UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

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

For the transition period from ______________________ to _______________________ ______________

Commission file number 0-15661

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, IL		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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

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 filer x	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 August 3, 2009
(Common stock, $.01 par value)		30,610,718 Shares

AMCOL INTERNATIONAL CORPORATION

INDEX

		Page No.
Part I - Financial Information

Item 1:	Financial Statements
	Condensed Consolidated Balance Sheets –
	June 30, 2009 and December 31, 2008	3

	Condensed Consolidated Statements of Operations –
	three and six months ended June 30, 2009 and 2008	5

	Condensed Consolidated Statements of Comprehensive Income –
	three and six months ended June 30, 2009 and 2008	6

	Condensed Consolidated Statements of Changes in Equity –
	six months ended June 30, 2009 and 2008	7

	Condensed Consolidated Statements of Cash Flows –
	six months ended June 30, 2009 and 2008	8

	Notes to Condensed Consolidated Financial Statements	9

Item 2:	Management’s Discussion and Analysis of Financial
	Condition and Results of Operations	19

Item 3:	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4:	Controls and Procedures	36

Part II - Other Information

Item 1A:	Risk Factors	37

Item 4:	Submission of Matters to a Vote of Security Holders	40

Item 6:	Exhibits	40

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

Item 1: Financial Statements

	June 30,		December 31,
ASSETS	2009		2008
	(unaudited)		*
Current assets:
Cash and cash equivalents	$	21,357	$	19,441
Accounts receivable, net		155,196		197,611
Inventories		104,776		125,066
Prepaid expenses		13,969		12,812
Deferred income taxes		4,723		5,358
Income tax receivable		4,008		3,490
Other		161		7,409

Total current assets		304,190		371,187

Investment in and advances to affiliates and joint ventures		28,043		30,025

Property, plant, equipment, and mineral rights and reserves:
Land and mineral rights		53,628		17,186
Depreciable assets		399,099		380,555

		452,727		397,741
Less: accumulated depreciation and depletion		222,606		206,398
		230,121		191,343
Other assets:
Goodwill		71,035		68,482
Intangible assets, net		50,352		53,974
Deferred income taxes		15,136		15,867
Other assets		22,575		13,702
		159,098		152,025
	$	721,452	$	744,580

Continued…

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30,			December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY	2009			2008
	(unaudited)			*
Current liabilities:
Accounts payable	$	43,837		$	45,297
Accrued liabilities		52,257			63,197
Total current liabilities		96,094			108,494

Long-term debt		230,056			256,821

Pension liabilities		24,263			22,939
Other liabilities		41,120			27,971
		65,383			50,910
Equity:
Common stock		320			320
Additional paid in capital		82,586			86,350
Retained earnings		261,712			262,453
Accumulated other comprehensive income (loss)		540			(4,721	)
		345,158			344,402
Treasury stock		(16,330	)		(18,196	)

Total AMCOL shareholders' equity		328,828			326,206

Noncontrolling interest		1,091			2,149
Total equity		329,919			328,355
	$	721,452		$	744,580

*Condensed from audited financial statements.

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

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Net sales	$	335,619		$	425,256		$	171,200		$	233,847
Cost of sales		245,251			316,246			124,052			171,187
Gross profit		90,368			109,010			47,148			62,660
General, selling and administrative expenses		66,421			72,847			33,368			39,209
Operating profit		23,947			36,163			13,780			23,451
Other income (expense):
Interest expense, net		(6,566	)		(5,238	)		(3,159	)		(2,837	)
Other, net		(2,714	)		595			(1,502	)		830
		(9,280	)		(4,643	)		(4,661	)		(2,007	)
Income before income taxes and income (loss) from
affiliates and joint ventures		14,667			31,520			9,119			21,444
Income tax expense		3,117			8,383			1,546			5,666
Income before income (loss) from affiliates and
joint ventures		11,550			23,137			7,573			15,778
Income (loss) from affiliates and joint ventures		(1,642	)		625			(1,634	)		(670	)
Net income		9,908			23,762			5,939			15,108

Net income (loss) attributable to noncontrolling interests		(365	)		307			(158	)		274

Net income (loss) attributable to AMCOL shareholders	$	10,273		$	23,455		$	6,097		$	14,834

Weighted average common shares outstanding		30,719			30,336			30,744			30,413

Weighted average common and common equivalent shares outstanding		30,928			30,938			30,984			30,993

Basic earnings per share attributable to AMCOL shareholders	$	0.33		$	0.77		$	0.20		$	0.49

Diluted earnings per share attributable to AMCOL shareholders	$	0.33		$	0.76		$	0.20		$	0.48

Dividends declared per share	$	0.36		$	0.32		$	0.18		$	0.16

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

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Total						AMCOL Shareholders						Noncontrolling Interest
	Three Months Ended						Three Months Ended						Three Months Ended
	June 30,						June 30,						June 30,
	2009			2008			2009			2008			2009			2008
Net income (loss)	$	5,939		$	15,108		$	6,097		$	14,834		$	(158	)	$	274
Other comprehensive income (loss):
Foreign currency translation adjustment		13,471			1,379			13,131			1,435			340			(56	)
Unrealized gain (loss) on interest rate swap agreement		1,151			2,109			1,151			2,109			-			-
Other		(206	)		(663	)		(206	)		(663	)		-			-

Comprehensive income (loss)	$	20,355		$	17,933		$	20,173		$	17,715		$	182		$	218

	Total						AMCOL Shareholders						Noncontrolling Interest
	Six Months Ended						Six Months Ended						Six Months Ended
	June 30,						June 30,						June 30,
	2009			2008			2009			2008			2009			2008
Net income (loss)	$	9,908		$	23,762		$	10,273		$	23,455		$	(365	)	$	307
Other comprehensive income (loss):
Foreign currency translation adjustment		4,505			6,618			4,208			6,674			297			(56	)
Unrealized gain (loss) on interest rate swap agreement		1,319			(3	)		1,319			(3	)		-			-
Other		(266	)		(70	)		(266	)		(70	)		-			-

Comprehensive income (loss)	$	15,466		$	30,307		$	15,534		$	30,056		$	(68	)	$	251

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

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(In thousands)

				AMCOL Shareholders
	Total Equity			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Treasury Stock			Paid-in Capital			Noncontrolling Interest
Balance at December 31, 2007	$	352,650		$	258,164		$	33,248		$	320	$	(21,008	)	$	81,599		$	327
Net income		23,762			23,455														307
Dividends		(9,671	)		(9,671	)
Purchase of treasury shares		(2,062	)										(2,062	)
Issuance of treasury shares pursuant to options and acquisition		4,920											4,216			704
Tax benefit from employee stock plans		946														946
Vesting of common stock in connection with employee stock plans		1,542														1,542
Comprehensive income (loss)		6,545						6,601											(56	)
Investments made		2,447																	2,447
Other		183																	183

Balance at June 30, 2008		381,262			271,948			39,849			320		(18,854	)		84,791			3,208

