Amcol International 8-K Reports 18% Increase In Diluted Earnings Per Share from Continuing Operations

For further information, contact:	Don Pearson
	Vice President & CFO
	847.394.8730

AMCOL INTERNATIONAL (NYSE:ACO)

REPORTS 18% INCREASE IN DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS

ARLINGTON HEIGHTS, IL., JULY 18, 2008—AMCOL International Corporation (NYSE:ACO) today reported 2008 second-quarter income from continuing operations of $17.9 million or $0.58 per diluted share, compared with $15.3 million or $0.49 per diluted share in the same prior-year period.

Net sales from continuing operations rose 28.2% to $233.8 million for the quarter ended June 30, 2008, compared with $182.5 million for the 2007 period. Acquisitions and favorable foreign currency translation represented approximately $8.7 million and $5.4 million, respectively, of the second-quarter sales growth. Operating profit increased by 22.5% over the 2007 period to $23.5 million. Acquisitions added $1.4 million to current-period operating profit while foreign currency translation contributed $0.8 million.

For the six-month period ended June 30, 2008, income from continuing operations was $26.5 million, or $0.86 per diluted share, compared with $26.1 million, or $0.84 per diluted share in the prior-year period. Net income for the six-month period ended June 30, 2008, was $26.5 million, or $0.86 per diluted share compared with $25.8 million, or $0.83 per diluted share in the prior-year period, reflective of a $0.01 charge for discontinued operations that occurred during the second quarter of 2007.

Net sales from continuing operations for the six-month period ended June 30, 2008, rose 22.8 % to $425.3 million, compared with $346.2 million for the 2007 period. Acquisitions and favorable foreign currency translation represented approximately $14.6 million and $9.6 million, respectively, of the sales growth. Operating profit improved by 6.9% over the 2007 period to $36.2 million. Current-year operating profit includes earnings from acquisitions and favorable foreign currency translation of $1.4 million and $1.3 million, respectively.

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AMCOL Q2 2008 EARNINGS

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This release should be read in conjunction with the attached unaudited condensed consolidated financial statements. Further discussion of items and events impacting earnings are included later in this press release.

“We had strong revenue growth across all of our reporting segments this quarter” says Larry Washow, AMCOL President and Chief Executive Officer. “Operating profit grew as well, particularly in Oilfield Services and Environmental. However, it was another quarter where we saw significant energy price increases impacting our margins.”

“In spite of the ongoing cost issues, the Minerals segment did deliver gross and operating margin improvement compared to the first quarter of 2008.” Washow continued, “We are not at all satisfied with the results, but even with the difficult operating environment we are seeing a positive trend that we expect will continue.”

“Also compared to last quarter, the Environmental segment experienced strong growth due to the seasonal nature of its business,” Washow stated.

“Oilfield Services benefited from the strong market conditions as well as a mid-quarter acquisition, which is already a positive contributor. Second quarter results show overall sales growth of 63.5%, generating a 77.7% operating profit improvement,” Washow added.

“Costs are an ongoing issue as we saw overhead spending increase primarily due to benefits and IT costs, plus additional expenses related to acquisitions. We have also increased our R&D spending,” Washow concluded.

STATEMENT OF OPERATIONS HIGHLIGHTS:

Net sales: The following details the consolidated sales growth components over the 2007 second quarter:

Minerals: Freight pass-through revenue accounted for approximately one-fourth of the base business growth, principally from the pet products and metal castings divisions. Base business sales were driven by demand in the Asia-Pacific metal casting market and certain specialty materials product lines, notably from customers in South Africa and China, in addition to price increases in U.S. metal castings and basic materials divisions.

Sales from acquisitions were contributed by our operations in Turkey and Mexico.

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AMCOL Q2 2008 EARNINGS

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Environmental: Base business growth in building materials division shipments and installation services in Western Europe and Poland as well as higher shipments in lining technology product lines in the U.S. market contributed to the increase in the quarter.

