SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 - For the fiscal year ended December 31, 1999

Commission file number 1-13905

COMPX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)

Delaware                                            57-0981653     
-------------------------------                           --------------------
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                            Identification No.)

16825 Northchase Drive, Suite 1200, Houston, TX                   77060       
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(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:          (281) 423-3377   
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Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class                           which registered

Class A common stock                      New York Stock Exchange
($.01 par value per share)

Securities registered pursuant to Section 12(g) of the Act:

None.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   X

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 and (2) has been subject to such filing requirements for
the past 90 days. Yes X No

As of  February  29,  2000,  6,148,580  shares  of  Class A  common  stock  were
outstanding.  The  aggregate  market  value of the 5.8 million  shares of voting
stock held by nonaffiliates  of Valhi,  Inc. as of such date  approximated  $108
million.

Documents incorporated by reference

The  information  required by Part III is  incorporated  by  reference  from the
Registrant's definitive proxy statement to be filed with the Commission pursuant
to  Regulation  14A not later  than 120 days  after the end of the  fiscal  year
covered by this report.

PART I

ITEM 1.   BUSINESS

General

CompX  International  Inc.  (NYSE:  CIX) is a leading  manufacturer  of
ergonomic  computer support systems,  precision ball bearing slides and security
products  for  use in  office  furniture,  computer-related  applications  and a
variety of other products.  The Company's products are principally  designed for
use in medium to  high-end  applications,  where  product  design,  quality  and
durability are critical to the Company's customers. The Company believes that it
is among the world's largest producers of ergonomic computer support systems for
office  furniture  manufacturers,  precision  ball  bearing  slides and security
products  consisting  of cabinet locks and other  locking  mechanisms.  In 1999,
CompX  generated  net  sales of $225.9  million,  a 49%  increase  from 1998 (an
increase of 5% excluding sales attributable to acquisitions). In 1999, ergonomic
computer  support systems,  precision ball bearing slides and security  products
accounted for approximately 19%, 48% and 33% of net sales, respectively.

Valhi, Inc. and Valhi's wholly-owned subsidiary Valcor, Inc. own 64% of
the Company's  outstanding common stock. Contran Corporation holds,  directly or
through  subsidiaries,  approximately 93% of Valhi's  outstanding  common stock.
Substantially all of Contran's outstanding voting stock is held either by trusts
established for the benefit of certain  children and  grandchildren of Harold C.
Simmons,  of which Mr. Simmons is the sole trustee,  or by Mr. Simmons directly.
Mr.  Simmons is  Chairman  of the Board and Chief  Executive  Officer of each of
Contran,  Valhi and Valcor and may be deemed to control  each of such  companies
and CompX.

The  Company  was  incorporated  in  Delaware  in 1993  under  the name
National  Cabinet Lock, Inc. At that time,  Valhi  contributed the assets of its
Cabinet Lock Division and the stock of Waterloo Furniture Components Limited. In
1996,  the Company  changed its name to CompX  International  Inc. In 1998,  the
Company issued  approximately 6 million shares of its common stock in an initial
public offering and CompX acquired two additional lock producers. In 1999, CompX
acquired two  additional  slide  producers and in January 2000 acquired  another
lock producer. See Note 2 to the Consolidated Financial Statements.

As  provided by the safe harbor  provisions  of the Private  Securities
Litigation  Reform Act of 1995, the Company cautions that the statements in this
Annual  Report on Form 10-K relating to matters that are not  historical  facts,
including,  but not limited to,  statements  found in this Item 1 -  "Business,"
Item 3 - "Legal Proceedings," Item 7 - "Management's  Discussion and Analysis of
Financial  Condition and Results of  Operations"  and Item 7A - "Quantative  and
Qualitative Disclosures About Market Risk," are forward-looking  statements that
represent  management's  belief and  assumptions  based on  currently  available
information.  Forward-looking  statements  can be identified by the use of words
such as "believes,"  "intends,"  "may," "should,"  "anticipates,"  "expected" or
comparable terminology,  or by discussions of strategies or trends. Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are reasonable, it cannot give any assurances that these expectations
will prove to be correct.  Such  statements by their nature involve  substantial
risks and uncertainties that could  significantly  impact expected results,  and
actual  future  results  could differ  materially  from those  described in such
forward-looking  statements.  Among the factors that could cause  actual  future
results to differ materially are the risks and  uncertainties  discussed in this
Annual  Report  and those  described  from time to time in the  Company's  other
filings with the Securities and Exchange Commission. While it is not possible to
identify all factors, the Company continues to face many risks and uncertainties
including,  but not  limited  to,  future  supply and  demand for the  Company's
products,  cost  of  raw  materials,   general  global  economic  and  political
conditions, demand for office furniture, service industry employment levels, the
possibility of labor disruptions,  competitive  products and prices,  substitute
products,  customer and competitor  strategies,  the  introduction  of tariff or
non-tariff  trade  barriers,  the impact of pricing  and  production  decisions,
potential  difficulties  in integrating  completed  acquisitions,  environmental
matters (such as those requiring  emission and discharge  standards for existing
and new  facilities),  government  regulations  and  possible  changes  therein,
possible future litigation and other risks and uncertainties. Should one or more
of these risks  materialize (or the consequences of such a development  worsen),
or should the  underlying  assumptions  prove  incorrect,  actual  results could
differ  materially from those forecasted or expected.  The Company disclaims any
intention  or  obligation  to  update or revise  any  forward-looking  statement
whether as a result of new information, future events or otherwise.

Industry Overview

During  the  mid  1990's,  prior  to  1998,  approximately  75%  of the
Company's products were sold to the office furniture  manufacturing industry. As
a result  of  strategic  acquisitions  in the lock  industry  in 1998 and in the
precision  ball  bearing  slide  industry in 1999,  the Company has expanded its
product  offering and reduced its  percentage  of sales to the office  furniture
market.  Currently,  approximately 62% of the Company's products are sold to the
office furniture  manufacturing industry while the remainder are sold for use in
other  products,  such  as  vending  equipment,   electromechanical  enclosures,
transportation,  computers and related equipment, and other non-office furniture
and  equipment.  CompX's  management  believes  that its emphasis on new product
development,  sales of its ergonomic  computer  support systems as well as slide
and  security  products  used in  computer  applications  result in the  Company
experiencing  higher  rates of growth  than the office  furniture  industry as a
whole.

The Company  believes that  fundamental  shifts in  technology,  health
considerations  and work  processes in the office  workplace  provide new growth
opportunities.  Increased  use of technology  has caused  businesses to redesign
their  workspaces with greater  emphasis on the space  efficient  integration of
computers  and other office  technologies  into the office  workplace as well as
protecting  computer  equipment from damage and theft.  Additionally,  increased
regulatory  sensitivity to ergonomic  concerns and heightened focus on the risks
of  repetitive  stress  injury  have  also  influenced  redesign  of the  office
workplace.  In 1996,  California  became  the first  state to adopt  legislation
relating to  ergonomics  in the  workplace.  In Europe,  organizations  like the
International  Organization for  Standardization  and the European Committee for
Standardization have proposed draft guidelines that specify ranges of adjustment
in height and angle of  workstation  tabletops  and  computer  keyboard  support
mechanisms  aimed at reducing the  likelihood of injury from  repetitive  stress
tasks. In the United States, the Occupational Safety & Health Administration has
recently  issued  a draft  standard  that  addresses  guidelines  for  ergonomic
standards in the workplace.  This standard is a  program-oriented  standard that
will  place   responsibility   on  the   employer  to   mitigate   the  risk  of
musculoskeletal  injury in workplaces prone to cause repetitive stress injuries.
It is currently  believed  that this proposal may be adopted as an OSHA standard
during the year 2000.

The influence of existing and proposed legislation concerning workplace
ergonomics  continues  to affect the demand for  ergonomically  designed  office
furniture products, which allow workers to adjust and re-arrange the orientation
of office equipment and supplies for greater comfort,  safety and  productivity.
Businesses  increasingly  are seeking  changes in work processes to achieve more
efficient  workspace  utilization,  resulting  in the  creation  of  new  office
furniture designs that embrace office sharing concepts such as office "hoteling"
and open office  designs.  The Company's  products target  manufacturers  of new
furniture  designed to address these industry dynamics as well as customers that
specialize in retrofitting existing office furniture.

Products

CompX  manufactures  and sells components in three major product lines:
ergonomic  computer support systems,  precision ball bearing slides and security
products.  The Company's  ergonomic  computer support systems and precision ball
bearing slides are sold under the Waterloo Furniture  Components,  Thomas Regout
and Dynaslide brand names and the Company's security products are sold under the
National Cabinet Lock, Fort Lock,  Timberline Lock and Chicago Lock brand names.
The Company believes that its brand names are well recognized in the industry.

Ergonomic computer support systems. CompX is a leading manufacturer and
innovator in ergonomic  computer  support systems for office  furniture.  Unlike
products  targeting the residential  market,  which is more price sensitive with
less  emphasis on the  overall  value of products  and  service,  the CompX line
consists  of more  highly  engineered  products  designed  to provide  ergonomic
benefits for business and other sophisticated users.

The Company's  ergonomic  computer  support systems include  adjustable
computer  keyboard  support arms. These devices are designed to attach to office
desks in workplace and in home office  environments where there exists a need to
permit  computer users to adjust their computer  keyboard to various heights and
positions  to  alleviate  possible  strains  and stress  which may  result  from
repetitive activities, such as typing or data entry on computer keyboards. These
products also maximize  usable  workspace and permit the storage of the keyboard
underneath the desk. CompX  introduced its first ergonomic  keyboard arm in 1983
and the Leverlock  adjustment  mechanism in 1989,  which is designed to make the
adjustment of the keyboard arm easier for all (including physically  challenged)
users.  In 1999, the Company  introduced the  Lift-n-Lock  mechanism that allows
adjustment of the keyboard arm without the use of levers or knobs.

In 1999,  the Company  began a program to utilize its  engineering  and
design capabilities to develop proprietary ergonomic product designs for its key
customers.  Under this program, the Company will design and manufacture products
on a proprietary basis for key customers. The Company believes this program will
allow it to provide its  customers  one-stop  shopping  for product  designs and
manufacturing  capabilities.  In  1999,  the  Company  completed  a  proprietary
keyboard arm design for one of its key office furniture  customers.  The product
design  combines  both  the  ergonomic   functionality  and  the  aesthetics  to
complement  the  customer's  line of office  furniture  products.  Sales of this
product  began  in  mid-1999.  In late  1999,  a second  proprietary  adjustable
keyboard arm design was begun for another office furniture customer.

The Company is currently  developing a height  adjustable  work surface
utilizing  its patented  twin-lift  mechanism.  This  product  provides the user
significantly more work surface than the traditional  keyboard arm. The enhanced
work  surface  can be used to support a mouse tray and other  ergonomic  related
products at a height adjustable level.

Adjustable  computer table mechanisms  address the need for flexibility
and  adjustability in work surfaces.  The Company's  adjustable table mechanisms
provide adjustable  workspace heights that permit users to stand or sit and that
can be easily adjusted for different user needs.  The Company is also developing
a height adjustable work table whereby the Company's  patented  counterbalancing
feature  will allow the user to easily  adjust  the  height of the  entire  work
surface without the use of levers or cranks.

The  prevalence  of computers in the  workplace has also created a need
for safe and convenient storage solutions for the central processor unit ("CPU")
case. In 1997,  the Company  introduced a CPU storage device that can be mounted
under a work surface or on the side of desk panels to store the CPU case off the
floor to  minimize  the  adverse  effects of dust and  moisture  or damage  from
accidental  impact.  The unit operates on a slide  mechanism that also pivots to
provide ease of access to  peripheral  connections  while  allowing  convenient,
unobtrusive storage.

CompX also  offers a number of  complementary  accessories  to its main
products.  These  include  ergonomic  wrist rest aids,  mouse pad  supports  and
computer  monitor support arms, such as the Monitor Master for the adjustment of
heavy monitors to reduce eye strain.

Precision ball bearing  slides.  CompX  manufactures a complete line of
precision  ball bearing  slides for use in office  furniture,  computer  related
equipment and other applications. Precision ball bearing slides are manufactured
to stringent  industry  standards  and are designed in  conjunction  with office
furniture  original  equipment  manufacturers  ("OEMs") to meet the needs of end
users with respect to weight support capabilities and ease of movement.

In  addition  to its  basic  product  line,  sales  based  on  patented
innovations account for an increasing  proportion of the Company's sales growth.
In 1994, CompX introduced the Butterfly Take Apart System,  which is designed to
easily disengage  drawers from filing cabinets.  The following year, the Company
began  selling its  Integrated  Slide Lock  ("ISL"),  with which a file  cabinet
manufacturer  can reduce the possibility of multiple drawers being opened by the
user at the same time,  significantly reducing the risk of injury from a falling
cabinet  while  lowering  the total  cost of  manufacturing  the  complete  file
cabinet. The Company's patented concept affords OEM's cost savings advantages in
production,  since the ISL is designed as an integral  part of the drawer slide,
compared  to custom  fabricated  add-on  solutions  previously  utilized by most
manufacturers.

In  recent  years,   applications  other  than  office  furniture  have
represented a rapidly growing source of demand for the Company's  precision ball
bearing slides.  Opportunities in heavy-duty  applications  such as tool storage
cabinets   and   electromechanical   applications   have   created   new  market
opportunities. As a result of the design efforts focused on these markets, CompX
created the Ball Lock to prevent heavily filled  drawers,  such as auto mechanic
tool boxes,  from opening  while  cabinets  are moved during  routine use in the
field.  The Company's  products are used  extensively in professional  toolboxes
and,  increasingly,  in  electromechanical  imaging  equipment to facilitate the
movement of machine components in the document reproduction process.

The Company  acquired  Thomas Regout in January  1999,  and in November
1999 acquired the business that  produces the Dynaslide  line of precision  ball
bearing slides  ("Dynaslide").  These  acquisitions  expand the Company's market
presence in the precision, ball bearing slide market, allowing it to service the
high- medium- and low-end segments of the market. These products in the U.S., in
Europe  and in Asia are  utilized  in  highly  engineered  applications  such as
computer network server cabinets where convenient  access for hardware  upgrades
and maintenance is required while providing stability and protection to critical
network system components.

Security  products.  The Company  believes that it is a North  American
market  leader in the  manufacturer  and sale of cabinet locks and other locking
mechanisms. The Company manufactures locking mechanisms that generally fall into
three  categories:  disc tumbler cabinet locks,  pin tumbler locks and KeSet and
Tubar high security locks.

Disc tumbler  locks,  also called wafer tumbler or plate tumbler locks,
derive their keying from a series of flat  tumblers  with a window in the middle
through  which the key  passes to open the lock.  This type of lock is  normally
limited to two levels of keying,  a passkey and one master  key. A disc  tumbler
lock provides moderate security and is manufactured at all four of the Company's
security products facilities.  Disc tumbler locks represent the lowest cost lock
to produce, resulting in lower selling prices to customers.

Pin tumbler locks are keyed with a series of small pins manufactured on
in-house automatic screw machines. A stack of pins is required for each cut in a
key. Due to the increased  number of parts,  this type of lock is more costly to
manufacture  than a disc tumbler lock,  and offers  increased  variety in keying
with more than one  level of master  keying.  Pin  tumbler  locks  also  provide
substantially more security and are commonly used in banking,  vending, computer
and  institutional  furniture  industries.  Tubular  key pin  tumbler  locks are
designed for significant special applications for major customers,  particularly
in the vending industry.  These proprietary products are redesigned  frequently,
which requires a substantial ongoing engineering effort.

The Company's  industrial  customers  include  manufacturers of cabinet
enclosures,  from  office  furniture  to  electrical  circuit  panels to vending
machines.   A  substantial  portion  of  the  Company's  sales  volume  involves
specialized adaptations to individual  manufacturers' enclosure  specifications.
CompX also has a standardized product line suitable for many customers. However,
a substantial portion of the Company's volume involves  specialized  adaptations
to individual manufacturer's enclosure specifications.