Balance at December 31, 2008	$	328,355		$	262,453		$	(4,721	)	$	320	$	(18,196	)	$	86,350		$	2,149
Net income (loss)		9,908			10,273														(365	)
Dividends		(11,014	)		(11,014	)
Purchase of treasury shares		(175	)										(175	)
Issuance of treasury shares pursuant to options and acquisition		778											2,041			(1,263	)
Tax benefit from employee stock plans		783														783
Vesting of common stock in connection with employee stock plans		1,430														1,430
Purchase of noncontrolling interest shares		(5,704	)													(4,714	)		(990	)
Comprehensive income (loss)		5,558						5,261											297

Balance at June 30, 2009		329,919			261,712			540			320		(16,330	)		82,586			1,091

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

AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Six Months Ended
	June 30,
	2009			2008
Cash flow from operating activities:
Net income	$	9,908		$	23,762
Adjustments to reconcile from net income to net cash
provided by (used in) operating activities:
Depreciation, depletion, and amortization		17,875			15,747
Other non-cash charges		3,630			(488	)
Changes in assets and liabilities, net of effects of acquisitions:
Decrease (increase) in current assets		45,157			(53,864	)
Decrease (increase) in noncurrent assets		(4,665	)		(650	)
Increase (decrease) in current liabilities		(8,004	)		12,065
Increase (decrease) in noncurrent liabilities		1,639			1,416
Net cash provided by (used in) operating activities		65,540			(2,012	)
Cash flow from investing activities:
Capital expenditures		(32,446	)		(23,313	)
Capital expenditures - corporate building		(6,400	)		(6,273	)
Proceeds fron sale of depreciable assets - corporate building		6,400			-
Acquisitions, net of cash		(522	)		(42,257	)
Investments in and advances to affiliates and joint ventures		(889	)		(9,715	)
Receipts from (advances to) Chrome Corp		6,000			(6,000	)
Other		1,874			(1,198	)
Net cash used in investing activities		(25,983	)		(88,756	)
Cash flow from financing activities:
Net change in outstanding debt		(28,792	)		84,820
Net change in outstanding debt - corporate building		-			11,081
Proceeds from sales of treasury stock		768			1,272
Purchases of treasury stock		(165	)		(2,062	)
Dividends		(11,014	)		(9,671	)
Excess tax benefits from stock-based compensation		686			913
Net cash provided by (used in) financing activities		(38,517	)		86,353
Effect of foreign currency rate changes on cash		876			1,115
Net increase (decrease) in cash and cash equivalents		1,916			(3,300	)
Cash and cash equivalents at beginning of period		19,441			25,282
Cash and cash equivalents at end of period	$	21,357		$	21,982

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

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Operations

We, AMCOL International Corporation (the Company), operate 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
	June 30,
	2009			2008
Minerals		46	%		49	%
Environmental		30	%		32	%
Oilfield services		19	%		15	%
Transportation		7	%		7	%
Intersegment shipping		-2	%		-3	%
		100	%		100	%

Further discussion of segment information is included in Note 4, “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, 2008, is unaudited. The condensed consolidated balance sheet as of December 31, 2008 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, 2008. 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, 2009 and 2008, and our financial position as of June 30, 2009, 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, 2008.

Certain items in the prior year’s condensed consolidated financial statements contained herein and notes thereto have been reclassified to conform to the condensed consolidated financial statement presentation for the three and six months ended June 30, 2009. These reclassifications did not have a material impact on our financial statements.

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.

As appropriate, we have evaluated subsequent events that have occurred through August 10, 2009, the date of issuance for these condensed consolidated financial statements as well as the filing date of this Form 10-Q.

Recently Adopted Accounting Standards

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” (“SFAS 160”). A noncontrolling interest, sometimes called a minority interest, is the portion of equity in a subsidiary not directly or indirectly attributable to a parent company. SFAS 160 establishes standards of reporting for noncontrolling interests as well as deconsolidation of a subsidiary. SFAS 160 clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be clearly identified and reported within equity in the consolidated statement of financial position, albeit separate from the parent company’s equity. It also requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and noncontrolling interests rather than reporting the noncontrolling interest as a deduction in arriving at net income. The adoption of SFAS 160 on January 1, 2009 did not have a material impact on our financial statements. The presentation and disclosure requirements of this standard were applied retrospectively.

In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS157-2, “Effective Date of FASB Statement No. 157,” (“FSP FAS157-2”), which delayed our effective date of SFAS No. 157, “Fair Value Measurements,” (“SFAS 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 (at least annually). The adoption of FSP FAS 157-2 on January 1, 2009 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,” (“SFAS 161”). This standard requires enhanced disclosures about an entity’s derivative and hedging activities and is intended to improve 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 FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The adoption of this standard on January 1, 2009 did not have a material impact on our financial statements. See Note 7 for additional disclosures required by this standard.

In April 2009, FASB issued FSP No. 141(R)-1, “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies,” (“FSP FAS 141(R)-1”). This FSP amends and clarifies the provisions of SFAS No. 141(R), “Business Combinations,” (“SFAS No. 141 (R)”) for initial recognition and measurement, subsequent measurement, accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This FSP requires pre-acquisition contingencies assumed in a business combination to be recognized at acquisition date fair value. If the fair value cannot be determined during the measurement period, and if the information available before the end of the measurement period indicates that it is probable that an asset existed or a liability incurred at the acquisition date and such amount can reasonably be estimated, then the provisions of SFAS No. 5, “Accounting for Contingencies,” and FASB Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss,” shall be applied. Contingent consideration arrangements assumed in a business combination shall still be measured subsequently per the provisions of SFAS No. 141(R). We adopted FSP FAS 141(R)-1 on January 1, 2009. This standard did not have a material impact on our financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” (“FSP FAS 107-1 and APB 28-1”). This FSP amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. This FSP also amends Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim periods. This standard did not have a material impact on our financial statements when we adopted it on June 30, 2009.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” (“SFAS 165”). This standard establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. Although introducing new terminology, the standard is based on the same principles that currently exist with US GAAP. It does, however, require disclosure of the date through which we have evaluated subsequent events. This standard did not have a material impact on our financial statements when we adopted it on June 30, 2009.

Recently Issued Accounting Standards (Not Yet Adopted)

Accounting pronouncements approved by various standard setting and governmental authorities that have not yet become effective with respect to our condensed consolidated financial statements are detailed as follows, together with our assessment of the potential impact they may have on our condensed consolidated financial statements:

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” (“SFAS 167”). This standard amends consolidation guidance applicable to variable interest entities (“VIEs”) and requires additional disclosures concerning an enterprise’s continual involvement with VIEs. We are currently evaluating the effect this standard will have on our financial statements when we adopt it on January 1, 2010.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162,” (“SFAS 168”). Once in effect, The FASB Accounting Standards CodificationTM (Codification) will become the source of US GAAP recognized by the FASB to be applied by all non-governmental entities. Codification will supersede all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. We do not believe this standard will have a material impact on our financial statements when we adopt it on September 30, 2009.

