NEW YORK, July 27--Minerals Technologies Inc. (NYSE: MTX) today reported second quarter net income of $12.6 million, a 4-percent decrease from the $13.1 million reported in the second quarter of 2005. Diluted earnings per common share were $0.63, the same as reported in the second quarter of last year. "As we announced in June, the company did not achieve the increase in operating income expected during the quarter," said Paul R. Saueracker, chairman, president and chief executive officer. Worldwide sales in the quarter increased 9 percent to $266.5 million from $244.7 million in the previous year. Foreign exchange had a minimal unfavorable impact on sales. Income from operations was $20.9 million in the second quarter, slightly above the prior year. Worldwide sales for the first six months of 2006 increased 7 percent to $532.5 million from $495.5 million reported last year. Foreign exchange had an unfavorable impact on sales of approximately $6.1 million or 1 percentage point of growth. Operating income for the first six months of 2006 was $39.8 million, an 11-percent decrease from the $44.9 million reported in the first half of 2005. For the first six months of 2006, net income decreased 11 percent to $25.4 million from $28.4 million last year. Diluted earnings per common share decreased 7 percent to $1.27 from $1.36 for the same period in 2005. "In a comparison of the second quarter of 2006 with the same period last year, our operating income improved only slightly as a result of a number of factors," said Mr. Saueracker. "These included unrecovered raw material and energy cost increases; reduced contributions from the metallurgical product line; paper mill and paper machine shutdowns affecting several satellite PCC facilities; and, increased market development and ramp-up costs for our Synsil®Products. "Partially mitigating these factors were improved paper industry operations in Finland, which had faced labor disputes in the second quarter of last year; improved operations of our two large satellite precipitated calcium carbonate (PCC) plants in China; and the ramp up of our European coating program," said Mr. Saueracker. Sales in the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, increased 12 percent to $179.6 million from $160.7 million in the comparable quarter of 2005. Income from operations for the second quarter of 2006 was $13.3 million, a 9-percent increase over the $12.2 million reported the previous year. For the first six months of 2006, Specialty Minerals sales increased 10 percent to $362.1 million from $330.5 million in the same period in 2005. Income from operations for the six months decreased 11 percent to $25.5 million from $28.6 million in the first half of last year. Worldwide net sales of PCC, which is used primarily in paper manufacturing, increased 12 percent in the second quarter to $137.8 million from $122.9 million in the same period in 2005. Total PCC sales for the first six months of 2006 were $281.1 million, a 9-percent increase from $256.9 million in the prior year. For the second quarter, Paper PCC sales grew 14 percent to $123.7 million from $108.8 million in the prior year. For the first half of 2006, Paper PCC sales grew 10 percent to $251.9 million. "Paper PCC achieved sales growth in all regions during the second quarter as total worldwide unit volumes grew 11 percent," said Mr. Saueracker. "Four percentage points of this growth were attributable to the ramp-up of volumes from new facilities in China and Germany and 3 percentage points of growth were due to the resumption of operations in Finland that had been affected by the labor actions in 2005. Strong demand and satellite PCC expansions more than offset the volume losses associated with the paper mill shutdowns." Sales of Specialty PCC in the quarter were essentially flat compared to prior year at $14.1 million. For the first six months of 2006, Specialty PCC sales increased 3 percent to $29.2 million from $28.4 million. Sales of Processed Minerals products for the second quarter were $41.8 million, an 11-percent increase over the $37.8 million reported for the same period in 2005. Talc sales increased 18 percent to $16.1 million from $13.7 million in the prior year due to strong global demand for plastics and consumer-related markets. For the six months, sales of Processed Minerals products increased 10 percent to $81.0 million from $73.6 million in the first half of 2005. Processed Minerals products are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries. Second quarter net sales in the Refractories segment, which primarily serves the steel industry, increased 3 percent to $86.9 million from $84.0 million in the same period of 2005. Sales in the metallurgical product line decreased 15 percent to $20.8 million from $24.5 million in the second quarter of 2005. Sales of refractory products and systems to steel and other industrial applications increased 11 percent to $66.1 million from $59.5 million in the prior year. Income from operations for the Refractories segment in the second quarter of 2006 decreased 12 percent to $7.6 million from $8.6 million in the same period last year. "The Refractories segment experienced strong demand for its refractory products and systems during the quarter," said Mr. Saueracker. "The decline in sales in the metallurgical product line, however, was attributable primarily to lower prices as a result of a reduction in raw material costs passed through to customers." For the six months, sales in the Refractories segment increased 3 percent to $170.4 million from $165.0 million in the same period in 2005. However, income from operations for the six months decreased 12 percent--from $16.3 million for the first six months of 2005 to $14.3 million. The decline in operating income for the six months was due to lower margins in the metallurgical product line, and additional costs related to new business development activities. Mr. Saueracker concluded: "We are disappointed with the company's operating income performance for the second quarter, but looking forward, we believe that our results will improve through the remainder of the year," The company has scheduled an analyst conference call for Friday, July 28, 2006 at 11:00 a.m. to discuss operating results for the second quarter. The conference call will be broadcast over the company's website, www.mineralstech.com. | 