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

FORM 10-Q





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

For the quarterly period ended September 30, 2001
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. 0-9600CPAC, INC.(Exact name of registrant as specified in its charter)



|New York(State or other jurisdiction of
 incorporation or organization) |  | 16-0961040(I.R.S. Employer Identification No.)
|----------------------------------------------------------------------- |  | ----------------------------------------------

2364 Leicester Rd.
Leicester, New York  14481



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



Not Applicable
(Former name, former address and former fiscal year, if changed since last report)



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

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, 2001                      
|----------------------------------- | ------------------------------------------------------------------------
|Common Stock, $.01 par value        | 5,156,249                                                               
|                                    |                                                                         
|Options Outstanding & Not Exercised | Shares to cover the options will not be issued until they are exercised.
|1,125,838                          

<PAGE 1>



CPAC, INC. AND SUBSIDIARIESINDEX





|        |                                                                                                                                                                         | Page No.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|        | PART I -- FINANCIAL INFORMATION                                                                                                                                         |         
|Item 1. | Financial Statements.                                                                                                                                                   |         
|        | CPAC, Inc. and Subsidiaries Consolidated Balance Sheets -- September 30, 2001 (Unaudited), and March 31, 2001                                                           | 3       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Six Months Ended September 30, 2001, and September 30, 2000 (Unaudited)   | 4       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income -- Three Months Ended September 30, 2001, and September 30, 2000 (Unaudited) | 5       
|        | CPAC, Inc. and Subsidiaries Consolidated Statements of Cash Flows -- Six Months Ended September 30, 2001, and September 30, 2000 (Unaudited)                            | 6       
|        | Notes to Consolidated Financial Statements                                                                                                                              | 7       
|Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations.                                                                                  | 8       
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.                                                                                                             | 11      
|        |                                                                                                                                                                         |         
|        | PART II -- OTHER INFORMATION                                                                                                                                            |         
|Item 1. | Legal Proceedings.                                                                                                                                                      | 12      
|Item 2. | Changes in Securities and Use of Proceeds.                                                                                                                              | 12      
|Item 3. | Defaults Upon Senior Securities.                                                                                                                                        | 12      
|Item 4. | Submission of Matters to a Vote of Security Holders.                                                                                                                    | 12      
|Item 5. | Other Information.                                                                                                                                                      | 12      
|Item 6. | Exhibits and Reports on Form 8-K.                                                                                                                                       | 12      
|        | SIGNATURE PAGE                                                                                                                                                          | 14      
|        | EXHIBIT INDEX                                                                                                                                                           | 15      

<PAGE 2>



PART I -- FINANCIAL INFORMATION

Item 1.     FINANCIAL STATEMENTS.