Oilfield Services: Demand for domestic water treatment services in the Gulf of Mexico was the largest contributor to base business growth. Emerging markets in West Africa and Malaysia represented approximately 28.6% of the revenue growth. The Premium Reeled Tubing (“PRT”) acquisition added $3.5 million of revenue in the quarter.

Transportation: Traffic levels increased over the prior-year quarter due to higher demand from consumer products shippers.

Gross profit: Sales growth provided the increase in gross profit; however, gross margin was 26.8%, a 50 basis point decline from the 2007 quarter.

Minerals: The gross margin decline is primarily attributed to rising energy costs and increases in production and mining costs, principally in the U.S., where pricing initiatives reduced the impact of these cost increases on gross margin.

Environmental: Gross margin was comparable to the prior-year quarter. 

Oilfield Services: Gross margin improved 110 basis points over the prior quarter due to improved pricing, product mix, emerging markets growth and the acquisition of PRT.

Transportation: Gross margin declined 120 basis points principally due to unrecovered fuel surcharges.

General, selling and administrative expenses (GS&A): GSA expenses increased $8.6 million, a 27.9% increase over the 2007 second quarter. Expenses in each segment increased, with Oilfield Services experiencing the largest increase due to overall growth of the business, entering emerging markets and the acquisition of PRT.

Minerals: Base business GS&A grew due to increased research and development expenditures for the specialty materials division and personnel costs in the Asia-Pacific region.

Environmental: GS&A increased primarily due to increased compensation and sales commission expenses at the Poland-based operations.

Corporate: GS&A increased $2.1 million due to increasing benefits costs and IT expenses resulting from infrastructure investments.

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AMCOL Q2 2008 EARNINGS

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Operating profit: The increase over the prior-year quarter was primarily caused by the combined effect of the gross profit improvement somewhat offset by increases in GS&A costs, especially in our Corporate segment, which drove the 50 basis points decrease in operating margin.

Interest expense: Net interest expense increased by approximately $0.7 million over the prior-year quarter due to higher average debt levels.

Other, net: The increases represents a currency hedge gain on a position in the Australian dollar for our pending South Africa chrome mine investment, offset by other foreign currency fluctuations and minority interest.

Income taxes: The effective tax rate for the second quarter of 2008 was 26.8% compared with 24.7% for the same period in 2007. This is due to increased operating profit in the U.S., which has higher tax rates than international operations.

Income from joint ventures: Income from our India based investments remained relatively consistent versus prior periods.

Share count: Weighted average common and common equivalent shares outstanding were 31.0 million and 30.9 million for the quarters ended June 30, 2008 and 2007, respectively.

FINANCIAL POSITION AND CASH FLOW HIGHLIGHTS:

Long-term debt increased to $249.5 million at June 30, 2008 compared to $164.2 million at December 31, 2007.  The increase was primarily due to funding acquisitions, increased working capital levels and capital expenditures.Total long-term debt represented 40.6% of capitalization at June 30, 2008, compared with 31.8% at December 31, 2007.  Cash and cash equivalents were $22.0 million at June 30, 2008 compared with $25.3 million at December 31, 2007.

Working capital increased to $250.3 million at June 30, 2008 from $202.5 million at December 31, 2007.  The current ratio was 3.1-to-1 and 3.0-to-1 at June 30, 2008, and December 31, 2007, respectively.

Cash flow used in operating activities was $2.0 million year-to-date as of June 30, 2008 compared to $25.6 million cash being generated in the prior-year period.  The increase in working capital caused the decline in operating cash flows compared with the prior-year period, principally due to a greater increase in accounts receivable of $24.7 million.

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AMCOL Q2 2008 EARNINGS

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Excluding the corporate building, acquisitions were the primary investing activity in the 2008 period amounting to $42.3 million, largely due to the PRT acquisition compared with $38.4 million in the prior-year period.  Capital expenditures in the 2008 period amounted to $23.3 million compared with $21.0 million in the prior-year period.