Note 2: 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 attributable to AMCOL shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share was computed by dividing net income attributable to AMCOL shareholders by the weighted average common shares outstanding after consideration of the dilutive effect of stock based compensation outstanding during each period.

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2009		2008		2009		2008
Weighted average number of common shares outstanding		30,719,389		30,336,315		30,744,447		30,412,832
Dilutive impact of stock based compensation		208,579		602,087		239,696		580,598
Weighted average number of common and common equivalent shares outstanding for the period		30,927,968		30,938,402		30,984,143		30,993,430
Number of common shares outstanding at the end of the period		30,602,966		30,380,915		30,602,966		30,380,915

Weighted average number of anti-dilutive shares excluded from the computation of diluted earnings per share		1,606,728		640,207		1,143,072		18,333

Note 3: ADDITIONAL BALANCE SHEET INFORMATION

Our inventories at June 30, 2009 and December 31, 2008 are comprised of the following components:

	June 30,		December 31,
	2009		2008
Crude stockpile inventories	$	31,844	$	40,056
In-process and finished goods inventories		45,152		51,653
Other raw material, container, and supplies inventories		27,780		33,357
	$	104,776	$	125,066

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:

	Six Months Ended
	June 30,
	2009			2008
Balance at beginning of period	$	5,649		$	5,699
Settlement of obligations		(669	)		(625	)
Liabilities incurred and accretion expense		862			1,579
Acquisition of mining claims		474			-
Foreign Currency		136			-
Balance at end of period	$	6,452		$	6,653

Note 4: BUSINESS SEGMENT INFORMATION

As previously mentioned, we operate in five 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 several items, such as net interest expense 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:

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Net sales:
Minerals	$	155,636		$	206,347		$	75,479		$	107,003
Environmental		99,603			136,260			55,370			78,041
Oilfield services		64,031			61,798			32,133			37,655
Transportation		22,849			31,233			11,558			16,883
Intersegment shipping		(6,500	)		(10,382	)		(3,340	)		(5,735	)
Total	$	335,619		$	425,256		$	171,200		$	233,847

Operating profit (loss):
Minerals	$	13,391		$	16,207		$	5,783		$	8,520
Environmental		10,848			18,226			7,154			12,255
Oilfield services		9,367			12,697			4,450			8,748
Transportation		990			1,613			509			833
Corporate		(10,649	)		(12,580	)		(4,116	)		(6,905	)
Total	$	23,947		$	36,163		$	13,780		$	23,451

	As of Jun. 30, 2009		As of Dec. 31, 2008
Assets:
Minerals	$	345,970	$	341,111
Environmental		159,430		177,898
Oilfield services		159,152		160,691
Transportation		3,549		4,761
Corporate		53,351		60,119
Total	$	721,452	$	744,580

	Six Months Ended				Three Months Ended
	June 30,				June 30,
	2009		2008		2009		2008
Depreciation, depletion and amortization:
Minerals	$	8,113	$	7,667	$	4,000	$	3,993
Environmental		3,003		3,180		1,519		1,605
Oilfield services		5,887		4,023		2,937		2,249
Transportation		21		16		10		7
Corporate		851		861		451		458
Total	$	17,875	$	15,747	$	8,917	$	8,312

Capital expenditures:
Minerals	$	23,647	$	11,911	$	3,832	$	4,224
Environmental		1,095		2,311		559		1,453
Oilfield services		6,465		6,209		4,000		2,925
Transportation		-		17		-		5
Corporate		7,639		9,138		458		5,216
Total	$	38,846	$	29,586	$	8,849	$	13,823

Research and development expense:
Minerals	$	2,698	$	2,573	$	1,363	$	1,297
Environmental		1,073		1,130		546		486
Oilfield services		335		256		168		137
Corporate		127		576		41		428
Total	$	4,233	$	4,535	$	2,118	$	2,348

Note 5: EMPLOYEE BENEFIT PLANS

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

	Six Months Ended						Three Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Service cost	$	824		$	835		$	412		$	417
Interest cost		1,303			1,187			652			594
Expected return on plan assets		(1,073	)		(1,561	)		(519	)		(780	)
Amortization of acturial (gain) / loss		213			(32	)		106			(16	)
Amortization of prior service cost		31			34			15			17
Net periodic benefit cost	$	1,298		$	463		$	666		$	232

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008, we expect to contribute up to $1,000 to our pension plan in 2009.

Note 6: INCOME TAXES

Our effective tax rate for the six months ended June 30, 2009 and 2008 was 21.3% and 26.8%, respectively. For both periods, the rate 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.

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 or the statute of limitations is closed for our U.S. federal income tax returns for all years through 2004. The IRS has recently begun auditing the 2005, 2006 and 2007 tax years.

Note 7: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITES

As a multinational corporation with operations throughout the world, we are subject to certain market risks, including those related to foreign currency, interest rates and government actions. We use a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. We use derivative financial instruments only for risk management and not for trading or speculative purposes.

The following table sets forth the fair values of our derivative instruments:

	Balance Sheet	Fair Value as of
Liability Derivatives	Location	June 30, 2009		December 31, 2008

Derivatives designated as hedging instruments under Statement 133:

Interest rate swap	Other liabilities	$	3,642	$	5,997

Derivatives not designated as hedging instruments under Statement 133:

Foreign currency exchange contracts	Accounts payable	$	512		N/A

SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use several inputs in the valuation technique used to calculate the fair value of each derivative instrument. The fair value hierarchy under SFAS 157 prioritizes these inputs in the following three broad levels:

Level 1 – Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities we have the ability to access at the measurement date.

Level 2 – Valuation is based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and model based valuations for which all significant inputs are observable in the market.

Level 3 – Valuation is based on model based techniques that use unobservable inputs for the asset or liability. These inputs reflect our own assumption about the assumption market participants would use in pricing the asset or liability.

The interest rate swap and foreign currency exchange contracts are valued using discounted cash flows. The key inputs include foreign exchange rate, forward points and interest rate which are readily observable at commonly quoted intervals for the term of the contract and the valuation does not involve significant management judgment.

The following table illustrates how the fair value of our derivative instruments is dependent upon different levels of input assumptions for our derivatives outstanding as of June 30, 2009:

Fair Value Measurements Using

Balance at

Quoted Prices in

Active Markets

for Identical

Assets

Significant Other

Observable

Inputs

Significant

Unobservable

Inputs

Description

6/30/2009

(Level 1)

(Level 2)

(Level 3)

Interest rate swap

3,642

N/A

3,642

N/A

Foreign currency exchange contracts

512

N/A

512

N/A

4,154

The following table illustrates how the fair value of our derivative instruments is dependent upon different levels of input assumptions for our derivatives outstanding as of December 31, 2008:

Fair Value Measurements Using

Balance at

Quoted Prices in

Active Markets

for Identical

Assets

Significant Other

Observable

Inputs

Significant

Unobservable

Inputs

Description

12/31/2008

(Level 1)

(Level 2)

(Level 3)

Interest rate swap

5,997

N/A

5,997

N/A

Cash flow hedges

	Amount of Gain or (Loss) Recognized in OCI on Derivatives					Amount of Gain or (Loss) Recognized in OCI on Derivatives
	(Effective Portion)					(Effective Portion)
Derivatives in Statement 133 Cash Flow Hedging Relationships	Six Months Ended June 30,					Three Months Ended June 30,
	2009		2008			2009		2008

Interest rate swap	$	1,319	$	(3	)	$	1,151	$	2,109

We use interest rate swaps to manage floating interest rate risk on debt securities. Interest rate differentials are paid or received on these arrangements over the life of the agreements. At the end of June 30, 2009 and 2008, we had an interest rate swap outstanding which effectively hedges the variable interest rate of our senior notes to a fixed rate of 5.6% per annum.

