Welcome, ladies and gentlemen, to the Minerals Technologies Inc. Third Quarter 2013 Earnings Conference Call. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to turn the conference over to your host, Rick Honey, Vice President of Investor Relations. Please go ahead.

Good morning. Welcome to our third quarter 2013 earnings conference call. Today, Chief Executive Officer Bob Wetherbee will provide some insights into our third quarter performance. And we'll then turn the call over to our Chief Financial Officer, Doug Dietrich, who will give you a detailed report of our financial results for the quarter. Following Doug, D.J. Monagle, Senior Vice President and Managing Director of our Paper PCC business, will provide an update on our growth initiatives for that business in Asia. Before we begin, I need to remind you that on Page 8 of our 2012 10-K, we list the various factors and conditions that may affect future results. Statements related to future performance by members of our management are subject to these cautionary remarks and conditions. Now I will turn the call over to Bob Wetherbee. Bob?

Thanks, Rick. Good morning, and thanks for joining us today. Minerals Technologies posted record financial results for the third quarter, with operating income of $32.8 million, up 15% over the prior year. Operating income as a percentage of sales reached 12.9% as we continued to improve over last quarter and exceeded the 2015 goal we established 3 years ago. Earnings per share for the quarter were $0.63 compared with $0.54 in the same period a year ago, a 17% increase. And underlying sales increased 4% as we continue to grow the top line. Our Specialty Minerals segment posted record quarterly operating income of $26 million, a 12% increase over the $23.3 million in the third quarter of 2012. Continued execution of our geographic expansion and new product innovation strategies drove this growth. Our Paper PCC business benefited from the restart of the satellite plant in Alizay, France, and the continued ramp-up of new satellites in India and Thailand. We also increased sales in our Processed Minerals and North American specialty PCC product lines. During the quarter, we announced 2 new contracts for the construction of satellite PCC plants. The first was in China. We signed a joint venture agreement with Nanning Jindaxing Paper for the construction of a 45,000 metric ton satellite plant. The second was in Europe, where we reached agreement for a 14,000 metric ton satellite plant with an established paper company that wish to remain anonymous for competitive reasons. We expect both plants to be operational in the fourth quarter of 2014. Fulfill, our high-filler technology for the paper industry, continued to gain momentum. Earlier this week, we announced a commercial agreement with a paper mill in India, who asked to remain anonymous for competitive reasons, that is deploying our Fulfill E-325 technology. This technology allows papermakers…

Thanks, Bob. Good morning, everyone. Let's go through our consolidated and business segment results for the quarter. I'll highlight the key market and operational elements of our financial results in each major product line and comment on comparisons to both the third quarter of last year, and sequentially, to the second quarter of this year. As Bob mentioned, we achieved record operating income of $32.8 million this quarter. And earnings per share were $0.63, which is a 17% increase from the $0.54 recorded last year. Our strong performance this quarter was led by the Specialty Minerals segment, which also achieved record quarterly profits of $26 million, a 12% improvement over the prior year, and was 15.5% of sales. Paper PCC operating income increased over 15% compared to last year. And the Performance Minerals business continues on its strong track with operating income growth of 6%. The Refractories segment operating income also improved, up 17% from the third quarter of last year. Our consolidated sales this quarter increased 3% or about $6 million over last year. Our underlying sales grew approximately 4%, as foreign exchange had a 1% unfavorable effect. We saw underlying sales growth in both the Specialty Minerals and Refractories segments and, in total, the growth was in line with the expectations that we communicated to you on our last call. Gross profit was approximately $60 million, 8% above the prior year. Gross margins expanded to 23.6% from 22.4% last year, driven by price increases, sales of higher-margin products like Fulfill and a 4% improvement in manufacturing productivity. Total fixed overhead costs dropped to 14.3% of sales as compared to 14.9% last year, a 4% improvement. As we've discussed on previous calls, we continue to control our overhead expenses tightly, which has helped drive a greater portion of these…