Approximately $2.0 million has been expended on share repurchases thru June 30, 2008, with $6.6 million remaining under authorization.  Eighty thousand shares were repurchased at an average price of $25.45 per share.  Dividends declared year-to-date through June 30, 2008, increased by 15.2 % over the prior-year period to $9.7 million.

This release contains certain forward-looking statements regarding AMCOL’s expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL’s various markets, utilization of AMCOL’s plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL’s annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL’s expectations.

AMCOL International, headquartered in Arlington Heights, IL, produces and markets a wide range of specialty mineral products used for industrial, environmental and consumer-related applications. AMCOL is the parent of American Colloid Co., CETCO (Colloid Environmental Technologies Company), CETCO Oilfield Services Company and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL’s common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL’s web address is www.amcol.com. AMCOL’s second quarter conference call will be available live today at 11 a.m. EDT on the AMCOL website.

Financial tables follow.

AMCOL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except per share data)

		Six Months Ended						Three Months Ended
		June 30,						June 30,
		2008			2007			2008			2007
Net sales	$	425,256		$	346,182		$	233,847		$	182,454
Cost of sales		316,246			252,892			171,187			132,663
Gross profit		109,010			93,290			62,660			49,791
General, selling and administrative expenses		72,847			59,459			39,209			30,654
Operating profit		36,163			33,831			23,451			19,137
Other income (expense):
Interest expense, net		(5,238	)		(4,097	)		(2,837	)		(2,155	)
Other, net		288			(170	)		523			(3	)
		(4,950	)		(4,267	)		(2,314	)		(2,158	)
Income before income taxes and income from affiliates and joint ventures		31,213			29,564			21,137			16,979
Income tax expense		8,383			7,501			5,666			4,190
Income before income from affiliates and joint ventures		22,830			22,063			15,471			12,789
Income from affiliates and joint ventures		3,643			4,032			2,381			2,466
Income from continuing operations		26,473			26,095			17,852			15,255
(Loss) Income from discontinued operations		-			(286	)		-			(286	)
Net income	$	26,473		$	25,809		$	17,852		$	14,969
Weighted average common shares outstanding		30,336			30,154			30,413			30,155
Weighted average common and common equivalent shares outstanding		30,938			30,951			30,993			30,879
Basic earnings per share:
Continuing operations	$	0.87		$	0.87		$	0.59		$	0.51
Discontinued operations		-			(0.01	)		-			(0.01	)
Basic earnings per share	$	0.87		$	0.86		$	0.59		$	0.50
Diluted earnings per share:
Continuing operations	$	0.86		$	0.84		$	0.58		$	0.49
Discontinued operations		-			(0.01	)		-			(0.01	)
Diluted earnings per share	$	0.86		$	0.83		$	0.58		$	0.48
Dividends declared per share	$	0.32		$	0.28		$	0.16		$	0.14

AMCOL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30,		December 31,
ASSETS	2008		2007
	(unaudited)		*
Current assets:
Cash and equivalents	$	21,982	$	25,282
Accounts receivable, net		212,999		166,835
Inventories		109,642		91,367
Prepaid expenses		13,279		13,529
Deferred income taxes		5,035		4,374
Income tax receivable		-		2,768
Other		7,341		475
Total current assets		370,278		304,630
Investments in and advances to affiliates and joint ventures		62,524		49,309
Property, plant, equipment, mineral rights and reserves:
Land and mineral rights		21,594		21,394
Depreciable assets		403,682		352,100
		425,276		373,494
Less: accumulated depreciation and depletion		210,258		196,904
		215,018		176,590
Other assets:
Goodwill		75,153		59,840
Intangible assets, net		55,247		41,257
Deferred income taxes		5,075		5,513
Other assets		16,386		15,007
		151,861		121,617
	$	799,681	$	652,146

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	54,580	$	44,274
Accrued liabilities		65,401		57,833
Total current liabilities		119,981		102,107
Long-term debt		249,541		164,232
Long-term debt - corporate building		11,081		-
Total long-term debt		260,622		164,232
Minority interests in subsidiaries		3,208		327
Pension liabilities		9,302		7,559
Other liabilities		25,525		25,598
		38,035		33,484
Stockholders’ equity:
Common stock		320		320
Additional paid in capital		84,791		81,599
Retained earnings		274,966		258,164
Accumulated other comprehensive income		39,820		33,248
		399,897		373,331
Less:
Treasury stock		18,854		21,008
		381,043		352,323
	$	799,681	$	652,146

* Condensed from audited financial statements.

