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, 2001

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.)

5430 LBJ Freeway, Suite 1700, Dallas, Texas                     75240-2697    
-----------------------------------------------           --------------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:          (972) 233-1700   
--------------------

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.

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 March 1, 2002,  5,103,280 shares of Class A common stock were outstanding.
The  aggregate  market  value of the 4.7 million  shares of voting stock held by
nonaffiliates of Valhi, Inc. as of such date approximated $62.0 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,  precision
ball bearing slides and security products  consisting of cabinet locks and other
locking mechanisms.  In 2001,  precision ball bearing slides,  security products
and ergonomic  computer support systems accounted for approximately 44%, 35% and
17% of net sales, respectively. The remaining sales were generated from sales of
other products.

Valhi, Inc. and Valhi's  wholly-owned  subsidiary Valcor, Inc. owned 69% of
the Company's outstanding common stock at December 31, 2001. Contran Corporation
holds,   directly  or  through   subsidiaries,   approximately  94%  of  Valhi's
outstanding  common stock.  Substantially  all of Contran's  outstanding  voting
stock is held by trusts  established  for the  benefit of certain  children  and
grandchildren  of Harold C. Simmons,  of which Mr. Simmons is sole trustee.  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 security products producers. In 1999,
CompX  acquired two more slide  producers and in January 2000  acquired  another
security products 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  beliefs 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,  changes in costs of raw materials and other  operating costs (such as
energy costs),  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 trade barriers, the impact of pricing
and production decisions,  fluctuations in the value of the U.S. dollar relative
to other currencies  (such as the euro,  Canadian dollar and New Taiwan dollar),
potential  difficulties  in integrating  completed  acquisitions,  uncertainties
associated with new product  development,  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  publicly  or  revise  such  statements   whether  as  a  result  of  new
information, future events or otherwise.

Industry Overview

During the mid 1990's and 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 security products industry in 1998 and 2000 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 59% 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  and  other  non-office   furniture
applications   result  in  the   potential   for  higher  rates  of  growth  and
diversification of risk than the office furniture industry as a whole.

Products

CompX  manufactures  and sells  components  in three major  product  lines:
precision ball bearing slides,  security products and ergonomic computer support
systems.  The Company's  precision  ball bearing  slides and ergonomic  computer
support systems 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, Chicago Lock and TuBAR brand
names.  The Company  believes  that its brand names are well  recognized  in the
industry.

Precision  ball  bearing  slides.  CompX  manufactures  a complete  line of
precision  ball bearing  slides for use in office  furniture,  computer  related
equipment, tool storage cabinets, imaging equipment, file cabinets, desk drawers
and other applications.  These products include CompX's Integrated Slide Lock in
which a file cabinet manufacturer can reduce the possibility of multiple drawers
being opened at the same time,  and the  adjustable  Ball Lock which reduces the
risk of heavily-filled  drawers,  such as auto mechanic tool boxes, from opening
while in movement.  Precision ball bearing slides are  manufactured to stringent
industry  standards  and are designed in  conjunction  with  original  equipment
manufacturers  ("OEMs")  to meet the needs of end users  with  respect to weight
support capabilities, ease of movement and durability.

In addition to CompX's basic  precision  ball bearing slide product  lines,
sales based on patented innovations such as the Butterfly Take Apart System, the
Integrated  Slide  Lock and the  Ball  Lock  have  accounted  for an  increasing
proportion  of  the  Company's  sales.  These  applications  have  expanded  the
Company's  product  offerings  within the office  furniture  industry as well as
adding products for heavy-duty tool storage cabinets,  electromechanical imaging
equipment and computer server network cabinets.