CPAC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS



|                                                                                                   |                                                                                                                                         | September 30, 2001(Unaudited) |            | March 31, 2001(Note) |  
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ---------- | -------------------- | -
|ASSETS                                                                                             |                                                                                                                                        
|Current assets:                                                                                    |                                                                                                                                         |                               |            |                     
|                                                                                                   | Cash and cash equivalents                                                                                                               | $   8,000,034                 |            | $   8,859,885        |  
|                                                                                                   | Accounts receivable (net of allowance for doubtful accounts
      of $697,000 and $645,000, respectively)                               | 14,611,502                    |            | 14,341,047           |  
|                                                                                                   | Inventory                                                                                                                               | 18,034,855                    |            | 17,500,006           |  
|                                                                                                   | Prepaid expenses and other current assets                                                                                               | 2,588,822                     |            | 2,345,282            |  
|                                                                                                   | Total current assets                                                                                                                    | 43,235,213                    |            | 43,046,220           |  
|Property, plant and equipment, net                                                                 | 17,934,953                                                                                                                              |                               | 18,960,122 |                     
|Goodwill and intangible assets (net of amortization of
   $3,034,505 and $2,751,116, respectively) | 12,434,008                                                                                                                              |                               | 12,799,458 |                     
|Other assets                                                                                       | 2,737,751                                                                                                                               |                               | 2,630,353  |                     
|                                                                                                   |                                                                                                                                         | $ 76,341,925                  |            | $ 77,436,153         |  
|                                                                                                   |                                                                                                                                        
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                               |                                                                                                                                        
|Current liabilities:                                                                               |                                                                                                                                         |                               |            |                     
|                                                                                                   | Current portion of long-term debt                                                                                                       | $      941,017                |            | $   1,263,577        |  
|                                                                                                   | Accounts payable                                                                                                                        | 5,015,004                     |            | 5,035,909            |  
|                                                                                                   | Accrued payroll and related expenses                                                                                                    | 1,771,910                     |            | 1,532,263            |  
|                                                                                                   | Accrued income taxes payable                                                                                                            | 947,459                       |            | 483,370              |  
|                                                                                                   | Other accrued expenses and liabilities                                                                                                  | 2,804,760                     |            | 3,227,685            |  
|                                                                                                   | Total current liabilities                                                                                                               | 11,480,150                    |            | 11,542,804           |  
|                                                                                                   |                                                                                                                                         |                               |            |                      |  
|Long-term debt, net of current portion                                                             | 7,703,722                                                                                                                               |                               | 7,731,913  |                     
|Other long-term liabilities                                                                        | 5,645,898                                                                                                                               |                               | 5,435,088  |                     
|Shareholders' equity:                                                                              |                                                                                                                                         |                               |            |                     
|                                                                                                   | Common stock, par value $0.01 per share;
   Authorized 30,000,000 shares;
   Issued 5,241,556 shares and 5,500,477 shares, respectively | 52,416                        |            | 55,004               |  
|                                                                                                   | Additional paid-in capital                                                                                                              | 10,736,184                    |            | 12,372,174           |  
|                                                                                                   | Retained earnings                                                                                                                       | 43,348,876                    |            | 42,299,580           |  
|                                                                                                   | Accumulated other comprehensive income (loss)                                                                                           | (2,035,133                    | )          | (1,410,222           | )
|                                                                                                   |                                                                                                                                         | 52,102,343                    |            | 53,316,536           |  
|Less:  Treasury stock, at cost, 85,307 shares                                                      | (590,188                                                                                                                                | )                             | (590,188   | )                   
|                                                                                                   | Total shareholders' equity                                                                                                              | 51,512,155                    |            | 52,726,348           |  
|                                                                                                   |                                                                                                                                         | $ 76,341,925                  |            | $ 77,436,153         |  



Note:  The balance sheet at March 31, 2001 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 SIX MONTHS ENDEDSEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
UNAUDITED



|                                   |                                                  | 2001               |               | 2000               |  
|---------------------------------- | ------------------------------------------------ | ------------------ | ------------- | ------------------ | -
|                                   |                                                  |                    |               |                    |  
|Net sales                          | $  50,536,067                                    |                    | $  54,646,759 |                   
|                                   |                                                  |                    |               |                    |  
|Costs and expenses:                |                                                  |                    |               |                   
|                                   | Cost of sales                                    | 28,134,082         |               | 30,180,713         |  
|                                   | Selling, administrative and engineering expenses | 19,006,319         |               | 19,089,700         |  
|                                   | Research and development expense                 | 305,916            |               | 327,563            |  
|                                   | Interest expense, net                            | 279,610            |               | 469,369            |  
|                                   |                                                  |                    |               |                    |  
|                                   |                                                  | 47,725,927         |               | 50,067,345         |  
|Income before income tax expense   | 2,810,140                                        |                    | 4,579,414     |                   
|                                   |                                                  |                    |               |                    |  
|Provision for income tax expense   | 1,025,000                                        |                    | 1,775,000     |                   
|                                   |                                                  |                    |               |                    |  
|                                   | Net income                                       | $    1,785,140     |               | $    2,804,414     |  
|                                   |                                                  |                    |               |                    |  
|Income per common share:           |                                                  |                    |               |                   
|                                   | Basic                                            | $             0.34 |               | $             0.50 |  
|                                   | Diluted                                          | $             0.34 |               | $             0.50 |  
|Average common shares outstanding: |                                                  |                    |               |                   
|                                   | Basic                                            | 5,269,481          |               | 5,586,828          |  
|                                   | Diluted                                          | 5,281,952          |               | 5,622,521          |  
|                                   |                                                  |                    |               |                    |  
|Comprehensive income:              |                                                  |                    |               |                   
|                                   | Net income                                       | $    1,785,140     |               | $    2,804,414     |  
|                                   | Other comprehensive income (loss)                | (624,911           | )             | (210,574           | )
|                                   |                                                  |                    |               |                    |  
|                                   | Comprehensive income                             | $    1,160,229     |               | $    2,593,840     |  



