Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Minerals Technologies Inc., First Quarter 2008 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions). I would now like to turn the conference over to Rick Honey, Vice President of Investor Relations. Mr. Honey, you may begin your conference.

Good morning. Welcome to our first quarter 2008 Earnings Conference Call. Joe Muscari, Chairman and Chief Executive Officer will begin today’s call with an overview of the quarter and then look at some of the changes and important metrics that have occurred since the realignment of operations last October. He will be followed by John Sorel, Senior Vice President and Chief Financial Officer, who will review our first quarter financial results. After the review of our financial performance, Joe will provide some further thoughts on MTI's path forward. This call is being webcast from the company website, www.mineralstech.com. To view the webcast go to investor information page, presentations and conference calls. If you are viewing the presentation on the webcast, please note that we have provided a PDF file for clearer viewing of the charts. Before we begin, I need to remind you that on page 7 of our 2007 10-K, we list the various factors and conditions that may affect future results. Statements related to future performance by members of our management are subject to these cautionary remarks and conditions. Now I will turn the call over to Joe Muscari. Joe?

Thanks, Rick. Good morning everyone. Last night, we released our first quarter financial results with earnings of $0.90 per share for the quarter and net income of $17.2 million, a record quarter in the company’s 15 year history. What I would like to do in the first part of this call is share with you some of the improvements we have seen as a result of the restructuring of our operations and further advancement of our major initiatives. As you can see from this chart, this quarter's results coming after an improved fourth quarter represents what I would characterize as pivotal, a significant improvement from the relatively flat performance track that MTI has been on for the previous five years. The belief that we are on a higher level of performances is further reinforced by the return on capital level achieved in the first quarter. The first quarter return on capital on an annualized rate basis was 8.4%, this compares to 6% in 2006 and 5.4% in the first quarter of 2007. This 40% improvement puts us on a very good footing to get above our cost of capital of 9% as quickly as possible. Let’s look at some of the reasons for this improvement, to begin with, our restructuring initiatives have continued on track and we are realizing the savings that we had targeted. We have executed multifaceted realignment of our operations well and we will continue to focus on it, until it’s complete. Our expense reduction initiative, which began in 2007, has also continued into 2008, in addition to removing $1 million of expenses associated with discontinued operations. Our GS&A decreased to 11.6% of sales in the first quarter a 10% decrease from the 12.7% rate experienced in the first quarter of 2007, this result in an 8%…

Thank you, Joe. Good morning everyone. I will now provide you with an overview of our consolidated and segment financial results for the first quarter and discuss the key market and operational elements of our performance. This first slide provides an overview of the company’s consolidated results for the quarter. Overall, the company reported earnings per diluted share of $0.90, $0.88 from continuing operations, representing the company’s strongest quarterly earnings performance in its history. Sales grew 5% to $12 million. Overall, volume decreases were recorded in all product line, but were more than offset by the favorable effect of foreign exchange, which was $12 million and a similar amount that was attributable to price increases. Operating income increased 20% to $27.1 million and represented 9.8% of sales including $1.4 million of additional restructuring cost. Operating income growth occurred mainly in the Paper PCC and refractors product line, and was derived primarily from the savings achieved to the execution of the restructuring program laid out in the third quarter of last year until much lesser extent a benefit from foreign exchange. Income from continuing operations, which includes the benefit of lower interest expense and a lower tax rate compared to last year, grew 34% to $16.8 million. Growth of total earnings per share by 61%, a $0.90 per share reflects improved income from continuing operations and an $0.11 per share benefit from discontinued operation primarily Synsil. Net income for the quarter was a record $17.2 million dollars, 59% higher than the $10.8 million reported last year. Our return on capital on an annualized quarterly basis was 8.4% as compared with 5.4% in the first quarter of last year. The ROC metric was driven primarily from the increase in net income with about one half percentage point of the improvement coming from…

Thanks, John. Before I turn it over to questions just a few additional thoughts that I would like to share with you. I have now been at MTI a little over a year. And in that timeframe I believe the company has been able to develop a new and reenergize sense of direction of a purpose. We are able to instill a new discipline on expenses and capital allocation reversing a downward trend the company had been on. Through our strategic review with subsequent restructuring process we have been able to build a stronger foundation upon which to build the future. All of our initiatives with the effort and support of our dedicated employees have contributed to the improvement we see in the first quarter results. We have a long way to go in terms of realizing the growth potential and value potential ahead of us. But, as you can see from our shareholder value checklist many things came together well for us in spite of the challenges and economic difficulties that confronted us in the first quarter as John and I have been discussing with you. As we look ahead, we will continue to face significant challenges, some will get tougher for us such as energy, raw material costs and consolidation. But, I believe we have are fundamentally better positioned to handle these challenges and continue the improvement process we have done last year to increase shareholder value. Now, let’s open it up for questions.