The  Company's  acquisition  of Fort Lock in March  1998  expanded  the
Company's offering of locking mechanisms to include several new market segments.
These include locks for ignition  systems and storage  compartments  for a major
motorcycle  manufacturer and products to major OEM's including  manufacturers of
aftermarket security devices for desktop and laptop computers.  Electronic locks
utilized in safes in hotel rooms and sold in retail stores,  as well as versions
for securing tool boxes are also a significant product line added as a result of
the Fort Lock acquisition.

The Company's KeSet high security  system is a proprietary  design of a
pin tumbler lock with parts  manufactured  from  hardened  steel  components  to
prevent forced entry.  A significant  feature of the product line is the ability
to change the keying on a single lock 64 times  without  removing  the lock from
its enclosure.  This product is used primarily to protect money in  applications
such as soft drink vending  machines,  gaming  machines and parking meters where
higher  levels of security are required as is the patented  Tubar high  security
lock gained in the Company's  acquisition of the assets of Chicago Lock Company,
discussed below.

Each of the  industries  served with cabinet  locks has a  distribution
segment for  replacement  needs or for supplying small shops whose volume is not
substantial enough to buy directly from a lock manufacturer.  CompX has met this
need in part with its  industry-industry-unique  STOCK LOCKS inventory  program.
Partially as a result of this program, the Company believes it holds the largest
cabinet  lock  market  share in North  America in both  locksmith  and  hardware
component distribution.

The Company's STOCK LOCKS distribution program represents approximately
15% of its  security  products  sales.  This  program is comprised of over 1,200
stock keeping units (also referred to as SKUs) of standardized locking products.
This program plans,  manufactures and packages locks to inventory with a variety
of keying and finishes for  shipment to customers  generally  within 24 hours of
receipt of the customer  order,  and is being expanded to include  products from
all of CompX's securities products companies.

Sales under this program are made both to a North American distribution
and Factory  Centers network as well as to large OEMs when special needs require
either smaller quantities or non-special products other than their normal volume
requirements.  This network supplies the Company's products both to after-market
replacement  markets and to cabinet shops who do not purchase  directly from the
Company due to their smaller size.

The  established  distributor  network for STOCK LOCKS has been used to
develop a standardized product line in other segments of the Company's products.
Currently  both ergonomic  computer  support  systems and, to a limited  extent,
precision ball bearing slides,  are enjoying growing  marketing  success through
these and new ergonomic distribution channels.

In  January  2000,  the  Company  acquired  substantially  all  of  the
operating assets of Chicago Lock Company, including its wholly owned subsidiary,
Tubar Security  Products.  The acquisition of Chicago Lock expands the Company's
product offerings into the vending and gaming industries.

Sales, Marketing and Distribution

CompX  sells   components  to  OEMs  and  to  distributors   through  a
specialized  sales force. The majority of the Company's sales are to OEMs, while
the balance represents standardized products sold through distribution channels.

Sales  to  large  OEM   customers  are  made  through  the  efforts  of
factory-based sales and marketing professionals and engineers working in concert
with salaried field salespeople and independent manufacturer's  representatives.
Manufacturers'  representatives  are selected based on special skills in certain
markets or with current or potential customers.

A  significant   portion  of  the  Company's  sales  are  made  through
distributors.  The Company has a significant  market share of cabinet lock sales
to the locksmith distribution channel. CompX supports its distributor sales with
a line of standardized products used by the largest segments of the marketplace.
These products are packaged and merchandised for easy  availability and handling
by distributors and the end user. Based on the Company's  successful STOCK LOCKS
inventory program,  similar programs have been implemented for distributor sales
of ergonomic  computer support systems and to some extent precision ball bearing
slides. Since their addition to the Company's  distributor product line in 1992,
sales of these  products  to the  distributor  market  have  grown to  represent
approximately 10% of combined  ergonomic  computer support systems and precision
ball bearing slide net sales.

To  afford  a  competitive  advantage  to the  Company  as  well  as to
customers,  ergonomic  computer support system and precision ball bearing slides
in  North  America  are  delivered   primarily  by  means  of  a   Company-owned
tractor/trailer  fleet. This  satellite-monitored  fleet improves the timely and
economic delivery of products to customers. Another important economic advantage
to the Company's  customers of an in-house  trucking fleet is that it allows the
shipment of many  products in  returnable  metal  baskets (in lieu of corrugated
paper  cartons),  which avoids both the  environmental  and  economic  burden of
disposal.

The  Company  does  not  believe  it is  dependent  upon  one  or a few
customers,  the  loss of which  would  have a  material  adverse  effect  on its
operations. In 1997, 1998 and 1999, sales to the Company's ten largest customers
accounted for approximately 30%, 40% and 30% of sales, respectively. In 1997 and
1999,  sales  to the  Company's  largest  customer  were  less  than  10% of the
Company's total sales. In 1998, one customer, Hon Industries Inc., accounted for
approximately 10% of sales. In 1997, six of the Company's top ten customers were
located in the United  States.  In 1998 and 1999,  nine of the Company's top ten
customers were located in the United States.

Acquisitions

In January 1999, the Company acquired Thomas Regout Holding N.V. ("Thomas
Regout"),  a producer of precision ball bearing slides based in the Netherlands,
for $53.2  million.  In November  1999,  the Company  acquired the business that
manufactures  the Dynaslide  line of precision  ball bearing  slides,  which are
produced in two  manufacturing  plants in Taipei,  Taiwan.  The Company believes
that  Dynaslide is one of the lowest cost  producers  of precision  ball bearing
slides in the world, and this acquisition enables CompX to offer products to its
customers at the low,  middle and high-end  requirements  of the precision  ball
bearing slide market. See Note 2 to the Consolidated Financial Statements.

As previously reported, in March and November 1998 the Company acquired
two locking  systems  producers - Fort Lock  Corporation  and related assets and
Timberline Lock, Ltd. and related assets.

In  January  2000,  the  Company  acquired  substantially  all  of  the
operating assets of Chicago Lock Company for approximately $9.2 million in cash.
CompX  used  borrowings  under  its  existing  credit  facility  to pay the cash
purchase price.

Manufacturing and operations

At December 31, 1999,  CompX operated six  manufacturing  facilities in
North  America  (two in each of  Canada  and  Illinois  and one in each of South
Carolina and Michigan),  one facility in the  Netherlands  and two facilities in
Taiwan.  Ergonomic products or precision ball bearing slides are manufactured in
the facilities located in Canada, the Netherlands and Taiwan.  Security products
are manufactured in the facilities located in South Carolina and Illinois. CompX
also leases a  distribution  center in  California.  CompX believes that all its
facilities are well maintained and satisfactory for their intended purposes.

Raw Materials

Coiled  steel is the  major raw  material  used in the  manufacture  of
precision ball bearing slides and ergonomic  computer support  systems.  Plastic
resins for injection molded plastics are also an integral material for ergonomic
computer support systems. Purchased components, including zinc castings, are the
principal raw materials used in the manufacture of security products.  These raw
materials are purchased  from several  suppliers and are readily  available from
numerous sources.

The Company  occasionally  enters  into raw  material  arrangements  to
mitigate the short-term impact of future increases in raw material costs.  While
these  arrangements  do not commit the Company to a minimum volume of purchases,
they  generally  provide  for  stated  unit  prices  based upon  achievement  of
specified  volume  purchase  levels.  This allows the Company to  stabilize  raw
material  purchase  prices  provided  the  specified  minimum  monthly  purchase
quantities are met. Materials purchased on the spot market are sometimes subject
to unanticipated  and sudden price increases.  Due to the competitive  nature of
the markets served by the Company's  products,  it is often difficult to recover
such increases in raw material costs through  increased  product  selling prices
and consequently  overall operating margins can be affected by such raw material
cost pressures.

Competition

The office furniture market is highly competitive.  Suppliers to office
furniture OEMs compete on the basis of (i) product design,  including  ergonomic
and aesthetic  factors,  (ii) product quality and durability,  (iii) price, (iv)
on-time delivery and (v) service and technical support.  The Company focuses its
efforts on the  middle- and  high-end  segments  of the  market,  where  product
design, quality, durability and service are placed at a premium.

The  market  for  the  Company's   security  products  is  also  highly
competitive.  This  market  is  highly  fragmented  with a number  of  small- to
medium-sized  manufacturers who supply the market.  There are a number of small-
to medium-sized  importers of products  manufactured in Asia. Lock manufacturers
and  distributors  compete  on the  basis of (i)  product  design,  (ii)  custom
engineering  capability,  (iii)  price and (iv) order  fulfillment  lead  times.
Through  its Fort Lock,  Timerbline  Lock and  Chicago  Lock  acquisitions,  the
Company has broadened its product  offering.  The Company has also  continued to
place a high  level of  emphasis  on  customer  service  and  responsiveness  to
individual customer needs.

The Company believes it derives a significant  competitive advantage as
a result of its focus on (i) a  collaborative  approach  to  product  design and
engineering,  (ii)  increased  manufacturing  and assembly  automation and (iii)
implementation of distribution programs that reduce order fulfillment times.

The Company  competes in the ergonomic  computer support systems market
with one  major  producer  and a  number  of small  manufacturers  that  compete
primarily  on the basis of product  quality,  features  and price.  The  Company
competes in the precision ball bearing slide market with two large manufacturers
and a number of smaller  manufacturers  that  compete  primarily on the basis of
product  quality and price.  The  Company's  security  products  compete  with a
variety of relatively small competitors, which makes significant price increases
difficult.

Although  the  Company  believes  that  it has  been  able  to  compete
successfully  in its markets to date,  there can be no assurance that it will be
able to continue to do so in the future.

Patents and Trademarks

CompX  holds a number of patents  relating to its  component  products,
certain  of which are  believed  to be  important  to CompX  and its  continuing
business activity.  CompX's major trademarks and brand names, including National
Cabinet Lock, Fort Lock,  Timberline Lock,  Chicago Lock, Tubar,  Thomas Regout,
STOCK LOCKS, ShipFast,  Waterloo Furniture Components Limited and Dynaslide, are
protected by registration in the United States and elsewhere with respect to the
products it  manufactures  and sells.  The Company  believes such trademarks are
well recognized in the component products industry.

Foreign operations

The Company has  substantial  operations and assets located outside the
United States, principally slide and ergonomic product operations in Canada, and
beginning in 1999, in the Netherlands and Taiwan. See Note 2 to the Consolidated
Financial Statements. Substantially all of the Company's 1999 non-U.S. sales are
to customers  located in Canada and Europe.  Foreign  operations are subject to,
among other  things,  currency  exchange  rate  fluctuations  and the  Company's
results  of  operations  have in the past been both  favorably  and  unfavorably
affected by  fluctuations  in currency  exchange  rates.  Political and economic
uncertainties  in certain of the  countries  in which the Company  operates  may
expose the Company to risk of loss.  The Company  does not believe that there is
currently  any  likelihood  of  material  loss  through  political  or  economic
instability,  seizure,  nationalization  or similar  event.  The Company  cannot
predict,  however,  whether  events  of this  type in the  future  could  have a
material  effect on its operations.  See Item 7 -  "Management's  Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations"  and Item 7A -
"Quantitative  and Qualitative  Disclosures About Market Risk" and Note 1 to the
Consolidated Financial Statements.

Environmental Matters

The  Company's  operations  are  subject to federal,  state,  local and
foreign laws and regulations relating to the use, storage, handling, generation,
transportation, treatment, emission, discharge, disposal and remediation of, and
exposure  to,  hazardous  and  non-hazardous  substances,  materials  and wastes
("Environmental  Laws").  The Company's  operations also are subject to federal,
state,  local and foreign  laws and  regulations  relating to worker  health and
safety. The Company believes that it is in substantial  compliance with all such
laws and  regulations.  The costs of maintaining  compliance  with such laws and
regulations have not significantly impacted the Company to date, and the Company
has no significant planned costs or expenses relating to such matters. There can
be no assurance, however, that compliance with future Environmental Laws or with
future laws and regulations  governing worker health and safety will not require
the  Company  to  incur  significant  additional  expenditures,   or  that  such
additional  costs  would not have a  material  adverse  effect on the  Company's
business, consolidated financial condition, results of operations or liquidity.

Employees

As of December  31,  1999,  the  Company  employed  approximately  2,145
employees,  including  700 in the  United  States,  890  in  Canada,  385 in the
Netherlands,  130 in Taiwan and 40 in France. Approximately 85% of the Company's
employees in Canada are represented by a labor union.  The Company's  collective
bargaining  agreement  with such union  expired in January 2000 and is currently
being renegotiated. The provisions of the expired agreement are being maintained
during the  negotiation  period.  In addition,  substantially  all of the hourly
employees,  at the Company's  recently  acquired  Chicago Lock  facility  (which
employed  approximately  240 employees,  approximately  170 of which were hourly
employees,  at January  10,  2000,  the date of  acquisition)  are  covered by a
collective  bargaining  agreement expiring in October 2000. The Company believes
that its labor relations are satisfactory.

ITEM 2.   PROPERTIES

The Company's  principal executive offices are located in approximately
3,200  square feet of leased space at 16825  Northchase  Drive,  Houston,  Texas
77060.  The following  table sets forth the location,  size and general  product
types produced for each of the Company's facilities.

Products
Facility Name           Location                   Size         Produced
-------------           --------                   ----         --------
(square feet)

Owned Facilities:
----------------

Manitou               Kitchener, Ontario       280,000    Slides

Trillium              Kitchener, Ontario       116,000    Ergonomic products

Thomas Regout         Maastricht,
the Netherlands         270,000    Slides

Grand Rapids, MI          60,000    Slides and Ergonomic
products

National Cabinet
Lock                 Mauldin, SC              163,000    Locks

Fort Lock             River Grove, IL          100,000    Locks

Timberline            Lake Bluff, IL            16,000    Locks

Dynaslide             Taipei, Taiwan            43,000    Slides

Leased Facilities:
-----------------

Dynaslide             Taipei, Taiwan            32,000    Slides

Chicago Lock          Pleasant Prairie, WI      65,000    Locks

Chicago Tubar         Hoffman Estates, IL        5,000    Locks

Chicago Lock          Hoffman Estates, IL        5,000    Lock distribution

Distribution Center   Chino, CA                  6,000    Product distribution

The Manitou,  Maastricht,  and National  Cabinet  Lock  facilities  are
ISO-9001  registered.  The  Dynaslide  owned  facility is  ISO-9002  registered.
ISO-9001 registration of the Trillium,  Grand Rapids and Fort Lock facilities is
anticipated  in 2001.  The Company  believes  that all its  facilities  are well
maintained and satisfactory for their intended  purposes.  The leases associated
with Chicago Lock facilities were assumed in January 2000.

ITEM 3.   LEGAL PROCEEDINGS

The Company is involved,  from time to time,  in various  environmental,
contractual,  product  liability,  patent (or  intellectual  property) and other
claims and disputes  incidental to its business.  Currently no  environmental or
other  material  litigation  is pending  or, to the  knowledge  of the  Company,
threatened.  The Company  currently  believes that the disposition of all claims
and  disputes,  individually  or in the  aggregate,  should  not have a material
adverse effect on the Company's  consolidated  financial  condition,  results of
operations or liquidity.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters  were  submitted  to a vote of  security  holders  during the
quarter ended December 31, 1999.

PART II

ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY AND RELATED  STOCKHOLDER MATTERS

The Company's Class A common stock is listed and traded on the New York
Stock Exchange (symbol:  CIX). As of February 29, 2000, there were approximately
31 holders of record of CompX Class A common  stock.  The  following  table sets
forth the high and low closing  sales  prices for CompX Class A common stock for
1998 and 1999 (subsequent to the Company's March 1998 initial public  offering),
according to the New York Stock Exchange  Composite Tape, and dividends paid per
share during such  periods.  On February 29, 2000 the closing price per share of
CompX Class A common stock according to the NYSE Composite Tape was $18 5/8.

Dividends
High             Low              paid

Year ended December 31, 1998

First Quarter                        $24 3/16       $23 1/8            $  -
Second Quarter                        27 1/2         19 5/8               -
Third Quarter                         24 11/16       16 3/4               -
Fourth Quarter                        26 1/2         16 3/16              -

Year ended December 31, 1999

First Quarter                        $26 7/16       $12 3/4            $  -
Second Quarter                        17 7/8         12 1/8               -
Third Quarter                         19             15 1/2               -
Fourth Quarter                        19 1/2         17 5/8            .125

Subsequent  to the  Company's  March 1998  initial  public  offering of
shares of its Class A common stock, the Company paid its first regular quarterly
dividend in December 1999. The declaration  and payment of future  dividends and
the amount thereof will be dependent  upon the Company's  results of operations,
financial   condition,   cash  requirements  for  its  businesses,   contractual
requirements  and restrictions and other factors deemed relevant by the Board of
Directors.