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 ENDEDSEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
UNAUDITED



|                                   |                                                  | 2001               |               | 2000               |  
|---------------------------------- | ------------------------------------------------ | ------------------ | ------------- | ------------------ | -
|                                   |                                                  |                    |               |                    |  
|Net sales                          | $  26,254,944                                    |                    | $  27,042,488 |                   
|                                   |                                                  |                    |               |                    |  
|Costs and expenses:                |                                                  |                    |               |                   
|                                   | Cost of sales                                    | 14,868,432         |               | 14,657,396         |  
|                                   | Selling, administrative and engineering expenses | 9,406,464          |               | 9,518,583          |  
|                                   | Research and development expense                 | 151,742            |               | 161,691            |  
|                                   | Interest expense, net                            | 143,105            |               | 261,519            |  
|                                   |                                                  |                    |               |                    |  
|                                   |                                                  | 24,569,743         |               | 24,599,189         |  
|Income before income tax expense   | 1,685,201                                        |                    | 2,443,299     |                   
|                                   |                                                  |                    |               |                    |  
|Provision for income tax expense   | 608,000                                          |                    | 966,000       |                   
|                                   |                                                  |                    |               |                    |  
|                                   | Net income                                       | $    1,077,201     |               | $    1,477,299     |  
|                                   |                                                  |                    |               |                    |  
|Income per common share:           |                                                  |                    |               |                   
|                                   | Basic                                            | $             0.21 |               | $             0.27 |  
|                                   | Diluted                                          | $             0.21 |               | $             0.26 |  
|Average common shares outstanding: |                                                  |                    |               |                   
|                                   | Basic                                            | 5,216,651          |               | 5,555,021          |  
|                                   | Diluted                                          | 5,230,298          |               | 5,601,525          |  
|                                   |                                                  |                    |               |                    |  
|Comprehensive income:              |                                                  |                    |               |                   
|                                   | Net income                                       | $    1,077,201     |               | $    1,477,299     |  
|                                   | Other comprehensive income (loss)                | (227,176           | )             | (24,533            | )
|                                   |                                                  |                    |               |                    |  
|                                   | Comprehensive income                             | $       850,025    |               | $    1,452,766     |  



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



<PAGE 5>



CPAC, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED
SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000
UNAUDITED



