UNITED STATES SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.  20549


FORM
10-Q/A


(Amendment
No. 1)


(Mark
One)


x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
              SECURITIES
      EXCHANGE ACT OF 1934





For the
quarterly period endedJune 30,
2008


or


o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
              SECURITIES
      EXCHANGE ACT OF 1934





For the
transition period
from________________________to___________________________________________________





Commission
file number0-15661





AMCOL INTERNATIONAL CORPORATION


(Exact
name of registrant as specified in its charter)


Delaware
                
                36-0724340(State
      or other jurisdiction of incorporation or organization)
                
                (IRS
      Employer Identification No.)
 
 2870 Forbs Avenue, Hoffman Estates,
      Illinois
                60192(Address
      of principal executive offices)
                (Zip
      Code)
 
 (847) 851-1500
 (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 xNo
 ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company (as
defined in Rule 12b-2 of the Exchange Act).
 Large
      accelerated filer   ̈
              Accelerated
      filerx
              Non-accelerated
      filer   ̈Smaller
      reporting company  ̈
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).   Yes  ̈No
x
 
 Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
 
 Class
                  
                  Outstanding at July 31,
  2008(Common
      stock, $.01 par value)
                  
                  30,382,412
      Shares







AMCOL
International Corporation





Quarterly
Report on Form 10-Q/A





For
the Quarter Ended June 30, 2008





EXPLANATORY
NOTE




This Form
10-Q/A is being filed to amend our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2008 in order to reflect the restatement of our unaudited
consolidated financial statements and amendments to related disclosures,
including Management’s Discussion and Analysis of Financial Condition and
Results of Operations.  As previously reported in our Form 8-K filed
with the Securities and Exchange Commission on January 29, 2009 (the Form 8-K),
this restatement is required to properly account for the value of derivative
instruments held by Ashapura Minechem Limited, a publicly traded Indian company
in which we hold a 21% interest accounted for using the equity method of
accounting (Ashapura).  Note 2 of this Form 10-Q/A discloses
previously reported results as well as the restated results in our unaudited
condensed financial statements for the three month and six month periods ended
June 30, 2008.




In
addition, Item 6 of Part II has been updated to contain current certifications
of the Chief Executive Officer and the Chief Financial Officer as required by
Sections 302 and 906 of the Sarbanes–Oxley Act of 2002.




Except as
described above and as otherwise required to reflect the effects of the
restatement, we have not modified or updated other disclosures presented in the
original report on Form 10-Q.  Information not affected by the
restatement is unchanged and reflects the disclosure made at the time of the
original filing of the Form 10-Q on August 8, 2008.


2


AMCOL INTERNATIONAL
CORPORATION
 
 INDEX




Page No.Part I - Financial
    InformationItem
      1:
                                                          Financial
      StatementsCondensed
      Consolidated Balance Sheets –June
      30, 2008 and December 31, 2007
                                                          4Condensed
      Consolidated Statements of Operations –three
      and six months ended June 30, 2008 and 2007
                                                          6Condensed
      Consolidated Statements of Comprehensive Income –three
      and six months ended June 30, 2008 and 2007
                                                          7Condensed
      Consolidated Statements of Cash Flows –six
      months ended June 30, 2008 and 2007
                                                          8Notes
      to Condensed Consolidated Financial Statements
                                                          9Item
      2:
                                                          Management’s
      Discussion and Analysis of FinancialCondition
      and Results of Operations
                                                          24Part II - Other InformationItem
      1A:
                                                          Risk
      Factors
                                                          41Item
      6:
                                                          Exhibits
                                                          41


3




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


(In
thousands)


Item
1.  Financial Statements





June 30,
                                          
                                          
                                          December 31,2008
                                          
                                          
                                          2007ASSETS
                                          
                                          (Unaudited)(Restated)(Note 2)
                                          
                                          
                                          *Current
      assets:Cash
      and cash equivalents
                                          
                                          $
                                          21,982
                                          
                                          
                                          $
                                          25,282Accounts
      receivable, net
                                          
                                          
                                          212,999
                                          
                                          
                                          
                                          166,835Inventories
                                          
                                          
                                          109,642
                                          
                                          
                                          
                                          91,367Prepaid
      expenses
                                          
                                          
                                          13,279
                                          
                                          
                                          
                                          13,529Deferred
      income taxes
                                          
                                          
                                          5,035
                                          
                                          
                                          
                                          4,374Income
      tax receivable
                                          
                                          
                                          -
                                          
                                          
                                          
                                          2,768Other
                                          
                                          
                                          7,341
                                          
                                          
                                          
                                          475Total
      current assets
                                          
                                          
                                          370,278
                                          
                                          
                                          
                                          304,630Investment
      in and advances to affiliates and joint ventures
                                          
                                          
                                          57,909
                                          
                                          
                                          
                                          49,309Property,
      plant, equipment, and mineral rights and reserves:Land
      and mineral rights
                                          
                                          
                                          21,594
                                          
                                          
                                          
                                          21,394Depreciable
      assets
                                          
                                          
                                          403,682
                                          
                                          
                                          
                                          352,100425,276
                                          
                                          
                                          
                                          373,494Less:
      accumulated depreciation and depletion
                                          
                                          
                                          210,258
                                          
                                          
                                          
                                          196,904215,018
                                          
                                          
                                          
                                          176,590Other
      assets:Goodwill
                                          
                                          
                                          75,153
                                          
                                          
                                          
                                          59,840Intangible
      assets, net
                                          
                                          
                                          55,247
                                          
                                          
                                          
                                          41,257Deferred
      income taxes
                                          
                                          
                                          6,701
                                          
                                          
                                          
                                          5,513Other
      assets
                                          
                                          
                                          16,386
                                          
                                          
                                          
                                          15,007153,487
                                          
                                          
                                          
                                          121,617$
                                          796,692
                                          
                                          
                                          $
                                          652,146




Continued...


4


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (In
thousands)


June 30,
                                                    
                                                    
                                                    December
      31,2008
                                                    
                                                    
                                                    2007LIABILITIES AND STOCKHOLDERS' EQUITY
                                                    
                                                    (Unaudited)(Restated)(Note 2)
                                                    
                                                    
                                                    *Current
      liabilities:Accounts
      payable
                                                    
                                                    $
                                                    54,580
                                                    
                                                    
                                                    $
                                                    44,274Accrued
      liabilities
                                                    
                                                    
                                                    65,401
                                                    
                                                    
                                                    
                                                    57,833Total
      current liabilities
                                                    
                                                    
                                                    119,981
                                                    
                                                    
                                                    
                                                    102,107Long-term
      debt
                                                    
                                                    
                                                    249,541
                                                    
                                                    
                                                    
                                                    164,232Long-term
      debt - corporate building
                                                    
                                                    
                                                    11,081
                                                    
                                                    
                                                    
                                                    -Total
      long-term debt
                                                    
                                                    
                                                    260,622
                                                    
                                                    
                                                    
                                                    164,232Minority
      interests in subsidiaries
                                                    
                                                    
                                                    3,208
                                                    
                                                    
                                                    
                                                    327Pension
      liabilities
                                                    
                                                    
                                                    9,302
                                                    
                                                    
                                                    
                                                    7,559Other
      liabilities
                                                    
                                                    
                                                    25,525
                                                    
                                                    
                                                    
                                                    25,59838,035
                                                    
                                                    
                                                    
                                                    33,484Stockholders’
      equity:Common
      stock
                                                    
                                                    
                                                    320
                                                    
                                                    
                                                    
                                                    320Additional
      paid in capital
                                                    
                                                    
                                                    84,791
                                                    
                                                    
                                                    
                                                    81,599Retained
      earnings
                                                    
                                                    
                                                    271,948
                                                    
                                                    
                                                    
                                                    258,164Accumulated
      other comprehensive income
                                                    
                                                    
                                                    39,849
                                                    
                                                    
                                                    
                                                    33,248396,908
                                                    
                                                    
                                                    
                                                    373,331Less:Treasury
      stock
                                                    
                                                    
                                                    18,854
                                                    
                                                    
                                                    
                                                    21,008378,054
                                                    
                                                    
                                                    
                                                    352,323$
                                                    796,692
                                                    
                                                    
                                                    $
                                                    652,146





*Condensed
from audited financial statements.


The
accompanying notes are an integral part of these condensed consolidated
financial statements.


5


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 (In
thousands, except per share amounts)




Six Months Ended
                                            
                                            
                                            Three Months EndedJune 30,
                                            
                                            
                                            June 30,2008
                                            
                                            
                                            2007
                                            
                                            
                                            2008
                                            
                                            
                                            2007(Restated)
                                            
                                            
                                            
                                            
                                            
                                            (Restated)(Note 2)
                                            
                                            
                                            
                                            
                                            
                                            (Note 2)Net
      sales
                                            
                                            $
                                            425,256
                                            
                                            
                                            $
                                            346,182
                                            
                                            
                                            $
                                            233,847
                                            
                                            
                                            $
                                            182,454Cost
      of sales
                                            
                                            
                                            316,246
                                            
                                            
                                            
                                            252,892
                                            
                                            
                                            
                                            171,187
                                            
                                            
                                            
                                            132,663Gross
      profit
                                            
                                            
                                            109,010
                                            
                                            
                                            
                                            93,290
                                            
                                            
                                            
                                            62,660
                                            
                                            
                                            
                                            49,791General,
      selling and administrative expenses
                                            
                                            
                                            72,847
                                            
                                            
                                            
                                            59,459
                                            
                                            
                                            
                                            39,209
                                            
                                            
                                            
                                            30,654Operating
      profit
                                            
                                            
                                            36,163
                                            
                                            
                                            
                                            33,831
                                            
                                            
                                            
                                            23,451
                                            
                                            
                                            
                                            19,137Other
      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 (loss) from affiliates and joint
      ventures
                                            
                                            
                                            31,213
                                            
                                            
                                            
                                            29,564
                                            
                                            
                                            
                                            21,137
                                            
                                            
                                            
                                            16,979Income
      tax expense
                                            
                                            
                                            8,383
                                            
                                            
                                            
                                            7,501
                                            
                                            
                                            
                                            5,666
                                            
                                            
                                            
                                            4,190Income
      before income (loss) from affiliates andjoint
      ventures
                                            
                                            
                                            22,830
                                            
                                            
                                            
                                            22,063
                                            
                                            
                                            
                                            15,471
                                            
                                            
                                            
                                            12,789Income
      (loss) from affiliates and joint ventures
                                            
                                            
                                            625
                                            
                                            
                                            
                                            4,032
                                            
                                            
                                            
                                            (637
                                            )
                                            
                                            
                                            2,466Income
      from continuing operations
                                            
                                            
                                            23,455
                                            
                                            
                                            
                                            26,095
                                            
                                            
                                            
                                            14,834
                                            
                                            
                                            
                                            15,255Income
      (loss) from discontinued operations, net of tax
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (286
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (286
                                            )Net
      income
                                            
                                            $
                                            23,455
                                            
                                            
                                            $
                                            25,809
                                            
                                            
                                            $
                                            14,834
                                            
                                            
                                            $
                                            14,969Weighted
      average common shares outstanding
                                            
                                            
                                            30,336
                                            
                                            
                                            
                                            30,154
                                            
                                            
                                            
                                            30,413
                                            
                                            
                                            
                                            30,155Weighted
      average common and common equivalent shares outstanding
                                            
                                            
                                            30,938
                                            
                                            
                                            
                                            30,951
                                            
                                            
                                            
                                            30,993
                                            
                                            
                                            
                                            30,879Basic
      earnings per share:Continuing
      operations
                                            
                                            $
                                            0.77
                                            
                                            
                                            $
                                            0.87
                                            
                                            
                                            $
                                            0.49
                                            
                                            
                                            $
                                            0.51Discontinued
      operations
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (0.01
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (0.01
                                            )Basic
      earnings per share
                                            