Prior to the March 1998  initial  public  offering,  the  Company  paid
dividends to Valcor  aggregating  $6.1 million in 1997 and $1.8 million in 1998.
In addition,  on December 12, 1997,  the Company paid a $50 million  dividend to
Valcor in the form of a note payable.  The Company utilized borrowings under its
Revolving  Senior Credit Facility to repay in full the note payable to Valcor in
1998.

ITEM 6.   SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with
the  Company's  Consolidated  Financial  Statements  and Item 7 -  "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The Company's  operations  are comprised of a 52 or 53 week fiscal year.
Each of the years 1995  through  1997 and 1999  consisted  of a 52 week year and
1998 was a 53 week year.

Years ended December 31,
--------------------------------
1995      1996    1997      1998        1999
----      ----    ----      ----        ----
($ in millions, except per share data)
Income Statement Data

Net sales ......................   $  80.2  $  88.7  $ 108.7    $ 152.1    $ 225.9

Operating income ...............   $  19.4  $  21.6  $  27.1    $  30.8    $  40.1

Income before income taxes .....   $  19.9  $  22.1  $  27.7    $  32.5    $  39.2
Income taxes ...................       7.8      9.1     11.0       12.0       14.1
Minority interest in losses ....      --       --       --          (.2)       (.1)
-------  -------  -------    -------    -------

Net income ...................   $  12.1  $  13.0  $  16.7    $  20.7    $  25.2
=======  =======  =======    =======    =======

Cash dividends (1) .............   $   6.0  $   6.2  $   6.1    $   1.8    $   2.0

Basic earnings per share data ..   $  1.21  $  1.30  $  1.67    $  1.37    $  1.56

Weighted average common shares
outstanding ...................      10.0     10.0     10.0       15.1       16.1

Balance Sheet Data
(at year end):
Cash and other current assets    $  27.7  $  32.2  $  45.4    $  86.5    $  72.5
Total assets .................      44.4     48.5     63.8      152.4      202.9
Current liabilities ..........       9.6      8.1     64.4       20.3       27.0
Long-term debt, including
current maturities ..........        .1       .2     50.4        1.7       22.3
Stockholders' equity (deficit)      32.6     39.2     (1.2)     130.0      149.4

(1) In addition to the amounts shown above, in December 1997 the Company
paid a $50 million dividend to Valcor in the form of a demand note payable.  The
note was repaid in February 1998 using borrowings under the Company's  Revolving
Senior Credit Facility. See Note 10 to the Consolidated Financial Statements.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview

The Company sells ergonomic computer support systems and precision ball
bearing slides and security  products which consist of cabinet locks and locking
mechanisms.  The  Company  manufactures  its  ergonomic  and slide  products  in
facilities  located  in  Canada,  the  Netherlands,  Taiwan  and  Michigan.  The
Company's  security  products are  manufactured  in facilities  located in South
Carolina,  Illinois  and  Wisconsin.  During  the  mid-1990's,  prior  to  1998,
approximately  75% of the  Company's  net sales were to  customers in the office
furniture  industry.  Beginning in 1998, the Company has increased its net sales
and net  income  through  internal  growth  and  through a series  of  strategic
acquisitions.  The  acquisitions  have allowed the Company to expand its product
offerings and customer  base to include a larger number of non-office  furniture
industry products and customers. In 1998, primarily as a result of the Fort Lock
acquisition,  approximately  50% of the Company's net sales were to customers in
the office furniture industry.  In 1999, the Company acquired two precision ball
bearing slide producers  allowing it to expand its product offering to encompass
the high,  medium,  and low ends of the precision ball bearing slide market.  In
1999,  approximately  62% of the  Company's  net sales were to  customers in the
office furniture industry. The Company's customer base now includes customers in
the computer and related products,  transportation and recreation  industries as
well as its traditional office furniture industry customers.

In March 1998,  the Company  completed the  acquisition of the Fort Lock
Corporation and related assets for an aggregate  purchase price of approximately
$33 million (the "Fort Lock Acquisition").  Funding of the Fort Lock Acquisition
was provided by available cash on hand and borrowings under the Revolving Senior
Credit Facility, which borrowings were repaid with a portion of the net proceeds
of the Company's initial public offering. In November 1998, the Company acquired
Timberline  Lock,  Ltd. and related  assets,  a  manufacturer  of locks for wood
furniture applications, for approximately $8 million in cash funded by available
cash on hand.

In January 1999, the Company  acquired  Thomas Regout,  a precision ball
bearing slide  producer,  for a purchase price of $53.2 million using  available
cash on hand and $20 million of  borrowings  under the  Company's  $100  million
revolving bank credit facility. In November 1999, the Company acquired Dynaslide
for $11.8 million in cash.

Assuming the Thomas Regout and Fort Lock  Acquisitions  occurred January
1, 1998,  the  Company's  unaudited  pro forma net sales  would have been $212.6
million in 1998 and pro forma  operating  income would have been $32.5  million.
The pro forma  financial  information  is not  necessarily  indicative of actual
results had the  transactions  occurred at the  beginning of the period,  nor do
they purport to represent  results of future operations of the merged companies.
The pro forma effects of the Timberline Lock and Dynaslide  acquisitions are not
material.

The Company's profitability primarily depends on its ability to utilize
its production capacity  effectively,  which is affected by, among other things,
the demand for its products, and its ability to control its manufacturing costs,
primarily  comprised of raw  materials  such as zinc,  copper,  coiled steel and
plastic resins and of labor costs.  Raw material costs  represent  approximately
47% of the Company's total cost of sales. Beginning in August 1998, steel prices
declined  approximately  5%,  resulting  in an overall  decrease in raw material
costs of  approximately  2% in 1998 compared to 1997. In 1999,  steel prices did
not change  significantly.  The Company  occasionally  enters into raw  material
supply arrangements to mitigate the short-term impact of future increases in raw
material costs.  While these arrangements do not commit the Company to a minimum
volume of purchases,  they  generally  provide for stated unit prices based upon
achievement  of specified  volume  purchase  levels.  This allows the Company to
stabilize raw material  purchase prices  provided the specified  minimum monthly
purchase  quantities are met. The Company  currently  anticipates  entering into
such arrangements for zinc, coiled steel and plastic resins in 2000 and does not
anticipate significant changes in the cost of these materials from their current
levels.  Materials  purchased  on the  spot  market  are  sometimes  subject  to
unanticipated and sudden price increases.  Due to the competitive  nature of the
markets served by the Company's products,  it is often difficult to recover such
increases in raw material  costs through  increased  product  selling prices and
consequently overall operating margins can be affected by such raw material cost
pressures.

Labor costs represent  approximately 20% of the Company's total cost of
sales.  At  December  31,  1999,  none  of The  Company's  U.S.  employees  were
represented  by bargaining  units and wage increases  historically  have been in
line with overall inflation indices. Approximately 84% of the Company's Canadian
employees  are  covered by a three year  collective  bargaining  agreement  that
expired in January 2000 and  provided for annual wage  increases of 2% - 3%. The
provisions of the expired  agreement  will be maintained  while a new collective
bargaining   agreement  is  negotiated.   Wage  increases  for  these  employees
historically have been in line with overall inflation indices.

Selling,   general  and  administrative   costs  consist  primarily  of
salaries, commissions and advertising expenses directly related to product sales
and in 1997 and 1999 have been consistent as a percentage of net sales. In 1998,
in connection with the Company's  initial public offering in March 1998, five of
the Company's  officers and  directors  were awarded  164,880  shares of Class A
Common Stock. Accordingly, the Company recognized a $3.3 million pre-tax charge,
included in selling, general and administrative expenses, equal to the aggregate
value of the Class A shares awarded based on the initial public offering price.

About  74%,  66% and 43% of the  Company's  net sales in 1997,  1998 and
1999,  respectively,  were  generated by its Canadian  operations.  About 60% of
these   Canadian-produced   sales  are   denominated   in  U.S.   dollars  while
substantially  all of the  related  costs  are  incurred  in  Canadian  dollars.
Consequently,  relative changes in the U.S. dollar/Canadian dollar exchange rate
affect operating results.  Since U.S.  dollar/Canadian dollar exchange rates did
not  fluctuate  significantly  from 1993 through  1997,  the impact on operating
income of  fluctuations in the value of the U.S. dollar relative to the Canadian
dollar  during  this  period was not  material.  Compared  to the prior  period,
fluctuations  in the value of the U.S.  dollar  relative to the Canadian  dollar
increased  operating income  (excluding the effect of the stock award charge) by
3% and  reduced  net sales by  approximately  1% in 1998 and  reduced  operating
income by 1% and reduced net sales by less than 1% in 1999.

Likewise,  approximately  17% of  the  Company's  1999  net  sales  were
generated by its operations in the Netherlands. Approximately 83% of these sales
are  denominated  in Dutch guilders or the euro while  substantially  all of the
related cost are  incurred in Dutch  guilders or the euro.  Fluctuations  in the
value of the U.S.  dollar relative to the Dutch guilder and/or euro did not have
a material impact on operating income or net sales in 1999.

Sales of slides and  ergonomic  products were impacted in the first half
of 1999 by softening demand in the office furniture industry.  This slowdown was
consistent   with  growth  rate   statistics   published  by  The  Business  and
Institutional  Furniture  Manufacturers  Association  (BIFMA), an association of
office furniture  manufacturers and their  associates.  During the first half of
1999, the slowdown in the office furniture industry resulted in decreased demand
for the Company's slides and ergonomic  products  compared to 1998. In the third
quarter of 1999, demand for the Company's slide and ergonomic  products began to
recover  and the  Company's  net sales of slide and  ergonomic  products  in the
second half of 1999  reflected the  increased  demand.  Overall,  due in part to
expected improved demand in the office furniture  industry,  the Company expects
its sales and operating income to be higher in 2000 compared to 1999.

Results of Operations

Year ended December 31, 1999 compared to year ended December 31, 1998

Net sales.  Net sales increased $73.8 million,  or 49% in 1999 compared
to 1998.  This  increase is  primarily  due to the  inclusion  of the results of
operations  for the full  year of  Timberline  Lock and  Thomas  Regout  and the
November  and  December  results for  Dynaslide.  Excluding  the effect of these
acquisitions,  net sales in 1999 increased 5% compared to net sales in 1998. The
5% increase  reflects an increase in the  Company's  product sales to the office
furniture industry (primarily slides and ergonomic products), which increased 5%
along with increased sales of the Company's security products, which improved 3%
over the prior year.

Operating income. In 1999,  operating income increased $7.7 million, or
22% over 1998. The majority of this growth was due to the acquisitions mentioned
earlier.  Excluding the effect of the  acquisitions  and excluding the effect of
the $3.3 million stock award which occurred in 1998,  operating income increased
$1.3 million or 4% over the prior year.  Sales of slides and ergonomic  products
were  impacted  in the first  half of 1999 by  softening  demand  in the  office
furniture  industry,  however such sales and  operating  income  improved in the
second half of 1999 as office furniture demand improved.

Year ended December 31, 1998 compared to year ended December 31, 1997

Net sales. Net sales increased $43.4 million, or 40% in 1998 compared to
1997,  primarily due to increased volumes in all product lines and the inclusion
of the results of Fort Lock beginning March 3, 1998. Combined net sales from the
Company's  ergonomic  computer  support systems and precision ball bearing slide
products  increased  $11.6  million,  or 14%,  based on higher unit  volumes and
relatively  stable prices.  Security products net sales increased $31.8 million,
or 113%,  primarily due to sales  attributable to Fort Lock.  Excluding the Fort
Lock acquisition, net sales of security products increased 4%.

Operating  income.  Operating  income  increased  $6.9  million  in 1998
compared to 1997  (excluding the $3.3 million stock award  charge),  or 24%, due
primarily to the increased volumes in all product lines and the inclusion of the
results of Fort Lock which was  acquired  on March 3, 1998.  Excluding  the Fort
Lock  Acquisition  and the $3.3 million  stock award  charge,  operating  income
increased 14% over 1997. The increase is due to increased net sales as discussed
above and a decline in certain raw  material  costs.  Beginning  in August 1998,
steel prices declined  approximately 5%, resulting in an overall decrease in raw
material costs of approximately 2% in 1998 compared to 1997.

Year 2000 Issue

General.  As a result of certain computer  programs being written using
two digits  rather than four to define the  applicable  year,  certain  computer
programs that had date-sensitive  software may have recognized a date using "00"
as the year 1900 rather than the year 2000. This could have resulted in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary  inability to process  transactions,  send invoices or
engage in normal business activities.

Over the past few years,  the Company  addressed the Year 2000 Issue in
an attempt to ensure that its computer  systems would  function  properly  after
December 31, 1999. This process included, among other things, the identification
of all systems and applications potentially affected by the Year 2000 Issue, the
determination  of which systems and  applications  required  remediation and the
completion  thereof  and the  testing  of  systems  and  applications  following
remediation for Year 2000 compliance. As part of its normal business operations,
the Company had already installed upgraded information systems at certain of its
locations which addressed the Year 2000 Issue. In addition,  confirmations  were
requested from major software and hardware vendors, suppliers and customers that
they were developing and implementing  plans to become, or that they had become,
Year 2000 compliant.  Contingency plans were also developed to address potential
Year 2000 issues  related to business  interruption  in the event one or more of
the  Company's  internal  systems or the systems of third  parties upon which it
relied ultimately proved not to be Year 2000 compliant. After all of the efforts
described  above,  the  Company  believed  that its key  systems  were Year 2000
compliant  prior to December  31,  1999.  Excluding  the cost of ongoing  system
upgrades,  the  amount  spent by CompX to  address  the Year 2000  Issue was not
significant.

To date in 2000,  none of the Company's  manufacturing  facilities have
suffered any significant  downtime due to  non-compliant  systems,  nor have any
significant  problems associated with the Year 2000 Issue been identified in any
of such  companies'  systems.  The  Company  will  continue to monitor its major
systems in order to ensure that such systems continue to be Year 2000 compliant.
However,  based  primarily  upon the length of time into 2000 which has  elapsed
without the identification of any significant  problems related to the Year 2000
Issue,  the  Company  does  not  currently  expect  any  significant  Year  2000
Issue-related problems will develop for any of its systems.

Impact of accounting standards not yet adopted

See Note 1 to the Consolidated Financial Statements.

Liquidity and Capital Resources

Consolidated cash flows

Operating  activities.  Trends in cash flows from operating  activities,
excluding  changes in assets and  liabilities  and non-cash stock award charges,
for 1997,  1998 and 1999,  are generally  similar to the trends in the Company's
earnings.  Cash flow provided by operating  activities  (excluding  the non-cash
stock award charge) totaled,  $23.0 million, $24.3 million and $28.4 million for
the years ended December 31, 1997, 1998 and 1999, respectively,  compared to net
income  of  $16.7  million,  $20.7  million  and  $25.2  million,  respectively.
Depreciation  and  amortization  increased  in 1998  and 1999 in part due to the
acquisitions discussed above.

Changes in assets and  liabilities  result  primarily from the timing of
production,  sales  and  purchases.  Such  changes  in  assets  and  liabilities
generally  tend to even out over time and  result in trends in cash  flows  from
operating activities generally reflecting earnings trends.

Investing  activities.  Net cash used by investing  activities  totaled
$5.5 million,  $54.2 million and $84.6 million for the years ended  December 31,
1997,  1998 and 1999,  respectively.  Cash used by investing  activities in 1998
includes  an  aggregate  of  $41.6  million  for the Fort  Lock  and  Timberline
acquisitions.  Likewise in 1999,  $65.0  million in cash was used for the Thomas
Regout and Dynaslide acquisitions. Other cash flows from investing activities in
each of the past  three  years  related  principally  to  capital  expenditures.
Capital expenditures in the past three years emphasized  manufacturing equipment
which utilizes new  technologies and increases  automation of the  manufacturing
process to provide for increased  productivity  and efficiency.  The increase in
capital  expenditures  in 1998 and 1999 relates  primarily to the additions of a
third plating line at the Company's Kitchener  facility,  facility expansions in
Mauldin and Kitchener, the acquisition of an adjoining manufacturing building at
Fort Lock and the addition of automation equipment at all facilities.