Other

We are exposed to potential gains or losses from foreign currency fluctuations affecting net investments and earnings denominated in foreign currencies. Our primary exposures are to fluctuations in exchange rates between the U.S. dollar and the Euro, British pound and Polish zloty. We also have significant exposure to fluctuations in exchange rates between the British pound and the Euro as well as between the Polish zloty and the Euro. We have entered into a series of foreign exchange forward contracts to mitigate the risk of currency fluctuations on these exposures. We also entered into a series of foreign exchange collars to mitigate the risk of currency fluctuations on our February 2009 purchase of a chrome mine in South Africa, the purchase price of which was paid in Australian dollars.

We have not designated these contracts for hedge accounting treatment and therefore, changes in fair value of these contracts are recorded in earnings as follows:

	Location of Gain or (Loss)	Amount of Gain or (Loss) Recognized in Income on Derivatives					Amount of Gain or (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments Under Statement 133	Recognized in Income on	Six Months Ended June 30,					Three Months Ended June 30,
	Derivatives	2009			2008		2009			2008

Foreign currency exchange contracts	Other, net	$	(4,792	)	$	1,964	$	(3,910	)	$	1,673

Note 8: 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.

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 27A of the Securities Act of 1933, as amended, and 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; oil and gas prices and conditions in those 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 industries. 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 our mineral based 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 two of the core components of our longevity and future prospects.

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 segment’s customer base is primarily comprised of oil and gas 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; our fastest growing markets are in the Asia-Pacific and Eastern European regions, which have continued to outpace the United States in economic growth in recent years. Consequently, the state of the US and international economies impacts our revenues.

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 ensure 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, as appropriate, when we believe those businesses are fairly valued and fit with our overall growth strategy. However, the existing global economic will make it more challenging for us to do this than it has in recent years.

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 throughout this report as well as 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, 2008. In general, the significance of these risks has not materially changed over the past year except as they are affected by the global economic and credit crisis occurring in the United States and throughout many of the economies in which we operate. The ongoing credit crisis is characterized by increased volatility, and lack of available capital for short and long term financing. The credit crisis may increase the risks outlined in our latest Annual Report on Form 10-K, especially in the areas of our reliance on key industries (which could be more adversely affected due to the credit crisis), volatility of our stock price, and increased exchange rate sensitivity. In addition, the credit crisis may affect our ability to obtain additional financing to fund acquisitions or other activities on terms substantially similar to our current debt facilities should that need arise in the future. Any of these factors could adversely affect our business opportunities and results.

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, please read our Annual Report on Form 10-K for the year ended December 31, 2008.

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, 2009 vs. June 30, 2008

Consolidated Review

The following table compares our operating results for the quarters ended June 30, 2009 and June 30, 2008:

	Three Months Ended June 30,
Consolidated	2009			2008			2009 vs. 2008
	(Dollars in Thousands, Except Per Share Amounts)
Net sales	$	171,200		$	233,847			-26.8	%
Cost of sales		124,052			171,187
Gross profit		47,148			62,660			-24.8	%
margin %		27.5	%		26.8	%
General, selling and administrative expenses		33,368			39,209			-14.9	%
Operating profit		13,780			23,451			-41.2	%
margin %		8.0	%		10.0	%
Other income (expense):
Interest expense, net		(3,159	)		(2,837	)		11.4	%
Other, net		(1,502	)		830			-281.0	%
		(4,661	)		(2,007	)

Income before income taxes and income (loss) from affiliates and joint ventures		9,119			21,444
Income tax expense		1,546			5,666			-72.7	%
effective tax rate		17.0	%		26.4	%

Income before income (loss) from affiliates and joint ventures		7,573			15,778
Income (loss) from affiliates and joint ventures		(1,634	)		(670	)		143.9	%

Net income		5,939			15,108

Net income (loss) attributable to noncontrolling interests		(158	)		274			-157.7	%

Net income (loss) attributable to AMCOL shareholders	$	6,097		$	14,834			-58.9	%

Basic earnings per share attributable to AMCOL shareholders	$	0.20		$	0.49

Diluted earnings per share attributable to AMCOL shareholders	$	0.20		$	0.48

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

	Organic			Acquisitions			Foreign Exchange			Total
Minerals		-11.5	%		0.0	%		-2.0	%		-13.5	%
Environmental		-5.8	%		0.3	%		-4.2	%		-9.7	%
Oilfield services		-3.9	%		1.7	%		-0.2	%		-2.4	%
Transportation & intersegment shipping		-1.3	%		0.0	%		0.0	%		-1.3	%
Total		-22.5	%		2.0	%		-6.4	%		-26.9	%
% of change		83.7	%		-7.5	%		23.8	%		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:

	Americas			EMEA			Asia Pacific			Total
Minerals		26.3	%		10.1	%		7.7	%		44.1	%
Environmental		15.7	%		14.3	%		2.3	%		32.3	%
Oilfield services		16.9	%		0.8	%		1.1	%		18.8	%
Transportation		4.8	%		0.0	%		0.0	%		4.8	%
Total - current year's period		63.7	%		25.2	%		11.1	%		100.0	%
Total from prior year's comparable period		67.1	%		23.3	%		9.6	%		100.0	%

Net sales:

The decrease in net sales is driven by an overall decrease in our organic revenues predominantly within our minerals and environmental services segments.

Gross profit:

Overall gross profit decreased due to the decrease in net sales mentioned above. However, gross margin increased due primarily to price increases in our minerals segment implemented in 2008 which were not in full effect during the prior year’s quarter.

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

GS&A expenses decreased 14.9%, with all of our segments reducing expenses as compared to last year’s quarter. The decreases were greatest in our environmental and corporate segments. Favorable exchange rate movements helped drive the decrease in the environmental segment, especially from fluctuations in European currencies. Efforts to reduce costs within our corporate departments combined with favorable gains on benefit plan assets helped decrease operating expenses in that segment.

Operating profit:

Operating profit decreased due to the decrease in gross profit as mentioned earlier. On a segment basis, our environmental and oilfield services segments experienced the largest decreases as these businesses are more heavily impacted by the current economic environment, the impact of which is heightened as these businesses move into their busiest time of the season. Operating profit margin decreased across all segments as the reductions in GS&A expenses were not large enough to offset the impact of decreased gross profits.