Thank you, Doug. Good morning, everyone. I'd like to provide you with some insight into the growth opportunities that we're pursuing in Asia, especially China and India, through geographic expansion and the development of new technologies. Three years ago, we presented our vision of the long-term growth we saw in China and India based on 2 factors: tons of uncoated wood-free produced compared with the tons of PCC used in paper production in these 2 countries. We then estimated how the potential PCC tons would grow based upon the historical annual rate of growth in uncoated wood-free paper production and our ability to differentiate and make a positive impact with our new technologies in this emerging region. This provided us the basis for our strategies and objectives designed at converting this region to our core technology and delivering significant growth. Today, I'd like to review that potential PCC growth rate and bring you up-to-date on the advancements we've made through the execution of our strategy of geographic expansion. This slide is a graphic depiction of potential PCC growth in China and India, compared to the established regions of Europe and the Americas. Today, 12.4 million tons of uncoated freesheet are produced in North and South America, while 11 million tons are produced in Europe. As a point of reference, these markets have declined between 1% and 3% per year over the past 10 years. In comparison, India is producing about 3.5 million tons of uncoated wood-free, and is growing by more than 7% per year. China produces 16.5 million tons of uncoated wood-free, more than both North and South America combined, and is growing more than 6% a year. Now let's look at PCC penetration, which we define as the tons of PCC used in paper production as a percent…

[Operator Instructions] And our first question in queue is from Jeff Zekauskas of JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: This is Silke Kueck for Jeff. The announced shutdown in West America of uncoated freesheet will probably off be -- remember, this is Portland, Alabama mill for IP and the Georgia-Pacific and the Boise plant. And the -- like as far as I can tell, like the shutdowns will happen in the fourth quarter. And like a rollover to new plants will probably not happen until like the second half of next year. So is it the case like the first half next year will be under, on the PCC side, will it be under significant pressure because of all those North American capacity coming off?

Silke, so what we see is that the majority of the tons -- so the capacity is coming out. And it's probably about 160,000 tons of total capacity. But what we see is the production off of that capacity being shifted to other mills. We see it being shifted to other mills within the IP in the case of Portland and other IP mills in North America. So it's unclear exactly how that shift is going to take place, exactly where the paper tons are going to go. We see that shift taking place over the next 4 to 6 months. But we see the majority of those tons being absorbed into other mills where we have satellites. We think there might be some net negative impact as we go through that shift, but that's unclear to us at the moment. And we'll be seeing how that plays out over the next 2 quarters. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. Then also I have a couple of question to clarify some of like the recent announcements for Fulfill and the new satellite expansion. The 45,000-ton agreement in China was Nanning. Is that a new plant? Or is that an expansion plant?

Yes. Silke, that's a new plant and a new customer for us. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay, that's what I thought. And the 14,000 tons in Europe, is that an expansion? Or is it an expansion, an existing site? Or is it a completely new plant?

Silke, that is a new plant and a new customer for us. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: A new plant and a new customer for you, okay. And how come this customer hasn't become a Fulfill customer then immediately?

Which one are you referring to? Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: The European one.

Well, we don't have the plant in place yet. So we will work with them quickly to assess the fit of Fulfill in their grades, but we need to get our plan and our operation in place. And so let's just go through the sequence like you've seen in India. We'll get a new business. We'll offer them a portfolio of technologies and work with them to optimize conversion to our products. And then the introduction of those new technologies to optimize the efficiency of that transition. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. And I guess that answers then my last question. So the new Fulfill customer that you signed is probably one of the customers that -- it's probably one of like the new satellite plants in India that you've announced like the past 2 years?

I will put it out of probably into definitely. It is one of our -- the new plants we've announced over the previous years. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. And if I can ask a last question, I'll get back into queue. Were the ground calcium carbonate results this year, were they supported by the launch of this new -- of the VICRON products? Or were these sales not significant enough yet to make a difference?

They are, Silke. So we've seen both. It's 2 things, the new products that we're putting out, so the VICRON products, as well as you mentioned some products that displays other -- our niche markets that display some higher value minerals. But at the same time, we've seen some market growth in both the East and West Coast due to the construction industry. And on the West Coast in particular, some of the construction and our sales into the roofing industry has been strong lately. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: And so like, I guess, it means that maybe like half of the gross is due to the underlying market growing and maybe half of the growth is due to the new product introductions?

Yes. Probably to a little bit more at this point since some of those products are new, a little bit more toward the market growth. But yes, the new products are contributing.

Our next question in queue is from Daniel Moore of CJS Securities.

You've done, obviously, a tremendous job over the last year or so in terms of margin improvements and efficiency gains. Doug, you mentioned lime specifically. Maybe talk a little bit about input costs and what you're seeing around energy and electricity costs and any potential impact that may have in your ability to continue to expand margins here in the near term?

