,856       |  
|                                                 |                                                                                                 |                 |                 |                 |  
|Cash flows from investing activities:            |                                                                                                 |                 |                 |                
|                                                 | Purchase of property, plant, and equipment, net                                                 | (928,271        | )               | (2,600,320      | )
|                                                 | Business acquisition, net of cash acquired                                                      |                 |                 | (622,696        | )
|                                                 | Net cash used in investing activities                                                           | (928,271        | )               | (3,223,016      | )
|                                                 |                                                                                                 |                 |                 |                 |  
|Cash flows from financing activities:            |                                                                                                 |                 |                 |                
|                                                 | Common stock repurchase                                                                         | (978,995        | )               | (2,392,481      | )
|                                                 | Issuance of common stock                                                                        |                 |                 | 39,733          |  
|                                                 | Proceeds from long-term borrowings                                                              | 1,555,300       |                 | 1,981,848       |  
|                                                 | Repayment of long-term borrowings                                                               | (2,192,954      | )               | (690,717        | )
|                                                 | Payment of cash dividends                                                                       | (1,175,780      | )               | (1,217,013      | )
|                                                 | Net cash used in financing activities                                                           | (2,792,429      | )               | (2,278,630      | )
|                                                 |                                                                                                 |                 |                 |                 |  
|                                                 | Effect of exchange rate changes on cash                                                         | (32,115         | )               | (214            | )
|                                                 |                                                                                                 |                 |                 |                 |  
|                                                 | Net increase in cash and cash equivalents                                                       | 2,091,248       |                 | 4,026,996       |  
|                                                 |                                                                                                 |                 |                 |                 |  
|Cash and cash equivalents -- beginning of period | 4,436,509                                                                                       |                 | 412,123         |                
|                                                 |                                                                                                 |                 |                 |                 |  
|Cash and cash equivalents -- end of period       | $     6,527,757                                                                                 |                 | $     4,439,119 |                

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

<PAGE 6>

CPAC, INC. AND SUBSIDIARIES

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 nine-month period ended December 31, 2000 and December 31,
1999 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 at December 31, 2000 (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, 2000, Annual Report to Shareholders. The results of operations for the nine-months ended December 31, 2000 are not
necessarily indicative of the operating results for the full year.



2 -- INVENTORY

Inventory is summarized as follows:



|                                  | December 31, 2000 |  | March 31, 2000
|--------------------------------- | ----------------- |  | --------------
|Raw materials and purchased parts | $    7,776,962    |  | $   7,332,230 
|Work-in-process                   | 1,060,824         |  | 1,055,426     
|Finished goods                    | 9,817,386         |  | 10,475,084    
|                                  | $ 18,655,172      |  | $ 18,862,740  



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
December 31, | Nine Months Ended
December 31,
|------------------------------------------------------ | ------------------------------- | ------------------------------
|                                                       | 2000                            | 1999                          
|Basic weighted average number
   of shares outstanding | 5,514,810                       | 6,163,527                     
|Effect of dilutive stock options                       | 15,541                          | 20,045                        
|Dilutive shares outstanding                            | 5,530,351                       | 6,183,572                     

Unexercised stock options to purchase 744,061 and 794,629 shares of the Company's common stock as of December 31, 2000 and 1999, 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 2000, are still outstanding at the end of the period.

<PAGE 7>

4 -- COMPREHENSIVE INCOME

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



5 -- SEGMENT INFORMATION

For purposes of financial reporting, the Company operates in two industry segments: the Fuller Brands segment and the Imaging segment. Information concerning the Company's business segments for the quarters and nine months
ended December 31, 2000 and 1999 are as follows:



|                             | Three Months Ended
December 31, |   | Nine Months Ended
December 31, |  
|---------------------------- | ------------------------------- | - | ------------------------------ | -
|                             |                                 |   |                                |  
|                             | 2000                            |   | 1999                           |  
|Net sales to customers:      |                                 |   |                                |  
|Fuller Brands                | $   13,648,231                  |   | $  15,623,396                  |  
|Imaging                      | 10,408,599                      |   | 11,512,310                     |  
|                             |                                 |   |                                |  
|Total net sales to customers | $   24,056,830                  |   | $  27,135,706                  |  
|                             |                                 |   |                                |  
|Operating income:            |                                 |   |                                |  
|Fuller Brands                | $     1,118,998                 |   | $    1,853,835                 |  
|Imaging                      | 838,092                         |   | 1,117,015                      |  
|                             | 1,957,090                       |   | 2,970,850                      |  
|Corporate income (loss)      | (78,192                         | ) | (175,639                       | )
|Interest expense, net        | (162,862                        | ) | (141,016                       | )
|                             |                                 |   |                                |  
|Consolidated pretax income   | $     1,716,036                 |   | $    2,654,195                 |  

Sales between segments are not material.