                                            $
                                            0.77
                                            
                                            
                                            $
                                            0.86
                                            
                                            
                                            $
                                            0.49
                                            
                                            
                                            $
                                            0.50Diluted
      earnings per share:Continuing
      operations
                                            
                                            $
                                            0.76
                                            
                                            
                                            $
                                            0.84
                                            
                                            
                                            $
                                            0.48
                                            
                                            
                                            $
                                            0.49Discontinued
      operations
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (0.01
                                            )
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (0.01
                                            )Diluted
      earnings per share
                                            
                                            $
                                            0.76
                                            
                                            
                                            $
                                            0.83
                                            
                                            
                                            $
                                            0.48
                                            
                                            
                                            $
                                            0.48Dividends
      declared per share
                                            
                                            $
                                            0.32
                                            
                                            
                                            $
                                            0.28
                                            
                                            
                                            $
                                            0.16
                                            
                                            
                                            $
                                            0.14





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


6


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
 (In
thousands)




Six Months Ended
                      
                      
                      Three Months EndedJune 30,
                      
                      
                      June 30,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007(Restated)
                      
                      
                      
                      
                      
                      (Restated)(Note 2)
                      
                      
                      
                      
                      
                      (Note 2)Net
      income
                      
                      $
                      23,455
                      
                      
                      $
                      25,809
                      
                      
                      $
                      14,834
                      
                      
                      $
                      14,969Other
      comprehensive income (loss):Foreign
      currency translation adjustment
                      
                      
                      6,674
                      
                      
                      
                      4,567
                      
                      
                      
                      1,435
                      
                      
                      
                      3,162Unrealized
      gain (loss) on interest rate swap agreement
                      
                      
                      (3
                      )
                      
                      
                      -
                      
                      
                      
                      2,109
                      
                      
                      
                      -Other
                      
                      
                      (70
                      )
                      
                      
                      140
                      
                      
                      
                      (663
                      )
                      
                      
                      55Comprehensive
      income
                      
                      $
                      30,056
                      
                      
                      $
                      30,516
                      
                      
                      $
                      17,715
                      
                      
                      $
                      18,186





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


7


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In
thousands)




Six Months EndedJune 30,2008
                        
                        
                        2007(Restated)(Note 2)Cash
      flow from operating activities:Net
      income
                        
                        $
                        23,455
                        
                        
                        $
                        25,809Adjustments
      to reconcile from net income to net cash provided by (used in) operating
      activities:Depreciation,
      depletion, and amortization
                        
                        
                        15,747
                        
                        
                        
                        13,805Other
      non-cash charges
                        
                        
                        (181
                        )
                        
                        
                        (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
                        
                        
                        
                        7,289Increase  (decrease)
      in noncurrent liabilities
                        
                        
                        1,416
                        
                        
                        
                        7,783Net
      cash provided by (used in) operating activities
                        
                        
                        (2,012
                        )
                        
                        
                        25,586Cash
      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
                        )
                        
                        
                        2,425Net
      cash used in investing activities
                        
                        
                        (88,756
                        )
                        
                        
                        (62,881
                        )Cash
      flow from financing activities:Net
      change in outstanding debt
                        
                        
                        84,820
                        
                        
                        
                        55,564Net
      change in outstanding debt - corporate building
                        
                        
                        11,081
                        
                        
                        
                        -Proceeds
      from sales of treasury stock
                        
                        
                        1,272
                        
                        
                        
                        1,283Purchases
      of treasury stock
                        
                        
                        (2,062
                        )
                        
                        
                        (6,115
                        )Dividends
                        
                        
                        (9,671
                        )
                        
                        
                        (8,393
                        )Excess
      tax benefits from stock-based compensation
                        
                        
                        913
                        
                        
                        
                        927Net
      cash provided by financing activities
                        
                        
                        86,353
                        
                        
                        
                        43,266Effect
      of foreign currency rate changes on cash
                        
                        
                        1,115
                        
                        
                        
                        1,396Net
      increase (decrease) in cash and cash equivalents
                        
                        
                        (3,300
                        )
                        
                        
                        7,367Cash
      and cash equivalents at beginning of period
                        
                        
                        25,282
                        
                        
                        
                        17,805Cash
      and cash equivalents at end of period
                        
                        $
                        21,982
                        
                        
                        $
                        25,172





The
accompanying notes are an integral part of these condensed consolidated
financial statements.


8


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)




Note
1:             
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Company
Operations





AMCOL International Corporation (the
Company) operates in five segments:  minerals, environmental, oilfield
services, transportation and corporate.  The minerals segment mines,
processes and distributes clays and products with similar applications to
various industrial and consumer markets.  The environmental segment
processes and distributes clays and products with similar applications for use
as a moisture barrier in commercial construction, landfill liners and in a
variety of other industrial and commercial applications.  The oilfield
services segment provides onshore and offshore water treatment filtration,
pipeline separation, waste fluid treatment, rental tools, coil tubing and well
testing data services for the oil and gas industry.  The
transportation segment includes a long-haul trucking business and a freight
brokerage business, which provide services to our other segments as well as
third-party customers.  Intersegment sales are insignificant, other
than intersegment shipping, which is eliminated in the corporate segment. The
composition of our revenues by segment is as follows:




Six Months Ended
                    
                    
                    Three Months EndedJune 30,
                    
                    
                    June 30,2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007Minerals
                    
                    
                    49
                    %
                    
                    
                    50
                    %
                    
                    
                    46
                    %
                    
                    
                    47
                    %Environmental
                    
                    
                    32
                    %
                    
                    
                    33
                    %
                    
                    
                    33
                    %
                    
                    36
                    %Oilfield
      services
                    
                    
                    15
                    %
                    
                    
                    13
                    %
                    
                    
                    16
                    %
                    
                    
                    13
                    %Transportation
                    
                    
                    7
                    %
                    
                    
                    7
                    %
                    
                    
                    7
                    %
                    
                    
                    7
                    %Intersegment
      shipping
                    
                    
                    -3
                    %
                    
                    
                    -3
                    %
                    
                    
                    -2
                    %
                    
                    
                    -3
                    %100
                    %
                    
                    
                    100
                    %
                    
                    
                    100
                    %
                    
                    
                    100
                    %





Further discussion of segment
information is included in Note 5, “Business Segment Information.”





Basis
of Presentation





The financial information included
herein has been prepared by management and, other than the condensed
consolidated balance sheet as of December 31, 2007, is unaudited.  The
condensed consolidated balance sheet as of December 31, 2007 has been derived
from, but does not include all of the disclosures contained in, the audited
consolidated financial statements for the year ended December 31,
2007.  The information furnished herein includes all adjustments that
are, in our opinion, necessary for a fair presentation of our results of
operations and cash flows for the interim periods ended June 30, 2008 and 2007,
and our financial position as of June 30, 2008, and all such adjustments are of
a normal recurring nature.  The accompanying condensed consolidated
financial information should be read in conjunction with the consolidated
financial statements and related notes included in our Annual Report on Form
10-K for the year ended December 31, 2007.


9


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America (“US GAAP”) requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results may differ from those
estimates.


The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year for a variety of reasons, including the seasonality of our
environmental segment, which varies due to the seasonal nature of the
construction industry, and our oilfield services segment, which varies due to
seasonality of weather in its various markets.





New
Accounting Standards





In
September 2006, Financial Accounting Standard Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“FAS
157”).  This statement defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. In February 2008, FASB issued
FASB Staff Position FAS157-2, Effective Date of FASB Statement No.
157,which delays our effective date of FAS 157 to January 1, 2009, for nonfinancial assets and
nonfinancial liabilities, except for items that are recognized or disclosed at
fair value in the financial statements on a recurring basis.  Therefore,
FAS 157 applies to financial instruments, and items that are recognized or
disclosed at fair value in an entity’s financial statements on a recurring
basis. The adoption of FAS 157 on January 1, 2008 did not have a material impact
on our financial statements.





In March 2008, the FASB issued SFAS No.
161, “Disclosures about
Derivative Instruments and Hedging Activities an amendment of FASB Statement No.
133(“FAS 161”).This standard requires enhanced disclosures about an entity’s derivative
and hedging activities and thereby improves the transparency of financial
reporting. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for under Statement No. 133 and its
related interpretations, and (c) how derivative instruments and related hedged
items affect an entity’s financial position, financial performance, and cash
flows. We do not believe this standard will have a material impact on our
financial statements when we adopt it on January 1, 2009.




In April 2008, the FASB issued FASB
Staff Position (“FSP”) No. 142-3, “Determination of the Useful Life of
Intangible Assets,” (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors
that should be considered in developing renewal or extension assumptions used to
determine the useful life of a recognized intangible asset under FASB Statement
No. 142, “Goodwill and Other
Intangible Assets” (“SFAS 142”). This FSP intends to improve the
consistency between the useful life of a recognized intangible asset under SFAS
142 and the period of expected cash flows used to measure the fair value of the
asset under FASB Statement No. 141(R), “Business Combinations,” and
other U.S. generally accepted accounting principles. We do not believe this
standard will have a material impact on our financial statements when we adopt
it on January 1, 2009.




10


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)


In May 2008, the FASB issued SFAS No.
162, “The Hierarchy of
Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 is
intended to improve financial reporting by identifying a consistent framework,
or hierarchy, for selecting accounting principles to be used in preparing
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles in the United States.
This statement will be effective 60 days following the Securities and Exchange
Commission’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles. We do not
believe this standard will have a material impact on our financial statements
when we adopt it.




Note
2:              RESTATEMENT




Our condensed financial statements as
of and for the six and three month periods ended June 30, 2008 have been
restated to correct an error relating to the fair value of derivative
instruments held by Ashapura Minechem Limited, a publicly traded Indian company
(Ashapura). We hold a 21% interest in Ashapura and account for this investment
using the equity method of accounting. Historically, Ashapura has entered into a
variety of derivative contracts to hedge foreign currency exposure on its
receivables and payables. These derivative contracts primarily relate to the
conversion of currencies between the United States Dollar (USD) and the Indian
Rupee. Unlike Indian accounting principles, US GAAP requires that we record the
fair value of these derivative contracts in our balance sheet as of the end of
each reporting period and record the changes in such fair values in our
statement of operations.  In the course of preparing our financial
statements for the year ended December 31, 2008, we discovered that we have not
included some of Ashapura’s derivative contracts in the fair value calculations
and have not correctly computed the fair value of their other derivative
contracts.




The
adjustment to correct the error, which is a non-cash charge, had the effect of
decreasing Income from affiliated and joint ventures by $3,018 for the six and
three month periods ended June 30, 2008, increasing Accumulated other
comprehensive income by $29, decreasing Investment in and advances to affiliates
and joint ventures by $4,615, and increasing long term Deferred income tax
assets by $1,626 for the period ended June 30, 2008.