So 2 things. Energy does affect us directly, primarily in Performance Minerals at our processing facilities. But energy impacts us indirectly through magnesium oxide and lime, particularly lime. In Paper PCC, those energy -- that lime cost increase comes to us. We absorb it in certain quarters. And in North America, we'll absorb that share in the fourth quarter. But we are contractually able to pass that through pricing in a delayed fashion. And North America will pass it through next year. We've offset some of the energy increases. As you remember, we converted our kilns in our Adams facility from Number 6 oil to natural gas. And we've made some substantial savings this year on the conversion of those 2 kilns. And as I outlined on my slides, that's been slightly offset by some higher electricity costs. So we've seen pretty big increases in unit electricity cost, both in the East Coast and the West Coast in our Processed Minerals business.

So just to clarify, going -- but you've obviously been able to offset those. And expectation will be you continue to be able to do so barring any further material jump?

Yes, yes. Sorry about that. I've probably left the answer to your question. To answer your question, so we work on price increases. Now we've pushed some price increases, as I mentioned, in Performance Minerals to offset that. We work in a the Refractories business, obviously, with magnesium oxide prices to push our value proposition. And the savings we passed, we gave to steelmakers as we maintained those furnaces. We've pushed those prices. We worked to push those prices during price increases. So largely, we've been able to offset those increases in Performance Minerals. And contractually, we do that in Paper.

Got it, very good. And you talked a little bit about Refractories. You gave a lot of detail. And I appreciate it. Metallurgical wire demand continues to grow. Maybe just remind us of those drivers. And historically, Q4 is a seasonally important quarter for equipment sales and Refractories. What are your expectations as we go in the tail-end of the year here?

Sure. The first thing, I'm taking Metallurgical Wire, and then I can give it to Han to give some more color. Largely driven by geographic growth. So we've seen some new sales. We've been selling into India over the past several years and also in the Middle East and Turkey. Han, you want to give a little color to that?

Yes. Thank you, Doug. So if you look to Metallurgical Wire and into third quarter and our strategy in general, we saw in the third quarter geographical growth, like Doug mentioned, in Turkey and in the Middle East, but also specifically in Russia, and also in our home market in the United States. And so that is our first pillar of growth. Then the second pillar of growth for us is new products. So we launched, last year, lower activity wire. And that has opened up new accounts for us. And that project is really going well at the moment. And finally, if you look to the North American market, historically, we have been focused on slab gases and medium slab gases. And we have made some breakthroughs and that we're also selling in conventional slab gases. So we have kind of expanded our market in North America. And specifically, in the third quarter, we have some gains in the conventional slab gases.

And Dan, I'll answer the second part of your question, the equipment sales. Yes. Typically, the fourth quarter is higher than other quarters as customers have outages. And they generally commission those units that we sell in the fourth quarter. Fortunately, similar to last year, we're seeing a bit of a slowdown in capital spending has continued. We've been mentioning that all year. And we haven't seen the general increase in equipment sales that we're going to see in the fourth quarter. And that's why I've indicated that in terms of Refractories from the third to fourth, we're going to see similar operating income.

Got it. And so -- but that's embedded in the guidance like before?

Yes, yes.

Last question, if you look back a couple of years ago, your 2015 goals. Revenue, perhaps, trending a little lower, but obviously on the margin side, you've been able to already exceed those. If you were to update both of those goals, what might they look like? Or will you consider doing so going forward?

Yes. This is Bob, Dan. We were certainly excited to be at 12.9% in the third quarter. And year-to-date, we're close to 12.2%, Doug, in terms of what we've been able to achieve. As we look forward, we can see sufficient and plenty of room to grow going forward. I think as we get into 2014, we'll have a chance to redo our -- revisit our goals over the longer term. But when you look at the fundamentals, when you look at the Fulfill growth, the geographic expansion, I'm talking about Metallurgical Wire, we do see the opportunity for additional improvement in that area. Doug, any additional flavor you want to add to that?

I'll agree with Bob. I think there's definitely room for margin growth, both gross margin growth and operating income growth, Dan. I think the gross margins, as we continue with our productivity improvements, that's an underlying piece of our operational strategy. We look at higher margin products like Fulfill. D.J. showed you a technology pipeline that has new products in it, which are also higher-margin. But then we're going also leverage our cost base to grow margins, to grow the operating margin. So I think, look, we're sitting at 13%. I think we can push that to 14%. When we set some targets, we'll expand that. Can we push to 15%? Perhaps over time. But there's certainly the levers in there to be able to expand it further.