Capital  expenditures  for 2000 are  estimated at  approximately  $25.1
million,  the  majority of which  relate to  projects  that  emphasize  improved
production  efficiency  and  increase  production  capacity and  development  of
e-commerce  capabilities.  Firm  purchase  commitments  for capital  projects in
process at December 31, 1999  approximated $4 million.  As discussed  above, the
Company  acquired  substantially  all of the  operating  assets of Chicago  Lock
Company for  approximately  $9.2 million in cash during January 2000.  Funds for
this acquisition were provided by borrowings on the Company's existing revolving
credit facility.

Financing activities.  Net cash provided (used) by financing activities
totaled  ($5.9)  million,  $58.7  million and $17.0  million for the years ended
December  31,  1997,  1998 and 1999,  respectively.  Net cash  provided  in 1998
includes  $110.4  million of net proceeds from the Company's  March 1998 initial
public  offering  and the  repayment  of the $50 million note payable to Valcor,
discussed  below.  Prior  to the  initial  public  offering,  the  Company  paid
dividends  to its  parent  company  aggregating  $6.1  million  in 1997 and $1.8
million in 1998.  In  addition,  on December  12,  1997,  the Company paid a $50
million  dividend to Valcor in the form of a note payable.  The Company utilized
borrowings  under the Revolving Senior Credit Facility to repay the note payable
to Valcor.  See Notes 9 and 10 to the  Consolidated  Financial  Statements.  The
Company also paid its first  regular  quarterly  dividend of $0.125 per share in
December 1999 since the initial  public  offering.  Total cash dividends paid in
1999 were $2.0 million.

At December 31, 1999, after borrowing $20 million to fund acquisitions,
the Company had $80 million of borrowing availability under its Revolving Senior
Credit Facility.

Other

Management  believes that cash generated  from  operations and borrowing
availability  under the Revolving Senior Credit Facility,  together with cash on
hand,  will be  sufficient  to meet the  Company's  liquidity  needs for working
capital, capital expenditures, debt service and dividends.

The  Company   periodically   evaluates  its  liquidity   requirements,
alternative uses of capital,  capital needs and available  resources in view of,
among other things, its capital expenditure requirements in light of its capital
resources  and  estimated  future  operating  cash  flows.  As a result  of this
process,  the  Company  may in the  future  seek to  raise  additional  capital,
refinance or restructure indebtedness,  issue additional securities,  modify its
dividend  policy or take a combination of such steps to manage its liquidity and
capital  resources.  In the normal  course of  business,  the Company may review
opportunities for acquisitions, joint ventures or other business combinations in
the  component  products  industry.  In the event of any such  transaction,  the
Company may consider using available cash,  issuing additional equity securities
or increasing the indebtedness of the Company or its subsidiaries.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General.  The Company is exposed to market risk from changes in foreign
currency  exchange rates and interest rates.  The Company has also  periodically
entered into currency forward  contracts to either manage a very nominal portion
of foreign exchange rate market risk associated with receivables  denominated in
a currency  other than the  holder's  functional  currency or to hedge  specific
foreign currency  commitments.  Otherwise,  the Company does not generally enter
into  forward or option  contracts  to manage  such market  risks,  nor does the
Company enter into any such contract or other type of derivative  instrument for
trading or speculative  purposes.  Other than the contracts discussed below, the
Company was not a party to any forward or derivative  option contract related to
foreign  exchange  rates or interest  rates at December  31, 1998 and 1999.  See
Notes 1 and 11 to the Consolidated Financial Statements.

Interest  rates.  The Company is exposed to market risk from changes in
interest rates, primarily related to indebtedness.

At December 31, 1999,  substantially  all of the Company's  outstanding
indebtedness  were  variable  rate  borrowings  and related  principally  to $20
million in borrowings under the Company's existing $100 million revolving senior
credit   facility.   The  outstanding   balance  at  December  31,  1999  (which
approximates fair value) had a weighted-average  interest rate of 6.21%. Amounts
outstanding   under  this  credit  facility  are  due  in  2003.  The  remaining
indebtedness  outstanding at December 31, 1999, and all outstanding indebtedness
at December 31, 1998, is not material.

Foreign currency  exchange rates. The Company is exposed to market risk
arising  from  changes  in  foreign  currency  exchange  rates  as a  result  of
manufacturing  and  selling  its  products  worldwide.  Earnings  are  primarily
affected  by  fluctuations  in the  value of the  U.S.  dollar  relative  to the
Canadian dollar, the Dutch guilder, the euro and beginning in November 1999, the
New Taiwanese dollar.

Certain of CompX's  sales  generated  by its  Canadian  operations  are
denominated in U.S.  dollars.  To manage a portion of the foreign  exchange rate
market risk  associated  with such  receivables,  at December 31, 1999 CompX had
entered into a series of short-term  forward exchange contracts maturing through
March 2000 to exchange an aggregate of $6.0 million for an equivalent  amount of
Canadian  dollars at exchange  rates ranging  between Cdn$ 1.491 and Cdn $ 1.486
per U.S.  dollar.  The Company was not a party to such  contract at December 31,
1998.

Solely  in  connection  with the  January  1999  acquisition  of Thomas
Regout,  on December 30, 1998 the Company  entered  into a  short-term  currency
forward  contract to purchase NLG 75.0 million for $40.1 million which  contract
was  executed  on January 19,  1999.  See Note 2 to the  Consolidated  Financial
Statements.  The  Company was not a party to any such  contract at December  31,
1999.

The estimated fair value of all such outstanding  forward  contracts at
December 31, 1998 and 1999 is not material.

Other.  Beginning January 1, 1999, eleven of the fifteen members of the
European  Union ("EU"),  including  the  Netherlands  and France,  adopted a new
European  currency unit (the "euro") as their common legal  currency.  Following
the introduction of the euro, the participating  countries'  national currencies
remain  legal tender as  denominations  of the euro from January 1, 1999 through
January 1, 2002,  and the  exchange  rates  between  the euro and such  national
currency units are fixed.

The functional  currencies of the Company's Thomas Regout operations in
Maastricht, the Netherlands, have begun conversion to the euro from its national
currency.  This is expected to be completed in 2001. Although not expected,  the
euro  conversion  may impact the  Company's  operations  including,  among other
things,  changes in product pricing decisions necessitated by cross-border price
transparencies.  Such  changes in product  pricing  decisions  could impact both
selling prices and purchasing costs and, consequently,  favorably or unfavorably
impact  results  of  operations.  Because  of the  inherent  uncertainty  of the
ultimate effect of the euro conversion,  the Company cannot  accurately  predict
the  impact of the euro  conversion  on its  results  of  operations,  financial
condition or liquidity.

The above discussion includes forward-looking statements of market risk
which  assume  hypothetical  changes  in market  prices.  Actual  future  market
conditions  will likely differ  materially from such  assumptions.  Accordingly,
such  forward-looking  statements  should not be considered to be projections by
the Company of future events or losses.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  information  called  for by this Item is  contained  in a separate
section of this Annual Report. See "Index of Financial Statements and Schedules"
(page F).

ITEM 9.  CHANGES  IN AND  DISAGREEMENTS WITH  ACCOUNTANTS ON  ACCOUNTING  AND 
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information  required by this Item is incorporated by reference to
CompX's  definitive Proxy Statement to be filed with the Securities and Exchange
Commission  pursuant  to  Regulation  14A  within  120 days after the end of the
fiscal year covered by this report (the "CompX Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

The  information  required by this Item is incorporated by reference to
the CompX Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this Item is incorporated by reference to
the CompX Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this Item is incorporated by reference to
the CompX Proxy Statement. See Note 10 to the Consolidated Financial Statements.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) and (d)      Financial Statements and Schedules

The Registrant

The consolidated  financial statements and schedules listed on
the accompanying  Index of Financial  Statements and Schedules
(see page F) are filed as part of this Annual Report.

(b)                       Reports on Form 8-K

Reports  on Form  8-K  filed  for the  quarter  ended
December 31, 1999.

October  15, 1999 - Reported  Items 5 and 7.  October
18, 1999 - Reported Items 5 and 7. November 19, 1999-
Reported  Items 5 and 7. November 30, 1999-  Reported
Items 5 and 7.  December 15, 1999-  Reported  Items 5
and 7.

(c)                        Exhibits

Included  as  exhibits  are the  items  listed in the
Exhibit  Index.  CompX will  furnish a copy of any of
the  exhibits  listed below upon payment of $4.00 per
exhibit to cover the costs to CompX of furnishing the
exhibits.  Instruments defining the rights of holders
of  long-term  debt issues which do not exceed 10% of
consolidated  total  assets will be  furnished to the
Commission upon request.

Item No.                            Exhibit Item

3.1      Restated  Certificate of  Incorporation of Registrant - incorporated by
reference to Exhibit 3.1 of the Registrant's  Registration Statement on
Form S-1 (File No. 333-42643).

3.2      Bylaws of Registrant - incorporated  by reference to Exhibit 3.2 of the
Registrant's Registration Statement on Form S-1 (File No. 333-42643).

10.1     Intercorporate  Services  Agreement  between the  Registrant and Valhi,
Inc. effective as of January 1, 1999.

10.2     Intercorporate   Services  Agreement  between  the  Registrant  and  NL
Industries,  Inc.  effective  as of January 1, 1999 -  incorporated  by
reference to Exhibit 10.1 to NL Industries,  Inc.'s Quarterly Report on
Form 10-Q (File No. 1-640) for the quarter ended June 30, 1999.

10.3*    CompX  International Inc. 1997 Long-Term  Incentive Plan - incorporated
by reference to Exhibit 10.2 of the Registrant's Registration Statement
on Form S-1 (File No. 333-42643).

10.4*    CompX  International  Inc.  Variable  Compensation Plan effective as of
January 1, 1999 -  incorporated  by  reference  to Exhibit  10.4 of the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1998.

Item No.                            Exhibit Item

10.5     Agreement between Haworth, Inc. and Waterloo Furniture Components, Ltd.
and Waterloo  Furniture  Components,  Inc.  effective October 1, 1992 -
incorporated   by  reference  to  Exhibit  10.3  of  the   Registrant's
Registration Statement on Form S-1 (File No. 333-42643).

10.6     Tax Sharing  Agreement  among the Registrant,  Valcor,  Inc. and Valhi,
Inc. dated as of January 2, 1998 - incorporated by reference to Exhibit
10.4 of the Registrant's  Registration  Statement on Form S-1 (File No.
333-42643).

10.7     $100,000,000  Credit  Agreement  between the Registrant,  Bankers Trust
Company,  as Agent and various lending  institutions dated February 26,
1998 -  incorporated  by reference to Exhibit 10.5 of the  Registrant's
Registration Statement on Form S-1 (File No. 333-42643).

10.8     Amendment No. 1 to Credit Agreement between  Registrant,  Bankers Trust
Company, as Agent and various lending institutions,  dated December 15,
1999.

10.9     Stock  Purchase   Agreement  between  CompX   International   Inc.  and
Shareholders  of  Fort  Lock  Corporation  dated  February  3,  1998  -
incorporated   by  reference  to  Exhibit  10.7  of  the   Registrant's
Registration Statement on Form S-1 (File No. 333-42643).

10.10    Offer and  Acquisition  Agreement dated December 18, 1998 between CompX
International  Inc. and Thomas Regout  Holding N.V. -  incorporated  by
reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K
dated January 29, 1999.

21.1     Subsidiaries of the Registrant.

23.1     Consent of PricewaterhouseCoopers LLP.

27.1     Financial Data Schedule for the year ended December 31, 1999.

99.1     Annual  Report  of  the  National   Cabinet  Lock,  Inc.   Contributory
Retirement  Plan  (Form  11-K) to be filed  under  Form  10-K/A to this
Annual Report on Form 10-K within 180 days after December 31, 1999.

99.2     Annual  Report of the 401(k)  Plan of The Fort Lock  Corporation  (Form
11-K) to be filed under Form 10-K/A to this Annual  Report on Form 10-K
within 180 days after December 31, 1999.

*Management contract, compensatory plan or agreement

SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) 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.

COMPX INTERNATIONAL INC.

By:      /s/ Joseph S. Compofelice
Joseph S. Compofelice
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)

Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been signed by the following  persons in the  capacities  and on
the dates indicated.

Signature                          Title                        Date

/s/ Joseph S. Compofelice      Chairman of the Board, President   March 22, 2000
---------------------------     and Chief Executive Officer
Joseph S. Compofelice                                      

/s/ John A. Miller             Vice President,                    March 22, 2000
-----------------------------  Chief Financial Officer and Treasurer
John A. Miller                  (Principal Financial Officer)

/s/ David A. Bowers            Vice President and President       March 22, 2000
-----------------------------   of CompX Security Products
David A. Bowers                 and Director

/s/ Todd W. Strange            Vice President and                 March 22, 2000
-----------------------------   Controller (Principal
Accounting Officer)

/s/ Glenn R. Simmons           Director                           March 22, 2000
-----------------------------                         
Glenn R. Simmons

/s/ Edward J. Hardin           Director                           March 22, 2000
-----------------------------                                                  
Edward J. Hardin

/s/ Paul M. Bass, Jr.          Director                           March 22, 2000
-----------------------------                                  
Paul M. Bass, Jr.

/s/ Ann Manix                  Director                           March 22, 2000
----------------------------                                         
Ann Manix

/s/ Steven L. Watson           Director                           March 22, 2000
-----------------------------                                
Steven L. Watson

Annual Report on Form 10-K

Items 8, 14(a) and 14(d)

Index of Financial Statements and Schedules

Financial Statements                                                   Page

Report of Independent Accountants                                    F-1

Consolidated Balance Sheets - December 31, 1998 and 1999             F-2

Consolidated Statements of Income -
Years ended December 31, 1997, 1998 and 1999                        F-4

Consolidated Statements of Comprehensive Income -
Years ended December 31, 1997, 1998 and 1999                        F-5

Consolidated Statements of Cash Flows -
Years ended December 31, 1997, 1998 and 1999                        F-6

Consolidated Statements of Stockholders' Equity -
Years ended December 31, 1997, 1998 and 1999                        F-8

Notes to Consolidated Financial Statements                           F-9

Financial Statement Schedules

Report of Independent Accountants                                    S-1

Schedule II - Valuation and qualifying accounts                      S-2

Schedules I, III and IV are omitted because they are not applicable.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors of CompX International Inc.:

In our opinion,  the accompanying  consolidated  balance sheets of CompX
International Inc. and Subsidiaries,  and the related consolidated statements of
income,  comprehensive  income,  cash flows and  stockholders'  equity,  present
fairly, in all material respects,  the consolidated  financial position of CompX
International  Inc. and  Subsidiaries  as of December 31, 1998 and 1999, and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 1999, in conformity with accounting
principles  generally accepted in the United States.  These financial statements
are the  responsibility of the Company's  management;  our  responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits of the consolidated financial statements in accordance with
auditing standards  generally accepted in the United States,  which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.

PricewaterhouseCoopers LLP

Houston, Texas
February 13, 2000

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 1998 and 1999

(In thousands, except share data)

ASSETS                                      1998            1999
----            ----

Current assets:

Cash and cash equivalents ........................      $ 47,363      $ 12,169
Accounts receivable, less allowance for
doubtful accounts of $310 and $725 ..............        18,976        29,053
Income taxes receivable from affiliates ..........           573            22
Refundable income taxes ..........................           524           462
Inventories ......................................        16,952        27,659
Prepaid expenses .................................         1,381         1,858
Deferred income taxes ............................           688         1,258
--------      --------

Total current assets .........................        86,457        72,481
--------      --------

Other assets:
Goodwill .........................................        22,317        41,697
Other intangible assets ..........................         2,938         2,787
Deferred income taxes ............................          --           2,499
Other ............................................           400           203
--------      --------

Total other assets ...........................        25,655        47,186
--------      --------

Property and equipment:
Land .............................................         1,219         3,549
Buildings ........................................        13,678        27,898
Equipment ........................................        39,216        70,242
Construction in progress .........................         3,533         6,710
--------      --------
57,646       108,399
Less accumulated depreciation ....................        17,376        25,154
--------      --------

Net property and equipment ...................        40,270        83,245
--------      --------

$152,382      $202,912
========      ========

See accompanying notes to consolidated financial statements.