11


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)


The
adjustment previously discussed affects the condensed consolidated balance sheet
at June 30, 2008 as illustrated below:




June 30, 2008(unaudited)ASSETSAs PreviouslyReported
                                    
                                    
                                    Adjustment
                                    
                                    
                                    As RestatedCurrent
      assets:Cash
      and cash equivalents
                                    
                                    $
                                    21,982
                                    
                                    
                                    
                                    
                                    
                                    $
                                    21,982Accounts
      receivable, net
                                    
                                    
                                    212,999
                                    
                                    
                                    
                                    
                                    
                                    
                                    212,999Inventories
                                    
                                    
                                    109,642
                                    
                                    
                                    
                                    
                                    
                                    
                                    109,642Prepaid
      expenses
                                    
                                    
                                    13,279
                                    
                                    
                                    
                                    
                                    
                                    
                                    13,279Deferred
      income taxes
                                    
                                    
                                    5,035
                                    
                                    
                                    
                                    
                                    
                                    
                                    5,035Income
      tax receivable
                                    
                                    
                                    -
                                    
                                    
                                    
                                    
                                    
                                    
                                    -Other
                                    
                                    
                                    7,341
                                    
                                    
                                    
                                    
                                    
                                    
                                    7,341Total
      current assets
                                    
                                    
                                    370,278
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    370,278Investment
      in and advances to affiliates and joint ventures
                                    
                                    
                                    62,524
                                    
                                    
                                    
                                    (4,615
                                    )
                                    
                                    
                                    57,909Property,
      plant, equipment, and mineral rights and reserves:Land
      and mineral rights
                                    
                                    
                                    21,594
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    21,594Depreciable
      assets
                                    
                                    
                                    403,682
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    403,682425,276
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    425,276Less:
      accumulated depreciation and depletion
                                    
                                    
                                    210,258
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    210,258215,018
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    215,018Other
      assets:Goodwill
                                    
                                    
                                    75,153
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    75,153Intangible
      assets, net
                                    
                                    
                                    55,247
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    55,247Deferred
      income taxes
                                    
                                    
                                    5,075
                                    
                                    
                                    
                                    1,626
                                    
                                    
                                    
                                    6,701Other
      assets
                                    
                                    
                                    16,386
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    16,386151,861
                                    
                                    
                                    
                                    1,626
                                    
                                    
                                    
                                    153,487$
                                    799,681
                                    
                                    
                                    $
                                    (2,989
                                    )
                                    
                                    $
                                    796,692




Continued...


12


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)




June 30, 2008(unaudited)LIABILITIES
      AND STOCKHOLDERS' EQUITYAs PreviouslyReported
                                                          
                                                          
                                                          Adjustment
                                                          
                                                          
                                                          As RestatedCurrent
      liabilities:Accounts
      payable
                                                          
                                                          $
                                                          54,580
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          $
                                                          54,580Accrued
      liabilities
                                                          
                                                          
                                                          65,401
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          65,401Total
      current liabilities
                                                          
                                                          
                                                          119,981
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          119,981Long-term
      debt
                                                          
                                                          
                                                          249,541
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          249,541Long-term
      debt - corporate building
                                                          
                                                          
                                                          11,081
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          11,081Total
      long-term debt
                                                          
                                                          
                                                          260,622
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          260,622Minority
      interests in subsidiaries
                                                          
                                                          
                                                          3,208
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          3,208Pension
      liabilities
                                                          
                                                          
                                                          9,302
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          9,302Other
      liabilities
                                                          
                                                          
                                                          25,525
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          25,52538,035
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          38,035Stockholders’
      equity:Common
      stock
                                                          
                                                          
                                                          320
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          320Additional
      paid in capital
                                                          
                                                          
                                                          84,791
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          84,791Retained
      earnings
                                                          
                                                          
                                                          274,966
                                                          
                                                          
                                                          
                                                          (3,018
                                                          )
                                                          
                                                          
                                                          271,948Accumulated
      other comprehensive income
                                                          
                                                          
                                                          39,820
                                                          
                                                          
                                                          
                                                          29
                                                          
                                                          
                                                          
                                                          39,849399,897
                                                          
                                                          
                                                          
                                                          (2,989
                                                          )
                                                          
                                                          
                                                          396,908Less:Treasury
      stock
                                                          
                                                          
                                                          18,854
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          
                                                          18,854381,043
                                                          
                                                          
                                                          
                                                          (2,989
                                                          )
                                                          
                                                          
                                                          378,054$
                                                          799,681
                                                          
                                                          
                                                          $
                                                          (2,989
                                                          )
                                                          
                                                          $
                                                          796,692




13


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)


The adjustment discussed previously
also affects the condensed consolidated statement of operations for the six and
three month periods ended June 30, 2008 as illustrated below:




Six Months EndedJune 30, 2008As PreviouslyReported
                                      
                                      
                                      Adjustment
                                      
                                      
                                      As RestatedNet
      sales
                                      
                                      $
                                      425,256
                                      
                                      
                                      
                                      
                                      
                                      $
                                      425,256Cost
      of sales
                                      
                                      
                                      316,246
                                      
                                      
                                      
                                      
                                      
                                      
                                      316,246Gross
      profit
                                      
                                      
                                      109,010
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      109,010General,
      selling and administrative expenses
                                      
                                      
                                      72,847
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      72,847Operating
      profit
                                      
                                      
                                      36,163
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      36,163Other
      income (expense):Interest
      expense, net
                                      
                                      
                                      (5,238
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (5,238
                                      )Other,
      net
                                      
                                      
                                      288
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      288(4,950
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (4,950
                                      )Income
      before income taxes and income from affiliates and joint
      ventures
                                      
                                      
                                      31,213
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      31,213Income
      tax expense
                                      
                                      
                                      8,383
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      8,383Income
      before income from affiliates andjoint
    ventures
                                      
                                      
                                      22,830
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      22,830Income
      from affiliates and joint ventures
                                      
                                      
                                      3,643
                                      
                                      
                                      
                                      (3,018
                                      )
                                      
                                      
                                      625Income
      from continuing operations
                                      
                                      
                                      26,473
                                      
                                      
                                      
                                      (3,018
                                      )
                                      
                                      
                                      23,455Income
      (loss) from discontinued operations, net of tax
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -Net
      income
                                      
                                      $
                                      26,473
                                      
                                      
                                      $
                                      (3,018
                                      )
                                      
                                      $
                                      23,455Weighted
      average common shares outstanding
                                      
                                      
                                      30,336
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      30,336Weighted
      average common and common equivalent shares outstanding
                                      
                                      
                                      30,938
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      30,938Basic
      earnings per share:Continuing
      operations
                                      
                                      $
                                      0.87
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      0.77Discontinued
      operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -Basic
      earnings per share
                                      
                                      $
                                      0.87
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      0.77Diluted
      earnings per share:Continuing
      operations
                                      
                                      $
                                      0.86
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      0.76Discontinued
      operations
                                      
                                      
                                      -
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      -Diluted
      earnings per share
                                      
                                      $
                                      0.86
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      0.76Dividends
      declared per share
                                      
                                      $
                                      0.32
                                      
                                      
                                      
                                      
                                      
                                      
                                      $
                                      0.32




Continued...


14


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)




Three Months EndedJune 30, 2008As PreviouslyReported
                            
                            
                            Adjustment
                            
                            
                            As RestatedNet
      sales
                            
                            $
                            233,847
                            
                            
                            
                            
                            
                            $
                            233,847Cost
      of sales
                            
                            
                            171,187
                            
                            
                            
                            
                            
                            
                            171,187Gross
      profit
                            
                            
                            62,660
                            
                            
                            
                            -
                            
                            
                            
                            62,660General,
      selling and administrative expenses
                            
                            
                            39,209
                            
                            
                            
                            
                            
                            
                            
                            39,209Operating
      profit
                            
                            
                            23,451
                            
                            
                            
                            -
                            
                            
                            
                            23,451Other
      income (expense):Interest
      expense, net
                            
                            
                            (2,837
                            )
                            
                            
                            
                            
                            
                            
                            (2,837
                            )Other,
      net
                            
                            
                            523
                            
                            
                            
                            
                            
                            
                            
                            523(2,314
                            )
                            
                            
                            -
                            
                            
                            
                            (2,314
                            )Income
      before income taxes and income (loss) from affiliates and joint
      ventures
                            
                            
                            21,137
                            
                            
                            
                            
                            
                            
                            
                            21,137Income
      tax expense
                            
                            
                            5,666
                            
                            
                            
                            
                            
                            
                            
                            5,666Income
      before income (loss) from affiliates and joint ventures
                            
                            
                            15,471
                            
                            
                            
                            -
                            
                            
                            
                            15,471Income
      (loss) from affiliates and joint ventures
                            
                            
                            2,381
                            
                            
                            
                            (3,018
                            )
                            
                            
                            (637
                            )Income
      from continuing operations
                            
                            
                            17,852
                            
                            
                            
                            (3,018
                            )
                            
                            
                            14,834Income
      (loss) from discontinued operations, net of tax
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            -Net
      income
                            
                            $
                            17,852
                            
                            
                            $
                            (3,018
                            )
                            
                            $
                            14,834Weighted
      average common shares outstanding
                            
                            
                            30,413
                            
                            
                            
                            
                            
                            
                            
                            30,413Weighted
      average common and common equivalent shares outstanding
                            
                            
                            30,993
                            
                            
                            
                            
                            
                            
                            
                            30,993Basic
      earnings per share:Continuing
      operations
                            
                            $
                            0.59
                            
                            
                            
                            
                            
                            
                            $
                            0.49Discontinued
      operations
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            -Basic
      earnings per share
                            
                            $
                            0.59
                            
                            
                            
                            
                            
                            
                            $
                            0.49Diluted
      earnings per share:Continuing
      operations
                            
                            $
                            0.58
                            
                            
                            
                            
                            
                            
                            $
                            0.48Discontinued
      operations
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            -Diluted
      earnings per share
                            
                            $
                            0.58
                            
                            
                            
                            
                            
                            
                            $
                            0.48Dividends
      declared per share
                            
                            $
                            0.16
                            
                            
                            
                            
                            
                            
                            $
                            0.16




15


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)


The
effect of the adjustment previously discussed in this Note 2 on the condensed
consolidated statement of comprehensive income for the six and three month
periods ended June 30, 2008, when compared to the amounts originally reported,
is as follows:





Six Months Ended
                      
                      
                      Three Months EndedJune 30,
                      
                      
                      June 30,2008
                      
                      
                      2008
                      
                      
                      2008
                      
                      
                      2008(As Reported)
                      
                      
                      (As Restated)
                      
                      
                      (As Reported)
                      
                      
                      (As Restated)(Note 2)
                      
                      
                      
                      
                      
                      (Note 2)Net
      income
                      
                      $
                      26,473
                      
                      
                      $
                      23,455
                      
                      
                      $
                      17,852
                      
                      
                      $
                      14,834Other
      comprehensive income (loss):Foreign
      currency translation adjustment
                      
                      
                      6,645
                      
                      
                      
                      6,674
                      
                      
                      
                      1,406
                      
                      
                      
                      1,435Unrealized
      gain (loss) on interest rate swap agreement
                      
                      
                      (3
                      )
                      
                      
                      (3
                      )
                      
                      
                      2,109
                      
                      
                      
                      2,109Other
                      
                      
                      (70
                      )
                      
                      
                      (70
                      )
                      
                      
                      (663
                      )
                      
                      
                      (663
                      )Comprehensive
      income
                      
                      $
                      33,045
                      
                      
                      $
                      30,056
                      
                      
                      $
                      20,704
                      
                      
                      $
                      17,715


16


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (In
thousands, except share and per share amounts)




The
effect of the adjustment previously discussed in this Note 2 on the condensed
consolidated statement of cash flows for the six month period ended June 30,
2008, when compared to the amounts originally reported, is as
follows:





Six Months EndedJune 30,2008
                      
                      
                      2008As Reported
                      
                      
                      (As Restated)(Note 2)Cash
      flow from operating activities:Net
      income
                      
                      $
                      26,473
                      
                      
                      $
                      23,455Adjustments
      to reconcile from net income to net cash provided by (used in) operating
      activities:Depreciation,
      depletion, and amortization
                      
                      
                      15,747
                      
                      
                      
                      15,747Other
      non-cash charges
                      
                      
                      (3,199
                      )
                      
                      
                      (181
                      )Changes
      in assets and liabilities, net of effects of acquisitions:Decrease
      (increase) in current assets
                      
                      
                      (53,864
                      )
                      
                      
                      (53,864
                      )Decrease
      (increase) in noncurrent assets
                      
                      
                      (650
                      )
                      
                      
                      (650
                      )Increase
      (decrease) in current liabilities
                      
                      
                      12,065
                      
                      
                      