Our next question in queue is from Rosemarie Morbelli of Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Could you give us, D.J., a little more details on those new applications for some of your Fulfill product lines? Well you say it will go, for example, in waste management, well, how is it going to play a role there? And if you could give us a feel for what your products will do in the other categories.

Okay. So thanks for asking the question, Rosemarie. Here's some thoughts for you. So there are several themes in our product development. And the Fulfill product line is really addressing that higher filler loading. So we introduced that portfolio to you before. And that brand, that portfolio will continue to focus on those areas. But let's address some of the waste management strains and those sort of things. We were talking about this expansion into Asia, in general. And I think I, by design, tried to show you the concentration in China. If we look at that Chinese papermaker, they're under stress trying to reduce their energy cost, trying to reduce some of the waste streams that come out of their paper mill and trying to reduce fiber. So Fulfill is addressing the need to reduce their fiber cost by putting in more PCC. But also, we've got a couple of other technologies that are coming out that in addition to just the standard PCC that cleans out the air by sucking CO2 out of their exhaust stats, we can also manipulate and change some of their waste products into functional filler products. I hesitate to go much further than that, but it has to do with us having a much better understanding of China now that we've deployed a lot of technical and business development resources there. And looking at that region is very fertile further business development. So that -- so I'm hoping I'm asking -- or I'm answering your question, but that's the way that we're looking at that. Rosemarie J. Morbelli - Gabelli & Company, Inc.: And in the other categories, D.J.?

Well, we've identified that energy reduction will be one of the things that we're working on. And so we've got some products and processes that can help the papermaker reduce their energy. Just as a point of reference, increased filler, in general, helps reduce energy because it's easier to dry than the fiber is on paper. But we're talking about introducing new processes that can really change the energy footprint of a papermaker in a different way. That would be one of them. And then we also are trying to get into the packaging market in a more aggressive way. So that would -- those are 2 of the other things that I was trying to highlight in that area. Rosemarie J. Morbelli - Gabelli & Company, Inc.: That is helpful. And on the packaging side, does that mean that you would use PCC in corrugated cardboard, for example, which you are not doing now? Or what would you be doing?

So you asked a very specific and technical question. Let me try and give you a general answer. We're looking at all packaging. The packaging that, right now, makes the easiest and the most sense for us is the white packaging, the higher-end folded boxboard. But -- and we've had a good growth even over the last year in Europe in penetrating some of that market with PCC in those applications. But -- so our immediate thrust is probably in the whiter packaging, but we do have some development programs. And some of the boxes that were in that pipeline are looking for avenues to penetrate into packaging broader. You mentioned corrugated, that would be one. But I hesitate to go much further into that because they're under development. And then the exact pigment portfolio or the pigment platform may or may not be PCC. We're looking at several developments. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Okay. And just on Fulfill, if you look at the existing agreements, some of them are probably now anniversarying 1 year or more -- well, let's say 1 year. Do you see that the paper mill is expanding its -- a specific paper mill is expanding its use of Fulfill in different machines or a paper company expanding into several of their mills? Could you give us a feel as to what is happening on those existing contracts, older contracts?

Gladly. So for those papermakers that have been running the technology, and we've been able to really expand the use of Fulfill across their grade structure. We are now in the process of deploying some equipment to go into other machines. Now as we go into another machine, that does take us to requalify on that machine and do more design work. But yes, we are seeing, really, over the next couple of months even just deploying that technology further within existing customers across different machines and grades.

[Operator Instructions] Our next question in queue is from Andrew Dunn of KeyBanc Capital Markets.

So just to maybe follow up on Rosemarie's question a little bit. Could I get you to -- give us some idea of how many of these plants now you would say are in the stage where they're using meaningful quantities of Fulfill, so maybe not just like trial runs, but really starting to consume higher amounts of volume of that product? And then maybe also, could you give us some idea of where your tech -- your royalty payment for that product's at?

This is Bob. We have 14 signed agreements and very active across the globe to do that. I think when you look at the trial side, so we had 21 that are actively being pursued to get that lined up. D.J. might have -- maybe in the best position to answer the details of that particular question.