Security products.  The Company believes that it is a North American market
leader  in  the  manufacture  and  sale  of  cabinet  locks  and  other  locking
mechanisms.  CompX provides  security products to various  industries  including
institutional furniture, banking, industrial equipment and vehicles, vending and
computer.  CompX's  security  products are sold under the National Cabinet Lock,
Fort Lock,  Timberline  Lock,  Chicago Lock and TuBAR brand names. The Company's
products can also be found in various  applications  including ignition systems,
office  furniture,  vending  and gaming  machines,  parking  meters,  electrical
circuit panels,  storage  compartments  for  motorcycles,  security  devices for
laptop and desktop  computers as well as mechanical and electronic locks for the
toolbox industry. Some of these products may include CompX's KeSet high security
system,  which has the  ability to change  the keying on a single  lock 64 times
without removing the lock from its enclosure.

The Company  manufactures  disc tumbler  locking  mechanisms  at all of its
security  products  facilities,  which mechanisms  provide moderate security and
generally represent the lowest cost lock to produce. CompX also manufactures pin
tumbler locking  mechanisms,  including its KeSet, ACE II and TuBAR brand locks,
which  mechanisms  are more  costly  to  produce  and are  used in  applications
requiring  higher  levels of security.  A  substantial  portion of the Company's
sales  consist  of  products   with   specialized   adaptations   to  individual
manufacturers'  specifications.  CompX, however, also has a standardized product
line  suitable for many  customers.  This  standardized  product line is offered
through a North American  distribution and factory centers network as well as to
large OEMs through the Company's STOCK LOCKS distribution program.

Ergonomic  computer  support systems.  CompX is a leading  manufacturer and
innovator in ergonomic  computer support systems.  Unlike products targeting the
residential  market,  which are 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.

Ergonomic  computer support systems include  adjustable  computer  keyboard
support  arms,  designed  to attach to desks in the  workplace  and home  office
environments  to  alleviate  possible  strains  and stress and  maximize  usable
workspace, adjustable computer table mechanisms which provide variable workspace
heights, CPU storage devices which minimize adverse effects of dust and moisture
and a number of complementary accessories,  including ergonomic wrist rest aids,
mouse pad supports and computer  monitor  support arms.  These products  include
CompX's  Leverlock  ergonomic  keyboard  arm,  which  is  designed  to make  the
adjustment of the keyboard arm easier for all (including  physically-challenged)
users. In addition,  the Company offers its engineering and design  capabilities
for the  design and  manufacture  of  products  on a  proprietary  basis for key
customers.

Sales, Marketing and Distribution

CompX  sells  components  to OEMs and to  distributors  through a dedicated
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 field
salespeople  and  independent  manufacturers'  representatives.   Manufacturers'
representatives  are  selected  based on special  skills in  certain  markets or
relationships 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. The Company also operates a small  tractor/trailer fleet associated with
its Canadian facilities.

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
1999, 2000 and 2001, sales to the Company's ten largest customers  accounted for
approximately 33%, 35% and 36% of sales,  respectively.  In 1999, 2000 and 2001,
sales to the  Company's  largest  customer  were less than 10% of the  Company's
total sales.  In 1999 and 2000,  nine of the Company's  top ten  customers  were
located in the United States.  In 2001, eight of the Company's top ten customers
were located in the United States.

Manufacturing and Operations

At December 31, 2001, CompX operated six manufacturing  facilities in North
America  (two in each of Illinois  and Canada and one in each of South  Carolina
and  Michigan),  one facility in the  Netherlands  and two facilities in Taiwan.
Precision  ball bearing  slides or ergonomic  products are  manufactured  in the
facilities  located in Canada,  the Netherlands,  Michigan and Taiwan.  Security
products  are  manufactured  in the  facilities  located in South  Carolina  and
Illinois.  The Company owns all of these facilities except for one of the Taiwan
facilities and the  Netherlands  facility,  which are leased.  See also Item 2 -
"Properties".  CompX also  leases a  distribution  center in  California.  CompX
believes that all of 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 outside of these arrangements 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.
Consequently,  overall  operating  margins can be affected by such raw  material
cost pressures.