(Operator Instructions). Your first question comes from the line of Bob Koort with Goldman Sachs.

Thanks. Good morning.

Good morning Bob.

Joe, could you tell us who the counterparty was to the Chester sale and maybe what business they are in if there is hope if they could also buy the Texas facility?

Yes the counterparty was Mississippi line and I think they have looked at it but I am not sure that they will be party buying it. Doug, you have any thing to add around that.

No. The Mississippi line was the counterparty as with Chester early, but we have others also involved in the Chester, interest in the Chester and Cleveland facility right now.

And did you say, I didn’t quite catch you, John is it nominal procedures that meaningful?

I would call it meaningful for lower equity and about $4 million net in discontinued -- next quarter.

Got it. And then what’s the scope in terms of proceed range order magnitude from Mt. Vernon and Wellsville?

I think it’s too early to get into that we are not that close to closing yet, so we will just keep you updated as the data comes in.

Okay. And then Joe, obviously you made terrific progress here I am curious on the 9% return on capital I think in one year of original blueprints that was the 2010 target may be that looks little to early with your balance sheet being substantially under utilized, does it make sense to ramp up leverage and reduce your equity base in order to reduce your cost to capital?

Well, we are going to put a checklist on the shareholder checklist for the ROC, I am pleased with where we are, but keep in mind moving a return on a billion dollar capital basis is not an easy thing to do when we set the target we also had in vision that there would be capital expenditures in terms of some growth requirements coming. So, keep that in perspective as well as you think about the target but I am sufficed to say, I am pleased with the progress that we made in the first quarter, we now need to repeat it and stay on that track and then further lift it and that’s why I used the term “as quickly as possible” and that’s what we are really trying to do is to move about that, that’s very, very quickly.

In terms of utilizing your balance sheet more aggressively, either for return of capital or acquisition?

Yeah, I think that’s something I touched on in the last call. We are going to process of reviewing areas and companies that might make sense for us, as we reset our strategies and that’s certainly would be a possibility, Bob.

Your next question comes from line of Jeff Zekauskas with JP Morgan.

Hi, good morning.

Good morning.

When I look at your cost reductions and SG&A expense and R&D, I suppose if that impart the result of some of the head count rationalizations? All things just being equal, should your SG&A and R&D expenses follow that same trend and be lower in absolute dollars year-over-year for the next three quarters?

Yeah, we are focused pretty heavily on trying to make that happen you know that’s why I used the term continuous improvement. The whole company has worked hard beyond the restructuring program to reduce our expenses. We have a number of initiatives that we are focused on and including increased shared services inside the company as well as looking at some possible outsourcing, so I think the they way we look at this Jeff, is that it is something as a company we need to overtime continue to both drive down and leverage up as we increased sales, be able to do that in a way that we are better utilizing the resources that we have inside the company, so there are two aspects to it and part of it is to process building, process collapsing, and it involves a number things that actually would well beyond the restructuring.

You spoke of there being 15 to $20 million cost reduction effort this year. How much did you achieved in the first quarter of that 15 to 20?

Well, I am going to let John, cover this but the thing to keep in mind as you, in terms as you look at the, our cost savings really came from a number of different fronts, it was the restructuring. And I, we track very well in terms of catering what we in vision when we set that target for ourselves. But, we also had savings that came from expense reduction and another area that helped us and that we had a very good operating performance from PCC manufacturing during the quarter where we were able to get and capture some cost tables. So, you have it occurring in a number of different areas. And I think John, can probably give you a little further insight to it.

Okay.