                      12,065Increase  (decrease)
      in noncurrent liabilities
                      
                      
                      1,416
                      
                      
                      
                      1,416Net
      cash provided by (used in) operating activities
                      
                      
                      (2,012
                      )
                      
                      
                      (2,012
                      )Cash
      flow from investing activities:Capital
      expenditures
                      
                      
                      (23,313
                      )
                      
                      
                      (23,313
                      )Capital
      expenditures - corporate building
                      
                      
                      (6,273
                      )
                      
                      
                      (6,273
                      )Acquisitions,
      net of cash
                      
                      
                      (42,257
                      )
                      
                      
                      (42,257
                      )Investments
      in and advances to affiliates and joint ventures
                      
                      
                      (9,715
                      )
                      
                      
                      (9,715
                      )Investments
      in restricted cash
                      
                      
                      (1,908
                      )
                      
                      
                      (1,908
                      )Other
                      
                      
                      (5,290
                      )
                      
                      
                      (5,290
                      )Net
      cash used in investing activities
                      
                      
                      (88,756
                      )
                      
                      
                      (88,756
                      )Cash
      flow from financing activities:Net
      change in outstanding debt
                      
                      
                      84,820
                      
                      
                      
                      84,820Net
      change in outstanding debt - corporate building
                      
                      
                      11,081
                      
                      
                      
                      11,081Proceeds
      from sales of treasury stock
                      
                      
                      1,272
                      
                      
                      
                      1,272Purchases
      of treasury stock
                      
                      
                      (2,062
                      )
                      
                      
                      (2,062
                      )Dividends
                      
                      
                      (9,671
                      )
                      
                      
                      (9,671
                      )Excess
      tax benefits from stock-based compensation
                      
                      
                      913
                      
                      
                      
                      913Net
      cash provided by financing activities
                      
                      
                      86,353
                      
                      
                      
                      86,353Effect
      of foreign currency rate changes on cash
                      
                      
                      1,115
                      
                      
                      
                      1,115Net
      increase (decrease) in cash and cash equivalents
                      
                      
                      (3,300
                      )
                      
                      
                      (3,300
                      )Cash
      and cash equivalents at beginning of period
                      
                      
                      25,282
                      
                      
                      
                      25,282Cash
      and cash equivalents at end of period
                      
                      $
                      21,982
                      
                      
                      $
                      21,982


17


AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)




Note
3:         EARNINGS PER
SHARE




The table below provides further share
information used in computing our earnings per share for the periods presented
herein.  Basic earnings per share was computed by dividing net income
by the weighted average number of common shares outstanding during each
period.  Diluted earnings per share was computed by dividing net income by
the weighted average common shares outstanding after consideration of the
dilutive effect of stock options outstanding during each period.





Six
      Months Ended
                              June
      30,
                            
                            
                            Three
      Months Ended
                              June
      30,2008
                            
                            
                            2007
                            
                            
                            2008
                            
                            
                            2007Weighted
      average number of common shares outstanding
                            
                            
                            30,336,315
                            
                            
                            
                            30,154,043
                            
                            
                            
                            30,412,832
                            
                            
                            
                            30,155,216Dilutive
      impact of stock options
                            
                            
                            602,087
                            
                            
                            
                            796,962
                            
                            
                            
                            580,598
                            
                            
                            
                            723,851Weighted
      average number of common and common equivalent shares outstanding for the
      period
                            
                            
                            30,938,402
                            
                            
                            
                            30,951,005
                            
                            
                            
                            30,993,430
                            
                            
                            
                            30,879,067Number
      of common shares outstanding at the end of the period
                            
                            
                            30,380,915
                            
                            
                            
                            29,937,103
                            
                            
                            
                            30,380,915
                            
                            
                            
                            29,937,103Weighted
      average number of anti-dilutive shares excluded from the computation of
      diluted earnings per share
                            
                            
                            640,207
                            
                            
                            
                            268,875
                            
                            
                            
                            18,333
                            
                            
                            
                            657,309





Note
4:         ADDITIONAL BALANCE SHEET
INFORMATION





Our inventories at June 30, 2008 and
December 31, 2007 are comprised of the following components:





June
      30,
                        2008
                      
                      
                      December
      31,
                        2007Crude
      stockpile inventories
                      
                      $
                      37,100
                      
                      
                      $
                      25,601In-process
      and finished goods inventories
                      
                      
                      43,283
                      
                      
                      
                      39,473Other
      raw material, container, and supplies inventories
                      
                      
                      29,259
                      
                      
                      
                      26,293$
                      109,642
                      
                      
                      $
                      91,367





We mine various minerals using a
surface mining process that requires the removal of overburden.  Under
various governmental regulations, we are obligated to restore the land
comprising each mining site to its original condition at the completion of
mining activity.  The obligation is adjusted to reflect the passage of
time and changes in estimated future cash outflows.  A reconciliation
of the activity within our reclamation obligation is as
follows:


18




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)





Six
      Months EndedJune30,2008
                        
                        
                        2007Balance
      at beginning of period
                        
                        $
                        5,699
                        
                        
                        $
                        5,715Settlement
      of obligations
                        
                        
                        (625
                        )
                        
                        
                        (852
                        )Liabilities
      incurred and accretion expense
                        
                        
                        1,579
                        
                        
                        
                        1,310Balance
      at end of period
                        
                        $
                        6,653
                        
                        
                        $
                        6,173





Note
5:         BUSINESS SEGMENT
INFORMATION





As previously mentioned, we operate in
five business segments.  We measure segment performance based on
operating profit, which is defined as net sales less cost of sales and general,
selling and administrative expenses related to a segment’s
operations.  The costs deducted to arrive at operating profit do not
include interest or income taxes.  Segment assets are those assets
used in the operations of that segment.  Corporate assets include cash
and cash equivalents, corporate leasehold improvements, and other miscellaneous
equipment.





The following summaries set forth
certain financial information by business segment:


19




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)





Six
      Months Ended
                            
                            
                            Three
      Months EndedJune
      30,
                            
                            
                            June
      30,2008
                            
                            
                            2007
                            
                            
                            2008
                            
                            
                            2007Net
      sales:Minerals
                            
                            $
                            206,347
                            
                            
                            $
                            171,526
                            
                            
                            $
                            107,003
                            
                            
                            $
                            85,713Environmental
                            
                            
                            136,260
                            
                            
                            
                            113,806
                            
                            
                            
                            78,041
                            
                            
                            
                            65,108Oilfield
      services
                            
                            
                            61,798
                            
                            
                            
                            44,994
                            
                            
                            
                            37,655
                            
                            
                            
                            23,030Transportation
                            
                            
                            31,233
                            
                            
                            
                            24,273
                            
                            
                            
                            16,883
                            
                            
                            
                            13,380Intersegment
      shipping
                            
                            
                            (10,382
                            )
                            
                            
                            (8,417
                            )
                            
                            
                            (5,735
                            )
                            
                            
                            (4,777
                            )Total
                            
                            $
                            425,256
                            
                            
                            $
                            346,182
                            
                            
                            $
                            233,847
                            
                            
                            $
                            182,454Operating
      profit (loss):Minerals
                            
                            $
                            16,207
                            
                            
                            $
                            17,571
                            
                            
                            $
                            8,520
                            
                            
                            $
                            8,314Environmental
                            
                            
                            18,226
                            
                            
                            
                            16,178
                            
                            
                            
                            12,255
                            
                            
                            
                            9,935Oilfield
      services
                            
                            
                            12,697
                            
                            
                            
                            8,090
                            
                            
                            
                            8,748
                            
                            
                            
                            4,924Transportation
                            
                            
                            1,613
                            
                            
                            
                            1,272
                            
                            
                            
                            833
                            
                            
                            
                            732Corporate
                            
                            
                            (12,580
                            )
                            
                            
                            (9,280
                            )
                            
                            
                            (6,905
                            )
                            
                            
                            (4,768
                            )Total
                            
                            $
                            36,163
                            
                            
                            $
                            33,831
                            
                            
                            $
                            23,451
                            
                            
                            $
                            19,137





As
      of June30,
                                      2008(Restated)
                                      (Note
      2)
                                    
                                    
                                    As
      of Dec. 31,
                                      2007Assets:Minerals
                                    
                                    $
                                    361,708
                                    
                                    
                                    $
                                    319,921Environmental
                                    
                                    
                                    216,550
                                    
                                    
                                    
                                    184,992Oilfield
      services
                                    
                                    
                                    153,907
                                    
                                    
                                    
                                    95,866Transportation
                                    
                                    
                                    4,749
                                    
                                    
                                    
                                    3,807Corporate
                                    
                                    
                                    59,778
                                    
                                    
                                    
                                    47,560Total
                                    
                                    $
                                    796,692
                                    
                                    
                                    $
                                    652,146


20




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)





Six
      Months Ended
                                    June
      30,
                                  
                                  
                                  Three
      Months Ended
                                    June
      30,2008
                                  
                                  
                                  2007
                                  
                                  
                                  2008
                                  
                                  
                                  2007Depreciation,
      depletion and amortization:Minerals
                                  
                                  $
                                  7,667
                                  
                                  
                                  $
                                  7,145
                                  
                                  
                                  $
                                  3,993
                                  
                                  
                                  $
                                  3,711Environmental
                                  
                                  
                                  3,180
                                  
                                  
                                  
                                  2,977
                                  
                                  
                                  
                                  1,605
                                  
                                  
                                  
                                  1,556Oilfield
      services
                                  
                                  
                                  4,023
                                  
                                  
                                  
                                  3,166
                                  
                                  
                                  
                                  2,249
                                  
                                  
                                  
                                  1,554Transportation
                                  
                                  
                                  16
                                  
                                  
                                  
                                  31
                                  
                                  
                                  
                                  7
                                  
                                  
                                  
                                  13Corporate
                                  
                                  
                                  861
                                  
                                  
                                  
                                  486
                                  
                                  
                                  
                                  458
                                  
                                  
                                  
                                  257Total
                                  
                                  $
                                  15,747
                                  
                                  
                                  $
                                  13,805
                                  
                                  
                                  $
                                  8,312
                                  
                                  
                                  $
                                  7,091Capital
      expenditures:Minerals
                                  
                                  $
                                  11,911
                                  
                                  
                                  $
                                  9,142
                                  
                                  
                                  $
                                  4,224
                                  
                                  
                                  $
                                  4,744Environmental
                                  
                                  
                                  2,311
                                  
                                  
                                  
                                  4,387
                                  
                                  
                                  
                                  1,453
                                  
                                  
                                  
                                  1,832Oilfield
      services
                                  
                                  
                                  6,209
                                  
                                  
                                  
                                  4,080
                                  
                                  
                                  
                                  2,925
                                  
                                  
                                  
                                  2,361Transportation
                                  
                                  
                                  17
                                  
                                  
                                  
                                  16
                                  
                                  
                                  
                                  5
                                  
                                  
                                  
                                  16Corporate
                                  
                                  
                                  9,138
                                  
                                  
                                  
                                  4,281
                                  
                                  
                                  
                                  5,216
                                  
                                  
                                  
                                  2,077Total
                                  
                                  $
                                  29,586
                                  
                                  
                                  $
                                  21,906
                                  
                                  
                                  $
                                  13,823
                                  
                                  
                                  $
                                  11,030Research
      and development expense:Minerals
                                  
                                  $
                                  2,573
                                  
                                  
                                  $
                                  1,854
                                  
                                  
                                  $
                                  1,297
                                  
                                  
                                  $
                                  927Environmental
                                  
                                  
                                  1,130
                                  
                                  
                                  
                                  1,088
                                  
                                  
                                  
                                  486
                                  
                                  
                                  
                                  553Oilfield
      services
                                  
                                  
                                  256
                                  
                                  
                                  
                                  88
                                  
                                  
                                  
                                  137
                                  
                                  
                                  
                                  85Corporate
                                  
                                  
                                  576
                                  
                                  
                                  
                                  435
                                  
                                  
                                  
                                  428
                                  
                                  
                                  
                                  332Total
                                  
                                  $
                                  4,535
                                  
                                  
                                  $
                                  3,465
                                  
                                  
                                  $
                                  2,348
                                  
                                  
                                  $
                                  1,897





Note
6:         EMPLOYEE BENEFIT
PLANS





Our net periodic benefit cost for our
defined benefit pension plan was as follows:





Six
      Months Ended
                            June
      30,
                          
                          
                          Three
      Months Ended
                            June
      30,2008
                          
                          
                          2007
                          
                          
                          2008
                          
                          
                          2007Service
      cost
                          
                          $
                          835
                          
                          
                          $
                          830
                          
                          
                          $
                          417
                          
                          
                          $
                          415Interest
      cost
                          
                          
                          1,187
                          
                          
                          
                          1,104
                          
                          
                          
                          594
                          
                          
                          
                          552Expected
      return on plan assets
                          
                          
                          (1,561
                          )
                          
                          
                          (1,347
                          )
                          
                          
                          (780
                          )
                          
                          
                          (673
                          )Amortization
      of prior service cost
                          
                          
                          2
                          
                          
                          
                          33
                          
                          
                          
                          1
                          
                          
                          
                          16Net
      periodic benefit cost
                          
                          $
                          463
                          
                          
                          $
                          620
                          
                          
                          $
                          232
                          
                          
                          $
                          310





We
previously disclosed in our Annual Report on Form 10-K for the year ended
December 31, 2007 that we expected to contribute $1,000 to our pension plan in
2008. That full contribution was made in the first quarter of
2008.