Competition

The  markets  CompX  participates  in are highly  competitive.  The Company
competes  primarily  on the basis of product  design,  including  ergonomic  and
aesthetic  factors,  product quality and durability,  price,  on-time  delivery,
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 Company  competes in the  precision  ball bearing slide market with two
large  manufacturers and a number of smaller domestic and foreign  manufacturers
that compete  primarily on the basis of product quality and price. The Company's
security  products  compete  with a variety of  relatively  small  domestic  and
foreign  competitors.  The Company  competes in the ergonomic  computer  support
systems  market with one major  producer  and a number of smaller  domestic  and
foreign  manufacturers  that compete  primarily on the basis of product quality,
features  and price.  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

The Company 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,  KeSet, Fort Lock,  Timberline Lock,  Chicago Lock, ACE II, 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 CompX  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/or ergonomic product operations in Canada,
the  Netherlands and Taiwan.  The majority of the Company's 2001 non-U.S.  sales
are to customers  located in Canada and Europe.  Foreign  operations are subject
to, among other  things,  currency  exchange  rate  fluctuations.  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,  2001,  the  Company  employed   approximately  2,000
employees,  including  790 in the  United  States,  710  in  Canada,  340 in the
Netherlands and 160 in Taiwan.  Approximately 79% of the Company's  employees in
Canada are  represented by a labor union.  The Company's  collective  bargaining
agreement with such union expires in 2003.  The Company  believes that its labor
relations are satisfactory.

ITEM 2.   PROPERTIES

The  Company's  principal  executive  offices are located in  approximately
1,000 square feet of leased space at 5430 LBJ Freeway,  Dallas, Texas 75240. The
following table sets forth the location, size and general product types produced
for each of the Company's facilities.

Size
(square
Facility Name                        Location                       feet)           Products Produced

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

Manitou                           Kitchener, Ontario                  206,000        Slides

Trillium                          Kitchener, Ontario                  110,000        Ergonomic products

Byron Center                      Byron Center, MI                    143,000        Slides

National Cabinet
Lock                             Mauldin, SC                         198,000        Security products

Fort Lock                         River Grove, IL                     100,000        Security products

Timberline                        Lake Bluff, IL                       16,000        Security products

Dynaslide                         Taipei, Taiwan                       43,000        Slides

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

Thomas Regout                     Maastricht,
the Netherlands                    270,000        Slides

Dynaslide                         Taipei, Taiwan                       25,000        Slides

Distribution Center               Rancho Cucamonga, CA                 12,000        Product distribution

The Manitou,  Trillium,  Thomas Regout, National Cabinet Lock and Fort Lock
facilities  are ISO-9001  registered.  The Dynaslide  owned facility is ISO-9002
registered. ISO-9001 registration of the Byron Center facility is anticipated in
2002.  The Company  believes that all its  facilities  are well  maintained  and
satisfactory for their intended purposes.

A sale/leaseback  transaction was executed on the Netherlands facility with
the municipality of Maastricht in December 2001. See Note 11 to the Consolidated
Financial Statements and see also Item 7 - "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

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  material
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, 2001.

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 March 1, 2002, there were  approximately 28
holders of record of CompX Class A common stock.  The following table sets forth
the high and low closing  sales  prices per share for CompX Class A common stock
for 2000 and 2001,  according to the New York Stock Exchange Composite Tape, and
dividends paid per share during such periods. On March 1, 2002 the closing price
per share of CompX Class A common stock according to the NYSE Composite Tape was
$13.10.

Dividends
High         Low           paid

Year ended December 31, 2000

First Quarter ..........................       $   19.88    $   17.88    $    .125
Second Quarter .........................           23.44        17.81         .125
Third Quarter ..........................           23.19        19.31         .125
Fourth Quarter .........................           20.93         8.94         .125

Year ended December 31, 2001

First Quarter ..........................       $   11.65    $    9.18    $    .125
Second Quarter .........................           13.00        10.77         .125
Third Quarter ..........................           13.40        10.45         .125
Fourth Quarter .........................           12.97         8.95         .125

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.