AMCOL INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2008			2007
Cash flow from operating activities:
Net income	$	26,473		$	25,809
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, depletion, and amortization		15,747			13,805
Other non - cash charges		(3,199	)		(4,893	)
Changes in assets and liabilities, net of effects of acquisitions:
Decrease (Increase) in current assets		(53,864	)		(22,625	)
Decrease (Increase) in noncurrent assets		(650	)		(1,582	)
Increase (decrease) in current liabilities		12,065			7,289
Increase (decrease) in noncurrent liabilities		1,416			7,783
Net cash provided by (used in) operating activities		(2,012	)		25,586
Cash flow from investing activities:
Capital expenditures		(23,313	)		(21,000	)
Capital expenditures - corporate building		(6,273	)		(906	)
Acquisitions, net of cash		(42,257	)		(38,393	)
Investments in and advances to affiliates and joint ventures		(9,715	)		(4,191	)
Investments in restricted cash		(1,908	)		(816	)
Other		(5,290	)		2,425
Net cash used in investing activities		(88,756	)		(62,881	)
Cash flow from financing activities:
Net change in outstanding debt		84,820			55,564
Net change in outstanding debt - corporate building		11,081			-
Proceeds from sales of treasury stock		1,272			1,283
Purchases of treasury stock		(2,062	)		(6,115	)
Dividends		(9,671	)		(8,393	)
Excess tax benefits from stock-based compensation		913			927
Net cash provided by financing activities		86,353			43,266
Effect of foreign currency rate changes on cash		1,115			1,396
Net increase (decrease) in cash and cash equivalents		(3,300	)		7,367
Cash and cash equivalents at beginning of period		25,282			17,805
Cash and cash equivalents at end of period	$	21,982		$	25,172

AMCOL INTERNATIONAL CORPORATION

SEGMENT RESULTS (unaudited)

QUARTER-TO-DATE

	Three Months Ended June 30,
Minerals	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	107,003	100.0	%	$	85,713	100.0	%	$	21,290	24.8	%
Cost of sales		88,659	82.9	%		69,381	80.9	%		19,278	27.8	%
Gross profit		18,344	17.1	%		16,332	19.1	%		2,012	12.3	%
General, selling and
administrative expenses		9,824	9.2	%		8,018	9.4	%		1,806	22.5	%
Operating profit		8,520	7.9	%		8,314	9.7	%		206	2.5	%

	Three Months Ended June 30,
Environmental	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	78,041	100.0	%	$	65,108	100.0	%	$	12,933	19.9	%
Cost of sales		51,165	65.6	%		42,521	65.3	%		8,644	20.3	%
Gross profit		26,876	34.4	%		22,587	34.7	%		4,289	19.0	%
General, selling and
administrative expenses		14,621	18.7	%		12,652	19.4	%		1,969	15.6	%
Operating profit		12,255	15.7	%		9,935	15.3	%		2,320	23.4	%

	Three Months Ended June 30,
Oilfield Services	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	37,655	100.0	%	$	23,030	100.0	%	$	14,625	63.5	%
Cost of sales		21,904	58.2	%		13,660	59.3	%		8,244	60.4	%
Gross profit		15,751	41.8	%		9,370	40.7	%		6,381	68.1	%
General, selling and
administrative expenses		7,003	18.6	%		4,446	19.3	%		2,557	57.5	%
Operating profit		8,748	23.2	%		4,924	21.4	%		3,824	77.7	%

