MINERALS TECHNOLOGIES INC - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2004

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-3295

MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

DELAWARE	25-1190717
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
405 Lexington Avenue, New York, New York 10174-1901 (Address of principal executive offices, including zip code)
(212) 878-1800 (Registrant's telephone number, including area code)

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 _____

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES X

NO _____

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
Common Stock, $0.10 par value

Outstanding at October 22, 2004
20,496,208

MINERALS TECHNOLOGIES INC.

INDEX TO FORM 10-Q


		Page No.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements:
	Condensed Consolidated Statement of Income for the three-month and nine-month periods ended September 26, 2004 and September 28, 2003 (unaudited)	3
	Condensed Consolidated Balance Sheet as of September 26, 2004 (unaudited) and December 31, 2003	4
	MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)	5
	MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
	REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	14

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures about Market Risk		22

Item 4. Controls and Procedures		22

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		23

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities		23

Item 6. Exhibits		24

Signature		25

PART 1. FINANCIAL INFORMATION

ITEM 1. Financial Statements

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

					Three Months Ended				Nine Months Ended

(in thousands, except per share data)						Sept. 26, 2004		Sept. 28, 2003			Sept. 26, 2004		Sept. 28, 2003

Net sales					$	236,424	$	198,234		$	675,189	$	602,058
Operating costs and expenses:
			Cost of goods sold			181,295		150,748			516,100		454,809
			Marketing and administrative expenses			23,670		21,854			69,460		64,853
			Research and development expenses			6,991		6,093			21,186		18,713
			Restructuring costs			26		--			1,026		--


Income from operations						24,442		19,539			67,417		63,683
Non-operating deductions, net						803		1,100			3,093		3,568

Income before provision for taxes
	on income and minority interests					23,639		18,439			64,324		60,115
Provision for taxes on income						7,024		5,144			19,117		16,772
Minority interests						402		526			1,286		1,374


Income before cumulative effect of
	accounting change					16,213		12,769			43,921		41,969
Cumulative effect of accounting change						--		--			--		3,433


Net income					$	16,213	$	12,769		$	43,921	$	38,536




Earnings per share:
	Basic:
		Before cumulative effect of accounting change			$	0.79	$	0.63		$	2.14	$	2.08
		Cumulative effect of accounting change --				--		--			--		( 0.17	)

				Basic earnings per share	$	0.79	$	0.63		$	2.14	$	1.91




	Diluted:
		Before cumulative effect of accounting change			$	0.78	$	0.62		$	2.12	$	2.06
		Cumulative effect of accounting change --				--		--			--		( 0.17	)

				Diluted earnings per share	$	0.78	$	0.62		$	2.12	$	1.89




Cash dividends declared per common share					$	0.05	$	0.025		$	0.15	$	0.075

Shares used in computation of earnings per share:
		Basic				20,556		20,185			20,532		20,132
		Diluted				20,769		20,489			20,763		20,349

See accompanying notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET

ASSETS

(in thousands, except per share data)				Sept. 26, 2004*		Dec. 31, 2003**


Current assets:
	Cash and cash equivalents		$	98,208	$	90,515
	Accounts receivable, net			176,553		147,600
	Inventories			97,231		86,378
	Prepaid expenses and other current assets			20,778		15,632

		Total current assets		392,770		340,125

Property, plant and equipment, less accumulated
	depreciation and depletion - September 26, 2004 - $686,015; December 31, 2003 - $648,362			572,349		561,588
Goodwill				52,749		52,721
Prepaid benefit cost				49,412		46,251
Other assets and deferred charges				33,136		34,815

		Total assets	$	1,100,416	$	1,035,500

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
	Short-term debt		$	30,000		$	30,347
	Current maturities of long-term debt			3,472			3,175
	Accounts payable			58,298			44,217
	Other current liabilities			50,105			44,296

		Total current liabilities		141,875			122,035

Long-term debt				95,949			98,159
Other non-current liabilities				112,575			107,925

	Total liabilities			350,399			328,119

Shareholders' equity:
	Common stock			2,771			2,742
	Additional paid-in capital			244,852			225,512
	Deferred compensation			( 2,297	)		( 1,220	)
	Retained earnings			765,780			724,936
	Accumulated other comprehensive income (loss)			3,283			3,814

				1,014,389			955,784

	Less treasury stock			264,372			248,403

		Total shareholders' equity		750,017			707,381


		Total liabilities and shareholders' equity	$	1,100,416		$	1,035,500

* Unaudited
** Condensed from audited financial statements

See accompanying Notes to Condensed Consolidated Financial Statements.

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

					Nine Months Ended

(in thousands, except per share data)							Sept. 26, 2004			Sept. 28, 2003

Operating Activities:

Net income						$	43,921		$	38,536
Adjustments to reconcile net income to net cash
	provided by operating activities:
		Cumulative effect of accounting change					--			3,433
		Depreciation, depletion and amortization					52,050			51,079
		Other non-cash items					9,734			4,254
		Net changes in operating activities					( 23,252	)		( 36,228	)

Net cash provided by operating activities							82,453			61,074


Investing Activities:

Purchases of property, plant and equipment							( 65,740	)		( 40,090	)
Acquisition of business							--			1,990
Other							942			1,229

Net cash used in investing activities							( 64,798	)		( 40,851	)


Financing Activities:

Proceeds from issuance of short-term debt							2,980			5,318
Repayment of debt							( 5,224	)		( 5,919	)
Purchase of common shares for treasury							( 15,969	)		( 4,716	)
Proceeds from issuance of stock under option plan							11,561			9,937
Cash dividends paid							( 3,077	)		( 1,513	)

Net cash used in financing activities							( 9,729	)		3,107


Effect of exchange rate changes on cash and
			cash equivalents				( 233	)		1,617


Net increase in cash and cash equivalents							7,693			25,037
Cash and cash equivalents at beginning of period							90,515			31,762

Cash and cash equivalents at end of period						$	98,208		$	56,799


Supplemental disclosure of cash flow information:
Interest paid						$	5,171		$	5,518




Income taxes paid						$	12,266		$	10,923




Non-cash Investing and Financing Activities:
Property, plant and equipment acquired by
				incurring installation obligations