Yes. I would say that over half of them were well-deployed. But when I say well-deployed, they're regularly using it, but we still have quite a bit of opportunity to just get across all their grades. And so we see a fair amount of growth just within the 14 contracts that we've signed. And that is a major effort over the next several months to expand our revenues and income associated with those 14 that are signed. What I also showed is that I know the chart isn't up right now. But we have put 1 across the line this quarter. That one will quickly start delivering some good revenues. And then the 2 that are in the cusp should also quickly come up to speed. These qualifications have taken longer, but we've done a pretty good job at getting qualified across a lot of the grades, prior to finalizing with the commercial contracts. We expect to get more contracts soon. And we would expect that we get a relatively quick effect on those. Does that help?

Yes. And I guess maybe going a little bit further with that. For some of the other applications that you were talking about, just outside of providing a filler product, but all other solutions, would you get technology payments or royalties from implementing those at your customers as well, maybe similar to what you're seeing for what you described for Fulfill?

Yes. And so without revealing exactly how we would do that, I think the right way of looking at it is that they would improve our margins. So yes. So the exact commercialization fees would be different. But yes, they will contribute to the margin growth that Bob and Doug were talking about earlier.

Okay, great. And then just maybe one more point of clarification, if I could. You mentioned that at Asia, I think, you're 11% there. You said it was overwhelmingly from your new satellite facilities. Can you give us some idea of, overall across the segment, what your growth was like in existing facilities, versus facilities that had come online in the last year?

Let me see if I can answer that. So segment sales increased about 4%. And there was a couple of factors, as I mentioned, the decline in Performance Minerals. But then, yes, that 11% growth in Asia Paper and 9% growth in Europe. So those 2 Paper PCC growth were 2 things: new satellites that came online. We had one come online at JK Paper in late -- in the second. That's still ramping up. On a year-over-year basis, we had another one that came on late last year in India, and then also one in Thailand. So the growth that you're seeing, that 11%, is really driven around new satellites, and then also the ramp-up of ones that have been on for a little less than a year. In Europe, that growth is, as I mentioned, the Alizay mill which came back online. So it's an existing satellite down for a couple of years, and it came back online recently under a new ownership, Double A paper. And the growth, we've had a full quarter of that facility's volume contributing to that growth. We've also had some outages in North American Paper that -- temporary maintenance outages in the third quarter, which we took away from some of that. And I mentioned that also in my comments. Does that help?

It does. And then just last question, I'll hop back in queue. Previously, I think you've talked a little bit about even some acquisition opportunities to expand maybe more along the lines of your Specialty business, clearly focused more on this call, I think, on kind of new opportunities within the business. Does that mean maybe you're focusing a little less now on opportunities for external expansion? Or is it still -- what does the pipeline look like there itself?

No. This is Bob. We're very active across all of our products, specifically in the Performance Minerals space -- the Specialty PCC business in terms of what we're seeing in the U.S. following our global customers around the world. We haven't backed off that at all. In fact, we're aggressively pursuing opportunities in Asia and expect to move in that area early next year. But whether it's talc, Specialty PCC, the customer base is giving us a strong pull to take our products globally. So we feel that's still very much the center of what we're doing.

Our next question is from Rosemarie Morbelli of Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Following up on this last question. If your main focus is on those areas, does that mean that you are kind of giving up the idea of adding a third leg? Or it is just that you have yet to find what you want?

No, we haven't. Rosemarie, we haven't given up on any aspect of it. And I think, in my comments, I talked about finding opportunities that leverage our minerals expertise, our operating expertise, our global presence and continuing to expand in that particular area. Actually, joining us today in the call is Jon Hastings, who handles our Corporate Development function. And Jon, can you share some insights into where you see us going?

Yes. Rosemarie, thanks for your question, and Bob, thanks. We do have a very robust portfolio of targets and opportunities that complements what we're doing, some geographic growth and also focusing on other technologies and new products. During the past year, we refreshed our portfolio screening. And the portfolio now cuts across all our businesses and all geographies. There are lots of different opportunities that we continue to focus on. And of course, I can't go into a whole lot of details about that, but we do have a very rich portfolio across the business. Joe, do you want to say anything?

No. Just as a quick reminder, that is the area with Bob on now as CEO that I'm able to spend more time with Jon in the acquisition area. And that's something that I have been spending a lot of time in, as has Jon and his entire team. So the energy and the opportunity level is still extremely high in the space. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Glad to see you have not fully retired, Joe.