	Three Months Ended June 30,
Transportation	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	16,883	100.0	%	$	13,380	100.0	%	$	3,503	26.2	%
Cost of sales		15,194	90.0	%		11,878	88.8	%		3,316	27.9	%
Gross profit		1,689	10.0	%		1,502	11.2	%		187	12.5	%
General, selling and
administrative expenses		856	5.1	%		770	5.8	%		86	11.2	%
Operating profit		833	4.9	%		732	5.5	%		101	13.8	%

	Three Months Ended June 30,
Corporate	2008			2007			2008 vs 2007
	(Dollars in Thousands)
Intersegment shipping sales	$	(5,735	)	$	(4,777	)
Intersegment shipping costs		(5,735	)		(4,777	)
Gross profit		-			-
General, selling and
administrative expenses		6,905			4,768			2,137	44.8	%
Operating loss		6,905			4,768			2,137	44.8	%

AMCOL INTERNATIONAL CORPORATION

SEGMENT RESULTS (unaudited)

YEAR-TO-DATE

	Six Months Ended June 30,
Minerals	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	206,347	100.0	%	$	171,526	100.0	%	$	34,821		20.3	%
Cost of sales		171,326	83.0	%		138,395	80.7	%		32,931		23.8	%
Gross profit		35,021	17.0	%		33,131	19.3	%		1,890		5.7	%
General, selling and
administrative expenses		18,814	9.1	%		15,560	9.1	%		3,254		20.9	%
Operating profit		16,207	7.9	%		17,571	10.2	%		(1,364	)	-7.8	%

	Six Months Ended June 30,
Environmental	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	136,260	100.0	%	$	113,806	100.0	%	$	22,454	19.7	%
Cost of sales		89,963	66.0	%		73,684	64.7	%		16,279	22.1	%
Gross profit		46,297	34.0	%		40,122	35.3	%		6,175	15.4	%
General, selling and
administrative expenses		28,071	20.6	%		23,944	21.0	%		4,127	17.2	%
Operating profit		18,226	13.4	%		16,178	14.3	%		2,048	12.7	%

	Six Months Ended June 30,
Oilfield Services	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	61,798	100.0	%	$	44,994	100.0	%	$	16,804	37.3	%
Cost of sales		37,345	60.4	%		27,737	61.6	%		9,608	34.6	%
Gross profit		24,453	39.6	%		17,257	38.4	%		7,196	41.7	%
General, selling and
administrative expenses		11,756	19.0	%		9,167	20.4	%		2,589	28.2	%
Operating profit		12,697	20.6	%		8,090	18.0	%		4,607	56.9	%

	Six Months Ended June 30,
Transportation	2008				2007				2008 vs 2007
	(Dollars in Thousands)
Net sales	$	31,233	100.0	%	$	24,273	100.0	%	$	6,960	28.7	%
Cost of sales		27,994	89.6	%		21,493	88.5	%		6,501	30.2	%
Gross profit		3,239	10.4	%		2,780	11.5	%		459	16.5	%
General, selling and
administrative expenses		1,626	5.2	%		1,508	6.2	%		118	7.8	%
Operating profit		1,613	5.2	%		1,272	5.3	%		341	26.8	%

	Six Months Ended June 30,
Corporate	2008			2007			2008 vs 2007
	(Dollars in Thousands)
Intersegment shipping sales	$	(10,382	)	$	(8,417	)
Intersegment shipping costs		(10,382	)		(8,417	)
Gross profit		-			-
General, selling and
administrative expenses		12,580			9,280			3,300	35.6	%
Operating loss		12,580			9,280			3,300	35.6	%

AMCOL INTERNATIONAL CORPORATION

SUPPLEMENTARY INFORMATION (unaudited)