Interest expense, net:

Net interest expense increased due to increased average debt levels - we began 2009 with debt levels significantly greater than those that existed at the beginning of 2008 due to increased capital spending, an acquisition, and increased working capital levels generated in 2008. 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 expense includes foreign currency transaction gains and losses for third party and intercompany related activity as well as gains and losses on foreign currency derivatives. Other expenses increased in 2009 largely due to losses on foreign currency transactions and derivatives to manage the risk of these foreign currency fluctuations.

Income tax expense:

Our effective tax rate decreased in 2009 to 17.0% compared with 26.4% in the prior year’s period because a greater proportion of our income is being derived by our foreign subsidiaries, whose tax rates are lower than the 35% US federal income tax rate.

Income (loss) from affiliates & joint ventures:

Our joint ventures experienced a loss during the quarter largely due to the fact that they are geographically less diversified businesses. For example, the majority of our Russian investee’s sales are generated within Russia, leading to losses as the Russian economy experiences significant decreases in the markets for its products. In addition, losses from our investment in Belgium increased as that business begins to establish operating activities after recently completing a production processing facility.

Diluted earnings per share:

Diluted EPS decreased commensurate with the decrease in net income as opposed to a change in the weighted average shares outstanding, which remained relatively constant.

Segment analysis:

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

Minerals Segment

	Three Months Ended June 30,
Minerals	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	75,479	100.0	%	$	107,003	100.0	%	$	(31,524	)	-29.5	%
Cost of sales		60,567	80.2	%		88,659	82.9	%
Gross profit		14,912	19.8	%		18,344	17.1	%		(3,432	)	-18.7	%
General, selling and
administrative expenses		9,129	12.1	%		9,824	9.2	%		(695	)	-7.1	%
Operating profit		5,783	7.7	%		8,520	7.9	%		(2,737	)	-32.1	%

	Three Months Ended June 30,
Minerals Product Line Sales	2009		2008		% change
	(Dollars in Thousands)
Metalcasting	$	30,954	$	44,709		-30.8	%
Specialty materials		22,007		27,328		-19.5	%
Pet products		15,355		19,179		-19.9	%
Basic minerals		6,090		13,317		-54.3	%
Other product lines		1,073		2,470		*
Total		75,479		107,003

* Not meaningful.

Decreased sales volumes accounted for the decrease in revenues over the prior year quarter, primarily in metalcasting and drilling products (part of basic minerals) due to the global recession. The segment also experienced decreased revenues due to adverse movements in foreign currency exchange rates, primarily the British pound and Turkish Lira to the US dollar. The effect of a full period of selling price increases that were instituted in the prior year but were not in effect in the prior year’s quarter worked to slightly ameliorate these decreases. The increased selling prices, however, were the primary driver behind the increase in gross margins.

GS&A expenses decreased marginally due principally to favorable foreign exchange rate movements, again primarily in European currencies. However, they did not decrease proportionally to revenues, leading to a slight decrease in operating profit margin.

Environmental Segment

	Three Months Ended June 30,
Environmental	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	55,370	100.0	%	$	78,041	100.0	%	$	(22,671	)	-29.1	%
Cost of sales		35,843	64.7	%		51,165	65.6	%
Gross profit		19,527	35.3	%		26,876	34.4	%		(7,349	)	-27.3	%
General, selling and
administrative expenses		12,373	22.3	%		14,621	18.7	%		(2,248	)	-15.4	%
Operating profit		7,154	13.0	%		12,255	15.7	%		(5,101	)	-41.6	%

	Three Months Ended June 30,
Environmental Product Line Sales	2009		2008		% change
	(Dollars in Thousands)
Lining technologies	$	34,670	$	48,452		-28.4	%
Building materials		15,099		22,858		-33.9	%
Other product lines		5,601		6,731		*
Total		55,370		78,041

* Not meaningful.

Revenues in the environmental segment decreased due to adverse movements in foreign currency exchange rates, primarily the British pound and Polish zloty to the US dollar, and organic decreases across all product lines due to the recession and credit crisis. Gross margins improved due to decreased raw material costs, such as resin and lower freight costs.

More than 75% of the decrease in GS&A expenses is attributable to foreign currency exchange rate fluctuations which, while they reduce the value of foreign denominated revenues, also reduce foreign denominated expenses. Operating profit margin decreased due to the combination of the above reasons.

Oilfield Services Segment

	Three Months Ended June 30,
Oilfield Services	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	32,133	100.0	%	$	37,655	100.0	%	$	(5,522	)	-14.7	%
Cost of sales		20,770	64.6	%		21,904	58.2	%
Gross profit		11,363	35.4	%		15,751	41.8	%		(4,388	)	-27.9	%
General, selling and
administrative expenses		6,913	21.5	%		7,003	18.6	%		(90	)	-1.3	%
Operating profit		4,450	13.9	%		8,748	23.2	%		(4,298	)	-49.1	%

Several of our oilfield services segment service offerings experienced fluctuations in revenues as compared to the prior year’s period. Although foreign markets were down overall, our foreign operations benefited from new revenues in Brazil that were not present in the prior year’s period as our activities were not operational in the prior year period. Domestically, our on-shore operations suffered more than our offshore operations, especially our Nitrogen services which experienced the largest decrease in revenues.

Certain of our businesses are experiencing significant selling price competition, especially our coil tubing and nitrogen businesses, due to reductions in demand and the entrance of competitors who used to primarily serve the offshore market but have focused more on the on-shore market given depressed activities offshore. All these factors led to significant decreases in gross margins, combined with the fact that the prior year’s gross margins were very good as certain of our businesses, such as our European business, experienced record profits in last year’s quarter.

Operating profits decreased due to the decreased gross profits mentioned above without commensurate decreases in GS&A expenses. Operating margin decreased as the profitability of our coil tubing business was lower than other parts of the business, thereby decreasing the overall profitability. Our coil tubing business has experienced significant competitive pressures as customers reduce their use of these services given the drop in oil and natural gas prices.

Transportation Segment

	Three Months Ended June 30,
Transportation	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	11,558	100.0	%	$	16,883	100.0	%	$	(5,325	)	-31.5	%
Cost of sales		10,212	88.4	%		15,194	90.0	%
Gross profit		1,346	11.6	%		1,689	10.0	%		(343	)	-20.3	%
General, selling and
administrative expenses		837	7.2	%		856	5.1	%		(19	)	-2.2	%
Operating profit		509	4.4	%		833	4.9	%		(324	)	-38.9	%

Traffic levels decreased as compared to the prior year period due to the recession in the United States. In addition, prices for gasoline have decreased, leading to decreased fuel surcharges. Both of these factors contributed to the decrease in this segment’s performance.