During the third quarter, the Company modified its method of allocating fiscal 2001 Corporate expenses to its two segments. This change, which was recorded retroactive to April 1, 2000, resulted in an increase in operating
income for the third quarter and nine months ended December 31, 2000, for the Fuller Brands and Imaging segments, and a decrease to Corporate's operating income for the third quarter and nine months ended December 31, 2000 in the amounts of
$95,595 and $281,500, respectively, with no effect on consolidated net income. No restatement of fiscal 2000 operating income was required.



6 -- SHAREHOLDERS' EQUITY

Stock Repurchase

For the nine months ended December 31, 2000 and 1999, respectively, the Company repurchased 133,056 and 313,991 shares of its common stock at an average cost of $7.36 and $7.62 per share, for a total cost of approximately
$979,000 and $2,392,000 as part of previously announced Board of Directors' authorized stock buyback programs.



7 -- 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.

<PAGE 8>

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

LIQUIDITY AND CAPITAL RESOURCES

The Company's operations continue to provide strong operating cash flows. Funds generated allowed the Company to reduce debt on a net basis by over $637,000, continue its stock buyback program with expenditures
approximating $979,000, continue property, plant and equipment purchases totaling approximately $928,000 and pay out dividends of approximately $1,176,000 during the first nine months of fiscal 2001. At December 31, 2000 the Company had a cash
balance of $6,527,757.

The Company maintains a line of credit with Bank of America with a borrowing capacity of $20,000,000. At December 31, 2000, the Company's borrowings under such line were zero. The interest rate is the lower of prime or the
30-day LIBOR rate plus .75%. The line of credit facility matures on October 31, 2002 and requires meeting certain financial covenants, with which the Company was in compliance at December 31, 2000.

CPAC Asia also has a line of credit with an international bank of 20,000,000 baht (approximately $475,000 based on the third quarter conversion rate in Thailand), with interest at prime plus 1% (Thailand prime was 8.25%) and
collateralized by a standby letter of credit (LOC) guaranteed by CPAC, Inc. At the end of its third quarter, CPAC Asia LTD. had approximately 15,039,000 baht (approximately $357,000 based on the third quarter conversion rate in Thailand) outstanding
against the line.

In December 2000, CPAC Asia entered into a borrowing arrangement with an international bank totaling 67,500,000 million baht (approximately $1,570,000 based on the third quarter conversion rate) to finance its Thailand based
facility. Proceeds from these obligations were used to payoff United States borrowings incurred when the Company had initially borrowed to finance the facility construction. The first obligation, totaling 16,875,000 baht (approximately $393,000 based on
the third quarter conversion rate) has interest due quarterly at 5.75%, and matures in December 2001. The second obligation, totaling 50,625,000 baht (approximately $1,177,000) with interest at 7.385%, requires quarterly payments of interest and
principal, with the obligation maturing in 2006. The obligations are collateralized with standby letters of credit guaranteed by CPAC, Inc.

The Company's working capital ratios at December 31, 2000, March 31, 2000, and December 31, 1999 were 4.14 to 1; 3.42 to 1; and 3.85 to 1. The working capital ratio improvement over March 31, 2000 and fiscal
2000's third quarter was due to lower current liability levels than previously carried.

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 December 31, 2000. It is expected that
additional financing may be necessary to allow the Company to pursue future acquisitions.

Asset Turnover Ratios



|                                  | December 31, 2000 | March 31, 2000 | December 31, 1999
|--------------------------------- | ----------------- | -------------- | -----------------
|(1)  Receivables-days outstanding | 51.1 days         | 54.3 days      | 53.9 days        
|(2)  Annual inventory turns       | 3.1 times         | 3.2 times      | 3.1 times        

Receivable days outstanding decreased over the comparable period last year and March 31, 2000, due to continued improvement in the Fuller Brands' days sales outstanding.

Annual inventory turns have remained fairly consistent with the comparable periods of fiscal 2000.

<PAGE 9>

RESULTS OF OPERATIONS

For purposes of financial reporting, the Company operates in two industry segments: the Fuller Brands segment, which includes the manufacture and sale of specialty chemical cleaning products and related accessories
(brushes, brooms, mops) for commercial, janitorial, and consumer use, as well as personal care products such as soaps, shampoos, and skin care items, and the Imaging segment which includes the manufacture and sale of prepackaged chemical formulations,
supplies, and equipment systems to the imaging industry. 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.