Jeff, if you recall when we first set this target out there, we said that it would be in annualized rate of 15 to $20 million achieved in 2008 and through the first quarter as Joe pointed out from a number of areas, we were on track and that’s why we included in our 88% headline on the press release the 1.4 million charges we had in restructuring. The net effect that we are looking at to get this annualized rate is to achieve it by getting a savings but also recognizing these ongoing expenses to do it those expenses are associated with the carrying of some of the assets as well as some of the programs that we have to do training and development within our company to achieve these savings that we projected. And so, we were not all there yet. But, we have had a very good start into the program and right now we believe that the net savings of 15 to 20 will be achieved in the year and will be at the high end of that.

Okay, fine. Thanks for that. Okay, so I guess what you are saying is that you saved something like $4.4 million in the first quarter, is that what you just said to me?

Essentially, I think that would be a good way to look at it as a net on a net realized basis.

So, in terms of capital expenditures, what is the high return on capital projects that you hope to spend on this year, and I think your original idea was that you would spend $70 million and you spent $10 in the first quarter. So, I think that your capital expenditure plans are probably prudent back a little bit. But, what are the higher returns on capital projects and how much do you expect to spend?

Yeah, we do, based on what we are seeing right now, what we thought we would be spending and coming in later in the year it will be less. A little hard to call exactly right now, but the higher return projects tend to be in a couple of areas, one for us is the PCC business, our satellite business historically has provided very good return on capital and things were working on right now that are pointed in the same direction. There are cost savings project that we were involved in looking at that would give us higher returns and thinks that can give us relatively fast pay back and then selectively in the refractories business, again opportunities where we can invest in things that can provide relatively fast returns, but I say on balance it would be PCC growth and supported that growth, selective growth supported in refractories and cost savings across the board in all season.

I guess and thank you, and then lastly for John, so you both talk about 300,000 shares in the first quarter, it’s probably a good quarterly pace for the remainder of the year and I’ll see first on your tax rate and which is nice to say, is there more to be done is this is a good rate to use for the year, is there more tax plan you can do?

Well I thank you for mentioning the tax rate, I had a feeling you might. Something that perhaps take a look at without getting into laying out what our buyback rate will be, it’s helpful I think to look at, if you look at the fourth quarter last year and first quarter this year. The last two quarters we’ve actually spent more than 90% of our free cash flow in buying back stock and returning moneys to shareholders. So, I don’t know that I want to say that’s the pace beyond, but we will continue to do again try that, as I mentioned in the last call trying to take a balanced approach to what we are doing within the context of the economic conditions we have right now which are quite uncertain. As well as opportunities to invest for the company and so I think that from that standpoint that, you know that’s about us as good as sense as I can give you but I think the last two quarters reflect in part what we are open to doing when we think it next time. Tax rate, I am going to defer to my financial friends over here. John?

It is the tax rate Jeff is based on our forecast for full year as at 31.

So how do you get the rate down?

Some has to do with our mix, some has to do with the way we were managing our dividends.

Okay, alright. Thank you very much.

Your next question comes from line of Mike Judd with Greenwich Consulting.

Thank you. It sounds like, you know, it did you know, given the comments that you are making about the June quarter that you anticipate that it, you know, so sequentially it looks flattish compared to the March quarter, do you have any thoughts along those lines? I mean is that the right conclusion or is at the wrong conclusion?

I think that’s sort of a guidance principle that we have here is, sequentially we would normally say a bigger pickup in performance minerals, the process mineral side of the business here in United States. But, we don’t see signs of that yet. So we are very cautious about that element of it. And last quarter, we realized and we are going to have some higher cost moving into refractories business into this first quarter and the business did an excellent job of recovering some of that to pricing. Our pricing has been strong in all three of the business areas. So, what we see an increasing cost coming energy in terms of energy and raw material. So we do see pressure on the second quarter and we are not looking to see the kind of pickup you might have seen traditionally in the cycle.

Okay. And then separately you guys have obviously done a great job you know, improving the return on capital but, you know, most companies that are involved in the basic material space that has got issues around higher raw material and energy costs. In the past, you guys have you know, sort of lagged in the -- in terms of me how to pass those through with the new management team here is there any thought about, anything that you could do differently than perhaps you might have done in the past in terms of changing your pricing and/or rather anything else you could do?