Corporate Segment

	Three Months Ended June 30,
Corporate	2009			2008			2009 vs. 2008
	(Dollars in Thousands)
Intersegment shipping sales	$	(3,340	)	$	(5,735	)		2,395
Intersegment shipping costs		(3,340	)		(5,735	)
Gross profit		-			-
General, selling and
administrative expenses		4,116			6,905			(2,789	)	-40.4		%
Operating loss		4,116			6,905			(2,789	)		-40.4	%

Intersegment shipping revenues and costs are related to billings from our transportation segment to its domestic minerals and environmental segment sister companies for services. These services are invoiced 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 decreased in many areas due to reduced consulting, IT and personnel related costs.

Six months ended June 30, 2009 vs. June 30, 2008

Consolidated Review

The following table compares our operating results for the period ended June 30, 2009 and June 30, 2008:

	Six Months Ended June 30,
Consolidated	2009			2008			2009 vs. 2008
	(Dollars in Thousands, Except Per Share Amounts)
Net sales	$	335,619		$	425,256			-21.1	%
Cost of sales		245,251			316,246
Gross profit		90,368			109,010			-17.1	%
margin %		26.9	%		25.6	%
General, selling and
administrative expenses		66,421			72,847			-8.8	%
Operating profit		23,947			36,163			-33.8	%
margin %		7.1	%		8.5	%
Other income (expense):
Interest expense, net		(6,566	)		(5,238	)		25.4	%
Other, net		(2,714	)		595			-556.1	%
		(9,280	)		(4,643	)

Income before income taxes and income (loss) from affiliates and joint ventures		14,667			31,520
Income tax expense		3,117			8,383			-62.8	%
effective tax rate		21.3	%		26.6	%

Income before income (loss) from affiliates and joint ventures		11,550			23,137
Income (loss) from affiliates and joint ventures		(1,642	)		625			-362.7	%

Net income		9,908			23,762

Net income (loss) attributable to noncontrolling interests		(365	)		307			-218.9	%

Net income (loss) attributable to AMCOL shareholders	$	10,273		$	23,455			-56.2	%

Basic earnings per share attributable to AMCOL shareholders	$	0.33		$	0.77

Diluted earnings per share attributable to AMCOL shareholders	$	0.33		$	0.76

We measure sales fluctuations by the relevant components: organic, acquisitions, and foreign currency exchange. The following table details the consolidated sales fluctuations by components over the prior year’s comparable period:

	Organic			Acquisitions			Foreign Exchange			Total
Minerals		-9.2	%		0.0	%		-2.7	%		-11.9	%
Environmental		-4.6	%		0.2	%		-4.2	%		-8.6	%
Oilfield services		-1.2	%		1.8	%		-0.1	%		0.5	%
Transportation & intersegment shipping		-1.1	%		0.0	%		0.0	%		-1.1	%
Total		-16.1	%		2.0	%		-7.0	%		-21.1	%
% of change		76.4	%		-9.4	%		33.0	%		100.0	%

In addition, 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			Total
Minerals		29.9	%		9.4	%		7.1	%		46.4	%
Environmental		14.7	%		12.7	%		2.3	%		29.7	%
Oilfield services		17.5	%		0.6	%		1.0	%		19.1	%
Transportation		4.8	%		0.0	%		0.0	%		4.8	%
Total - current year's period		66.9	%		22.7	%		10.4	%		100.0	%
Total from prior year's comparable period		67.6	%		22.9	%		9.5	%		100.0	%

Net sales:

The decrease in net sales predominantly stems from the decrease in volumes in our domestic minerals business and our environmental segment. Revenues from our oilfield services and transportation segments also decreased.

Gross profit:

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

GS&A expenses experienced an 8.8% decrease primarily due to favorable exchange rate movements in our environmental segment combined with decreases in our minerals and corporate segments.

Operating profit:

Operating profit decreased due to the decrease in gross profit as mentioned earlier. Excluding our corporate segment, every segment experienced deteriorating operating profits as we will outline later herein. However, our minerals segment experienced increased operating profit margins due to the aforementioned selling price increases.

Interest expense, net:

Other income (expense):

Other expense includes foreign currency transaction gains and losses for third party and intercompany related activity as well as gains and losses on foreign currency derivatives. Other expense increased in 2009 largely due to losses on derivative and foreign exchange transaction losses. We are undertaking several measures to ameliorate these losses.

Income tax expense:

Our effective tax rate is lower in 2009 than in 2008 due to a greater proportion of income being derived in our foreign operations, which typically have income tax rates which are lower than the statutory 35% in the USA.

Income (loss) from affiliates & joint ventures:

Our joint ventures experienced a loss during the period largely due to the fact that they are geographically less diversified businesses. For example, the majority of our Russian investee’s sales are generated within Russia, leading to losses as the Russian economy experiences significant decreases in the markets for its products. In addition, losses from our investment in Belgium increased as that business begins to establish operating activities after recently completing a production processing facility.

Diluted earnings per share:

Diluted EPS decreased commensurate with the decrease in net income as previously outlined.

Segment analysis:

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

Minerals Segment

	Six Months Ended June 30,
Minerals	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	155,636	100.0	%	$	206,347	100.0	%	$	(50,711	)	-24.6	%
Cost of sales		124,542	80.0	%		171,326	83.0	%
Gross profit		31,094	20.0	%		35,021	17.0	%		(3,927	)	-11.2	%
General, selling and administrative expenses		17,703	11.4	%		18,814	9.1	%		(1,111	)	-5.9	%
Operating profit		13,391	8.6	%		16,207	7.9	%		(2,816	)	-17.4	%

	Six Months Ended June 30,
Minerals Product Line Sales	2009		2008		% change
	(Dollars in Thousands)
Metalcasting	$	62,495	$	85,387		-26.8	%
Specialty materials		44,669		52,991		-15.7	%
Pet products		32,770		38,702		-15.3	%
Basic minerals		13,940		25,358		-45.0	%
Other product lines		1,762		3,909		*
Total		155,636		206,347

* Not meaningful.

Decreased sales volumes accounted for the reduction in revenues over the prior year period, primarily in metalcasting and drilling products (part of basic minerals) due to the global recession. The segment also experienced decreased revenues due to adverse movements in foreign currency exchange rates, primarily the British pound and Turkish Lira to the US dollar, which were more than offset by the effect of a full period of selling price increases that were instituted in the prior year but were not in effect in the prior year’s period. The increased selling prices also accounted for the increase in gross profit margins.

GS&A expenses decreased due to foreign exchange rate movements and decreases in employee related expenses. This decrease, along with the increase in gross profit margin, contributed to the increase in operating profit margins.

Environmental Segment

	Six Months Ended June 30,
Environmental	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	99,603	100.0	%	$	136,260	100.0	%	$	(36,657	)	-26.9	%
Cost of sales		65,977	66.2	%		89,963	66.0	%
Gross profit		33,626	33.8	%		46,297	34.0	%		(12,671	)	-27.4	%
General, selling and administrative expenses		22,778	22.9	%		28,071	20.6	%		(5,293	)	-18.9	%
Operating profit		10,848	10.9	%		18,226	13.4	%		(7,378	)	-40.5	%

	Six Months Ended June 30,
Environmental Product Line Sales	2009		2008		% change
	(Dollars in Thousands)

Lining technologies	$	61,423	$	80,947		-24.1	%
Building materials		27,477		42,853		-35.9	%
Other product lines		10,703		12,460		*
Total		99,603		136,260

* Not meaningful.

