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Minerals Technologies' Refractories Segment Returns to Profitability

February 9, 2010
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Minerals Technologies Inc. recently reported net income of $4.1 million, or $0.22 per share, for the fourth quarter of 2009, compared with $8.9 million, or $0.47 per share, in the third quarter of 2009. Earnings per share, excluding restructuring and impairment charges, were $0.62, compared to $0.53 per share in the third quarter.

“In the fourth quarter of 2009, we saw improved financial results over the third quarter on increased sales in our Precipitated Calcium Carbonate (PCC) and Refractories businesses,” said Joseph C. Muscari, chairman and CEO. “In addition, the restructuring program we announced in July is on track to provide annualized savings of between $16 million and $20 million upon completion, and we continue to improve our productivity, which better positions us for increased profitability.”

The company’s worldwide sales in the fourth quarter increased 9% to $256.2 million from $234.3 million in the third quarter. Excluding special items, income from operations was $17.3 million, a 22% increase over the $14.2 million recorded in the prior quarter. This growth was attributable to the significant improvement in the Refractories segment that resulted from volume increases related to improved steel industry conditions, as well as benefits from the restructuring program. Income from operations was $4.5 million, compared to $12.8 million in the prior year.

The Specialty Minerals segment’s worldwide sales in the fourth quarter increased 5% to $170.3 million, compared to $162.5 million in the prior quarter. Income from operations, excluding special items, decreased 4% to $15.1 million, compared with $15.8 million in the third quarter. The Processed Minerals product line was affected by volume declines as a result of the seasonal downturn of the construction industry, which was, however, less severe than anticipated.

Worldwide sales of PCC were $146.3 million, a 6% increase over the $137.5 million recorded in the third quarter. This growth was primarily attributable to increased volumes in all regions. Worldwide unit volumes of Paper PCC were up approximately 5% from the third quarter.

In the company’s Refractories segment, sales for the fourth quarter were $85.9 million, a 20% increase over the $71.8 million recorded in the third quarter. Excluding special items, the segment recorded operating income of $3.3 million, compared to an operating loss of $1.1 million in the third quarter.

Sales of refractory products and systems, used primarily in the steel market, increased 21% in the fourth quarter to $68.5 million from $56.8 million in the third quarter of 2009. This increase was attributable to improved production rates in the worldwide steel industry, which resulted in 15% higher volumes in refractory products, and to additional equipment sales. Sales in the metallurgical product line increased 16% sequentially to $17.4 million from $15.0 million in the previous quarter due to a favorable product mix in the calcium cored wire product line.

The company recorded a net loss of $23.8 million for the full year 2009, compared to net income of $65.3 million for 2008. The loss per share for the full year 2009 was $1.27, compared to earnings of $3.44 per share for 2008. Excluding special items, earnings were $1.55 per share, compared with $3.44 per share in the prior year.

Minerals Technologies' worldwide sales for the full year 2009 were $907.3 million, compared to $1,112.2 million in 2008, an 18% decline. Operating income, excluding special items, for the full year decreased 53% to $44.8 million, compared to $95.6 million recorded in 2008. The company reported a loss from operations of $17.1 million in 2009, compared to income of operations of $82.0 million in 2008.

“Our performance in 2009 clearly reflects the effects of the worldwide recession that began in late 2008,” said Muscari. “However, the restructuring we undertook in July reduced costs and conserved cash, putting the company in a much stronger position. Looking forward, we will continue to focus on new product development, productivity, safety and global growth initiatives, and, if the worldwide economy remains stable, Minerals Technologies will continue on the higher performance track demonstrated in the fourth quarter.”

Additional information is available at www.mineralstech.com.

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