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

December 31, 1998 and 1999

(In thousands, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY                    1998           1999
----           ----

Current liabilities:

Current maturities of long-term debt .............      $    609      $  1,367
Accounts payable and accrued liabilities .........        17,243        25,389
Income taxes .....................................         2,415            91
--------      --------

Total current liabilities ....................        20,267        26,847
--------      --------

Noncurrent liabilities:
Long-term debt ...................................         1,082        20,900
Deferred income taxes ............................           983         3,223
Accrued pension costs ............................          --           1,209
Other ............................................          --           1,274
--------      --------

Total noncurrent liabilities .................         2,065        26,606
--------      --------

Minority interest ..................................             4           103
--------      --------

Stockholders' equity:
Preferred stock, $.01 par value; 1,000 shares
authorized, none issued .........................          --            --
Class A common stock, $.01 par value;
20,000,000 shares authorized; 6,144,880 and 6,147,380
shares issued and outstanding ...................            61            61
Class B common stock, $.01 par value;
10,000,000 shares authorized, issued and outstanding        100           100
Additional paid-in capital .......................       118,027       118,067
Retained earnings ................................        14,270        37,415
Accumulated other comprehensive income-
currency translation ............................        (2,412)       (6,287)
--------      --------

Total stockholders' equity ...................       130,046       149,356
--------      --------

$152,382      $202,912
========      ========

Commitments and contingencies (Notes 2 and 11)

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Years ended December 31, 1997, 1998 and 1999

(In thousands, except per share data)

1997         1998         1999
---------    ---------    ---------

Net sales .................................   $ 108,652    $ 152,093    $ 225,888
---------    ---------    ---------

Costs and expenses:
Cost of sales ...........................      70,638      102,004      160,628
Selling, general and administrative .....      10,546       19,706       25,220
Other expense (income), net .............         401         (412)        (104)
General corporate expense (income), net .        (801)      (2,834)        (572)
Interest expense ........................         199        1,094        1,554
---------    ---------    ---------

80,983      119,558      186,726
---------    ---------    ---------

Income before income taxes and
minority interest ..................      27,669       32,535       39,162

Provision for income taxes ................      11,019       12,034       14,102

Minority interest .........................        --           (165)        (103)
---------    ---------    ---------

Net income ..........................   $  16,650    $  20,666    $  25,163
=========    =========    =========

Basic and diluted earnings per common share   $    1.67    $    1.37    $    1.56
=========    =========    =========

Shares used in the calculation of earnings
per share amounts:
Basic earnings per share ................      10,000       15,052       16,146
Dilutive impact of stock options ........        --             32            3
---------    ---------    ---------

Diluted earnings per share ..............      10,000       15,084       16,149
=========    =========    =========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 1997, 1998 and 1999

(In thousands)

1997         1998          1999
----         ----          ----

Net income ..............................    $ 16,650     $ 20,666     $ 25,163
--------     --------     --------

Other comprehensive income -
currency translation adjustment:
Pre-tax amount ......................      (1,472)      (2,001)      (3,875)
Less income tax benefit .............        (515)        (668)        --
--------     --------     --------

Total other comprehensive income ....        (957)      (1,333)      (3,875)
--------     --------     --------

Comprehensive income ..............    $ 15,693     $ 19,333     $ 21,288
========     ========     ========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 1997, 1998 and 1999

(In thousands)

1997          1998          1999
----          ----          ----

Cash flows from operating activities:

Net income ..............................          $16,650      $20,666      $25,163
Depreciation and amortization ...........            2,811        4,538        9,406
Deferred income taxes .......................       (651)        (830)      1,423
Noncash stock award of Management Shares ....       --          3,298        --
Minority interest ...........................       --           (165)       (103)
Other, net ..................................        338          (85)       (243)
Change in assets and liabilities:
Accounts receivable .......................     (3,117)      (1,319)     (3,186)
Inventories ...............................       (194)        (375)     (1,992)
Accounts payable and accrued liabilities ..      4,531        1,486      (2,470)
Accounts with affiliates ..................        710         (904)        532
Income taxes ..............................      1,502         (687)     (1,579)
Other, net ................................        372       (1,357)      1,471
--------    ---------    --------

Net cash provided by operating activities     22,952       24,266      28,422
--------    ---------    --------

Cash flows from investing activities:
Capital expenditures ........................     (5,536)     (12,928)    (19,703)
Purchase of business units ..................       --        (41,646)    (64,975)
Other, net ..................................         15          398          54
--------    ---------    --------

Net cash used by investing activities ...     (5,521)     (54,176)    (84,624)
--------    ---------    --------

Cash flows from financing activities:
Long-term debt:
Additions .................................        369       75,475      20,000
Principal payments ........................       (156)     (75,157)     (1,009)
Deferred financing costs paid .............       --           (200)       --
Repayment of demand note to Valcor ..........       --        (50,000)       --
Issuance of common stock ....................       --        110,378        --
Dividends ...................................     (6,098)      (1,800)     (2,018)
--------    ---------    --------

Net cash provided (used) by financing
activities .............................     (5,885)      58,696      16,973
--------    ---------    --------

Net increase (decrease) .......................   $ 11,546    $  28,786    $(39,229)
========    =========    ========

See accompanying notes to consolidated financial statements.

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Years ended December 31, 1997, 1998 and 1999

(In thousands)

1997        1998        1999
----        ----        ----

Cash and cash equivalents:
Net increase (decrease) from:
Operating, investing and financing

activities ...............................   $ 11,546    $ 28,786    $(39,229)
Business units acquired ...................       --           387       4,785
Currency translation ......................       (909)       (997)       (750)
Balance at beginning of year ................      8,550      19,187      47,363
--------    --------    --------

Balance at end of year ......................   $ 19,187    $ 47,363    $ 12,169
========    ========    ========

Supplemental disclosures:
Cash paid for:
Interest ..................................   $     35    $  1,244    $  1,253
Income taxes ..............................      9,617      14,449      13,284

Dividend in the form of a demand note payable   $ 50,000    $   --      $   --

Net assets consolidated -
business units acquired:
Cash and cash equivalents .................   $   --      $    387    $  4,785
Goodwill ..................................       --        23,145      22,700
Other intangible assets ...................       --         3,057        --
Other non-cash assets .....................       --        21,653      54,966
Liabilities ...............................       --        (6,596)    (17,476)
--------    --------    --------

Cash paid .................................   $   --      $ 41,646    $ 64,975
========    ========    ========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Years ended December 31, 1997, 1998 and 1999

(In thousands)

Accumulated other
comprehensive
income -     Total
Additional Retained    currency   stockholders'
Common stock    paid-in   earnings   translation    equity
Class A  Class B  capital   (deficit)                (deficit)
-------  ------- ---------- ---------        -----------

Balance at December 31, 1996    $-   $100   $  4,412   $ 34,852    $  (122)   $  39,242

Net income .................    --    --        --       16,650       --         16,650
Other comprehensive income .    --    --        --         --         (957)        (957)
Dividends:
Cash .....................    --    --        --       (6,098)      --         (6,098)
Noncash ..................    --    --        --      (50,000)      --        (50,000)
---   ----   --------   --------    -------    ---------

Balance at December 31, 1997    --    100      4,412     (4,596)    (1,079)      (1,163)

Net income .................    --    --        --       20,666       --         20,666
Other comprehensive income .    --    --        --         --       (1,333)      (1,333)
Cash dividends .............    --    --        --       (1,800)      --         (1,800)
Issuance of common stock:
Initial public offering ..    60    --     110,318       --         --        110,378
Management shares ........     1    --       3,297       --         --          3,298
---   ----   --------   --------    -------    ---------

Balance at December 31, 1998    61    100    118,027     14,270     (2,412)     130,046

Net income .................    --    --        --       25,163       --         25,163
Other comprehensive income .    --    --        --         --       (3,875)      (3,875)
Cash dividends .............    --    --        --       (2,018)      --         (2,018)
Issuance of common stock ...    --    --          40       --         --             40
---   ----   --------   --------    -------    ---------

Balance at December 31, 1999   $61   $100   $118,067   $ 37,415    $(6,287)   $ 149,356
===   ====   ========   ========    =======    =========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of significant accounting policies:

Organization.  CompX  International  Inc.  (NYSE:  CIX) is 64% owned by
Valhi, Inc. (NYSE: VHI) and Valhi's  wholly-owned  subsidiary Valcor, Inc. Prior
to  the  Company's  March  1998  initial  public  offering,  the  Company  was a
wholly-owned  subsidiary of Valcor. The Company manufactures and sells component
products (ergonomic computer support systems,  precision ball bearing slides and
security products). Contran Corporation holds, directly or through subsidiaries,
approximately  93% of Valhi's  outstanding  common stock.  Substantially  all of
Contran's  outstanding voting stock is held either by trusts established for the
benefit of certain children and grandchildren of Harold C. Simmons, of which Mr.
Simmons is sole trustee, or by Mr. Simmons directly.  Mr. Simmons,  the Chairman
of the Board and Chief Executive  officer of each of Contran,  Valhi and Valcor,
may be deemed to control each of such companies and the Company.

Management  estimates.  The  preparation  of  financial  statements  in
conformity with generally accepted accounting  principles requires management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements,  and the  reported  amount of revenues  and expenses
during the reporting  period.  Ultimate  actual results may, in some  instances,
differ from previously estimated amounts.

Principles of consolidation.  The accompanying  consolidated  financial
statements   include  the   accounts  of  CompX   International   Inc.  and  its
majority-owned  subsidiaries.  All material  intercompany  accounts and balances
have been  eliminated.  Certain  prior year  amounts have been  reclassified  to
conform to the current year presentation.

Fiscal year.  The Company's  operations are reported on a 52 or 53-week
fiscal year.  The years ended  December  31, 1997 and 1999 each  consisted of 52
weeks, and the year ended December 31, 1998 consisted of 53 weeks.

Translation   of  foreign   currencies.   Assets  and   liabilities   of
subsidiaries  whose  functional  currency  is other  than the  U.S.  dollar  are
translated  at  year-end  rates  of  exchange  and  revenues  and  expenses  are
translated  at average  exchange  rates  prevailing  during the year.  Resulting
translation  adjustments  are  accumulated  in  stockholders'  equity as part of
accumulated other comprehensive income, net of related deferred income taxes and
minority  interest.  Currency  transaction  gains and losses are  recognized  in
income currently.  The net foreign currency transaction gain (loss), included in
other  income,  net, was $303,000 in 1997,  $512,000 in 1998 and  ($290,000)  in
1999.

Cash and cash equivalents.  Cash equivalents consist principally of bank
time deposits and government and  commercial  notes with original  maturities of
three months or less.

Net sales. Sales are recorded when products are shipped. Title generally
passes at the point of shipment.

Inventories  and cost of sales.  Inventories  are stated at the lower of
cost or market. Inventories are based on average cost or the first-in, first-out
method.

Property, equipment and depreciation.  Property and equipment, including
purchased  computer software for internal use, are stated at cost.  Expenditures
for maintenance, repairs and minor renewals are expensed; expenditures for major
improvements are capitalized.  Depreciation for financial  reporting purposes is
computed principally by the straight-line method over the estimated useful lives
of 15 to 40 years for buildings and three to 10 years for equipment. Accelerated
depreciation methods are used for income tax purposes, as permitted.

When  events or changes in  circumstances  indicate  that assets may be
impaired, an evaluation is performed to determine if impairment does exist. Such
events or changes in  circumstances  include,  among other  things,  significant
current and prior periods or current and projected  periods  operating losses, a
significant  decrease in the market value of an asset or a significant change in
the  extent  or  manner  in which an asset is used.  All  relevant  factors  are
considered.  The test for  impairment  is performed by comparing  the  estimated
future  undiscounted cash flows (exclusive of interest expense)  associated with
the asset to the asset's net carrying  value to  determine  if a  write-down  to
market  value or  discounted  cash flow value is  required.  If the asset  being
tested for  impairment was acquired in a business  combination  accounted for by
the purchase method,  any goodwill which arose out of that business  combination
may  also  be  considered  in  the  impairment  test  if  the  goodwill  related
specifically  to the  acquired  asset and not to other  aspects of the  acquired
business, such as the customer base or product lines.

Intangible assets and amortization. Goodwill, representing the excess of
cost over fair value of individual net assets acquired in business  combinations
accounted for by the purchase method, is amortized by the  straight-line  method
over 20 years and is stated net of  accumulated  amortization  of $.8 million at
December 31, 1998 and $2.7 million at December 31, 1999.

Other  intangible  assets,  consisting  primarily of the estimated  fair
value of certain  patents  acquired,  are being  amortized by the  straight-line
method over the lives of such patents  (approximately  13.25 years  remaining at
December 31, 1999) and are stated net of accumulated amortization of $.2 million
at December 31, 1998 and $.4 million at December 31, 1999.

When events or changes in  circumstances  indicate  that  goodwill  and
other intangible assets may be impaired, an evaluation is performed to determine
if impairment  does exist.  Such events or  circumstances  include,  among other
things, a prolonged  period of time during which the Company's  consolidated net
book  value per share is less than the  Company's  quoted  market  price for its
common stock or  significant  current and prior periods or current and projected
periods  operating  losses  related to the  applicable  business.  All  relevant
factors are considered in determining  whether  impairment exists. If impairment
is determined to exist, goodwill and, if appropriate,  the underlying long-lived
assets  associated with the goodwill,  are written down to reflect the estimated
future  discounted  cash  flows  expected  to be  generated  by  the  underlying
business.

Currency forward contracts. Certain of the Company's sales generated by
its  non-U.S.   operations  are  denominated  in  U.S.   dollars.   The  Company
periodically uses currency forward contracts to manage a very nominal portion of
foreign exchange rate risk associated with receivables denominated in a currency
other than the holder's  functional  currency.  The Company has not entered into
these  contracts for trading or  speculative  purposes in the past, nor does the
Company  currently  anticipate  entering  into such  contracts  for  trading  or
speculative  purposes  in the  future.  At each  balance  sheet  date,  any such
outstanding  currency  forward contract is  marked-to-market  with any resulting
gain or loss  recognized in income  currently.  At December 31, 1999, he Company
held  contracts  designated as a hedge against such  receivables  to exchange an
aggregate of U.S. $6.0 million for an equivalent  amount of Canadian  dollars at
exchange  rates ranging  between Cdn.  $1.491 and Cdn.  $1.486.  Such  contracts
mature through March 2000. No such  contracts  were  outstanding at December 31,
1998.

The Company also will  periodically use currency  forward  contracts to
hedge specific foreign currency commitments.  Gains and losses on such contracts
are  deferred  and  included in the basis of the hedged  transaction  when it is
consummated.  In  connection  with CompX's  acquisition  of a slide  producer in
January 1999 (see Note 2), on December 30, 1998 CompX  entered into a short-term
currency  forward  contract to purchase NLG 75 million for $40.1 million,  which
contract was  executed on January 19,  1999.  The Company was not a party to any
such contract at December 31, 1999.

The estimated fair value of all such currency forward  contracts is not
material at December 31, 1998 and 1999.

Income taxes. Prior to March 1998, the Company was a member of Contran's
consolidated  United States  federal income tax group (the "Contran Tax Group").
The policy for  intercompany  allocation of federal  income taxes  provided that
subsidiaries included in the Contran Tax Group compute the provision for federal
income  taxes on a separate  company  basis.  The Company  made  payments to, or
received  payments  from,  Contran  in the  amount  they  would  have paid to or
received  from the  Internal  Revenue  Service  had it not been a member  of the
Contran Tax Group.  The separate  company  provisions and payments were computed
using the tax elections  made by Contran.  Subsequent  to the Company's  initial
public offering of shares of its Class A common stock in March 1998, the Company
became a separate U.S.  federal income taxpayer and ceased being a member of the
Contran  Tax Group.  The  Company  continues  to be a part of  consolidated  tax
returns filed by Contran in certain U.S. state jurisdictions.