|                                                 |                                                                                       | 2001           |                | 2000           |  
|------------------------------------------------ | ------------------------------------------------------------------------------------- | -------------- | -------------- | -------------- | -
|                                                 |                                                                                       |                |                |                |  
|Cash flows from operating activities:            |                                                                                       |                |                |               
|                                                 | Net income                                                                            | $    1,785,140 |                | $    2,804,414 |  
|                                                 | Adjustments to reconcile net income to net cash provided
    by operating activities: |                |                |                |  
|                                                 | Depreciation and amortization                                                         | 1,513,762      |                | 1,450,348      |  
|                                                 | Amortization of intangible assets                                                     | 357,573        |                | 331,587        |  
|                                                 | Changes in assets and liabilities, net of effects of business 
    acquisitions:      |                |                |                |  
|                                                 | Accounts receivable                                                                   | (352,654       | )              | (363,710       | )
|                                                 | Inventory                                                                             | (636,306       | )              | (283,107       | )
|                                                 | Accounts payable                                                                      | (49,118        | )              | (213,885       | )
|                                                 | Accrued expenses & liabilities                                                        | 677,989        |                | (36,503        | )
|                                                 | Other changes, net                                                                    | (655,089       | )              | (221,779       | )
|                                                 | Total adjustments                                                                     | 856,157        |                | 662,951        |  
|                                                 | Net cash provided by operating activities                                             | 2,641,297      |                | 3,467,365      |  
|                                                 |                                                                                       |                |                |                |  
|Cash flows from investing activities:            |                                                                                       |                |                |               
|                                                 | Purchase of property, plant, and equipment, net                                       | (589,488       | )              | (834,017       | )
|                                                 | Net cash used in investing activities                                                 | (589,488       | )              | (834,017       | )
|                                                 |                                                                                       |                |                |                |  
|Cash flows from financing activities:            |                                                                                       |                |                |               
|                                                 | Common stock repurchase                                                               | (1,638,578     | )              | (934,735       | )
|                                                 | Repayment of long-term borrowings                                                     | (534,322       | )              | (628,013       | )
|                                                 | Payment of cash dividends                                                             | (735,844       | )              | (789,694       | )
|                                                 | Net cash used in financing activities                                                 | (2,908,744     | )              | (2,352,442     | )
|                                                 |                                                                                       |                |                |                |  
|                                                 | Effect of exchange rate changes on cash                                               | (2,916         | )              | (711           | )
|                                                 |                                                                                       |                |                |                |  
|                                                 | Net (decrease) increase in cash and cash equivalents                                  | (859,851       | )              | 280,195        |  
|                                                 |                                                                                       |                |                |                |  
|Cash and cash equivalents -- beginning of period | 8,859,885                                                                             |                | 4,436,509      |               
|                                                 |                                                                                       |                |                |                |  
|Cash and cash equivalents -- end of period       | $    8,000,034                                                                        |                | $    4,716,704 |               



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



<PAGE 6>



CPAC, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSUNAUDITED



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 six-month period ended September 30, 2001 and September 30, 2000 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 September 30, 2001 (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, 2001, Annual Report to Shareholders.  The results of operations for the six-months ended September 30, 2001 are not necessarily indicative of the operating results for the full year.



2 -- INVENTORY

Inventory is summarized as follows:



|                                  | September 30, 2001 |  | March 31, 2001
|--------------------------------- | ------------------ |  | --------------
|Raw materials and purchased parts | $    7,305,927     |  | $   7,016,807 
|Work-in-process                   | 970,772            |  | 945,243       
|Finished goods                    | 9,758,156          |  | 9,537,956     
|                                  | $ 18,034,855       |  | $ 17,500,006  



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, |          
|------------------------------------------------------ | -------------------------------- | ------------------------------ | ---------
|                                                       | 2001                             |                                | 2000     
|Basic weighted average number
   of shares outstanding | 5,216,651                        |                                | 5,555,021
|Effect of dilutive stock options                       | 13,647                           |                                | 46,504   
|Dilutive shares outstanding                            | 5,230,298                        |                                | 5,601,525



Unexercised stock options to purchase 1,005,311 and 595,379 shares of the Company's common stock as of September 30, 2001 and 2000, 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 2001, are still outstanding at the end of the period.