Yeah, I think it’s fair to say, we literally have with the team here for the last year and then in the first quarter, have challenged pretty much low past the functions in paradigm since then we were continued into do that. Where we have opportunities on contract renewal to help better position for the future we are trying to do that, we have done some of that, but literally I say we were going to continue, because we need to look at all avenues, tap the full creativity of all the people we have that are focused on some of the different areas and because times are extremely challenging not that they are normally not challenging but, the things the both phase of things and rate of change and the rate of change relative to increases on our certainties in some of our markets these will be the China, supply positions that number of companies like Mintech and even other products that we get from China have, it does require a tremendous amount of focus, diligence and willingness to question and trying in things.

Okay. And then I see on your balance sheet under asset your inventory is up sequentially, is part of that deal foreign exchange or the others some seasonal factors in that and how do those inventory look from the volume perspective versus end of the year?

Yeah, we are up, some is currency but, as I touched on in my remarks the potential for supply interruptions from China due to the Olympics put us in a position where we felt that was prudent to bring materials then sooner from China than we otherwise would have. And that’s something actually that we are going to have to continue to a certain degree for the next several months.

Thanks for the help.

You bet.

Your next question comes from the line of Daniel Rizzo with Sidoti & Company.

Hi guys, you mentioned that you probably going to need to raise prices for the later in the year just given the way the raw material are trending, are you seeing any pushback from your customers on that?

Okay. And on filler fiber you said I think you said this is moving forward. Can you just provide as little color on what the progresses there?

Sure. I’m going to ask Ken to do that. Particularly he has just been with the major customers that were development work.

Okay. Alright, thanks guys.

Your next question comes from the line of Rosemarie Morbelli with Ingalls & Snyder.

Can you gives us a feel Joe, you talked about that you are going to concentrate some of your investments on those areas with highest return within refractory. Could you give us a better feel as to which those areas are?

Yeah, may I ask Bill to comment as well but, their areas where we can, let’s say effect cost savings quickly, investments in things such as films that allow us to have more control from a power supplies standpoint, so it will be -- I think that right now the primary areas are things that can help us from a supply chain and cost standpoint in another words help compress supply chain and ensure supply, as well as reduce cost. Bill you want to add to that.

Yeah, just to confirm what you mentioned Joe, is certainly our refractory business is one that you know, we are looking at finding new ways and means to improve our materials and you know continue to now attack cost as we move forward, and so certainly looking at investments in films particularly with one of our businesses in Europe where we’ve invested in a film in recent months. This is the area where we believe that we can drive the most effected use of our investment, you know, capabilities as well as driving higher levels of productivity at the same time. The other areas that we were looking at specifically, yes we have certainly a phase of maintenance that we need to mindful of. But in addition to that our metallurgical business is one that strong and in many respects it makes sense to play to our strongest suit.

Within that metallurgical business, are there any both on small acquisitions that out there in the market place that you could put your hands on?

Well there is always opportunity and it is something that Doug and rest of the corporate development team are assessing as we move forward and certainly, my focus currently is certainly operational to make our operations as best as they could be, and as Joe has echoed on previous calls that in many respects, you know we have entered into the period of significant assessment, and so from what I can see right now; yes there are opportunities but I think they may will be opportunistic.

Okay. Thanks for that. And then regarding the raw material cost going forward, I am assuming that you are mostly concerned about the cost of magnesia coming out of China, you had made an exhibition in Turkey; if my memory tells me right to get some more material there. Could you bring us up-to-date on that acquisition, which I think had some problems and what you think you can do in terms of improving that magnesia situation?

Okay. Well, I will certainly do my best to do that. Certainly from a raw material supply perspective, we are constantly searching for different sources. We use our internal R&D activities to reformulate in order to continue to provide the highest quality of material to our customers and also in a most cost effective manner. And, as it relates to the operation that we acquired in the late 2006 in Turkey certainly if we just going to look at it from the raw material supply perspective, it is our intend to utilize that business to satisfy not only the domestic Turkish market, but also to penetrate areas where we find attractive specifically continuing to penetrate in the middle east as well as eastern Europe. Looking at the businesses as it expands today after having been in the job for a little over 4 to 5 months here, clearly what we have is a business that has required a significant amount of effort as it pertains to integration, it’s certainly taken longer as we have an expectation as a company what you hear from Joe as echoed by all of the operating unit heads is that we raised the bar higher. And, so we have expectations to operate at high levels of performance as well. So, that coupled with integration and cultural change, it does take time. Combination of what we are attempting to do on the ground in terms of pricing, I have mentioned this in Europe penetration and operational excellence coupled with what we have put in relative to investment. We are seeing measured improvement and we will continue to drive hard this year and I expect that we will see the easy operations going from success to success going forward.