21




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)





Note
7:         INCOME
TAXES





Our effective tax rate from continuing
operations for the six months ended June 30, 2008 was 26.8%, which differs from
the U.S. federal statutory rate of 35.0% largely due to depletion deductions and
differences in local tax rates on the income from our foreign
subsidiaries.  Additionally, the 26.8% includes a decrease to income
tax expense of $118, primarily due to adjustments related to filing of foreign
tax returns combined with adjustments to our reserve for uncertain tax
positions. Excluding the $118, the effective tax rate would have been
27.2%.





Our effective tax rate from continuing
operations for the six months ended June 30, 2007 was 25.4%, which varies from
the U.S. federal statutory rate of 35.0% for the same depletion and foreign tax
rates mentioned above.  Additionally, the 25.4% includes an increase
to income tax expense of $373 for changes in estimates related to provision to
return differences.  Excluding the $373, the effective tax rate would
have been 24.1%.





In the
normal course of business, we are subject to examination by taxing authorities
throughout the world.  With few exceptions, we are no longer subject
to U.S. federal, state, local, or non-US income tax examinations by tax
authorities for years prior to 2001.  The Internal Revenue Service
(“IRS”) has examined our U.S. federal income tax returns for all years through
2003.





Note
8:         ACQUISITIONS





We made payments of $1,362 in the six
months ended June 30, 2008 to former owners of businesses we acquired pursuant
to contingent payment arrangements associated with those
acquisitions.





In May 2008, our oilfield services
segment acquired the business assets of Premium Reeled Tubing, L.L.C. (PRT). PRT
provides coiled tubing services commonly used in workovers and completions of
oil and gas production wells. We paid approximately $40,895 in cash and $3,648
in our common stock and recorded $14,071 of goodwill and $16,156 of intangible
assets for this acquisition as of June 30, 2008. The allocation of this purchase
price has not been finalized as we are in the process of determining the fair
values of the assets acquired and liabilities assumed.





Note
9:         DEBT





On May 20, 2008, we amended our
revolving credit agreement to increase the borrowing capacity from $150,000 to
$225,000, extended the maturity to April 1, 2013 and changed certain terms
affecting the amount of interest we pay; all other substantive terms and
conditions remained the same.


22




AMCOL
INTERNATIONAL CORPORATION AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


(In
thousands, except share and per share amounts)





Note
10:       DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITES




Foreign
Exchange Collars





We have
entered into a series of foreign exchange collars to mitigate the risk of
currency fluctuations on our potential purchase of a chrome mine in South
Africa, the purchase price of which is payable in Australian dollars. The
aggregate fair value of the foreign exchange collars as of June 30, 2008,
$1,990, is recorded within other current assets on our condensed balance sheet.
We have recorded a gain of $1,699 and $1,990 for three and six months ended June
30, 2008, respectively, in other income (expense).




Interest
Rate Swap




At June
30, 2008, we had an interest rate swap agreement outstanding which effectively
hedges the variable interest rate of our senior notes to a fixed rate of 5.6%
per annum. We have designated this hedge as a cash flow hedge. Accordingly, the
aggregate fair value of the interest rate swap as of June 30, 2008, $1,340, is
recorded within other long-term liability on our condensed balance sheet. Net of
tax, we have recorded a gain of $2,109 for the three months ended June 30, 2008,
in other comprehensive income.





Note
11:       SALE-LEASEBACK
TRANSACTION





On March 10, 2008, we entered into a
sale-leaseback transaction involving a new corporate facility which will be
completed in late 2008. During construction, we have and will continue to record
the expenditures for land and building on our balance sheet as land and
construction in progress assets, respectively. The total carrying value of the
property was approximately $18,208 as of June 30, 2008. Upon completion of
construction, we will sell and leaseback the facility under an operating lease
commitment with rental payments occurring January 2009 through December 2028.
Lease payments in fiscal 2009 approximate $2,532 and increase 2% annually
thereafter.





Note
12:       CONTINGENCIES





We are party to a number of lawsuits
arising in the normal course of business.  We do not believe that any
pending litigation will have a material adverse effect on our consolidated
financial statements.


23





Item
2:  Management’s Discussion and Analysis of Financial Condition and
Results of Operations





Forward-Looking
Statements





From time to time, certain statements
we make, including statements in this Management's Discussion and Analysis of
Financial Condition and Results of Operations section, constitute
"forward-looking statements" made in reliance upon the safe harbor contained in
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements relating to our Company or our
operations that are preceded by terms such as "expects," "believes,"
"anticipates," "intends" and similar expressions, and statements relating to
anticipated growth and levels of capital expenditures. Such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Our actual results, performance or achievements could differ
materially from the results, performance or achievements expressed in, or
implied by, these forward-looking statements as a result of various factors,
including without limitation the following: actual performance in our various
markets; conditions in the metalcasting and construction industries; operating
costs; competition; currency exchange rates and devaluations; delays in
development, production and marketing of new products; integration of acquired
businesses; and other factors set forth from time to time in our reports filed
with the Securities and Exchange Commission.  We undertake no duty to
update any forward looking statements to actual results or changes in our
expectations.





Overview





We are a global, specialty minerals
company and earn our revenues and profits from a diverse group of industrial and
consumer product lines.  Our principal operations are located in North
America, Europe and the Asia-Pacific region.





We
operate in five segments:  minerals, environmental, oilfield services,
transportation and corporate.  Our minerals segment operates in three
principal markets:  metalcasting, pet products and specialty
minerals.  The environmental segment’s principal markets include
lining technologies, building materials and water treatment.  Our
oilfield services segment provides both onshore and offshore water treatment
filtration, pipeline separation, waste fluid treatment, rental tools, coil
tubing and well testing data services for the oil and gas
industry.  Our transportation segment provides trucking services for
our domestic businesses as well as third parties.  Intersegment
shipping revenues are eliminated in our corporate segment.





The principal mineral that we utilize
to generate revenues is bentonite.  We own or lease bentonite reserves
in the United States, China, Turkey and Australia.  Additionally,
through our affiliates and joint ventures, we have access to bentonite reserves
in Egypt, India, Mexico, Russia and Azerbaijan.  Bentonite deposits
have varying physical properties which require us to identify which markets our
reserves can serve.  We believe that our understanding of bentonite
properties, mining methods, processing and application to markets are the core
components of our longevity and future prospects.


24





Our customers are engaged in various
end-markets and geographies.  Customers in the minerals segment range
from foundries that produce castings for automotive, industrial, and
transportation equipment, including heavy-duty trucks and railroad cars, to
producers of consumer goods, including cat box filler, cosmetics and
detergents.  The customers for our environmental segment’s lining
technologies and building materials products are predominantly engineering
contractors.  The oilfield services customer base is primarily
comprised of oil service or exploration companies.  A significant
portion of our products have been used in the same applications for decades and
have experienced minimal technological obsolescence.  A majority of
our business is performed under short-term agreements; therefore, terms of sale,
such as pricing and volume, can change within our fiscal year.





The majority of our revenues are
generated in North America; consequently, the state of the United States economy
impacts our revenues.  Our fastest growing markets are in the
Asia-Pacific and Central European regions, which have continued to outpace the
United States in economic growth in recent years.





Sustainable, long-term profit growth is
our primary objective.  We employ a number of strategic initiatives to
achieve this goal:





·
            Organic
      growth:  The central component of our growth strategy is
      expansion of our product lines and market presence.  We have a
      history of commitment to research and development and using this resource
      to bring innovative products to market.  We believe this
      approach to growth offers the best probability of achieving our long-term
      goals at the lowest risk.





·
            Globalization:  We
      have expanded our manufacturing and marketing organizations into European
      and Asia-Pacific regions over the last 40 years.  This operating
      experience enables us to expand further into emerging
      markets.  We see significant opportunities in the Asia-Pacific
      and Eastern European regions for expanding our revenues and earnings over
      the long-term as a number of markets we serve, such as metalcasting and
      lining technologies, are expected to grow.  We expect to take
      advantage of these growth areas either through our wholly owned
      subsidiaries or investments in affiliates and joint
    ventures.





·
            Mineral
      development:  Bentonite is a component in a majority of the
      products we produce.  Since it is a natural material, we must
      continually expand our reserve base to maintain a long-term
      business.  Our goal is to add new reserves to replace the
      bentonite mined each year.  Furthermore, we need to assure new
      reserves meet the physical property requirements for our diverse product
      lines and are economical to mine.  Our organization is committed
      to developing its global reserve base to meet these
      requirements.





·
            Acquisitions:  We
      continually seek opportunities to add complementary businesses to our
      portfolio of products.  Over the last four years, we have
      acquired a number of businesses.  A strong financial position
      will enable us to continue to acquire businesses which, in our assessment,
      are fairly valued and fit with our growth
  strategy.





A number of risks will challenge us in
meeting these long-term objectives, and there can be no assurance that we will
achieve success in implementing any one or more of them.  We describe
certain risks under “Item 1A. Risk Factors” and “Item 7A. Quantitative and
Qualitative Disclosure About Market Risk” within our Annual Report on Form 10-K
for the year ended December 31, 2007.  In general, the significance of
these risks has not materially changed over the past year.


25


Critical Accounting Policies
and Estimates





The discussion and analysis of our
financial condition and results of operations are based upon our condensed
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States.  We evaluate the
accounting policies and estimates used to prepare the financial statements on an
ongoing basis.  We consider the accounting policies used in preparing
our financial statements to be critical accounting policies when they are both
important to the portrayal of our financial condition and results of operations,
and require us to make estimates, complex judgments, and assumptions, including
with respect to events which are inherently uncertain.  As a result,
actual results could differ from these estimates.  For more
information on our critical accounting policies, one should also read our Annual
Report on Form 10-K for the year ended December 31, 2007.





Analysis of Results of
Operations





Following
is a discussion and analysis that describes certain factors that have affected,
and may continue to affect, our financial position and operating
results.  This discussion should be read with the accompanying
condensed consolidated financial statements.