4 -- COMPREHENSIVE INCOME

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





<PAGE 7>



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 ended September 30, 2001 and 2000 are as follows:





|                             | Three Months Ended
September 30, |   | Six Months Ended
September 30, |  
|---------------------------- | -------------------------------- | - | ------------------------------ | -
|                             | 2001                             |   | 2000                           |  
|Net sales to customers:      |                                  |   |                                |  
|Fuller Brands                | $   15,409,465                   |   | $  15,805,215                  |  
|Imaging                      | 10,845,479                       |   | 11,237,273                     |  
|                             |                                  |   |                                |  
|Total net sales to customers | $   26,254,944                   |   | $  27,042,488                  |  
|                             |                                  |   |                                |  
|Operating income:            |                                  |   |                                |  
|Fuller Brands                | $        909,493                 |   | $    1,283,617                 |  
|Imaging                      | 907,578                          |   | 1,206,630                      |  
|                             | 1,817,071                        |   | 2,490,247                      |  
|Corporate income (loss)      | 11,235                           |   | 214,571                        |  
|Interest expense, net        | (143,105                         | ) | (261,519                       | )
|                             |                                  |   |                                |  
|Consolidated pretax income   | $     1,685,201                  |   | $    2,443,299                 |  



Sales between segments are not material.





6 -- SHAREHOLDERS' EQUITY

Stock Repurchase

For the six months ended September 30, 2001 and 2000, respectively, the Company repurchased 258,921 and 125,547 shares of its common stock at an average cost of $6.33 and $7.45 per share, for a total cost of approximately $1,639,000 and $935,000 as part of previously announced Board of Directors' authorized stock buyback programs.



7 -- ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Financial Instruments and Hedging Activities," as amended by SFAS No. 137 and SFAS No. 138, was effective for the Company on April 1, 2001.  The adoption of this pronouncement did not have any effect on the Company's financial position, results of operations, or cash flows.



Statements of Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and No. 142 "Goodwill and Other Intangible Assets" were approved by the Financial Accounting Standards Board on June 30, 2001.  SFAS No. 141 eliminates the pooling of interests method for business combinations and requires use of the purchase method.  SFAS No. 142 changes the accounting for goodwill from an amortization approach to a non-amortization (impairment) approach.  The Statement requires amortization of goodwill recorded in connection with previous business combinations to cease upon adoption of the Statement.  The Company is currently reviewing the impact of adoption of this Statement on its financial position, results of operations, and cash flows and will be adopting and adhering to its requirements effective April 1, 2002.



8 -- 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.





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



LIQUIDITY AND CAPITAL RESOURCES





<PAGE 8>



The Company maintains a line of credit with Bank of America with a borrowing capacity of $20,000,000.  At September 30, 2001, 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 September 30, 2001.



CPAC Asia also has a line of credit with an international bank of 19,600,000 baht (approximately $433,000 based on the second quarter conversion rate in Thailand), with interest at prime plus 1% (Thailand prime was 8.75%) and collateralized by a standby letter of credit (LOC) guaranteed by CPAC, Inc.  At the end of its second quarter, CPAC Asia LTD. had approximately 12,694,000 baht (approximately $281,000 based on the second quarter conversion rate in Thailand) outstanding against the line.



CPAC Asia also has a borrowing arrangement with an international bank totaling 60,000,000 million baht (approximately $1,326,000 based on the second quarter conversion rate) to finance its Thailand-based facility. The first obligation, totaling 15,617,000 baht (approximately $345,000 based on the second quarter conversion rate) has interest due quarterly at 5.75%, and matures in December 2001.  The Company is currently discussing with the bank extending this obligation until December 2002.  The second obligation, totaling 44,383,000 baht (approximately $981,000) with interest at 7.35%, 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 September 30, 2001, March 31, 2001, and September 30, 2000 were 3.77 to 1; 3.73 to 1; and 3.63 to 1.  The working capital ratio improvement over March 31, 2001 and fiscal 2001's second 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 September 30, 2001.  It is expected that additional financing may be necessary to allow the Company to pursue future acquisitions.