Thank you. And really if I may address one last question, given the making, further I understand all of your comments and different answers. Given the economic environment, do you expect the gross margin to improve further over the next three quarters or actually have we seen the gross margin in the first quarter of the highest level for the year given you know, what you talked about and then same question regarding SG&A, is that 9.4% of sales more or less the optimum number for 2008, I am not saying longer ranch it will come down but for ’08?

Yeah, on both fronts we are dedicated to improving, I can’t give you a number at this stage, but all I can tell you is that we are really focused on continuous improvement. The margin question is what obviously we want to continue to expand it but there are a lot of things as John mentioned coming against those right now, that we are going to continue try to offset. So, not probably specific enough answer to your question other than to say, you got a dedicated group of folks from business unit standpoint and have been working hard at expanding it for the last four, five, six months we are going to continue on that track. How it plays out in part is going to be an impact that lot, the rate of increases that we have coming out us and can we offset those safe enough that’s the challenge we have that Bill just talked about and that exist in each business.

Okay. Thank you.

Your next question comes from the line of Steve Schwartz with First Analysis.

Hi, good morning gentlemen.

Good morning.

John, if we could talk about again the benefits from restructuring and so forth you threw out a number earlier about $4.5 million net and so if we backed the cost in the quarter about $6 million do you have feel of that $6 million how much of that fell into the R&D category?

I guess the best way to answer that Steve, is to say that the first benefit that you know, the largest share of this initially comes from the depreciation from the right off of the assets that was the first one and that’s the benefit that you saw starting in the fourth quarter of last year. Coming into this year then we started with the benefits of the other restructuring elements of which R&D is really not a large item, the changes were made throughout discontinuing operations, ceasing business in some areas and the restructuring did throughout the business. So, in that context R&D is not a particularly large share of it. The reduction R&D that you see on the P&L reflects not only the cost of R&D pure basic development but also the reduction in the effort in the essential area.

Okay. If you know the reason I ask, Joe, you mentioned in your commentary that trial activity was solid and but we have seen in the past where when R&D expenses drop, it is a result of lower trail activity so, I am really trying to get a gauge thereof, you know, how much of the decline in R&D is due to restructuring benefit and how much might be due to lower trail activity.

Yeah, I think the way you do to think about it is that, last year I would have like to have spent more money on trial activities, which somehow which got moved in to this year we are beginning to you know get back on track and that had nothing, it actually had more to do with the customers wanted the delay because of availability of their machines to run the trials on, which means business for this particular customer working with that result is good. But as you think about R&D area the John touched on it is that since there is a whole area of development that were no longer spending money on other than in some ancillary areas that came out of some earlier research that we didn’t since, so that is and that is one area where we did have quite a bit of trial expense in the R&D expense. The other is in the course of last year, we worked it trying to get our R&D efforts aligned and make sure we have the right resources, the right scientist, the right technologist working in the right businesses. And we restructured so that our R&D organization is now within each business unit. Now we have an umbrella organization that technology lead team to pull up together, but that process actually allowed us to save some money particularly in that coatings R&D area where we are able to consolidate into one location from two and again primarily dedicated to develop that work. So, with the number of factors that lead you to with the absolute is today.

Okay. That’s definitely helpful. You already had a few questions on the raw materials but I wanted to ask can you give us an idea perhaps for the year and the quarters relatively, how much were raw material costs up in the first quarter and then for the subsequent quarters relative to that. Where do you expect on the fall?

Yeah, I do not have those numbers handy, John do you have a rough sense of that?

Sorry, I missed that part.

Just to your raw material cost for the first quarter, how much they were up?

I really don’t.

Okay. If we just call on an index basis, the first quarter a 100, where would you expect a second, third, and fourth quarters to fall because it sounds like you guys at least have a feel for what’s coming?