Three
months ended June 30, 2008 vs. June 30, 2007





Consolidated
Review





The
following table compares our operating results for the quarters ended June 30,
2008 and June 30, 2007:


26





Three
      Months Ended June 30,Consolidated
                                                                            
                                                                            2008
                                                                              (Restated)
                                                                              (Note
      2)
                                                                            
                                                                            
                                                                            2007
                                                                            
                                                                            
                                                                            2008
      vs. 2007(Dollars
      in Thousands)Net
      sales
                                                                            
                                                                            $
                                                                            233,847
                                                                            
                                                                            
                                                                            $
                                                                            182,454
                                                                            
                                                                            
                                                                            
                                                                            28.2
                                                                            %Cost
      of sales
                                                                            
                                                                            
                                                                            171,187
                                                                            
                                                                            
                                                                            
                                                                            132,663Gross
      profit
                                                                            
                                                                            
                                                                            62,660
                                                                            
                                                                            
                                                                            
                                                                            49,791
                                                                            
                                                                            
                                                                            
                                                                            25.8
                                                                            %margin
      %
                                                                            
                                                                            
                                                                            26.8
                                                                            %
                                                                            
                                                                            
                                                                            27.3
                                                                            %General,
      selling and
                                                                              administrative
      expenses
                                                                            
                                                                            
                                                                            39,209
                                                                            
                                                                            
                                                                            
                                                                            30,654
                                                                            
                                                                            
                                                                            
                                                                            27.9
                                                                            %Operating
      profit
                                                                            
                                                                            
                                                                            23,451
                                                                            
                                                                            
                                                                            
                                                                            19,137
                                                                            
                                                                            
                                                                            
                                                                            22.5
                                                                            %margin
      %
                                                                            
                                                                            
                                                                            10.0
                                                                            %
                                                                            
                                                                            
                                                                            10.5
                                                                            %Other
      income (expense):Interest
      expense, net
                                                                            
                                                                            
                                                                            (2,837
                                                                            )
                                                                            
                                                                            
                                                                            (2,155
                                                                            )
                                                                            
                                                                            
                                                                            31.6
                                                                            %Other,
      net
                                                                            
                                                                            
                                                                            523
                                                                            
                                                                            
                                                                            
                                                                            (3
                                                                            )
                                                                            
                                                                            
                                                                            
                                                                            *(2,314
                                                                            )
                                                                            
                                                                            
                                                                            (2,158
                                                                            )Income
      before income taxes and income (loss) from affiliates and joint
      ventures
                                                                            
                                                                            
                                                                            21,137
                                                                            
                                                                            
                                                                            
                                                                            16,979Income
      tax expense
                                                                            
                                                                            
                                                                            5,666
                                                                            
                                                                            
                                                                            
                                                                            4,190
                                                                            
                                                                            
                                                                            
                                                                            35.2
                                                                            %effective
      tax rate
                                                                            
                                                                            
                                                                            26.8
                                                                            %
                                                                            
                                                                            
                                                                            24.7
                                                                            %Income
      before income (loss) from affiliates and joint ventures
                                                                            
                                                                            
                                                                            15,471
                                                                            
                                                                            
                                                                            
                                                                            12,789Income
      (loss) from affiliates and joint ventures
                                                                            
                                                                            
                                                                            (637
                                                                            )
                                                                            
                                                                            
                                                                            2,466
                                                                            
                                                                            
                                                                            
                                                                            -125.8
                                                                            %Income
      from continuing operations
                                                                            
                                                                            
                                                                            14,834
                                                                            
                                                                            
                                                                            
                                                                            15,255Gain
      (loss) on disposal of discontinued operations
                                                                            
                                                                            
                                                                            -
                                                                            
                                                                            
                                                                            
                                                                            (286
                                                                            )
                                                                            
                                                                            
                                                                            -100.0
                                                                            %Net
      income
                                                                            
                                                                            $
                                                                            14,834
                                                                            
                                                                            
                                                                            $
                                                                            14,969
                                                                            
                                                                            
                                                                            
                                                                            -0.9
                                                                            %





We
measure sales growth by the relevant components: organic or base businesses,
acquisitions, and foreign currency exchange. Growth due to foreign currency
exchange is measured as the change in revenues resulting from differences in
currency exchange rates between periods. Acquisition growth is measured as the
growth resulting from businesses within the first year (twelve consecutive
months) we own them. Any remaining growth is organic or base business growth.
The table details the consolidated sales growth components over the prior year’s
comparable period:





Base
      Business
                      
                      
                      Acquisitions
                      
                      
                      Foreign
                        Exchange
                      
                      
                      TotalMinerals
                      
                      
                      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
                      %
                      
                      
                      1.4
                      %Total
                      
                      
                      20.5
                      %
                      
                      
                      4.7
                      %
                      
                      
                      3.0
                      %
                      
                      
                      28.2
                      %%
      of growth
                      
                      
                      72.7
                      %
                      
                      
                      16.9
                      %
                      
                      
                      10.4
                      %
                      
                      
                      100.0
                      %





In
addition, the following table shows the distribution of sales across our three
principal geographic regions (Americas; Europe, Middle East, and Africa (EMEA);
and Asia Pacific) and the comparable total from the prior year’s
period:


27





Americas
                      
                      
                      EMEA
                      
                      
                      Asia
      Pacific
                      
                      
                      TotalMinerals
                      
                      
                      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
                      %





Net
sales:





Our overall increase in net sales was
driven by increases from base businesses (those operations owned for greater
than one year) predominantly within our minerals and oilfield services
segments.  Marginal increases in net sales resulted from foreign
currency fluctuations and acquisitions.





Gross
profit:





Overall
gross profit increased due to the increase in net sales.  The decrease
in gross profit margin is driven by our minerals segment.





General,
selling & administrative expenses (GS&A):





GS&A expenses increased in all
segments with the largest increases coming from our oilfield services and
corporate segments.  Overall increases in GS&A are being driven by
acquisitions, increased infrastructure to support sales and business growth, and
increased employee related benefit expenses.





Operating
profit:





Operating profit increased across all
segments, except corporate, due to increased gross profits.  Our
environmental and oilfield services segments increased the most due to the
seasonality of these businesses, organic growth, acquisitions and the ability to
leverage increased sales without commensurate increases in GS&A
expenses.





Interest
expense, net:





Net interest expense increased due to
increased average debt levels required to fund acquisitions, increased capital
spending and working capital levels.  We began 2008 with debt levels
significantly greater than those that existed at the beginning of 2007 due to
increased capital spending and acquisitions in 2007. The majority of our
long-term debt has a variable rate of interest which is primarily influenced by
changes in LIBOR.





Other
income (expense):





Other income includes the foreign
currency transaction and translation gains and losses for third party and
intercompany related activity.  It also includes the net effect of
foreign currency derivatives.  Other income increased in 2008 largely
due to a $1.7 million gain on a foreign currency derivative related to our
potential purchase of a chrome mine in South Africa, the purchase price of which
is payable in Australian dollars.  A future gain or loss of this size
is unlikely.


28





Income
tax expense:





Our
effective tax rate increased in 2008 to 26.8% due largely to an increase in
income being generated from domestic businesses, especially our oilfield
services operations, which are taxed at greater rates.  Our effective
tax rate in both reporting periods continues to differ from the U.S. federal
statutory 35.0% rate due to depletion deductions and differences in local tax
rates on the income of our foreign subsidiaries which are generally lower than
the U.S. rates.





Income
(loss) from affiliates & joint ventures:





Our investment in Ashapura gave rise to
the loss from affiliates and joint ventures due to the significant loss in fair
value of derivative instruments held by them.  See Note 2 of Notes to
Condensed Consolidated Financial Statements for more information.





Net
income:





The
decrease in current-period net income results largely from the increase in
operating profits previously discussed offset by the loss from affiliates and
joint ventures.





Diluted
earnings per
share:





Earnings per share decreased
commensurately with the decrease in net income.  The weighted average
common and common shares outstanding increased by 0.1 million
shares.





Segment
analysis:





Following is a review of operating
results for each of our five reporting segments:





Minerals
Segment





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
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2,012
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      12.3
                                                                                                                                                                                                      %Gross
      profit
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      18,344
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      17.1
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      16,332
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      19.1
                                                                                                                                                                                                      %General,
      selling andadministrative
      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
                                                                                                                                                                                                      %


29





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.




Organic,
or base business, growth comprised the majority of the growth in 2008 due to
strong demand across all product lines.  Pass thru freight revenues
comprised approximately one quarter of the growth.  The metalcasting
product group revenues increased due to strong demand in the Asia-Pacific region
and selling price increases in our domestic markets.  Specialty
materials revenues grew due to revenues being generated from our new and
developing operations overseas, notably South Africa and China.





Although
tempered by sales price increases mentioned above, gross profit margins
decreased mainly due to increased energy, production and mining costs in the
United States.  The decrease was also impacted by a greater
concentration of sales being derived from freight revenues, which do not
generate profits.





Approximately
one third of the increase in GS&A expenses in 2008 is due to
acquisitions.  The remainder is attributable to greater expenditures
on research and development activities within our specialty materials division
and personnel costs in our Asia-Pacific businesses.





Operating
margin decreased due to decreased gross margins and increased GS&A expenses
as previously discussed.





Environmental
Segment





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
                                                                        %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
                                                                        %


30





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.





Revenues
in the environmental segment grew significantly within base businesses and due
to foreign currency fluctuations.  Increased shipments in lining
technologies, building materials and more installation services in Western
Europe and Poland were the main drivers of organic growth and foreign currency
growth.





Gross
profit increased due to increased sales whilst gross margins remained relatively
constant.





GS&A
expenses increased mostly due to greater employee related costs and increased
expenses, such as compensation and sales commissions, in our faster growing
markets overseas, especially our Polish and Chinese operations.





Operating
profits increased due to the increase in gross profits previously mentioned and
the ability of this segment to leverage profits off less increases in GS&A
expenses.





Oilfield
Services Segment




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
                                            %Gross
      profit
                                            
                                            
                                            15,751
                                            
                                            
                                            
                                            41.8
                                            %
                                            
                                            
                                            9,370
                                            
                                            
                                            
                                            40.7
                                            %
                                            
                                            
                                            6,381
                                            
                                            
                                            
                                            68.1
                                            %General,
      selling andadministrative 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
                                            %




Oilfield
services revenues grew significantly in the 2008 period due to organic growth
and an acquisition made in the quarter, Premium Reeled Tubing
(“PRT”).  Demand for domestic waste water treatment services in the
Gulf of Mexico was the largest contributor to organic growth, but was
significantly helped by strong increases in our West African and Malaysian
operations.  In May 2008, we acquired PRT, whose operations are based
in Louisiana.  PRT provides coil tubing services to both on and
offshore operations used as a means for customers to deliver liquids or gasses
into production wells beneath the earth’s surface.  PRT added $3.5
million of revenues in the second quarter of 2008 versus the comparable 2007
period.





Gross profit and operating margins
increased due to a greater portion of revenues being derived in more profitable
service lines and geographies (especially our overseas markets), the acquisition
of PRT, and an ability to generate the increased revenues without comparable
increases in GS&A expenses.


31





Transportation
Segment





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
                                                              %Gross
      profit
                                                              
                                                              
                                                              1,689
                                                              
                                                              
                                                              
                                                              10.0
                                                              %
                                                              
                                                              
                                                              1,502
                                                              
                                                              
                                                              
                                                              11.2
                                                              %
                                                              
                                                              
                                                              187
                                                              
                                                              
                                                              
                                                              12.5
                                                              %General,
      selling andadministrative
      expenses
                                                              
                                                              
                                                              856
                                                              
                                                              
                                                              
                                                              5.1
                                                              %
                                                              
                                                              
                                                              770
                                                              
                                                              
                                                              
                                                              5.8
                                                              %
                                                              
                                                              
                                                              86
                                                              
                                                              
                                                              
                                                              11.2
                                                              %Operating
      profit
                                                              
                                                              
                                                              833
                                                              
                                                              
                                                              
                                                              4.9
                                                              %
                                                              
                                                              
                                                              732
                                                              
                                                              
                                                              
                                                              5.4
                                                              %
                                                              
                                                              
                                                              101
                                                              
                                                              
                                                              
                                                              13.8
                                                              %





Traffic
levels increased as compared to the prior year period due to greater demand from
consumer products shippers, leading to the increase in net
sales.  Unrecovered fuel surcharges led to the decrease in gross and
operating profit margins.