Asset Turnover Ratios



|                                  | September 30, 2001 | March 31, 2001 | September 30, 2000
|--------------------------------- | ------------------ | -------------- | ------------------
|(1)  Receivables-days outstanding | 52.4 days          | 51.3 days      | 52.2 days         
|(2)  Annual inventory turns       | 3.2 times          | 3.2 times      | 3.1 times         



Receivable-days outstanding increased slightly over March 31, 2001 and September 30, 2000, due to a slight decrease in Imaging customer payment practices.



Inventory turns, on an annualized basis, stayed relatively constant.





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.



Consolidated sales for the quarter ended September 30, 2001 decreased 2.9% over the quarter ended September 30, 2000 and decreased 7.5% for the six months ended September 30, 2001 over six months ended September 30, 2000.  Sales for the second quarter ended September 30, 2001 in the Fuller Brands segment decreased 2.5% as compared with the quarter ended September 30, 2000, and decreased 5.4% for the six months ended September 30, 2001 over the comparable period last year.  The decreases for the quarter and six-month periods were largely due to the continued decline in direct sales of Stanley Home Products and reduced purchases of Cleaning Technologies Group products from certain large customers who adjusted their inventory levels during the second quarter, due to the U.S. economic slowdown and business disruption caused by the September 11, 2001 terrorist attacks.  For the Imaging segment, overall sales in the second quarter decreased 3.5% as compared with the quarter ended September 30, 2000, and showed a 10.4% decrease for the six months ended September 30, 2001 over the comparable period last year.  The U.S. economic slowdown has hurt sales of chemicals and equipment in the photographic industry, while currency pressures in the Company's European operations have resulted in lower translated

<PAGE 9>



sales.  CPAC Asia LTD. sales, while also impacted by currency pressures, have offset this decline in Imaging sales by posting sales increases for the quarter and six months ended of well over 10%.



Consolidated gross margins were 43.4% for this quarter versus 43.7% for the year ended March 31, 2001 and 45.8% for the same quarter last year.  Gross margins in the Fuller Brands segment were 46.2%, 48.3%, and 50.1% for the quarter ended September 30, 2001, the year ended March 31, 2001, and the quarter ended September 30, 2000.  Decline over previous periods was the result of product mix sold, as well as increased manufacturing costs per unit due to reduced sales volume.  Gross margins in the Imaging segment were 39.3% for the quarter ended September 30, 2001, as compared to 37.2% for the year ended March 31, 2001 and 39.8% for the quarter ended September 30, 2000.  The increase over March 31, 2001 was a function of product mix sold both domestically and internationally, while the slight decrease this quarter, as compared to the comparable quarter last year, was a function of lower revenues from the photochemical operations.



Consolidated selling, administrative, and engineering costs this quarter were 35.8%, versus 35.3% for the year ended March 31, 2001, versus 35.2% for the same quarter last year.  In the Fuller Brands segment, selling, administrative and engineering costs for this quarter decreased to 39.5% from 40.2% for the year ended March 31, 2001 and 41.1% for the same quarter last year.  Despite continuing revenue declines, the Company continues to selectively invest in revenue generating programs in an effort to maintain and grow its business.  In the upcoming quarters, this will be closely monitored as potential recessionary conditions now impacting the business are better understood.  In the Imaging segment, selling, administrative and engineering costs for the quarter were 30.7% versus 28.9% for the year ended March 31, 2001 and 28.8% for the same quarter last year.  Declining revenues in the Company's domestic photochemical operations have contributed to this increase.  Similar to the Fuller Brands segment, current economic conditions will warrant monitoring these expenses to ensure present expenditures correlate with present revenues.



Net interest expense for the quarter and six months ended September 30, 2001 decreased, as compared to the second quarter and six months ended September 30, 2000, due to decreased debt and lower domestic interest rates.



The provision for income taxes as a percentage of pretax income for the quarter ended September 30, 2001 was 36.1% versus 37.2% for the year ended March 31, 2001, and versus 39.5% for the quarter ended September 30, 2000.  The decrease, as compared to the prior periods, is due partially to the impact of the tax holiday in Asia, which exempts most of CPAC Asia LTD.'s operating income from tax, as well as lower state taxes due to decreased domestic earnings.