Revenues in the environmental segment decreased due, almost equally, to two factors: exchange rates and reduced activity in our domestic markets due to the recession and credit crisis. Adverse movements in foreign currency exchange rates, primarily the British pound and Polish zloty to the US dollar, drove the decrease due to exchange rates. Organic decreases across all product lines, but most notably our lining technologies and contracting services divisions, accounted for the decrease due to recessionary and credit crisis factors. These decreases also led to the decrease in gross profits as gross margins were relatively constant.

GS&A expenses decreased in part due to the currency movements as mentioned above and due to decreased employee incentives and third party commissions stemming from decreased sales levels. Operating profit margin decreased due to the decrease in sales without a corresponding decrease in GS&A expenses.

Oilfield Services Segment

	Six Months Ended June 30,
Oilfield Services	2009				2008				2009 vs. 2008
	(Dollars in Thousands)

Net sales	$	64,031	100.0	%	$	61,798	100.0	%	$	2,233		3.6	%
Cost of sales		41,063	64.1	%		37,345	60.4	%
Gross profit		22,968	35.9	%		24,453	39.6	%		(1,485	)	-6.1	%
General, selling and administrative expenses		13,601	21.2	%		11,756	19.0	%		1,845		15.7	%
Operating profit		9,367	14.7	%		12,697	20.6	%		(3,330	)	-26.2	%

Strong increased demand for offshore, deep water filtration services and revenues from our May 2008 acquisition of our coil tubing business are the primary drivers of the increased sales over the prior year period. However, these sales levels are being achieved at reduced selling prices given increased competition for services as oil and gas companies curtail their investments and maintenance activities given the decline in the price of oil. The increased competition has thus led to reduced gross profits and gross margins.

GS&A expenses increased primarily due to the acquisition of our coil tubing business. Operating profits decreased due to the decreased gross profits mentioned above, and the decreased operating margins follow the decrease in gross margins. Additive to that, however, is our coil tubing business which has experienced significant competitive pressures as customers reduce their use of these services given the drop in oil prices.

Transportation Segment

	Six Months Ended June 30,
Transportation	2009				2008				2009 vs. 2008
	(Dollars in Thousands)
Net sales	$	22,849	100.0	%	$	31,233	100.0	%	$	(8,384	)	-26.8	%
Cost of sales		20,169	88.3	%		27,994	89.6	%
Gross profit		2,680	11.7	%		3,239	10.4	%		(559	)	-17.3	%
General, selling and administrative expenses		1,690	7.4	%		1,626	5.2	%		64		3.9	%
Operating profit		990	4.3	%		1,613	5.2	%		(623	)	-38.6	%

Corporate Segment

	Six Months Ended June 30,
Corporate	2009			2008			2009 vs. 2008
	(Dollars in Thousands)
Intersegment shipping sales	$	(6,500	)	$	(10,382	)		3,882
Intersegment shipping costs		(6,500	)		(10,382	)
Gross profit		-			-			-
General, selling and administrative expenses		10,649			12,580			(1,931	)	-15.3	%
Operating loss		10,649			12,580			(1,931	)	-15.3	%

Corporate GS&A expenses decreased due to reduced employee and employee related expenses, including benefits, as well as a decrease in professional and consulting expenses.

Liquidity and Capital Resources

Cash flows from operations, an ability to issue new debt instruments, and borrowings from our revolving credit facility have been our sources of funds to provide working capital, make capital expenditures, acquire businesses, repurchase common stock, and pay dividends to shareholders. We believe cash flows from operations and borrowings from an unused and committed credit facility will be adequate to support our current business needs for the foreseeable future. Given the current economic climate and credit crisis, it is unlikely that we would pursue a substantial acquisition in 2009. However, we may need additional debt or equity facilities in order to pursue acquisitions, when and if these opportunities become available, and we may or may not be able to obtain such facilities on terms substantially similar to our current facilities as discussed in Item 1A – Risk Factors in our Form 10-K for 2008. See our additional comments in the Overview section of Part 1, Item 2 of this report. 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, Item 1 of this report.

	Six Months Ended
Cash Flows	June 30,
($ in millions)	2009			2008
Net cash provided by operating activities	$	65.5		$	(2.0	)
Net cash used in investing activities	$	(26.0	)	$	(88.8	)
Net cash provided by (used in) financing activities	$	(38.5	)	$	86.4

Cash flows from operating activities increased substantially as compared to the prior year period due to decreased working capital levels, which we were able to reduce through decreased business activity resulting from the current economic environment and better inventory management. Historically, cash flows from operations have increased over the course of the year and we anticipate this pattern will continue for the remainder of this year.

Cash flows used in investing activities decreased in the current year period as the prior year period includes the acquisition of our coil tubing business and our investment in a Russian bentonite company. In 2009, we purchased a chrome sand mine in South Africa from Chrome Corporation for $15.1 million (included within capital expenditures). Investing activities in 2009 include the repayment of the $6 million loan from Chrome Corporation made in 2008.

Cash flows from financing activities decreased as we paid off debt whereas in the previous year we incurred more debt. We were able to pay down debt due to reduced working capital requirements and reduced investing activities. Year-to-date dividends increased in 2009 to $0.36 per share from $0.32 per share in the prior year period.

	As at
Financial Position	June 30,		December 31,
($ in millions)	2009		2008
Working capital	$	208.1	$	262.7
Goodwill & intangible assets	$	121.4	$	122.5
Total assets	$	721.5	$	744.6

Long-term debt	$	230.1	$	256.8
Other long-term obligations	$	65.4	$	50.9
Total equity	$	329.9	$	328.4

Working capital at June 30, 2009 decreased over the amount at December 31, 2008 due to decreases in accounts receivable and inventories partly commensurate with the decreased sales levels but also due to increased efforts to minimize these assets. Given the seasonality of our environmental segment and the project nature of some of our services provided in the oilfield services segment, working capital levels typically increase in the second and third quarters of the year. However, this trend may or may not continue in the current economic environment.

Long-term debt relative to total capitalization reduced slightly to 41.1% at June 30, 2009 versus 43.9% at December 31, 2008. We have approximately $87.0 million of borrowing capacity available from our revolving credit facility at June 30, 2009. We are in compliance with financial covenants related to the revolving credit facility as of the period covered by this report.

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

Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2008 discloses our contractual obligations and off-balance sheet arrangements. Other than the decrease in our long-term bank debt as disclosed in our condensed consolidated financial statements herein there were no material changes in our contractual obligations and off-balance sheet arrangements.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in our market risk from the disclosures made in our Annual Report on Form 10-K for the year ended December 31, 2008 other than those discussed in Part 1, Item 2 of this report.

Item 4: Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, they concluded that, as of the end of such period, our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting, on a timely basis, information we are required to disclose in the reports we file or submit under the Exchange Act.