Sales for the quarter ended December 31, 2000 decreased 11.3% over the quarter ended December 31, 1999, and decreased 5.3% for the nine months ended December 31, 2000 over the nine months ended December 31,
1999. Sales for the third quarter in the Fuller Brands segment decreased 12.6% as compared with the quarter ended December 31, 1999, and decreased 7.5% for the nine months ended December 31, 2000 over the comparable period last year. The
decreases for the quarter and nine-month periods were largely due to continued reduction in Fuller's consumer business with a major sweepstakes catalog organization and lower direct sales from the Stanley Home Products division. The decrease for the
current quarter also included lower Cleaning Technology Group sales, which were off 13.6% over the similar period last year. For the Imaging segment, overall sales in the third quarter decreased 9.6% as compared with the quarter ended December 31,
1999, and 2.0% for the nine months ended December 31, 2000 over the comparable period last year. Lower sales of domestic photo and medical imaging chemistry contributed to a net decrease. The Company's foreign operations sales growth were hampered
due to local currency values declining against the U.S. dollar. The decrease for the nine-month period was offset by the strong sales of the Company's Asian operation.

Gross margins were 43.5% for this quarter versus 42.8% for the year ended March 31, 2000 and 43.1% for the same quarter last year. Gross margins in the Fuller Brands segment were 47.9%, 46.9%, and 46.9% for the quarter ended
December 31, 2000, the year ended March 31, 2000, and the quarter ended December 31, 1999, respectively. Improvement over previous periods reflect the manufacturing efficiencies achieved from cost reduction efforts begun in the third
quarter of fiscal 2000 into the beginning of fiscal 2001. Gross margins in the Imaging segment were 37.8% for the quarter ended December 31, 2000, as compared to 36.9% for the year ended March 31, 2000, and 38.0% for the same quarter last year.
The increase over March 31 levels is partly a reflection of product mix sold and the continued strong performance of CPAC Asia.

Selling, administrative, and engineering costs this quarter were 35.1%, versus 33.4% for the year ended March 31, 2000, versus 32.2% for the same quarter last year. In the Fuller Brands segment, selling, administrative and
engineering costs for this quarter increased to 38.9% from 36.4% for the year ended March 31, 2000, and 34.1% for the same quarter last year. This increase is largely a result of relatively flat expenses on a lower sales volume during the third
quarter. It is expected that this percentage may remain higher than comparable 2000 periods, as efforts are made to stimulate sales growth in both the commercial and direct selling operations of Fuller Brands. In the Imaging segment, selling,
administrative, and engineering costs for the quarter were 29.4% versus 27.8% for the year ended March 31, 2000 and 28.0% for the same quarter last year. Similar to the Company's other segment, relatively flat expenses on decreasing sales caused the
increase as a percentage of sales.

Net interest expense for the nine months ended December 31, 2000 is higher than the comparable period last year, due to interest incurred on foreign borrowings in Asia.

The provision for income taxes as a percentage of pretax income for the quarter ended December 31, 2000 was 38.5% versus 36.3% for the year ended March 31, 2000, and versus 41.03% for

<PAGE 10>

the quarter ended December 31, 1999. The decrease from the comparable quarter last year is due to the impact of the Company's tax holiday in Asia, which exempts most of its operating income from tax. The
low tax rate from fiscal 2000 reflected the Federal income tax refund received in the fourth quarter.

Net income for the quarter and nine months ended December 31, 2000 decreased 32.5% and 3.3%, respectively, over the comparable quarter and nine months ended last year. The decrease is largely attributable to the economic
slowdown experienced in both segments.

Foreign Operations

Combined sales for the foreign operations rose approximately $535,000 in the third quarter of fiscal 2001 and $1,555,000 for the nine months ended December 31, 2000, versus comparable periods last year. The increases
were largely the result of CPAC Asia sales. For the first nine months of fiscal 2000, the Company's domestic photochemical manufacturer serviced the Company's Asian customers, until the Asian facility was completed. Starting at the end of the third
quarter of fiscal 2000, this business was shifted to the Bangkok, Thailand, facility, whereby it has expanded into new Asian markets. The remaining foreign operations in Belgium, Italy, and South Africa had net sales decreases of approximately 7.1% for
the third quarter ended December 31, 2000, versus the comparable quarter of fiscal 2000, and net sales increases of approximately 4.2% for the nine months ended December 31, 2000, versus the nine months ended December 31, 1999.