No, I'm working on it. Rosemarie J. Morbelli - Gabelli & Company, Inc.: If I could go -- I was looking at your previous 2015 revenue targets. You were expecting an additional $150 million on the Paper side, $150 million to $250 million on the new products and then market help of about $100 million. Where do you stand today?

Rosemarie, so obviously, we're not tracking with those targets that we set. However you look at the 3 components that you gave us, the $150 million geographic growth, we're on target with. We've mentioned a number of new satellites, some geographic expansion with wire products as well. So that $150 million were on track. In the $250 million new products, I'm not tracking quite the $250 million. Though, as you know, we're making some progress with Fulfill. We continue to deploy new technologies in both the Performance Minerals business. And D.J. has a number of them that are prepared to be commercialized, but we're still working with customers on that. And if you remember, filler-fiber was part of that in terms of the deployment. We thought we'd see out of Fulfill F, which we call it now through to 2015. And we have not commercialized fully the filler-fiber. As far as market growth, we have seen some of the $100 million in terms of the North America market, but what we didn't expect back in 2010 is we didn't see the European drop, which has taken some of that revenue back. So we're not tracking on the market growth, but we are on the geographic expansion fees, and to some extent, on the technology. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Okay. And If I may ask one last question. Is it reasonable to assume that you will buy back about 1.3 million shares a year in each of the next 2 years? And how much of that could be offset by dilution? And what would be the net, net change to your average fully diluted shares?

Well, I guess, I can't comment on the exact number of shares because that will depend on, I guess, the price that we purchased them at. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Yes, I know, I know. I made -- I did the math. It's $58 or something like that.

Yes. It'll probably equate to around a 5% per year share count reduction. And the dilution is only through exercising of options and other things that are out there. So it should be very small -- a small impact to dilution over that, at least that $150 million buyback.

Our next question is from the line of Jeff Zekauskas of JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: I just wanted to go really quickly over the satellite -- over like the new PCC plants that were coming on in '14. So does the Shandong Sun paper plant, that's 100,000 tons in PCC that was scheduled to the first quarter, and another smaller one of 20,000 tons this first quarter. Are those still on plan to start up as scheduled?

The Jianghe, which is the smaller of the 2, will start in the first quarter. Sun Paper has been delayed because of some changes in the customer's operation. But that'll come on later in 2014. Second half is what we're targeting right now. And then Nanning Jindaxing would be in the fourth quarter. When that comes on -- and then we're aggressively pursuing some other opportunities. And we hope to contribute even more. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: There were also a couple of like U.S. satellite expansion that were to come -- they were to come on in the fourth quarter, if I remember that correctly. And are those still coming on?

They are still coming on, Silke... Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Those mason switches to Fulfill?

They were associated with the Fulfill technology in many cases. I think one of the things that happened with this recent shift in the North America market is we've got a bunch of our customers that are reassessing what their grade structures is. And so these -- we had worked through them with that. So these expansions start coming on. I had something going on in Latin America that's coming on now. North America starts coming on in the fourth -- first quarter. And then I've got them trickling out through the next several quarters. It's mostly to do with just what Doug was speaking to earlier. There has been a shift in the market regarding capacity. These people are now going to be coming up to some 90% operating rates. And they're working through the specific rate. So that's -- we just had to make sure we were deploying the right technology to meet their needs. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: So it sounds like that -- it sounds like some of these opportunities will just be pushed into, like, early '14.

That is correct. None of them went away. They are just slid back so that we could be more efficient, more sustainable. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Did you lose any opportunities with the Alabama plant? Because I -- what was the -- was the plant shut down, was that one -- was one of the expansion at the plant that is being shut down?

No. No, all the expansions are continuing. As we said, they just got shifted around. But did I lose opportunity with Courtland International Paper is a dear customer of ours. That was one of our facilities. And so, still, it's unfortunate that it shut down, yes.

Our next question is from Alan Mitrani of Sylvan Lake Asset Management.

Can you remind us what leverage ratios you're comfortable with? I know you have none now, but maybe you can just remind us?

I was about to say we're very comfortable with...

You're a little too comfortable, in my opinion, but that's fine.

Look, I think as a smaller small-cap company, as we are, in cyclical end markets, I think having a conservative balance sheet is prudent. I think we could look at a balance sheet that has 20%, 25% debt-to-capital. I think that's something that with our cash flows we could certainly sustain, and also still be on the conservative side, given the cyclical end markets.