We do, we take Mag-Oxide, we are up roughly, for the first half I think we were up, about 8.5% just on Mag-Oxide, what is that tracking there I think we are in the neighbor, we are looking at least $4 million ballpark on Mag, but Mag has been coming in ways in terms of we have been seeing Mag increases starting last year and the last way of increased and started around November, December timeframe.

That’s right, not in November.

Timeframe it leveled.

Okay. And on estimates you have mentioned that this has been underperforming, can you give us an idea of in what areas it’s not up to your expectations?

Again from perspective of the ability to be able to you know produce tonnages at you know to support the local market, really what we have been trying to do is we have been trying to become much more self sufficient in terms of conversion of ore into center, and so in terms of performance what we are looking to do part of our strategy is would be investments that we have made in the additional capacity, is to provide us with the ability to you know to process more of our ore. So, we can produce, and so we have our center as opposed to being totally reliant on some of the third party activity that we have engaged in terms of purchasing raw material. So, in terms of performance or perhaps disappointment just a question of getting from A to B and how quickly you know we were getting there. We set a very aggressive timeline, and we had some setbacks for variety of reasons, which we are addressing. We have an excellent team on the ground that I have got pretty confidence in. And, we were the working the equation and moving forward, so it’s just really a question of the expectation we had, the trend that we had, and the ability to be able to execute in the timeframe.

Okay, great. Thanks guys, have a good weekend.

Thank you.

(Operator instructions). Your next question is from Richard O'Reilly with Standard & Poors.

Good morning still gentlemen. I couldn’t get the slides could find the files of the slides so, I might be asking you to repeat something but can you quantify the volume declines by that various product lines? I know you did PCC down to 4%, can you give us an idea what the other product lines were like?

Yeah, go ahead John.

In the sales chart which I appreciate you didn’t have, during those comments we identified refractories down around 2% and the process minerals group although they were we said they were down slightly, it was only slightly they had picked up because last year’s levels were also very, very weak. So, they can get it to operate at a relatively low level, much of a changed volume wise there.

Okay, good, good. So, clearly you know, just a compliment, clearly the actions you’ve done, no else you have really flowed to the bottom line. I mean if you’re having this head wind of row and the volume decline so, I got to compliment you guys. That’s it, thank you.

Thank you very much. I appreciate it.

Your next question is a follow up question from Jeff Zekauskas with JPMorgan.

Yes, good morning. [Cecil Crooks] for Jeff, how are you.

Hi Cecil, how are you doing?

I’m good. I have one question of clarification and a couple of follow-ups. Did you say that you consolidated the Belgium coat of PCC plant into Walsum (ph) at this point? And maybe can you just like comment you know, how this is progressing and you know, if you had made any progress into like, moving into like a more satellite type approach on the PCC coated, in the PCC coatings areas?

Sure, that was as you know, an integral part of the restructuring, I’m going to let, Ken just update you on where we are on the consolidations.

No, no problem Joe. In terms of the consolidation, yeah, everything now is operational in Walsum. And effectively you know, we are got still running trails with key customers with various new products. We are very pleased with the performance of our new open club 3,000 product you know, for the coated wood-free segment. As well as you know, we are continuing to work with select customers in the development of additional products. I better target it to other market segments within the coating, coated papers market. So, overall I would say you know, its slow but I feel that we are making progress and with what we’ve planned.

And then secondly can you roughly allocate you know, the $1.4 million restructuring cost amongst the PCC and the refractory segment? And maybe also just allocate the cost segments you achieved in the quarter, like $4-$5 million among PCC and refractories? Just merely rough terms like 60:40 or 50:50, how do I think about it?

Well, the first of all the expenses -- some of the expenses are on a more general area, we haven’t really split them out by individual product line that way we just consolidated into group. Some of the expenses go not only with the facilities but also with some of the training and development we have to do internally in order to achieve some of the changes we have to make in the company, operate the way we were in vision operating it.

How about the cost savings?

