| NEW YORK, October 27--Minerals Technologies Inc. (NYSE: MTX) today reported third quarter net income of $12.2 million, a 24-percent decrease from the $16.2 million reported in the third quarter of 2004. Diluted earnings per common share decreased 23 percent to $0.60 from $0.78 in the same period last year. "Minerals Technologies had a difficult third quarter," said Paul R. Saueracker, chairman, president and chief executive officer. "We experienced weakness in the North American and European steel industries; higher energy and raw materials costs; ongoing development costs for the European precipitated calcium carbonate (PCC) coating program; continued higher than anticipated start-up costs at two new facilities in China; and market disruptions from Hurricanes Katrina and Rita. Collectively, these factors had a negative impact on our operating income between $5 million and $6 million." Worldwide sales in the quarter were up 4 percent to $246.8 million from $236.4 million in the previous year. Foreign exchange had a favorable impact on sales of approximately $1.8 million for the quarter, or approximately 1 percentage point of growth. Income from operations decreased 22 percent to $19.1 million from $24.4 million in the third quarter of 2004. Net income for the first nine months decreased 8 percent to $40.6 million from $43.9 million in the same period last year. Diluted earnings per share for the nine months decreased 8 percent to $1.96 from $2.12 for the same period in 2004. Worldwide sales for the first nine months of 2005 increased 10 percent to $742.4 million from $675.2 in the same period last year. Foreign exchange had a favorable impact on sales of approximately $12.5 million or 2 percentage points of growth. Operating income for the nine months was $64.0 million, a 5-percent decrease from $67.4 million in the comparable period of 2004. Worldwide sales in the third quarter for the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, increased 5 percent to $167.3 million from $160.0 million in the prior year. Income from operations in the third quarter of 2005 was $14.9 million, a 14-percent decrease from the $17.4 million in the third quarter of 2004. For the first nine months, the Specialty Minerals segment's sales were up 8 percent to $497.8 million from $458.9 million for the same period in 2004. Specialty Minerals recorded income from operations of $43.4 million, an 8-percent decline from the $47.0 million for the nine months of 2004. Worldwide sales of PCC, which is used primarily in the manufacturing processes of the paper industry, were $130.6 million, a 6-percent increase over the $123.6 million reported in the third quarter of 2004. PCC sales for the nine months of 2005 increased 9 percent to $387.5 million from the $354.5 million during the same period in 2004. Paper PCC volume from satellite plants increased 3 percent for the third quarter. This growth was due primarily to the ramp up of the two new satellite PCC plants in China and the new merchant facility in Germany. "Our satellite PCC plants in China continued to experience start-up issues that were related to complexities involved in scaling up a new innovative process technology that improves productivity," said Mr. Saueracker. "We are seeing continuous improvement in the operation of these plants." Mr. Saueracker also said that the European PCC program for coated paper has taken longer than anticipated, which also contributed to the weakness in the third quarter financial performance. "We are, however, continuing to experience increasing demand for our unique coating products produced at our plant in Walsum, Germany," he said. In the Processed Minerals product line, third-quarter sales increased 1 percent to $36.7 million from $36.4 million in the same quarter of last year. The customers served by this product line were most affected by the recent hurricanes. For the nine months, Processed Minerals sales increased 6 percent to $110.3 million from $104.4 million in the same period last year. Processed Minerals products, which include ground calcium carbonate, lime and talc, are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries. In the company's Refractories segment, sales for the third quarter were $79.5 million, a 4-percent increase over the $76.4 million for the third quarter of 2004. This sales growth was driven by the metallurgical product line in which sales increased 43 percent to $22.4 million. This increase was primarily attributable to price increases made necessary by the substantial escalation in the cost of raw materials for this product line. Sales of refractory products and systems to steel and other industrial applications decreased 6 percent to $57.1 million from $60.7 million in the prior year. Operating income for the third quarter in the Refractories segment was $4.2 million compared with the $7.0 million in the third quarter of 2004, a 40-percent decline. "In our consolidated results, the weakness in Refractories was the largest factor in the company's poor third quarter financial performance," said Mr. Saueracker. Sales for the nine months of 2005 in the Refractories segment were $244.6 million, a 13-percent increase over the $216.3 million in the previous year. For the nine months, Refractories operating income was $20.6 million, a 1-percent increase over the $20.4 million reported for the comparable period in 2004. Sales of metallurgical wire for the nine months increased 53 percent to $63.5 million from $41.6 million for the same period in the prior year. For the company, cost of goods sold was 79.3 percent of sales compared with 76.7 percent of sales in the third quarter last year. Cost of goods sold increased 8 percent in the Specialty Minerals segment, which had an unfavorable leveraging impact on the sales growth resulting in a 6 percent decline in production margin. This unfavorable leveraging was due to higher energy costs, development costs at the new merchant coating plant in Germany; the costs associated with the two new facilities in China; and the recent hurricanes. Collectively, these factors had an adverse impact on production margin and operating income of approximately $3 million. Cost of goods sold in the Refractories segment increased 9 percent. This had an unfavorable leveraging impact on sales growth resulting in a 10 percent decline in production margin. Lower volumes due to weakness in the steel industry--particularly in North America and Europe--as well as continuing higher raw material costs contributed to lower production margins for the Refractories segment. "We have initiated programs to mitigate these factors, which include price increases, energy surcharges and expense reduction throughout the company," said Mr. Saueracker. "In addition, our Board of Directors yesterday authorized a new, three-year $75 million share repurchase program that will become effective when the present $75 million share repurchase program is complete. We have accelerated our current program, which we now expect to complete well before the end of 2006. To date, we have spent about $59 million under this program." Mr. Saueracker concluded: "Because of the weakness in the third quarter, in looking at our financial performance for full year 2005, we now expect to earn between $2.60 and $2.65 per share." | 