Net income for the quarter and six months ended September 30, 2001 decreased 27.1% and 36.3%, respectively, over the comparable quarter and six months last year.  The decrease is largely attributable to the continuing economic slowdown experienced in both segments.



Foreign Operations

Foreign operations' net sales for the quarter ended September 30, 2001 remained flat versus the comparable period last year, while sales for the six months ended September 30, 2001 increased 2% over the comparable six-month period last year.  Strong performance from the Company's Asian subsidiary for the quarter and six months ended September 30, 2001 offset currency-effected net sales declines from the Company's Belgian, Italian, and South African subsidiaries.



Pretax profits for the combined foreign operations were down 15% and 12% for the quarter and six months ended September 30, 2001, despite CPAC Asia's strong performance in the second quarter.  Currency pressures and margin pressures from other photochemical competitors contributed to the net decline.



The Company's foreign operations once again experienced currency pressures, as the deterioration of all local currencies (Belgian franc, Italian lira, South African rand, and Thailand baht) against the U.S. dollar continued during the fiscal year.  The Company is not certain if the trend will continue throughout fiscal 2002, or reverse itself based on the world economy.  While the Company in the past has used hedging programs (primarily forward foreign currency exchange contracts) to help minimize the impact of these fluctuations on results of operations, it does not currently hold any of these contracts.  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 transaction losses are included in income or expense as incurred and are not material to the results of operations.



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," "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

<PAGE 10>



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 effect of changes in the distribution channels for Fuller Brands;                                                                                                                                                                   
|d. | the level of domestic demand for the Company's Imaging products and the impact of digital imaging;                                                                                                                                      
|e. | the ability to increase volume through the Great Bend manufacturing plant to absorb fixed overhead; and                                                                                                                                 
|f. | 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.



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.







<PAGE 11>





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 9, 2001.  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, 2002, with votes cast as follows:                                        
|        | For
4,952,775                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                           
|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                                                                                                                                                                                                                           

<PAGE 12>



| | 4.1                                                                                              | Loan Agreement dated February 9, 1994, and Letter of Commitment dated December 16, 1993, incorporated herein by reference to Form 10-K filed for period ended March 31, 1994, as amended by Exhibits 99.1 to 99.3 filed as Exhibits to the Form 10-Q for the quarter ended December 31, 1994, and amended by Letter of extension and increase dated October 29, 1996, filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1996, and further amended by First Amendment to Second Amended and Restated Loan Agreement dated October 31, 1996, filed as Exhibit 4.1 to Form 10-Q for the quarter ended December 31, 1996, and further amended by Agreement dated September 12, 1997 filed as Exhibit 99.1 to Form 10-Q for the quarter ended September 30, 1997, and further amended by Second Amendment to Second Amended and Restated Loan Agreement dated July 10, 1998, filed as Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 1998, and further amended by Agreement dated April 27, 2000 filed as Exhibit 4.1 to Form 10-K for the period ended March 31, 2000
| | ------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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 and September 7, 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 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 -- Not applicable                                                     
| | b.   Reports Filed on Form 8-K
None                                                             

<PAGE 13>







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   November 13, 2001  | By | /s/ Thomas N. Hendrickson
Thomas N. Hendrickson,
President, Chief Executive Officer, Treasurer
|                          |    |                                                                                               
|                          |    |                                                                                               
|Date   November  13, 2001 | By | /s/ Thomas J. Weldgen
Thomas J. Weldgen,
Vice President Finance and Chief Financial Officer   
|                          |    |                                                                                               
|                          |    |                                                                                               
|Date   November  13, 2001 | By | /s/ James W. Pembroke
James W. Pembroke,
Chief Accounting Officer                             



<PAGE 14>





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                                                                                
|        | 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 15>