Deferred  income tax  assets  and  liabilities  are  recognized  for the
expected future tax consequences of temporary differences between the income tax
and financial  reporting  carrying amounts of assets and liabilities,  including
undistributed  earnings  of  foreign  subsidiaries  which  are not  deemed to be
permanently  reinvested.  The Company  periodically  evaluates  its deferred tax
assets and adjusts any related valuation  allowance based on the estimate of the
amount of such deferred tax assets which the Company  believes does not meet the
"more-likely-than-not"  recognition  criteria.  Earnings of foreign subsidiaries
deemed to be permanently  reinvested  aggregate $16 million at December 31, 1998
and $32 million at December 31, 1999.

Earnings per share.  Basic  earnings per share of common stock is based
upon the weighted  average number of common shares actually  outstanding  during
each period.  Diluted  earnings per share of common stock includes the impact of
outstanding  dilutive stock options.  The weighted average number of outstanding
stock options which were excluded from the  calculation of diluted  earnings per
share because their impact would have been antidilutive aggregated approximately
472,514 in 1999 (nil in 1997 and 1998).

Stock   options.   The  Company   accounts  for   stock-based   employee
compensation  in accordance  with  Accounting  Principles  Board Opinion No. 25,
Accounting for Stock Issued to Employees, and its various interpretations. Under
APBO No.  25, no  compensation  cost is  generally  recognized  for fixed  stock
options in which the  exercise  price is not less than the  market  price on the
grant date.  Compensation cost recognized by the Company in accordance with APBO
No. 25 has not been significant in any of the past three years.

Other.  Advertising costs, expensed as incurred,  were $555,000 in 1997,
$423,000  in 1998  and  $1,030,000  in 1999.  Research  and  development  costs,
expensed as incurred,  were $468,000 in 1997, $643,000 in 1998 and $1,032,000 in
1999.

New  accounting  principle  not yet  adopted.  The  Company  will adopt
Statement of Financial  Accounting  Standards  ("SFAS") No. 133,  Accounting for
Derivative  Instruments and Hedging Activities,  no later than the first quarter
of 2001. Under SFAS No. 133, all derivatives will be recognized as either assets
or  liabilities  and measured at fair value.  The accounting for changes in fair
value of derivatives  will depend upon the intended use of the  derivative.  The
impact  on the  Company  of  adopting  SFAS No.  133,  if any,  has not yet been
determined but will be dependent upon the extent to which the Company is a party
to  derivative  contracts or hedging  activities  covered by SFAS No. 133 at the
time  of  adoption,   including  derivatives  embedded  in  non-derivative  host
contracts.

Note 2 - Business units acquired:

In 1998,  the  Company  acquired  two U.S.  lock  producers  (Fort Lock
Corporation  and related  assets in March 1998 and  Timberline  Lock,  Ltd.  and
related  assets  in  November  1998) for an  aggregate  cash  purchase  price of
approximately $41.6 million. Funding for these acquisitions was provided by cash
on hand and $25 million of borrowings under the Company's $100 million revolving
credit  facility   discussed  in  Note  6.  The  Company   accounted  for  these
acquisitions by the purchase method of accounting and, accordingly,  the results
of  operations  and cash flows of the  businesses  acquired  are included in the
Company's  consolidated  financial statements subsequent to the respective dates
of acquisition.

In January  1999,  the Company  acquired  Thomas  Regout  Holding  N.V.
("Thomas  Regout"),  a  precision  ball  bearing  slide  producer  based  in the
Netherlands for aggregate cash  consideration of NLG 98 million ($53.2 million),
using funds on hand and $20 million of borrowing  under the Company's  revolving
credit  facility.  In November  1999,  the Company  acquired the  business  that
produces the  Dynaslide  line of precision  ball  bearing  drawer  slides in two
manufacturing  plants in Taipei,  Taiwan  ("Dynaslide").  The purchase  price of
$11.8 million  includes all the assets and operations that produce the Dynaslide
products and was financed  with  existing  cash.  These  acquisitions  were also
accounted for by the purchase method, and accordingly, the results of operations
and cash flows of the acquired  businesses  have been  included in the Company's
consolidated  financial  statements  subsequent  to the  respective  acquisition
dates.

The  purchase  price  for  all  four of  these  acquisitions  has  been
allocated to the individual  assets acquired and liabilities  assumed based upon
estimated fair values.

Assuming  the  Thomas  Regout  and Fort Lock  Corporation  acquisitions
occurred as of January 1, 1998,  the  Company's  unaudited  pro forma net sales,
operating  income and net income in 1998 would have been $212.6  million,  $32.5
million and $20.1 million,  respectively.  Diluted pro forma earnings per common
share would have been $1.33 per share.  The pro forma  effect of the  Timberline
Lock, Ltd. and Dynaslide  acquisitions is not material.  The unaudited pro forma
financial  information is not  necessarily  indicative of the actual results had
the transactions occurred at the beginning of the period, nor do they purport to
represent the results of future operations of the combined companies.

In  January  2000,  the  Company  acquired  substantially  all  of  the
operating assets of Chicago Lock Company for approximately $9.2 million in cash.
CompX  used  borrowings  under  its  existing  credit  facility  to pay the cash
purchase price.

Note 3 -       Business and geographic segments:

The Company operates in one business segment - the manufacture and sale
of  ergonomic  and  slide  products  (ergonomic  computer  support  systems  and
precision  ball bearing  slides) and security  products for  furniture and other
markets.  The Company evaluates  segment  performance based on segment operating
income.  The accounting  policies of the reportable  operating  segments are the
same as those  described in Note 1. Capital  expenditures  include  additions to
property  and  equipment  but exclude  amounts  attributable  to business  units
acquired in business combinations accounted for by the purchase method. See Note
2.

In 1999,  the  Company  changed  its  definition  of segment  operating
income.  Operating  income is now  defined  as income  before  income  taxes and
interest  expense,  exclusive  of all  interest  and  dividend  income,  foreign
currency  transaction gains and losses and certain  non-recurring items (such as
gains and losses on  disposition  of business  units).  The prior  definition of
operating income included foreign  currency  transaction  gains and losses and a
portion of interest and dividend income. The effect of this change in definition
on  previously  reported  total segment  operating  income is a decrease of $1.3
million and $1.1  million in 1997 and 1998,  respectively.  Operating  income in
1997 and 1998, as presented  below, has been restated based on the Company's new
definition.

Segment  assets  are  comprised  of  all  assets  attributable  to  the
reportable  operating  segments.  Corporate  assets are not  attributable to the
operating  segments  and consist  primarily  of cash and cash  equivalents.  For
geographic  information,  net sales are  attributed to the place of  manufacture
(point-of-origin)  and  the  location  of the  customer  (point-of-destination);
property and equipment are  attributed to their physical  location.  At December
31,  1998  and  1999,  the net  assets  of  non-U.S.  subsidiaries  included  in
consolidated net assets approximated $38 million and $92 million, respectively.

Years ended December 31,
1997          1998           1999
----          ----           ----
(In thousands)

Operating income .....................    $  27,067     $  30,795     $  40,144

Interest expense .....................         (199)       (1,094)       (1,554)
General corporate income, net ........          801         2,834           572
---------     ---------     ---------

Income before income taxes .......    $  27,669     $  32,535     $  39,162
=========     =========     =========

Net sales:
Point of origin:
Canada ...........................    $  80,632     $  92,272     $  96,915
United States ....................       28,020        58,018        89,036
The Netherlands ..................         --            --          36,834
Other ............................         --           1,803         3,103
---------     ---------     ---------

$ 108,652     $ 152,093     $ 225,888
=========     =========     =========

Years ended December 31,
1997          1998           1999
----          ----           ----
(In thousands)

Point of destination:

United States ...............         $ 70,354         $105,189         $133,700
Canada ......................           33,974           40,284           43,556
Europe ......................              951            3,664           41,498
Other .......................            3,373            2,956            7,134
--------         --------         --------

$108,652         $152,093         $225,888
========         ========         ========

December 31,
1997          1998           1999
----          ----           ----
(In thousands)
Total assets:

Operating segment ..................      $ 63,794      $121,645      $202,028
Corporate ..........................          --          30,737           884
--------      --------      --------

$ 63,794      $152,382      $202,912
========      ========      ========

Net property and equipment:
Canada .............................      $ 12,567      $ 18,307      $ 25,217
United States ......................         5,596        20,607        34,235
The Netherlands ....................          --            --          17,602
Other Europe .......................          --           1,356         1,281
Other ..............................          --            --           4,910
--------      --------      --------

$ 18,163      $ 40,270      $ 83,245
========      ========      ========

Note 4 -       Inventories:

December 31,
1998               1999
----               ----
(In thousands)

Raw materials ............................            $ 6,520            $ 9,038
Work in process ..........................              5,748              8,669
Finished products ........................              4,634              9,898
Supplies .................................                 50                 54
-------            -------

$16,952            $27,659

Note 5 - Accounts payable and accrued liabilities:

December 31,
1998              1999
----              ----
(In thousands)

Accounts payable ...........................            $8,589            $9,850
Accrued liabilities:
Employee benefits ........................              4,498              7,746
Insurance ................................                842                707
Royalties ................................                504                504
Other ....................................              2,810              6,582
-------            -------

$17,243            $25,389

Note 6 -       Indebtedness:

December 31,
1998           1999
----           ---- 
(In thousands)

Revolving bank credit facility ...................        $  --          $20,000
Capital lease obligations and other ..............          1,691          2,267
-------        -------
1,691         22,267
Less current portion .............................            609          1,367
-------        -------

$ 1,082        $20,900

The Company has a $100 million unsecured revolving bank credit facility
which bears  interest at the  Eurodollar  Rate plus  between 17.5 and 90.0 basis
points  depending on certain  coverage ratios  (resulting in an interest rate of
6.21% at December 31, 1999) and is due no later than February  2003.  Borrowings
are available for the Company's general corporate purposes,  including potential
acquisitions.  At December 31, 1999,  $80 million was  available  for  borrowing
under this facility.  The facility  contains certain  covenants and restrictions
customary in lending  transactions of this type,  including  restrictions on the
payment  of  dividends  and   requirements  to  maintain   specified  levels  of
consolidated  net worth (as  defined).  At December 31, 1999,  $25.9  million is
available for dividends under the terms of the agreement.

Capital  lease  obligations,  stated net of inputed  interest,  are due
through 2001. The Company's other debt obligations are not material.

Aggregate maturities of long-term debt at December 31, 1999 are shown in
the table below.

Years ending December 31,                                 Amount
(In thousands)

2000                                                    $ 1,367
2001                                                        592
2002                                                         92
2003                                                     20,080
2004                                                         54
Thereafter                                                   82
-------

$22,267

Note 7 -       Employee benefit plans:

Defined  contribution  plans.  The  Company  maintains  various  defined
contribution  plans  with  Company  contributions  based  on  matching  or other
formulas.  Defined  contribution plan expense  approximated  $1,051,000 in 1997,
$1,074,000 in 1998 and $1,472,000 in 1999.

Defined benefit plans.  The Company  maintains a defined benefit pension
plan covering substantially all full-time employees of Thomas Regout.  Variances
from  actuarially  assumed  rates  will  result in  increases  or  decreases  in
accumulated  pension  obligations,  pension expense and funding  requirements in
future periods.

The rates used in  determining  the  actuarial  present value of benefit
obligations are presented below:

December 31, 1999

Discount rate                                                         4.0%
Rate of increase in future
compensation levels                                                  3.0%
Long-term rate of return on assets                                    4.0%

The funded status of the Company's  defined benefit  pension plans,  the
components of net periodic  defined  benefit  pension cost and the rates used in
determining the actuarial present value of benefit  obligations are presented in
the tables below.

Year ended December 31,
1999
(In thousands)

Change in projected benefit obligations ("PBO"):

PBO at beginning of the year .....................   $  --
Acquisition of Thomas Regout .....................     2,366
Service cost .....................................       151
Interest .........................................        92
Change in foreign exchange rates .................      (348)
Benefits paid ....................................      --
-------

PBO at end of the year .......................   $ 2,261
=======

Change in fair value of plan assets:
Fair value of plan assets at beginning of the year   $  --
Acquisition of Thomas Regout .....................       977
Actual return on plan assets .....................        41
Employer contributions ...........................        62
Participant contributions ........................        58
Change in foreign exchange rates .................      (148)
Benefits paid ....................................      --
-------

Fair value of plan assets at end of year .....   $   990
=======

Funded status at year-end -
Plan assets less than PBO ........................   $ 1,271
=======

Amounts  recognized  in the  statement of
financial  position - accrued  pension cost:
Current ........................................   $    62
Noncurrent .....................................     1,209
-------

$ 1,271

Net periodic pension cost:
Service cost benefits ............................   $   151
Interest cost on PBO .............................        92
Expected return on plan assets ...................       (41)
-------
$   202

Note 8 -       Income taxes:

The components of pre-tax income and the provision for income taxes, the
difference  between the  provision for income taxes and the amount that would be
expected  using  the  U.S.  federal  statutory  income  tax  rate of 35% and the
comprehensive provision for income taxes are presented below.

Years ended December 31,
1997          1998           1999
----          ----           ----
(In thousands)
Components of pre-tax income:

United States ............................   $  7,136    $  6,835    $ 14,112
Non-U.S ..................................     20,533      25,700      25,050
--------    --------    --------

$ 27,669    $ 32,535    $ 39,162
========    ========    ========

Provision for income taxes:
Currently payable:
U.S. federal and state .................   $  2,747    $  3,351    $  4,493
Foreign ................................      8,923       9,513       8,186
--------    --------    --------

11,670      12,864      12,679
--------    --------    --------
Deferred taxes:
U.S ....................................        (85)       (714)         38
Foreign ................................       (566)       (116)      1,385
--------    --------    --------

(651)       (830)      1,423
--------    --------    --------

$ 11,019    $ 12,034    $ 14,102
========    ========    ========

Expected tax expense, at the U.S. federal
statutory income tax rate of 35% ..........   $  9,684    $ 11,387    $ 13,708

Non-U.S. tax rates .........................        550         134         241

Incremental U.S. tax on earnings of
Canadian subsidiary .......................        631        --          --

No tax benefit for goodwill amortization ...       --           290         625

State income taxes and other, net ..........        154         223        (472)
--------    --------    --------

$ 11,019    $ 12,034    $ 14,102
========    ========    ========

Comprehensive provision (benefit) for
income taxes allocable to:
Pre-tax income ...........................   $ 11,019    $ 12,034    $ 14,102
Other comprehensive income -
currency translation ....................       (515)       (668)       --
--------    --------    --------

$ 10,504    $ 11,366    $ 14,102
========    ========    ========

The components of net deferred tax assets  (liabilities)  are summarized
below.

December 31,
1998          1999
----          ----
(In thousands)

Tax effect of temporary differences relating to:

Inventories ............................................   $   299    $  (114)
Property and equipment .................................    (3,023)    (5,559)
Accrued liabilities and other deductible differences ...     2,458      3,582
Tax loss and credit carryforwards ......................      --        4,812
Other taxable differences ..............................       (29)    (1,420)
Valuation allowance ....................................      --         (767)
-------    -------

$  (295)   $   534
=======    =======

Net current deferred tax assets ..........................   $   688    $ 1,258
Net noncurrent deferred tax assets .......................      --        2,499
-------
Net noncurrent deferred tax liabilities ..................      (983)    (3,223)
-------    -------

$  (295)   $   534
=======    =======

At December  31,  1999,  the  Company  had $1.6  million of foreign tax
credit  carryforwards,  which expire  through 2002.  The valuation  allowance at
December 31, 1999  represents an offset to a change in gross deferred income tax
assets due to a change in estimate of the Company's ability to utilize a portion
of these foreign tax credit carryforwards.