Changes in Internal Control Over Financial Reporting

The Securities and Exchange Commission, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring public companies to include in their annual reports on Form 10-K an assessment by management of the effectiveness of our internal controls over financial reporting. As described in our Annual Report on Form 10-K filed for the year ended December 31, 2008, we identified a material weakness in internal control over financial reporting relative to incorporating the results of our equity investees in our financial statements pursuant to the equity method of accounting. In particular, our design of internal controls did not address the proper accounting for the value of derivative instruments held by one of our equity investees, Ashapura Minechem Limited. As a result of the foregoing, we began implementing changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934) during the fiscal quarter ended March 31, 2009 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Specifically, these changes include transferring the responsibility of accounting for equity investees from our minerals segment to our corporate segment. We also enhanced controls over financial reporting of our equity investees to assure the consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles.

We began remediating this material weakness in the first quarter of 2009 and completed our activities in the second quarter of 2009. Accordingly, we have determined that the material weakness in our internal control over financial reporting relative to our accounting for equity investments as described in our annual report on Form 10-K for the year ended December 31, 2008 was remediated as of June 30, 2009.

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, 2008. In addition, we also face certain Market Risks as noted in Part 1, “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” of that Form 10-K. The risk factors presented below update, and should be considered in addition to, the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008.

Risks of International Expansion& Operation

An important part of our business strategy is to expand internationally, partly through our intent to seek acquisitions, joint ventures and strategic alliances globally. Sales and earnings from our overseas operations have increased considerably in recent years and comprose a significant portion of our financial results; morever, our income has been more sensitive to our earnings from joint ventures. As we expand and operate internationally, we will be subject to a myriad of risks, especially in less developed and higher growth countries. These risks relate to currency exchange rates, political and economic environments, business and trade laws, and regulatory and compliance issues. All of these risks can change beyond our control and lead to sudden, and potentially prolonged, changes in demand for our products, difficulty in enforcing agreements, or losses in the realizability of our assets.

Seasonality of Our Oilfield Services and Environmental Segments

Our oilfield services segment and environmental segment are affected by seasonal weather patterns. A majority of our oilfield services’ revenues are derived from the Gulf of Mexico and surrounding states, which are susceptible to hurricanes that typically occur in the Fall months. In addition, it is affected by customers’ demands for natural gas. Natural gas is affected by weather patterns as colder winters increase the demand for natural gas to heat homes and warmer summers increase the demand for natural gas to fuel generators providing electricity to run air conditioners. Actual or threatened hurricanes or changes in the demand for natural gas can result in volatile demand for services provided by our oilfield services segment.

Our environmental segment is affected by weather patterns which determine the feasibility of construction activities. Typically, less construction activity occurs in winter months and thus this segment’s revenues tend to be greatest in the second and third quarters when weather patterns in our geographic markets are more conducive to construction activities.

Cyclicality of Our Segments

All of our segments are affected by economic cycles. During periods of economic slowdown, our customers often reduce their capital expenditures and defer or cancel pending projects. Such developments occur even amongst customers that are not experiencing financial difficulties. These risks are more predominant in our environmental and minerals segments.

In our environmental segment, the construction and infrastructure markets are heavily dependent upon the strength of domestic and international economies. In our minerals segment, the metalcasting market is dependent upon the demand for castings for automotive, farming, railcar, home appliance and metallurgical uses. The recent volatility in the credit markets and the economic slowdown that was present in the beginning of 2009 has decreased demand for our environmental and minerals segments’ products and services due to the decreased demand in these markets. These decreases may or may not continue.

Sensitivity to Energy and Petroleum Related Products

We purchase a significant amount of raw materials which are derived from petrochemical products. Our production processes also consume a significant amount of energy, primarily electricity, diesel fuel, natural gas and coal. We use diesel fuel to operate our mining and processing equipment and our freight costs are heavily dependent upon fuel prices and surcharges.

These factors combined represent a large exposure to petrochemical and energy products which may be subject to significant price fluctuations. While we have been successful in attaining price increases in certain markets to offset some of these rising costs, there can be no assurance that we will be successful in continuing to achieve these price increases.

Ability to Complete, Integrate & Finance Acquisitions

Our business strategy includes pursuing acquisitions of complementary businesses, either through our own wholly-owned subsidiaries or investments in affiliates and joint ventures. The success of any future acquisitions or investments will be dependent upon our ability to locate an attractive business at an attractive price and our ability to successfully integrate them into our existing operations.

In addition, we have typically financed our acquisitions and investments with debt available to us under our various credit agreements. However, we may decide to pay all or a portion of the purchase price of any future acquisition or investment with shares of our common stock. If we use our common stock in this way, the ownership interests of our shareholders will be diluted and the price of the stock may decrease.

Impact of Competition

Our businesses have many competitors, some of whom are bigger and have more resources than we do. We also face competition for some of our products from alternative products, and some of the competition we face comes from competitors in lower-cost production countries like China and India. Many factors could change the level of competition we face in our markets, which could result in decreased demand for our products and services and negatively affect our financial performance.

Credit and Liquidity Concerns

In addition to the cash flows from our operations, we have relied on our ability to issue new debt instruments and borrow from our revolving credit facility to provide for our capital needs. These debt facilities require us to certify certain representations and warranties and to comply with certain covenants, including certain financial ratios. If we are not able to make these certifications, we may default on our debt facilities, which could impact our liquidity and have a material adverse effect on our business, financial position, and ability to raise debt in the future.

Even if we continue to satisfy the applicable financial covenants, the current volatility in the credit markets has caused a contraction in the availability and cost of obtaining credit generally. This contraction could potentially reduce our sources of future liquidity.

As described more fully under the heading “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our most recent Form 10-K, our debt securities are also subject to interest rate risk, which could adversely affect the cost of our debt for those portions that are not or are inadequately hedged.

Ability to Pay Dividends

We currently declare and pay regular cash dividends on our common stock. Any future payment of cash dividends will depend upon our financial condition, earnings, legal requirements, restrictions in our debt agreements and other factors deemed relevant by our board of directors. Our board of directors may decrease or discontinue payment of dividends at any time. In addition, we cannot assure you that the agreements governing our current and future indebtedness will permit us to pay dividends on our common stock.

Item 4: Submission of Matters to a vote of Security Holders

(a)

The Annual Meeting of Shareholders was held on May 7, 2009.

(b)

See Item 4(c) below.

(c)

At the Annual Meeting of Shareholders, the shareholders voted on the election of three directors, each to serve a three year term. The voting results were as follows:

Director	For		Withheld
Daniel P. Casey		21,969,576		517,592
Dale E. Stahl		21,898,661		588,506
Lawrence E. Washow		22,184,082		303,085

Item 6: Exhibits

Exhibit Number

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.

SIGNATURES

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

AMCOL INTERNATIONAL CORPORATION

Date: August 10, 2009	/s/ Lawrence E. Washow

	Lawrence E. Washow
	President and Chief Executive Officer

Date: August 10, 2009	/s/ Donald W. Pearson
	Donald W. Pearson
	Vice President and Chief Financial Officer

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.