Corporate
Segment





Three
      Months Ended June 30,Corporate
                                                      
                                                      2008
                                                      
                                                      
                                                      2007
                                                      
                                                      
                                                      2008
      vs. 2007(Dollars
      in Thousands)Intersegment
      shipping sales
                                                      
                                                      $
                                                      (5,735
                                                      )
                                                      
                                                      $
                                                      (4,777
                                                      )
                                                      
                                                      
                                                      (958
                                                      )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
                                                      %





Intersegment
shipping revenues and costs are related to billings from the transportation
segment to the domestic minerals and environmental segments for
services.  These services are invoiced to the minerals and
environmental segments at arms-length rates and those costs are subsequently
charged to customers.  Intersegment sales and costs reported above
reflect the elimination of these transactions.





Corporate GS&A expenses increased
due to greater employee benefit related expenses and IT infrastructure
investments.





Six
months ended June 30, 2008 vs. June 30, 2007





Consolidated
Review





The
following table compares our year-to-date operating results for the period ended
June 30, 2008 and June 30, 2007:




32




Six Months Ended June 30,2008(Restated)
                                                                
                                                                
                                                                2007
                                                                
                                                                
                                                                2008 vs. 2007Consolidated
                                                                
                                                                (Note
      2)(Dollars in Thousands)Net sales
                                                                
                                                                $
                                                                425,256
                                                                
                                                                
                                                                $
                                                                346,182
                                                                
                                                                
                                                                
                                                                22.8
                                                                %Cost of sales
                                                                
                                                                
                                                                316,246
                                                                
                                                                
                                                                
                                                                252,892Gros s profit
                                                                
                                                                
                                                                109,010
                                                                
                                                                
                                                                
                                                                93,290
                                                                
                                                                
                                                                
                                                                16.9
                                                                %margin
      %
                                                                
                                                                
                                                                25.6
                                                                %
                                                                
                                                                
                                                                26.9
                                                                %General, selling and administrative expenses
                                                                
                                                                
                                                                72,847
                                                                
                                                                
                                                                
                                                                59,459
                                                                
                                                                
                                                                
                                                                22.5
                                                                %Operating profit
                                                                
                                                                
                                                                36,163
                                                                
                                                                
                                                                
                                                                33,831
                                                                
                                                                
                                                                
                                                                6.9
                                                                %margin
      %
                                                                
                                                                
                                                                8.5
                                                                %
                                                                
                                                                
                                                                9.8
                                                                %Other income (expense):Interest expense, net
                                                                
                                                                
                                                                (5,238
                                                                )
                                                                
                                                                
                                                                (4,097
                                                                )
                                                                
                                                                
                                                                27.8
                                                                %Other, net
                                                                
                                                                
                                                                288
                                                                
                                                                
                                                                
                                                                (170
                                                                )
                                                                
                                                                
                                                                -269.4
                                                                %(4,950
                                                                )
                                                                
                                                                
                                                                (4,267
                                                                )Income before income taxes and
      income from affiliates and joint ventures
                                                                
                                                                
                                                                31,213
                                                                
                                                                
                                                                
                                                                29,564Income tax expense
                                                                
                                                                
                                                                8,383
                                                                
                                                                
                                                                
                                                                7,501
                                                                
                                                                
                                                                
                                                                11.8
                                                                %effective tax
      rate
                                                                
                                                                
                                                                26.9
                                                                %
                                                                
                                                                
                                                                25.4
                                                                %Income before income from
      affiliates and joint ventures
                                                                
                                                                
                                                                22,830
                                                                
                                                                
                                                                
                                                                22,063Income from affiliates and joint
      ventures
                                                                
                                                                
                                                                625
                                                                
                                                                
                                                                
                                                                4,032
                                                                
                                                                
                                                                
                                                                -84.5
                                                                %Income from continuing
      operations
                                                                
                                                                
                                                                23,455
                                                                
                                                                
                                                                
                                                                26,095Gain (loss) on disposal of
      discontinued operations
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                (286
                                                                )
                                                                
                                                                
                                                                -100.0
                                                                %Net income
                                                                
                                                                $
                                                                23,455
                                                                
                                                                
                                                                $
                                                                25,809




The
following table details our consolidated sales growth components over the prior
year’s comparable period:





Base
      Business
                        
                        
                        Acquisitions
                        
                        
                        Foreign
                          Exchange
                        
                        
                        TotalMinerals
                        
                        
                        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
                        %
                        
                        
                        1.4
                        %Total
                        
                        
                        15.8
                        %
                        
                        
                        4.2
                        %
                        
                        
                        2.8
                        %
                        
                        
                        22.9
                        %%
      of growth
                        
                        
                        69.4
                        %
                        
                        
                        18.4
                        %
                        
                        
                        12.2
                        %
                        
                        
                        100.0
                        %





The
following table shows the distribution of sales across our three principal
geographic regions (Americas, EMEA, and Asia Pacific) and the comparable total
from the prior year’s period:





Americas
                        
                        
                        EMEA
                        
                        
                        Asia
      Pacific
                        
                        
                        TotalMinerals
                        
                        
                        34.5
                        %
                        
                        
                        7.1
                        %
                        
                        
                        7.0
                        %
                        
                        
                        48.6
                        %Environmental
                        
                        
                        16.2
                        %
                        
                        
                        13.8
                        %
                        
                        
                        2.0
                        %
                        
                        
                        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
                        
                        
                        67.6
                        %
                        
                        
                        22.9
                        %
                        
                        
                        9.5
                        %
                        
                        
                        100.0
                        %Total
      from prior year's comparable period
                        
                        
                        69.4
                        %
                        
                        
                        22.6
                        %
                        
                        
                        8.0
                        %
                        
                        
                        100.0
                        %


33


Net
sales:





Our overall increase in net sales was
driven by increases across all segments, especially organic growth across all
segments.  Net sales increases were also attributable  to
acquisitions in our minerals, environmental and oilfield services
segments.  Growth due to foreign currency fluctuation predominantly
occurred within our environmental business.





Gross
profit:





Overall
gross profit increased due to the increase in net sales.  Gross profit
margins decreased, however, across all segments except our oilfield services
segment.  Gross margins were depressed in the 2008 period due to
decreases incurred within the first quarter of 2008 not yet recouped by
increases in the second quarter of 2008.  The decreased gross margins
in our minerals segment had the largest effect on the overall decrease in
margins.





General,
selling & administrative expenses (GS&A):





Increased GS&A expenses in the
minerals, environmental and corporate segments drove the overall increase in
GS&A.  The increase in our GS&A is predominantly driven by
expenses in our corporate segment, acquisitions, and increases due to greater
revenues, such as increased employee compensation and sales commissions expenses
within our environmental segment.





Operating
profit:





Operating profits increased largely due
to the increased operating profits in our oilfield services and environmental
segments exceeding the decrease in minerals and corporate
segments.  Foreign exchange fluctuations favorably impacted operating
profit growth in the period largely due to strong growth in European currencies
within our environmental segment.  Organic growth declines in our
minerals segment and increased expenses in our corporate segment combined with
organic growth in other segments led to a net decrease in operating profit from
organic growth and drove the decrease in operating margins.  Operating
profit growth from acquisitions was largely attained from the PRT acquisition
previously mentioned.





Interest
expense, net:





Net interest expense increased due to
increased average debt levels required to fund increased capital spending and
working capital levels.  We began 2008 with debt levels significantly
greater than those that existed at the beginning of 2007 due to increased
capital spending and acquisitions in 2007. The majority of our long-term debt
has a variable rate of interest which is primarily influenced by changes in
LIBOR.





Other
income (expense):





Other income includes the foreign
currency transaction and translation gains and losses for third party and
intercompany related activity.  It also includes the net effect of
foreign currency derivatives.  Other income increased in 2008 largely
due to a $2.0 million gain on a foreign currency derivative related to our
potential purchase of a chrome mine in South Africa, the purchase price of which
is payable in Australian dollars.  A future gain or loss of this size
is unlikely.


34





Income
tax expense:





The
effective tax rate increased to 26.9% in 2008 from 25.4% due to an increase in
income being generated in domestic jurisdictions, largely due to growth in our
oilfield services business.  Our effective tax rate in both reporting
periods continues to differ from the U.S. federal statutory 35.0% rate due to
depletion deductions and differences in local tax rates on the income of our
foreign subsidiaries which are generally lower than the U.S. rates.





Income
(loss) from affiliates & joint ventures:





In the current period, we earned
significantly less from our equity investees than in the prior year due to the
significant loss in fair value of derivative instruments held by
Ashapura.  See Note 2 of Notes to Condensed Consolidated Financial
Statements for more information.





Net
income:





The
decrease in current-period net income results largely from the increase in
operating profits previously discussed offset by decrease in income from
Ashapura, as discussed in Note 2 to the Condensed Consolidated Financial
Statements.





Diluted
earnings per
share:





Earnings per share decreased
commensurately with the decrease in net income.  Weighted average
common and common equivalent shares outstanding remained relatively constant
compared to the prior year period.





Segment
analysis:





Following is a review of operating
results for each of our five reporting segments:





Minerals
Segment





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
                                          %Gross
      profit
                                          
                                          
                                          35,021
                                          
                                          
                                          
                                          17.0
                                          %
                                          
                                          
                                          33,131
                                          
                                          
                                          
                                          19.3
                                          %
                                          
                                          
                                          1,890
                                          
                                          
                                          
                                          5.7
                                          %General,
      selling andadministrative
      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
                                          %


35





Six
      Months Ended June 30,Minerals
      Product Line Sales
                                      
                                      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.





Approximately
70% of the minerals segment’s increase in net sales occurred organically due in
large part to increased volumes, pass through freight revenues and selling price
increases within our domestic businesses, especially the metalcasting and pet
products groups.  In addition, this segment continued to benefit from
acquisitions, adding $7.9 million of revenue from businesses acquired in prior
periods mostly related to our Mexican joint venture and Turkish bentonite
facilities.  Greater demand in Asia for metalcasting products and for
certain specialty materials products also contributed to the organic increase in
sales.





Gross
profit margin decreased mainly due to increased energy, production and mining
costs in the United States.  The decrease was also impacted by
unfavorable product mix, as a greater proportion of sales were generated not
only in lower priced products but also by freight revenues, which do not
generate profits.





Acquisitions
contributed to the increase in GS&A expenses, adding approximately $1.3
million.  The remainder is attributable to greater expenditures on
research and development activities within our specialty materials division and
personnel costs in our Asia-Pacific businesses.





Operating
margin decreased due to decreased gross margins and increased GS&A expenses
as previously discussed.