Pretax profits for the combined foreign operations approximated 31.1% of consolidated pretax income for the third quarter of fiscal 2001, and 22.7% for the nine months ended December 31, 2000, up from 14.7% and 8.1% of the
comparable periods in fiscal 2000. Again, this was largely driven by profits from the Asian operation, as compared to start-up losses in the first nine months of fiscal 2000. Also strong earnings performance in the third quarter from the Company's Belgian
and Italian operations contributed to the overall foreign operation's profit increase.

The Company's foreign operations, however, incurred foreign currency pressures, as the deterioration in all local currencies (Belgian franc, Italian lira, South African rand, and the Thailand baht) became more pronounced. This
trend is expected to continue and may impact fourth quarter foreign results. The Company has from time to time used hedging programs (primarily forward foreign currency exchange contracts) to help minimize the impact of these fluctuations on results of
operations. At December 31, 2000 no forward currency exchange contracts were outstanding. The Company does not hold or issue derivatives for trading purposes and is not a party to leveraged derivative transactions. On a consolidated basis, foreign
currency exchange losses are included in income or expense as incurred and are not material to the results of operations.

Euro Conversion

On January 1, 1999, the Euro became the common currency of eleven of the fifteen member states of the European Union. After the introduction of the Euro, the national currencies will remain legal tender in the
participating countries until mid-calendar-year 2002. During the dual currency phase, businesses must be capable of conducting commercial transactions in either the Euro or the national currency. After the dual currency phase, all businesses in
participating countries must conduct all transactions in the Euro and must convert their financial records and reports to be Euro-based. The Company expects that all its facilities will be capable of complying with the Euro conversion timetable and with
customer requirements for quoting and billing in Euro dollars. The Company's information technology systems are currently meeting the dual currency phase requirements, and it is anticipated that the final phase of the Euro conversion will not have a
negative effect on the Company.

<PAGE 11>

Forward-Looking Information

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," "if," "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") which 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 Company's ability to continue to control and reduce its costs of production;                                                                                                                                                        
|c. | the level of demand for the Company's Imaging products and impact of digital imaging;                                                                                                                                                   
|d. | the level of competition and consolidation within the imaging industry;                                                                                                                                                                 
|e. | the effect of changes in the distribution channels for Fuller Brands;                                                                                                                                                                   
|f. | the level of demand for Fuller Brands' contract manufactured products;                                                                                                                                                                  
|g. | the level of competition and consolidation within the commercial cleaning supply industry; and                                                                                                                                          
|h. | 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 whom they transact business.

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

The information called for by this item is provided under the caption Foreign Operations under Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Also see Item 7A.
Quantitative and Qualitative Disclosures about Market Risk in the Company's Form 10-K for the year ended March 31, 2000.

<PAGE 12>

PART II



|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 
None                                                                                                                                                                                                              
|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                                                                                                                                                                                                                                                                    
|<PAGE 13>
|          | (10)  Material contracts                                                                                                                                                                                                                                               
|          | 10.1                                                                                                                                                                                                                                                                   
|          | 10.2                                                                                                                                                                                                                                                                   
|          | 10.3                                                                                                                                                                                                                                                                   
|          | 10.4                                                                                                                                                                                                                                                                   
|          | 10.5                                                                                                                                                                                                                                                                   
|          | (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
        Not applicable                                                                                                                                                                                                                       
|          | b.   Reports Filed on Form 8-K
      None                                                                                                                                                                                                                              
|<PAGE 14>





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.                                                                                    
|---------------------- | -- | ----------------------------------------------------------------------------------------------
|                       |    |                                                                                               
|                       |    |                                                                                               
|Date  February 9, 2001 | By | /s/ Thomas N. Hendrickson
Thomas N. Hendrickson,
President, Chief Executive Officer, Treasurer
|                       |    |                                                                                               
|                       |    |                                                                                               
|Date  February 9, 2001 | By | /s/ Thomas J. Weldgen
Thomas J. Weldgen,
Vice President Finance and Chief Financial Officer   
|                       |    |                                                                                               
|                       |    |                                                                                               
|Date  February 9, 2001 | By | /s/ James W. Pembroke
James W. Pembroke,
Chief Accounting Officer                             

<PAGE 15>

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                                                                                 
|10.       | Material contracts                                                                  
|          | 10.1                                                                                
|          | 10.2                                                                                
|          | 10.3                                                                                
|          | 10.4                                                                                
|<PAGE 16>
|          | 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                                                                 
|<PAGE 17>