I'm not thinking debt-to-cap. I'm thinking more about debt-to-EBITDA maybe in terms of coverage ratios. Do you think that way when looking at deals?

Yes. Okay, on an EBITDA basis, but we'd look to stay in the investment grade. Sure, we could lever up to 2.5x, 3x for a time period. We found something in the M&A front that was transformational, that really fit the company, we could see ourselves levering up for a time period. But I think very quickly pushing that leverage back down to the 2x EBITDA, 25% debt-to-capital kind of levels on a sustainable basis. So, willing to go a little bit higher for something that's the right deal, but we'd work that down very quickly to a sustainable level.

Okay. And about a year and change ago, I think before Bob came on, maybe Joe was talking -- you guys were talking about looking at big deals. Maybe you had something that passed over? You guys are very disciplined, obviously, which we appreciate. Any big deals on the horizon? Or is it more of the incremental geographical expansion type of thing?

Well, we -- obviously, I can't give you specifics. But as Jon mentioned, we have a very, I call it, active and healthy portfolio. And the range, the size of the deals in there are all over the map. From small, we have some things we've talked about in the past in terms of acquisition opportunities in the talc arena, our Specialty PCC arena in different parts of the world to, let's say, larger possibilities. So we really have a fairly wide range of possible targets that we continue to work.

I mean, the reason I asked, and we've had this conversation, you guys, as you do well. I appreciate the buybacks. I just -- I see where high yield spreads are to treasuries. I see where the debt markets are. And to me, in looking at the market, I appreciate that you're a small-cap company, but you're also a company that focuses on lean and cash flow very carefully. And what that means is with $11.5 of net cash on your books, you might miss an opportunity to really put in permanent capital, 10-, 20-year capital, and take advantage of these rates and really be able to look at your cash flows years out. And I would say, I mean you guys have the capabilities of doing the $20 dividend and still being meaningfully comfortable. Now I'd rather you buy something so we can have that cash flow for a long time or buy back meaningful amounts of stock, and not just the 2% to 4% a year. I just -- I'm trying to weigh what you've done relative to the opportunity as it relates to putting in permanent capital. The companies that have this cash flow certainty the way you guys do in an industry where you're an essential provider seem to be all buying back stock and lengthening out their debt capacity. You guys seem to have been paying off debt over the years, and only now are returning capital more aggressively. So can you just help me bridge that with relative to where your funnel is for acquisitions?

Yes. We -- first of all, I appreciate the perspectives and the comments. And this is more of a reminder in terms of where the approach we've historically taken -- I say historically, the last 3,4, 5 years. But post the recession, it's conservative, but also balanced. And the balance is between how close we may be to an acquisition, the size of the acquisition and the timing around that to determine if we don't think it's going to happen fast enough that we accelerate the stock buyback. Now we've just doubled our historical rate of buyback. That should be an indication of what the company is willing to do, and is going to continue to be willing to do in the interest of shareholder value. And so it's looking at that and taking that balanced look of the potential to increase and improve long-term value for shareholders through the various paths. We also doubled our dividend within the last year. So we're really -- we are absolutely sensitive to the points that you're making. And we're well-tuned into it. And we're going to continue to work like hell and make smart decisions. And we are very willing for the right acquisition to invest for the long term because, clearly, that has to be something that is in the best interest of what our shareholders want. And we're going to continue to be prudent around doing that. I used the term in the past when I've met with a number of you, we're not going to do something dumb. We haven't done that so far, but we -- our objective is to do something that's going to make sense for the longer-term. And if we can't get there fast enough, we're going to keep looking at ways to deliver value in the form of stock buyback or dividends back to shareholders. Doug, you want to add anything to that?

No. I think I want to mention it in the comments, as Joe mentioned a balanced approach. We're going to take our free cash flow for the next couple of years and deliver it back to shareholders. That means we're not going to continue to pile onto the cash balance. But as we see those acquisition opportunities ebb and flow, we're going to maintain, at least in the near-term, the opportunity should it come across. And as Joe mentioned, we'll be able to then and we're willing to lever up to do so. So I think it's just part of, as Joe mentioned, that balance use. And we're showing that we're willing to, obviously, put capital back to shareholders as needed.

There are no other questions. So I'd like to close out the call and thank everyone for their interest in Minerals Technologies. Have a great day.

Thank you. Once again, thank you, ladies and gentlemen, for joining today's conference. You may now disconnect. Have a great day.