At  December  31,  1999,  the  Company has net  operating  loss  ("NOL")
carryforwards,  which expire in 2007 through 2018, of approximately $8.4 million
for U.S.  federal  income tax  purposes.  The NOL  carryforwards  arose from the
acquisition of Thomas Regout's U.S. subsidiary. These losses may only be used to
offset future taxable income of the acquired subsidiary and are not available to
offset   taxable  income  of  other   subsidiaries.   Utilization  of  such  NOL
carryforward is limited to approximately $400,000 annually. The Company utilized
NOL  carryforwards  of $400,000 in 1999 to offset tax expense of  $140,000.  The
Company  believes  that it is  more-likely-than-not  that all such  NOLs will be
utilized to reduce future  income tax  liabilities.  Consequently,  no valuation
allowance  has been  recorded to offset the deferred tax asset  related to these
NOLs.

Note 9 - Stockholders' equity:

Shares of common stock
Class A           Class B
Issued           Issued

Balance at December 31, 1996 and 1997 .........            --         10,000,000

Issued at initial public offering .............       5,980,000             --
Stock award grants ............................         164,880
----------

Balance at December 31, 1998 ..................       6,144,880       10,000,000

Issued ........................................           2,500             --
---------       ----------

Balance at December 31, 1999 ..................       6,147,380       10,000,000
=========       ==========

Class A and Class B common stock. The shares of Class A Common Stock and
Class B Common Stock are  identical in all respects,  except for certain  voting
rights  and  certain  conversion  rights in respect of the shares of the Class B
Common  Stock.  Holders  of Class A Common  Stock are  entitled  to one vote per
share.  Valcor,  which  holds  all of the  outstanding  shares of Class B Common
Stock,  is entitled to one vote per share in all matters  except for election of
directors,  for which Valcor is entitled to ten votes per share.  Holders of all
classes of common stock entitled to vote will vote together as a single class on
all matters presented to the stockholders for their vote or approval,  except as
otherwise  required by  applicable  law.  Each share of Class A Common Stock and
Class B Common Stock have an equal and ratable right to receive  dividends to be
paid from the Company's  assets when, and if declared by the Board of Directors.
In the event of the dissolution,  liquidation or winding up of the Company,  the
holders of Class A Common  Stock and Class B Common  Stock will be  entitled  to
share  equally  and  ratably  in the assets  available  for  distribution  after
payments are made to the Company's creditors and to the holders of any preferred
stock of the Company that may be outstanding at the time.  Shares of the Class A
Common Stock have no  conversion  rights.  Under certain  conditions,  shares of
Class B Common Stock will convert,  on a  share-for-share  basis, into shares of
Class A Common Stock.

Public offering.  In March 1998, the Company completed an initial public
offering  of  5,980,000  shares  of the  Company's  Class A  Common  Stock at an
offering  price to the  public of $20.00  per  share.  The net  proceeds  to the
Company were approximately $110.4 million. A majority of the net proceeds to the
Company  from the offering  were used to repay  borrowings  under the  Company's
revolving credit facility discussed in Note 6.

Stock award grants. In March 1998, the Company granted 164,880 shares of
Class A Common Stock to certain key individuals of the Company (the  "Management
Shares") for their services in connection with the initial public offering.  The
Company valued such Class A shares awarded at the initial public  offering price
of $20 per share,  and the  aggregate  value of the Class A shares  awarded  was
approximately $3.3 million.  The Company recognized a charge, at the time of the
completion of the public  offering,  equal to the aggregate value of the Class A
shares awarded.

Incentive   compensation  plan.  The  CompX   International  Inc.  1997
Long-Term Incentive Plan provides for the award or grant of stock options, stock
appreciation rights,  performance grants and other awards to employees and other
individuals providing services to the Company. Up to 1.5 million shares of Class
A Common Stock may be issued  pursuant to the plan.  Generally,  employee  stock
options  are granted at prices not less than the market  price of the  Company's
stock on the date of grant,  and vest over five  years and expire ten years from
the date of grant.

The following  table sets forth changes in  outstanding  options during
1998  and  1999.  The  options  granted  in 1998  were  issued  concurrent  with
completion of the initial public  offering  discussed above at an exercise price
equal to the $20 per share initial public offering price.

Amount
Exercise        payable
price per         upon
Shares        share          exercise
(In thousands, except
per share amounts)

Outstanding at December 31, 1997 .......    --       $         --      $   --

Granted ................................     440              20.00       8,800
Canceled ...............................     (21)             20.00        (410)
----     --------------    --------

Outstanding at December 31, 1998 .......     419              20.00       8,390

Granted ................................     253       15.88- 20.00       4,647
Canceled ...............................     (14)      17.94- 20.00        (253)
----     --------------    --------

Outstanding at December 31, 1999 .......     658     $15.88-$20.00     $ 12,784
====     ==============    ========

Outstanding options at December 31, 1999 represent approximately 11% of
the Company's  outstanding Class A common shares at that date and expire through
2009 with a  weighted-average  remaining term of 9 years.  At December 31, 1999,
options to purchase  77,000 of the Company's  shares were  exercisable at $20.00
per share, or an aggregate  amount payable upon exercise of $1.6 million.  These
exercisable  options are  exercisable  through  2008 at a price  higher than the
Company's  December 31, 1999 market  price of $18.38 per share.  At December 31,
1999,  options to purchase 131,000 shares are scheduled to become exercisable in
2000 and an aggregate of 674,000 shares were available for future grants.

Other.  The following pro forma  information,  required by Statement of
Financial  Accounting  Standards  ("SFAS") No. 123,  "Accounting for Stock-Based
Compensation,"  is based on an  estimation  of the fair  value of CompX  options
issued  subsequent to January 1, 1998. The weighted average fair values of CompX
options  granted  during  1998  and 1999  were  $12.83  and  $11.56  per  share,
respectively.  The  fair  values  of such  options  were  calculated  using  the
Black-Scholes  stock option valuation model with the following  weighted-average
assumptions:  stock price volatility of 39% to 44%, risk-free rates of return of
5.1% to 6.6%,  dividend  yields of nil and an  expected  term of 10  years.  The
Black-Scholes model was not developed for use in valuing employee stock options,
but was developed for use in  estimating  the fair value of traded  options that
have no  vesting  restrictions  and are  fully  transferable.  In  addition,  it
requires the use of  subjective  assumptions  including  expectations  of future
dividends and stock price volatility.  Such assumptions are only used for making
the required  fair value  estimate and should not be considered as indicators of
future  dividend  policy or stock  price  appreciation.  Because  changes in the
subjective  assumptions  can  materially  affect  the fair value  estimate,  and
because employee stock options have characteristics significantly different from
those of traded options,  the use of the Black-Scholes  option-pricing model may
not provide a reliable estimate of the fair value of employee stock options.

Had  the  Company  elected  to  account  for its  stock-based  employee
compensation for all awards granted  subsequent to January 1, 1998 in accordance
with the fair  value-based  accounting  method of SFAS No.  123,  the  Company's
reported net income would have decreased by $.7 million and $1.0 million in 1998
and 1999  respectively,  or $.05 and $.06 per  basic  share,  respectively.  For
purposes of this pro forma  disclosure,  the estimated  fair value of options is
amortized to expense over the options' vesting period.  Such pro forma impact on
net income and basic earnings per share is not necessarily  indicative of future
effects on net income or earnings per share.

Note 10 -      Related party transactions:

The Company may be deemed to be  controlled  by Harold C.  Simmons.  See
Note 1.  Corporations  that may be deemed to be controlled by or affiliated with
Mr.  Simmons  sometimes  engage  in  (a)  intercorporate  transactions  such  as
guarantees,   management   and   expense   sharing   arrangements,   shared  fee
arrangements, joint ventures, partnerships, loans, options, advances of funds on
open account,  and sales, leases and exchanges of assets,  including  securities
issued by both related and  unrelated  parties,  and (b) common  investment  and
acquisition     strategies,     business     combinations,      reorganizations,
recapitalizations,  securities  repurchases,  and purchases and sales (and other
acquisitions  and  dispositions)  of  subsidiaries,  divisions or other business
units,  which  transactions have involved both related and unrelated parties and
have included  transactions  which  resulted in the  acquisition  by one related
party of a publicly-held  minority equity interest in another related party. The
Company  continuously  considers,  reviews and evaluates,  and understands  that
Contran and related entities consider,  review and evaluate,  such transactions.
Depending  upon the business,  tax and other  objectives  then  relevant,  it is
possible that the Company might be a party to one or more such  transactions  in
the future.

It is the policy of the Company to engage in  transactions  with related
parties  on terms,  in the  opinion of the  Company,  no less  favorable  to the
Company than could be obtained from unrelated parties.

In December 1997, the Company paid a $50 million  dividend to Valcor in
the form of a $50 million  demand note payable (the "Valcor  Note").  The Valcor
Note was  unsecured and bore  interest at a fixed rate of 6%.  Interest  expense
related to the Valcor Note was $164,000 in 1997 and $460,000 in 1998. The Valcor
Note was repaid in February 1998 using proceeds from the Company's new revolving
credit facility discussed in Note 6.

Under the terms of Intercorporate  Service Agreements with Valhi and NL
Industries,  Inc.  ("NL"), a  majority-owned  subsidiary of Valhi.  Valhi and NL
perform  certain  management,  financial  and  administrative  services  for the
Company on a fee basis.  Such fees are based upon  estimates  of time devoted to
the  affairs  of the  Company  by  individual  Valhi  or NL  employees  and  the
compensation of such persons.  In addition,  NL provides  certain  occupancy and
related office  services based upon square  footage  occupied.  Fees pursuant to
these agreements  aggregated  $260,000 in 1997, $354,000 in 1998 and $433,000 in
1999.

Certain of the  Company's  insurance  coverages  are  arranged  for and
brokered by EWI Re, Inc.  Parties  related to Contran own 90% of the outstanding
common  stock  of EWI,  and a  son-in-law  of  Harold  C.  Simmons  manages  the
operations of EWI. The Company  generally  does not  compensate EWI directly for
insurance, but understands that consistent with insurance industry practice, EWI
receives a commission for its services from the insurance underwriters.

The  Company and other  entities  related to Contran  participate  in a
combined risk  management  program.  Net charges from related parties related to
this buying program,  principally charges for insuring property and other risks,
aggregated  $208,000 in 1997,  $391,000 in 1998 and $265,000 in 1999. These fees
and  charges  are  principally  pass-through  in nature  and,  in the  Company's
opinion,  are reasonable and not materially different from those that would have
been incurred on a stand-alone basis.

Certain  employees of the Company have been awarded shares of restricted
Valhi common stock and/or  granted  options to purchase Valhi common stock under
the terms of Valhi's stock option plans.  Prior to March 1998,  the Company paid
Valhi the aggregate  difference between the option price and the market value of
Valhi's  common  stock  on the  exercise  date of such  options.  For  financial
reporting  purposes,  the Company  accounted for the related expense (credit) of
$472,000 in 1997 and  $(274,000) in 1998 in a manner  similar to accounting  for
stock  appreciation  rights.  Effective  March 1998,  the Company no longer pays
Valhi upon the exercise of such options.  Restricted stock which was granted was
forfeitable  unless certain periods of employment  were  completed.  The Company
paid  Valhi  the  market  value  of  the  restricted  shares  on the  dates  the
restrictions  expired,  and  accrued the related  expense  over the  restriction
period.

Note 11 -      Commitments and contingencies:

Legal  proceedings.  The  Company  is  involved,  from time to time,  in
various contractual,  product liability,  patent (or intellectual  property) and
other claims and disputes incidental to its business. Currently no environmental
or other  material  litigation  is pending or, to the  knowledge of the Company,
threatened.  The Company  currently  believes that the disposition of all claims
and  disputes,  individually  or in the  aggregate,  should  not have a material
adverse effect on the Company's  consolidated  financial  condition,  results of
operations or liquidity.

Environmental  matters and  litigation.  The  Company's  operations  are
governed by various federal,  state,  local and foreign  environmental  laws and
regulations.  The  Company's  policy is to comply  with  environmental  laws and
regulations  at  all  of  its  plants  and  to  continually  strive  to  improve
environmental  performance in association with applicable industry  initiatives.
The Company  believes that its  operations are in  substantial  compliance  with
applicable  requirements of  environmental  laws. From time to time, the Company
may be subject to environmental  regulatory  enforcement under various statutes,
resolution of which typically involves the establishment of compliance programs.

Income taxes.  The Company is undergoing  examinations of certain of its
income tax returns,  and tax authorities  have or may propose tax  deficiencies.
The Company  believes that it has  adequately  provided  accruals for additional
income taxes and related interest expense which may ultimately  result from such
examinations and believes that the ultimate disposition of all such examinations
should  not  have  a  material  adverse  effect  on its  consolidated  financial
position, results of operations or liquidity.

Prior to the Company's IPO, the Company was a member of the Contran Tax
Group for U.S. federal income tax purposes.  The Company and Valcor were parties
to a tax sharing  agreement  which provided for the  allocation of U.S.  federal
income tax  liabilities and tax payments as described in Note 1. The Company was
jointly and severally liable for the federal income tax of Contran and the other
companies included in the Contran Tax Group for all periods in which the Company
was included in Contran Tax Group for U.S.  federal income tax purposes.  Valcor
and Valhi have agreed,  however,  to indemnify the Company for any liability for
federal  income  taxes of the Contran Tax Group in excess of the  Company's  tax
liability computed in accordance with the tax sharing agreement.

Concentration of credit risk. The Company's  products are sold primarily
in North America and Europe to original equipment manufacturers. The ten largest
customers  accounted for  approximately  33%, 40% and 33% of sales in 1997, 1998
and 1999, respectively.  In 1997 and 1999, no single customer accounted for more
than 10% of sales.  In 1998,  one customer Hon  Industries  Inc.,  accounted for
approximately 10% of sales.

Other.  Royalty  expense was $849,000 in 1997,  $1,105,000  in 1998 and
$1,097,000 in 1999.  Royalties relate  principally to certain  Canadian-produced
products sold in the United States and are based upon volume.

Rent expense,  principally for equipment, was $425,000 in 1997, $496,000
in 1998 and $609,000 in 1999. At December 31, 1999, future minimum rentals under
noncancellable  operating leases are approximately $490,000 in 2000, $401,000 in
2001, $252,000 in 2002 and $19,000 in 2003.

Firm purchase  commitments  for capital  projects in process at December
31, 1999 approximated $4 million at December 31, 1999.

Note 12 - Quarterly results of operations (unaudited):

Quarter ended
March 31  June 30   Sept. 30  Dec. 31
--------  -------   --------  -------
(In millions, except per share amount)

1998:

Net sales ................................   $   32.1 $   39.7 $   38.7 $   41.6
Operating income .........................        3.8      8.8      8.6      9.6
Net income ...............................        2.2      6.1      6.0      6.5

Basic and diluted earnings per share .....   $     .18$     .38$     .37$    .40

1999:
Net sales ................................   $   55.2 $   55.0 $   55.9 $   59.8
Operating income .........................        9.6      9.7      9.4     11.4
Net income ...............................        5.9      6.1      6.1      7.1

Basic and diluted earnings per share .....   $     .37$     .38$     .38     .44

The sum of the  quarterly per share amounts may not equal the annual per
share amounts due to relative  changes in the weighted  average number of shares
used in the per share computations.

REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES

To the Stockholders and Board of Directors of CompX International Inc.:

Our audits of the consolidated  financial  statements referred to in our
report  dated  February  13,  2000  appearing  in  the  1999  Annual  Report  to
Shareholders  of  CompX   International  Inc.  (which  report  and  consolidated
financial statements are incorporated by reference in this Annual Report on Form
10-K) also included an audit of the financial statement schedules listed in Item
14(a)(2) of this Form 10-K. In our opinion,  these financial statement schedules
present fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements.

PricewaterhouseCoopers LLP

Houston, Texas
February 13, 2000

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

Additions
Balance at charged to           Recoveries             Balance
beginning  costs and            and currency           at end
Description                of year   expenses  Deductions translation Other(a)   of year

Year ended December 31, 1997:

Allowance for doubtful accounts .......   $ 167     $  193     $  (58)    $   9     $--       $  311
=====     ======     ======     =====     =====     ======

Amortization of other intangible assets   $  27     $   12     $ --       $--       $--       $   39
=====     ======     ======     =====     =====     ======

Year ended December 31, 1998:

Allowance for doubtful accounts .......   $ 311     $  109     $ (210)    $ (10)    $ 110     $  310
=====     ======     ======     =====     =====     ======

Amortization of goodwill ..............   $--       $  828     $ --       $--       $--       $  828
=====     ======     ======     =====     =====     ======

Amortization of other intangible assets   $  39     $  182     $ --       $  (5)    $--       $  216
=====     ======     ======     =====     =====     ======

Year ended December 31, 1999:

Allowance for doubtful accounts .......   $ 310     $   10     $  (89)    $--       $ 494     $  725
=====     ======     ======     =====     =====     ======

Amortization of goodwill ..............   $ 828     $1,902     $ --       $--       $--       $2,730
=====     ======     ======     =====     =====     ======

Amortization of other intangible assets   $ 216     $  210     $ --       $--       $--       $  426
=====     ======     ======     =====     =====     ======

(a)     1998 and 1999 - Business units acquired.