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.
Excluding 1998, each of the years 1997 through 2001 consisted of a 52-week year.
1998 was a 53-week year.

Years ended December 31,
--------------------------------
1997       1998       1999        2000      2001
----       ----       ----        ----      ----
($ in millions, except per share data)
Income Statement Data

Net sales ......................   $  108.7   $  152.1   $  225.9    $  253.3  $  211.4

Operating income ...............   $   27.5   $   30.4   $   40.0    $   37.3  $   12.5

Income before income taxes and
minority interest ............   $   27.7   $   32.5   $   39.2    $   35.5  $   12.9
Income taxes ...................       11.0       12.0       14.1        13.4       5.8
Minority interest in losses ....       --          (.2)       (.1)       --        --
--------   --------   --------    --------  --------

Net income ...................   $   16.7   $   20.7   $   25.2    $   22.1  $    7.1
========   ========   ========    ========  ========

Cash dividends (1) .............   $    6.1   $    1.8   $    2.0    $    8.1  $    7.6
Basic earnings per share data:
Net income ...................   $   1.67   $   1.37   $   1.56    $   1.37  $    .47
Cash dividends ...............   $    .61   $    .18   $   .125    $    .50  $    .50
Weighted average common shares
outstanding ...................       10.0       15.1       16.1        16.1      15.1

Balance Sheet Data
(at year end):

Cash and other current assets    $   45.4   $   86.5   $   72.5    $   83.0  $   94.9
Total assets .................       63.8      152.4      202.9       225.5     226.0
Current liabilities ..........       64.4       20.3       26.8        28.9      24.5
Long-term debt, including
current maturities ..........       50.4        1.7       22.3        40.6      49.1
Stockholders' equity (deficit)       (1.2)     130.0      149.4       151.0     143.0

(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.

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

Overview

The Company reported net income of $7.1 million,  or $.47 per diluted share
for the year ended  December  31, 2001, a decrease of 68% compared to net income
of $22.1  million or $1.37 per  diluted  share for the year ended  December  31,
2000. The Company's net income in 1999 was $25.2  million,  or $1.56 per diluted
share.

The continued weak economic conditions in the manufacturing sector in North
America  and Europe had a  significant  impact on  CompX's  results in 2001.  In
response to these conditions,  CompX reduced manufacturing fixed costs and other
costs  starting  in the first  quarter  of 2001 and  restructured  its  European
operations in the fourth quarter of 2001. The cost reductions and  restructuring
efforts are  designed to  minimize  the adverse  effects of lower sales and more
favorably  position  CompX to meet demand when the  economy  recovers.  In 2001,
CompX also entered into a  sale/leaseback  transaction for its over 100 year old
facility in the Netherlands which will provide the opportunity to move into more
modern  facilities.  Looking  forward,  CompX has stepped up efforts to increase
sales  outside  of the  office  furniture  industry  and to seek ways to further
reduce  costs,  including  expanding its foreign  sourcing of certain  component
products.

Prior to the fourth quarter of 2001, the Company operated in one reportable
segment - the  manufacture  and sale of  mechanically-engineered  components for
office  furniture  and other  markets.  During the fourth  quarter of 2001,  the
Company  implemented  certain  operational  and  other  changes  at  all  of its
facilities,  revising the  Company's  organizational  structure  and causing the
composition  of the reportable  segments to change.  The Company now defines its
operations in terms of three operating segments - CompX Security Products, CompX
Waterloo  and  CompX  Europe.   The  CompX  Security  Products   segment,   with
manufacturing  facilities in South Carolina and Illinois,  manufactures  locking
mechanisms  and  other  security  products  for sales to the  office  furniture,
banking,  vending,  computer and other  industries.  The CompX Waterloo segment,
with  facilities in Canada,  Michigan and Taiwan,  and the CompX Europe segment,
with  facilities  in the  Netherlands,  both  manufacture  a  complete  line  of
precision  ball  bearing  slides for use in office  furniture,  computer-related
equipment, tool storage cabinets and other applications.  Both of these segments
also either  manufacture  and/or distribute  ergonomic computer support systems.
Because of the similar economic  characteristics  between the CompX Waterloo and
CompX  Europe  segments  and  due to the  identical  products,  customer  types,
production processes and distribution methods shared by these two segments, they
have been  aggregated  into a single  reportable  segment for segment  reporting
purposes.  Prior period segment information has been reclassified to reflect the
new operating segments.