Environmental
Segment




Six
      Months Ended June 30,Environmental
                                                  
                                                  2008
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2008
      vs. 2007(Dollars
      in Thousands)Ne
      t sales
                                                  
                                                  $
                                                  136,260
                                                  
                                                  
                                                  
                                                  100.0
                                                  %
                                                  
                                                  $
                                                  113,806
                                                  
                                                  
                                                  
                                                  100.0
                                                  %
                                                  
                                                  $
                                                  22,454
                                                  
                                                  
                                                  
                                                  19.7
                                                  %Cost
      of sales
                                                  
                                                  
                                                  89,963
                                                  
                                                  
                                                  
                                                  66.0
                                                  %
                                                  
                                                  
                                                  73,684
                                                  
                                                  
                                                  
                                                  64.7
                                                  %Gross
      profit
                                                  
                                                  
                                                  46,297
                                                  
                                                  
                                                  
                                                  34.0
                                                  %
                                                  
                                                  
                                                  40,122
                                                  
                                                  
                                                  
                                                  35.3
                                                  %
                                                  
                                                  
                                                  6,175
                                                  
                                                  
                                                  
                                                  15.4
                                                  %General,
      selling andadministrative
      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
                                                  %


36




Six
      Months Ended June 30,2008
                                  
                                  
                                  2007
                                  
                                  
                                  %
      changeEnvironmental
      Product Line Sales
                                  
                                  (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.




Organic
growth comprised 55% of the increase in environmental segment revenues, which
were largely gained in the lining technologies sectors of the USA as well as
Central and Eastern European regions.  Some of the growth in the
lining technologies product group arises from installation services revenues
earned in these same markets.  Foreign currency fluctuations, mainly
in Poland and Europe, contributed 31% of the growth with the remainder arising
from a Polish acquisition in December 2007.





Gross
profit increased due to increased sales.  However, gross profit
margins decreased due to a greater concentration of sales occurring in less
profitable product lines, such as installation services within the lining
technologies product group.  In addition, increased production costs
in the United States negatively impacted gross margins.





GS&A
expenses increased mostly due to greater employee related costs, commissions
expenses and increased headcount incurred to support the revenue
growth.  In addition, approximately $1.1 million of the increase arose
from foreign currency fluctuations.





Operating
profits increased due to the increase in gross profit mentioned earlier without
equally commensurate increases in GS&A expenses.  Operating profit
margins decreased due to the decrease in gross margin mentioned
above.





Oilfield
Services Segment





Six
      Months Ended June 30,2008
                                      
                                      
                                      2007
                                      
                                      
                                      2008
      vs. 2007Oilfield
      Services
                                      
                                      (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
                                      %Gross
      profit
                                      
                                      
                                      24,453
                                      
                                      
                                      
                                      39.6
                                      %
                                      
                                      
                                      17,257
                                      
                                      
                                      
                                      38.4
                                      %
                                      
                                      
                                      7,196
                                      
                                      
                                      
                                      41.7
                                      %General,
      selling andadministrative
      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
                                      %





Organic growth comprised 80% of the net
sales increase for our oilfield services segment with the remainder arising from
the acquisition of PRT in May 2008.  Our organic growth was achieved
due to an increase in the amount of service equipment in the field, equipment
acquired in previous periods, greater demand for water treatment services,
especially in the Gulf of Mexico, and growth in our developing businesses in
Asia and Africa.


37





Gross profits increased with sales and
became more profitable due to the ability to greater utilization of equipment
and resources and increased revenues with more profitable business lines, such
as water treatment, nitrogen services and premium reeled
tubing.  GS&A expenses increased to help support revenue growth,
especially in our foreign businesses.





Operating
profits and margins increased due to the increased gross margins mentioned above
and moderate increases in GS&A expenses.





Transportation
Segment





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
                                          %Gross
      profit
                                          
                                          
                                          3,239
                                          
                                          
                                          
                                          10.4
                                          %
                                          
                                          
                                          2,780
                                          
                                          
                                          
                                          11.5
                                          %
                                          
                                          
                                          459
                                          
                                          
                                          
                                          16.5
                                          %General,
      selling andadministrative
      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
                                          %




Traffic
levels increased as compared to the prior year period due to greater demand from
consumer products shippers, leading to the increase in net
sales.  Unrecovered fuel surcharges led to the decrease in gross
profit margins.  Operating profits and margins increased due to the
increase in sales and stability of GS&A costs.





Corporate
Segment




Six
      Months Ended June 30,Corporate
                                                        
                                                        2008
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2008 vs. 2007(Dollars
      in Thousands)Intersegment
      shipping sales
                                                        
                                                        $
                                                        (10,382
                                                        )
                                                        
                                                        $
                                                        (8,417
                                                        )
                                                        
                                                        
                                                        (1,965
                                                        )Intersegment
      shipping costs
                                                        
                                                        
                                                        (10,382
                                                        )
                                                        
                                                        
                                                        (8,417
                                                        )Gross
      profit
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -General,
      sellingand administrative
      expenses
                                                        
                                                        
                                                        12,580
                                                        
                                                        
                                                        
                                                        9,280
                                                        
                                                        
                                                        
                                                        3,300
                                                        
                                                        
                                                        
                                                        35.6
                                                        %Operating
      loss
                                                        
                                                        
                                                        12,580
                                                        
                                                        
                                                        
                                                        9,280
                                                        
                                                        
                                                        
                                                        3,300
                                                        
                                                        
                                                        
                                                        35.6
                                                        %





Intersegment
shipping revenues and costs are related to billings from the transportation
segment to the domestic minerals and environmental segments for
services.  These services are invoiced to the minerals and
environmental segments at arms-length rates and those costs are subsequently
charged to customers.  Intersegment sales and costs reported above
reflect the elimination of these transactions.





Corporate GS&A expenses increased
due to greater employee benefit related expenses and increased expenses
associated with information technology investments.


38





Liquidity and capital
resources





Cash flows from operations, an ability
to issue new debt instruments, borrowings from our revolving credit facility and
proceeds from the exercise of stock options by employees have been our sources
of funds to purchase property, plant and equipment; acquire businesses;
repurchase common stock; and pay dividends to shareholders.  We
believe cash flows from operations and borrowings from an unused and committed
revolving credit facility will be adequate to support our current businesses for
the foreseeable future.  However, we will need additional credit
facilities in order to pursue additional acquisitions, when and if these
opportunities become available. If necessary, we believe we will be able to
obtain such credit at terms substantially similar to our current
facilities.  Following is a discussion and analysis of our cash flow
activities as presented in the Condensed Consolidated Statement of Cash Flows
presented within Part 1 of this report.




Cash
    Flows
                        
                        Six
      Months Ended
                          June
      30,($
      in millions)
                        
                        2008
                        
                        
                        2007Net
      cash provided by (used in) operating activities
                        
                        $
                        (2.0
                        )
                        
                        $
                        25.6Net
      cash used in investing activities
                        
                        $
                        (88.8
                        )
                        
                        $
                        (62.9
                        )Net
      cash provided by financing activities
                        
                        $
                        86.4
                        
                        
                        $
                        43.3





Cash flows from operating
activities decreased from the prior year period largely due to increased working
capital levels.  Historically, cash flows from operations have
increased over the course of the year and we anticipate this pattern will
continue for the remainder of 2008.





Cash
flows used in investing activities increased in the 2008 period due to increased
acquisition activity, investments to construct a corporate building, a $6
million loan made to a third party related to the agreement to invest in a
chrome mine in South Africa, and increased investments in joint-ventures, namely
a $6.6 million investment made into a group of Russian bentonite
companies.  Capital expenditures for 2008 are estimated to be in the
range of $45 million to $55 million.





In May
2008, we paid approximately $40.9 million for PRT, an organization that provides
coiled tubing services to on and offshore oil and gas drilling
operations.  In 2007, we paid approximately $38.4 million for
acquisitions, primarily the Liquid Boot Technologies and Microsponge®
operations.





Cash flows provided by financing
activities increased in the 2008 period as we required more external debt
funding to support our working capital and investing
activities.  Year-to-date dividends declared increased in 2008 to
$0.32 per share from $0.28 per share in the prior year’s comparable
period.  We repurchased 80 thousand shares of our common stock in the
current year period at an average price of $25.45 per share; as of June 30,
2008, we have $6.6 million of funds available to repurchase shares under a
program which expires on November 10, 2008.




39





As
      atFinancial
      Position
                            ($
      in millions)
                          
                          June
      30,
                            2008
                            (Restated)
                            (Note
      2)
                          
                          
                          December
      31,
                            2007Working
      capital
                          
                          $
                          250.3
                          
                          
                          $
                          202.5Goodwill
      & intangible assets
                          
                          $
                          130.4
                          
                          
                          $
                          101.1Total
      assets
                          
                          $
                          796.7
                          
                          
                          $
                          652.1Long-term
      debt
                          
                          $
                          260.6
                          
                          
                          $
                          164.2Other
      long-term obligations
                          
                          $
                          38.0
                          
                          
                          $
                          33.5Stockholders’
      equity
                          
                          $
                          378.1
                          
                          
                          $
                          352.3





Working
capital at June 30, 2008, increased over the amount at December 31, 2007 due to
loans made to a third party as mentioned above and an increase in other working
capital items, such as inventories and accounts receivable, commensurate with
our increase in sales.  Given the seasonality of our environmental
business and the project nature of some of our services provided in the oilfield
services segment, working capital levels typically increase in the second
quarter of the year.  Our current ratio was 3.1-to-1 and 3.0-to-1 at
June 30, 2008, and December 31, 2007, respectively.





Long-term debt increased due to
increased financing needs for working capital requirements and other investing
activities.  Consequently, long-term debt relative to total
capitalization rose to 40.8% at June 30, 2008, compared with 31.8% at December
31, 2007.  We have approximately $69.4 million of borrowing capacity
available from our revolving credit facility at June 30, 2008.  We are
in compliance with financial covenants related to the revolving credit facility
as of June 30, 2008.





Since the mid 1980’s, we have been
named as one of a number of defendants in product liability lawsuits relating to
the minor free-silica content within our bentonite products used in the
metalcasting industry.  The plaintiffs in these lawsuits are primarily
employees of our former and current customers.  To date, we have not
incurred significant costs in defending these matters.  We believe we
have adequate insurance coverage and do not believe the litigation will have a
material adverse impact on our financial position, liquidity or results of
operations.





Contractual Obligations and
Off-Balance Sheet Arrangements (in millions)





Item 7 of our Annual Report on Form
10-K for the year ended December 31, 2007 discloses our contractual obligations
and off-balance sheet arrangements.  Other than the increase in our
long-term bank debt as disclosed in our condensed consolidated financial
statements herein and the contribution to our defined benefit plan as discussed
in Note 6 of the Notes to Condensed Consolidated Financial Statements within
this Form 10-Q, there were no material changes in our contractual obligations
and off-balance sheet arrangements.


40


PART
II - OTHER INFORMATION





Item
1A:             Risk
Factors





Information regarding risk factors
appears in Part 1, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for
the year ended December 31, 2007.  Except as discussed previously in
our Management’s Discussion and Analysis section of this report, there have been
no material changes from the risk factors disclosed therein.





Item
6:                Exhibits




Exhibit
                          Number31.1
                        
                        Certification
      of Chief Executive Officer Pursuant to Rule
      13a-14(a)/15d-14(a)*31.2
                        
                        Certification
      of Chief Financial Officer Pursuant to Rule
      13a-14(a)/15d-14(a)*32
                        
                        Certification
      of Periodic Financial Report Pursuant to 18 U.S.C. Section
      1350**
      Filed
herewith.


41


SIGNATURES


Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this amendment
to be signed on its behalf by the undersigned thereunto duly
authorized.





AMCOL
      INTERNATIONAL CORPORATIONDate:
      March 13, 2009
                        
                        /s/
      Lawrence E. WashowLawrence
      E. WashowPresident
      and Chief Executive OfficerDate: March 13, 2009
                        
                        /s/
      Donald W. PearsonDonald
      W. PearsonVice
      President and Chief Financial
Officer


42


INDEX
TO EXHIBITS





31.1
            Certification
      of Chief Executive Officer Pursuant to Rule
      13a-14(a)/15d-14(a)*31.2
            Certification
      of Chief Financial Officer Pursuant to Rule
      13a-14(a)/15d-14(a)*32
            Certification
      of Periodic Financial Report Pursuant to 18 U.S.C. Section
      1350**
      Filed herewith.


43