COMPX INTERNATIONAL INC.

------------------------------

AMENDMENT NO. 1 TO THE
CREDIT AGREEMENT

dated as of December 15, 1999

------------------------------

BANKERS TRUST COMPANY,
as Agent

and

VARIOUS LENDING INSTITUTIONS

AMENDMENT NO. 1 TO
CREDIT AGREEMENT

This Amendment Number 1 to Credit Agreement (this "Agreement")
is entered into as of December 15,  1999,  by the and among COMPX  INTERNATIONAL
INC., a Delaware  corporation  (the  "Company"),  each of the several  financial
institutions signatory hereto (collectively, the "Majority Lenders") and Bankers
Trust Company,  a New York banking  corporation,  individually and as agent (the
"Agent") for the benefit of the Lenders under the Credit  Agreement  hereinafter
referred to.

RECITALS

A. The Company,  the Agent and the financial  institutions from time to
time party  thereto are parties to that  certain  Credit  Agreement  dated as of
February 26, 1998 (the "Credit  Agreement").  Unless otherwise specified herein,
capitalized  terms used in this  Agreement  shall have the meanings  ascribed to
them by the Credit Agreement, as amended hereby.

B. The  Borrowers,  the Agent and the  Majority  Lenders have agreed to
amend the Credit  Agreement on terms and conditions  herein set forth subject to
the terms and conditions hereof.

NOW,  THEREFORE,  in  consideration  of the  mutual  execution
hereof and other good and valuable  consideration,  the parties  hereto agree as
follows:

1. Amendments to Credit Agreement.  Section 8.5 of the Credit Agreement
is hereby amended by deleting the clause "after
the second  anniversary  hereof"  where such words first  appear after the words
"provided, however, that" in such section.

2.  Representations  and  Warranties  of  the  Borrowers.  The  Company
represents and warrants that:

(a)      The execution, delivery and performance by the Company of this
Agreement have been duly authorized by all necessary corporate
action and that this  Agreement is a legal,  valid and binding
obligation of the Company  enforceable  against the Company in
accordance with its terms,  except as the enforcement  thereof
may be  subject to the  effect of any  applicable  bankruptcy,
insolvency,   reorganization,   moratorium   or  similar   law
affecting creditors' rights generally;

(b)      Each of the  representations  and warranties  contained in the
Credit Agreement is true and correct in all material  respects
on and as of the date  hereof  as if made on the date  hereof,
except to the extent that any such  representation or warranty
relates to an earlier date, in which case such  representation
or warranty shall be true and correct in all material respects
as of such earlier date; and

(c)      After giving effect to this Agreement, no Default or Unmatured
Default has occurred and is continuing.

3.  Conditions to  Effectiveness  of Agreement.  This  Agreement  shall
become  effective  on the date  (the  "Effective  Date")  each of the  following
conditions precedent is satisfied:

(a)      Execution  and  Delivery.  The  Company,  the  Agent  and  the
Majority  Lenders  shall  have  executed  and  delivered  this
Agreement.

(b)      No  Defaults.  After  giving  effect  to  this  Agreement,  no
Unmatured  Event of  Default  or Event of  Default  under  the
Credit Agreement shall have occurred and be continuing.

(c)      Representations  and  Warranties.  After giving  effect to the
amendments contemplated by this Agreement, the representations
and warranties of the Company contained in this Agreement, the
Credit  Agreement and the other Loan  Documents  shall be true
and correct in all respects as of the Effective Date, with the
same effect as though made on such date,  except to the extent
that any such representation or warranty relates to an earlier
date, in which case such  representation  or warranty shall be
true and correct in all  material  respects as of such earlier
date.

(d)      General.  The Agent shall have received such other  documents,
Certificates and opinions, as it may reasonably require.

4.    Reference   to   and   Effect   Upon   the   Credit    Agreement.

(a)      Upon  the  Effective   Date,  each  reference  in  the  Credit
Agreement   to  "this   Agreement,"   "hereunder,"   "hereof,"
"herein,"  or words of like import and each  reference  to the
Credit  Agreement  in each Loan  Document  shall mean and be a
reference  to the Credit  Agreement  as amended  and  restated
hereby and the Credit Agreement is amended as set forth herein
and is hereby restated in its entirety to read as set forth in
the Credit Agreement with the amendments specified herein.

(b)      Except  as  specifically  amended  above,  all of  the  terms,
conditions and covenants of the Credit Agreement and the other
Loan  Documents  shall remain  unaltered and in full force and
effect and are hereby ratified and confirmed in all respects.

(c)      The execution,  delivery and  effectiveness  of this Agreement
shall not operate as a waiver of any right, power or remedy of
the Agent or any  Lender  under the  Credit  Agreement  or any
other Loan Document,  nor constitute a waiver of any provision
of the  Credit  Agreement  or any  Loan  Document,  except  as
specifically set forth herein.

5. Costs and Expenses.  The Company hereby affirms its obligation under
Section 11.04 of the Credit  Agreement to reimburse the Agent for all reasonable
costs, internal charges and out-of-pocket expenses paid or incurred by the Agent
in connection with the preparation,  negotiation, execution and delivery of this
Agreement,  including but not limited to the attorneys' fees and time charges of
attorneys for the Agent with respect thereto.

6.  Counterparts.  This  Agreement  may be  executed  in any  number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument.

(signature pages follow)

IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement  to be duly  executed  by their  respective  officers  thereunto  duly
authorized as of the date above first written.

COMP X INTERNATIONAL INC., a Delaware 
corporation

By:

Name:

Title:

BANKERS TRUST COMPANY, individually as a 
Lender and as Agent

By:

Name:

Title:

BANK OF AMERICA, N.A., (Formerly NationsBank, 
N.A.), as a Lender

By:

Name:

Title:

BANK OF TOYKO, as Lender

By:

Name:

Title:

FIRST UNION NATIONAL BANK, as a Lender

By:

Name:

Title:

WACHOVIA BANK, N.A., as a Lender

By:

Name:

Title:

REAFFIRMATION OF GUARANTY

Each of the undersigned acknowledges receipt of a copy of the Amendment
No. 1 to the Credit Agreement (the  "Amendment")  dated as of December 17, 1999,
consents to such  Amendment  and hereby  reaffirms  its  obligations  under that
certain Subsidiary Guaranty Agreement dated February 26, 1998.

Dated as of December 17, 1999.

INTERCORPORATE SERVICES AGREEMENT

This INTERCORPORATE SERVICES AGREEMENT (the "Agreement"),  effective as
of January 1, 1999, amends and supersedes that certain  Intercorporate  Services
Agreement  effective  as of  January 1, 1998  between  VALHI,  INC.,  a Delaware
corporation  ("Valhi"),  and COMPX  INTERNATIONAL  INC., a Delaware  corporation
("Recipient").

Recitals

A.  Employees  and  agents of Valhi  and  affiliates  of Valhi  perform
management,  financial and administrative functions for Recipient without direct
compensation from Recipient.

B. Recipient does not separately  maintain the full internal capability
to perform all necessary management, financial and administrative functions that
Recipient requires.

C.  The cost of  maintaining  the  additional  personnel  by  Recipient
necessary to perform the functions  provided for by this Agreement  would exceed
the fee set  forth in  Section  3 of this  Agreement  and that the terms of this
Agreement are no less  favorable to Recipient  than could  otherwise be obtained
from a third party for comparable services.

D. Recipient  desires to continue  receiving the management,  financial
and administrative  services presently provided by Valhi and affiliates of Valhi
and Valhi is willing to continue  to provide  such  services  under the terms of
this Agreement.

Agreement

For and in consideration of the mutual  premises,  representations  and
covenants herein contained, the parties hereto mutually agree as follows:

Section 1. Services to be Provided.  Valhi agrees to make  available to
Recipient the following services (the "Services") to be rendered by the internal
staff of Valhi and affiliates of Valhi:

(a)      Consultation   and   assistance   in   the   development   and
implementation of Recipient's  corporate business  strategies,
plans and objectives;

(b)      Consultation  and  assistance  in  management  and  conduct of
corporate affairs and corporate governance consistent with the
charter and bylaws of Recipient;

(c)      Consultation   and  assistance  in  maintenance  of  financial
records  and  controls,  including  preparation  and review of
periodic  financial  statements  and  reports to be filed with
public  and  regulatory  entities  and  those  required  to be
prepared for financial  institutions or pursuant to indentures
and credit agreements;

(d)      Consultation   and  assistance  in  cash   management  and  in
arranging  financing necessary to implement the business plans
of Recipient;

(e)      Consultation    and   assistance   in   tax   management   and
administration, including, without limitation, preparation and
filing  of  tax  returns,   tax  reporting,   examinations  by
government authorities and tax planning;

(f)      Consultation  and assistance in performing  internal audit and
control functions;

(g)      Consultation  and assistance with respect to employee  benefit
plans and incentive compensation arrangements; and

(h)      Such other services as may be requested by Recipient or deemed
necessary and proper from time to time.

Section 2.  Miscellaneous  Services.  It is the  intent of the  parties
hereto that Valhi provide only the Services requested by Recipient in connection
with routine management,  financial and administrative  functions related to the
ongoing  operations  of  Recipient  and not with  respect to  special  projects,
including  corporate  investments,  acquisitions and  divestitures.  The parties
hereto  contemplate that the Services rendered in connection with the conduct of
Recipient's  business  will  be on a scale  compared  to  that  existing  on the
effective  date of this  Agreement,  adjusted for internal  corporate  growth or
contraction, but not for major corporate acquisitions or divestitures,  and that
adjustments  may be required to the terms of this Agreement in the event of such
major corporate acquisitions,  divestitures or special projects.  Recipient will
continue to bear all other costs required for outside  services  including,  but
not  limited  to,  the  outside  services  of  attorneys,   auditors,  trustees,
consultants, transfer agents and registrars, and it is expressly understood that
Valhi assumes no liability for any expenses or services  other than those stated
in Section 1. In addition to the fee paid to Valhi by Recipient for the Services
provided  pursuant to this Agreement,  Recipient will pay to Valhi the amount of
out-of-pocket costs incurred by Valhi in rendering such Services.

Section 3. Fee for Services.  Recipient  agrees to pay to Valhi $81,000
quarterly, commencing as of January 1, 1999, pursuant to this Agreement.

Section  4.  Original  Term.  Subject  to the  provisions  of Section 5
hereof,  the original  term of this  Agreement  shall be from January 1, 1999 to
December 31, 1999.

Section  5.   Extensions.   This  Agreement  shall  be  extended  on  a
quarter-to-quarter  basis  after the  expiration  of its  original  term  unless
written  notification is given by Valhi or Recipient thirty (30) days in advance
of the first day of each  successive  quarter  or unless it is  superseded  by a
subsequent written agreement of the parties hereto.

Section  6.   Limitation  of  Liability.   In  providing  its  Services
hereunder,  Valhi shall have a duty to act, and to cause its agents to act, in a
reasonably prudent manner, but neither Valhi nor any officer, director, employee
or agent of Valhi or its  affiliates  shall be liable to Recipient for any error
of  judgment  or  mistake  of law or for  any  loss  incurred  by  Recipient  in
connection  with the  matter  to which  this  Agreement  relates,  except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
Valhi.

Section  7.  Indemnification  of Valhi by  Recipient.  Recipient  shall
indemnify and hold harmless Valhi, its affiliates and their respective officers,
directors  and  employees  from and  against  any and all  losses,  liabilities,
claims,  damages,  costs  and  expenses  (including  attorneys'  fees and  other
expenses of  litigation)  to which  Valhi or any such person may become  subject
arising out of the Services provided by Valhi to Recipient  hereunder,  provided
that such indemnity  shall not protect any person against any liability to which
such person  would  otherwise be subject by reason of willful  misfeasance,  bad
faith or gross negligence on the part of such person.

Section 8. Further Assurances.  Each of the parties will make, execute,
acknowledge and deliver such other instruments and documents,  and take all such
other actions,  as the other party may reasonably  request and as may reasonably
be required in order to effectuate  the purposes of this  Agreement and to carry
out the terms hereof.

Section 9. Notices.  All  communications  hereunder shall be in writing
and shall be addressed, if intended for Valhi, to Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240,  Attention:  President,  or such other
address as it shall have furnished to Recipient in writing,  and if intended for
Recipient,  to Two  Greenspoint  Plaza,  16825  Northchase  Drive,  Suite  1200,
Houston, Texas 77060, Attention: Chairman of the Board, or such other address as
it shall have furnished to Valhi in writing.

Section 10. Amendment and Modification.  Neither this Agreement nor any
term hereof may be  changed,  waived,  discharged  or  terminated  other than by
agreement in writing signed by the parties hereto.

Section 11.  Successors and Assigns.  This  Agreement  shall be binding
upon and inure to the  benefit  of Valhi  and  Recipient  and  their  respective
successors  and assigns,  except that neither  party may assign its rights under
this Agreement without the prior written consent of the other party.

Section 12.  Governing  Law. This  Agreement  shall be governed by, and
construed and interpreted in accordance with, the laws of the state of Texas.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.

VALHI, INC.

By:
Steven L. Watson
President

COMPX INTERNATIONAL INC.

By:
Joseph S. Compofelice
Chairman   of  the  Board,   
President   and  Chief
Executive Officer

EXHIBIT 21.1     SUBSIDIARIES OF THE REGISTRANT

% of Voting
Securities
Jurisdiction of             Held at
Incorporation or           December 31,
Name of Corporation                       Organization                 1999
-----------------------------------     ----------------             -------

Waterloo Furniture Components Limited        Canada                   100

Fort Lock Corporation                        Illinois                 100
Fort Securite SA                           France                    58

Timberline Lock, Ltd.                        Illinois                 100

CompX Europe B.V.                            Netherlands              100
Thomas Regout Holding B.V.                 Netherlands              100
Thomas Regout U.S.A., Inc.               Michigan                 100
Thomas Regout Nederland B.V.             Netherlands              100
Thomas Regout B.V.                       Netherlands              100
Thomas Regout International B.V.         Netherlands              100

CompX Asia Holding Corporation               Malaysia                 100
Yin Da Slide Co., Ltd.                     Taiwan                   100

Chicago Lock Company                         Delaware                 100

Chicago Tubar Company                        Delaware                 100

Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the  incorporation  by reference  in CompX  International
Inc.'s  (i)  Registration   Statement  (Form  S-8  No.  333-47539)  and  related
Prospectus  pertaining to the CompX  International Inc. 1997 Long-Term Incentive
Plan and (ii)  Registration  Statement  (Form  S-8 No.  333-56163)  and  related
Prospectus pertaining to the National Cabinet Lock, Inc. Contributory Retirement
Plan,  of our report dated  February 13, 2000 on our audits of the  consolidated
financial  statements and financial  statement  schedules of CompX International
Inc. and  Subsidiaries  included in this Annual Report on Form 10-K for the year
ended December 31, 1999.

PricewaterhouseCoopers LLP

Houston, Texas
March 22, 2000

<ARTICLE>                     5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COMPX
INTERNATIONAL INC.'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER>                                   1,000

<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                              DEC-31-1999
<PERIOD-START>                                 JAN-01-1999
<PERIOD-END>                                   DEC-31-1999
<CASH>                                         12,169
<SECURITIES>                                   0
<RECEIVABLES>                                  29,778
<ALLOWANCES>                                   725
<INVENTORY>                                    27,659
<CURRENT-ASSETS>                               72,481
<PP                                         108,399
<DEPRECIATION>                                 25,154
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<CURRENT-LIABILITIES>                          26,847
<BONDS>                                        20,900
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