QUARTER-TO-DATE

Composition of Sales by Geographic Region	Three Months Ended June 30, 2008
	Americas			EMEA			Asia Pacific			Total
Minerals		32.2	%		7.0	%		6.6	%		45.8	%
Environmental		17.1	%		13.9	%		2.4	%		33.4	%
Oilfield services		13.1	%		2.4	%		0.6	%		16.1	%
Transportation		4.8	%		0.0	%		0.0	%		4.8	%
Total - current year's period		67.1	%		23.3	%		9.6	%		100.0	%
Total from prior year's comparable period		70.3	%		22.1	%		7.6	%		100.0	%

Percentage of Revenue Growth by Component	Three Months Ended June 30, 2008
	vs.
	Three Months Ended June 30, 2007
	Base Business			Acquisitions			Foreign Exchange			Total
Minerals		9.1	%		1.8	%		0.8	%		11.7	%
Environmental		3.9	%		1.0	%		2.2	%		7.1	%
Oilfield services		6.1	%		1.9	%		0.0	%		8.0	%
Transportation		1.4	%		0.0	%		0.0	%		1.4	%
Total		20.5	%		4.7	%		3.0	%		28.2	%
% of growth		72.7	%		16.9	%		10.4	%		100.0	%

	Three Months Ended June 30,
Minerals Product Line Sales	2008		2007		% change
	(Dollars in Thousands)
Metalcasting	$	44,709	$	37,283		19.9	%
Specialty materials		27,328		20,031		36.4	%
Pet products		19,179		15,593		23.0	%
Basic minerals		13,317		11,636		14.4	%
Other product lines		2,470		1,170		*
Total		107,003		85,713
* Not meaningful.

	Three Months Ended June 30,
Environmental Product Line Sales	2008		2007		% change
	(Dollars in Thousands)
Lining technologies	$	48,452	$	39,753		21.9	%
Building materials		22,858		19,862		15.1	%
Other product lines		6,731		5,493		*
Total		78,041		65,108
* Not meaningful.

AMCOL INTERNATIONAL CORPORATION

SUPPLEMENTARY INFORMATION (unaudited)

YEAR-TO-DATE

Composition of Sales by Geographic Region	Six Months Ended June 30, 2008
	Americas			EMEA			Asia Pacific			Total
Minerals		34.5	%		7.1	%		7.0	%		48.5	%
Environmental		16.2	%		13.8	%		2.1	%		32.0	%
Oilfield services		12.0	%		2.0	%		0.5	%		14.5	%
Transportation		4.9	%		0.0	%		0.0	%		4.9	%
Total - current year's period		67.5	%		22.9	%		9.5	%		100.0	%
Total from prior year's comparable period		69.4	%		22.6	%		8.0	%		100.0	%

	Six Months Ended June 30, 2008
Percentage of Revenue Growth by Component	vs.
	Six Months Ended June 30, 2007
	Base Business			Acquisitions			Foreign Exchange			Total
Minerals		7.0	%		2.3	%		0.8	%		10.1	%
Environmental		3.6	%		0.9	%		2.0	%		6.5	%
Oilfield services		3.8	%		1.0	%		0.0	%		4.9	%
Transportation		1.4	%		0.0	%		0.0	%		1.4	%
Total		15.8	%		4.2	%		2.8	%		22.9	%
% of growth		69.4	%		18.4	%		12.2	%		100.0	%

Minerals Product Line Sales	Six Months Ended June 30,
	2008		2007		% change
	(Dollars in Thousands)
Metalcasting	$	85,387	$	73,869		15.6	%
Specialty materials		52,991		40,099		32.2	%
Pet products		38,702		32,081		20.6	%
Basic minerals		25,358		22,563		12.4	%
Other product lines		3,909		2,914		*
Total		206,347		171,526
* Not meaningful.

Environmental Product Line Sales	Six Months Ended June 30,
	2008		2007		% change
	(Dollars in Thousands)
Lining technologies	$	80,947	$	63,745		27.0	%
Building materials		42,853		39,445		8.6	%
Other product lines		12,460		10,616		*
Total		136,260		113,806
* Not meaningful.