Well, on the savings I think we gave a little guidance back in -- what you get to derive basically in the previous call, when we disclosed the breakdown of the assets as I said a little earlier a major portion of the same came from the reduction, depreciation cost related to the shutdown of facility and the values at the facilities were laid out in the K and where we broke down, for example a major components in both Synsil. So part of it is down and discontinued ops from the PCC part for example which is still an operating key. So, you are really looking at component as the cost that effect not only P&L they also effect the below to line discontinued offline. So, your best sense of it is to follow the P&L area, if you want more clarity on that you know, you may press when you break a call and we can take you through the K.

Okay.

Probably, the best source.

And then on the refractory side in China, is that plan now right side or is it there where we wanted to be rather are you doing anything in the refractory business in China currently?

Yeah. Actually, it maybe a good way to phrase but I think we have been in process, worst part of the restructuring and some part of that is was the plan itself the other was the overhead structure that Bill has been at work on putting together when I asked Bill to kind of give us a brief update on what’s happening in China.

Okay. And the last question on working capital. What is your working capital targets for the year and you know will it be you know back end passes territory by the end of the year or made already by the second quarter, can you tell?

Yeah I think as mentioned to add on with what John was saying, we will have some series up to the Beijing Olympics where there will be some inventories build that will then be working off after that. Someone might carry into 2009.

But does net working capital will be direct to CO, will it be a benefit by the end of the year?

So its one more time, in 2007 the working capital, the working capital changes were positive $35 million, so for the year do you think it will be, you can work it down to at least being neutral where do you think it would still be may be slightly negative or positive?

From the receivables standpoint circa we should be able to make it neutral.

Okay.

From the inventory side as Joe mentioned we could still have in it as positive.

Okay. Thanks very much

Time for one more question.

Your last question comes from Bob Koort with Goldman Sachs.

Stanley Giles, sitting with Bob. I have just some quick follow up questions regarding raw materials cost and I was wondering do you had some of your -- are you going to add some of your key raw materials or your fuel cost and given the substantial headwinds there and our keys or some of your key raw materials from some low cost regions on a global basis?

In terms of sourcing some of them….

Yes, or you do some adding programs try to oxide some of the raw materials headwinds there?

We have down that in the past that’s one of the tools we have used. In terms of the raw materials such as Mag-Oxide most of it comes from China for us, the issue is, that’s also what’s causing some of the potential interruptions, slowness, tightness of the very tight market right now that’s something that drive up the cost as well the Chinese government has raised the export tax levels and also removing incentives for export which has contributed to the higher prices. So the answer to the question is yes, we are looking at other sources and we are going to continued to do that to mitigate the China supply position of the dominance of that supply position. We also are -- our procurement group is actively looking at in all corners that the world as I guess most companies are. But we have been in added that’s not new for us, we are in the process of actually setting up a low cost country center in China, it will be [Tinjin] we have had a person there for sometime. We are adding to that group for the very reason of being able to help provide lower cost materials that we, you know, lower than we historically have then able to get both on the material side as well as the equipment side.

Okay, got you. Right, the second question is, I am curious because you have been aggressive in terms of pushing higher price listing a relative you know relatively week demand environment on materials did the pricing benefit in 1Q of ’08 for the outside the higher raw materials cost?

I am sorry could you repeat that please.

I am wondering did the pricing benefit you got in the new first quarter of ’08 fully offset the higher materials costs you see?

No, not a 100%.

But most of that being offset most of the cost has been offset?

Well it depends on the material, we had areas franchise in the chemical area that we would not able of fully offset. I touched on that that’s what I meant in the remark that we are going to see some of the -- there will be additional impacts from some of the areas that we have started to see price increases from and lower those in a chemicals area and those we were in the first quarter able to offset we were going to try to deal with those in the second quarter, but they are continuing up.

And then, how quickly do you think you can close this raw materials causing pricing gap?

Well, again part of that gap can be closed. Another part for instance particularly in refractories we have Bill and his team working on reformulation that can substitute and so the part of it is pricing and the other part is substitute.

Okay. Thank you very much.

Gentlemen, do you have any closing remarks?

Yeah, I'd just like to again thank everybody for their questions. The quarter, as I indicated for us, I review, I called it pivotal, I do believe it is a turning point for the company. And we are off to a good start for the year, which is important. But we also have a lot coming at us. But as I said, I think we were much better positioned to deal with the things coming at us then we were last year, so many events. Thank you.

That concludes today’s call. Thank you for your interest in Minerals Technologies.

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