As discussed in Note 14 to the Consolidated Financial Statements, beginning
in 2002 the Company will no longer recognize  periodic  amortization of goodwill
in its results of  operations.  The Company  would have  reported  net income of
approximately  $9.4 million in 2001, or about $2.3 million  higher than what was
actually  reported,  if the  goodwill  amortization  included  in the  Company's
reported net income had not been  recognized.  Of such $2.3 million  difference,
approximately  $1.4  million  and $.9  million  relate  to the  Company's  CompX
Security Products and CompX Waterloo/CompX Europe segments, respectively.

Critical Accounting Policies and Estimates

The  accompanying   "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations"  are based upon the Company's  consolidated
financial  statements,  which have been prepared in accordance  with  accounting
principles  generally  accepted in the United  States of America  ("GAAP").  The
preparation of these financial statements requires the Company to make estimates
and judgments  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 reported
period.  On an on-going basis,  the Company  evaluates its estimates,  including
those related to bad debts,  inventory  reserves,  the  recoverability  of other
long-lived  assets  (including  goodwill  and other  intangible  assets) and the
realization  of deferred  income tax assets.  The Company bases its estimates on
historical  experience and on various other  assumptions that are believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making judgments about the reported amounts of assets, liabilities, revenues and
expenses.  Actual  results may differ from  previously-estimated  amounts  under
different assumptions or conditions.

The Company believes the critical financial statement judgment risks of its
business are attributable to four primary areas.

o    Will  customer  accounts  receivable on the books be collected at full book
value?

o    Will inventory on hand be sold with a sufficient  mark up to cover the cost
to produce and ship the product? o Will future cash flows of the Company be
sufficient to recover the net book value of long-term assets? o Will future
taxable  income be  sufficient  to  utilize  recorded  deferred  income tax
assets?

The Company believes the following critical  accounting policies affect its
more  significant  judgments  and  estimates,   as  noted  above,  used  in  the
preparation of its consolidated financial statements:

o    Allowance for uncollectable accounts receivable. The Company maintains
allowances for doubtful  accounts for estimated  losses resulting from
the inability of its customers to make required payments.  The Company
takes  into  consideration  the  current  financial  condition  of the
customers,  the age of outstanding  balances and the current  economic
environment  when  assessing  the adequacy of the  allowances.  If the
financial  condition of the Company's  customers were to  deteriorate,
resulting  in  an  impairment  of  their  ability  to  make  payments,
increased allowances may be required.

o    Inventory  reserves.  The  Company  provides  reserves  for  estimated
obsolescence or unmarketable inventory equal to the difference between
the cost of inventory  and the estimated  net  realizable  value using
assumptions   about   future   demand  for  its  products  and  market
conditions.  The Company  also  considers  the age and the quantity of
inventory  on  hand  in  estimating  the  reserve.  If  actual  market
conditions  are less  favorable  than those  projected by  management,
increased inventory reserves may be required.

o    Net  book  value  of  long-term  assets.  The  Company  recognizes  an
impairment  charge  associated with its long-lived  assets,  including
property and equipment, goodwill and other intangible assets, whenever
it determines  that recovery of the long-lived  asset is not probable.
The   determination   is  made  in  accordance  with  applicable  GAAP
requirements  associated with the long-lived asset, and is based upon,
among other  things,  estimates of the amount of future net cash flows
to be generated by the  long-lived  asset and estimates of the current
fair value of the asset.  Adverse  changes in  estimates of future net
cash flows or  estimates of fair value could result in an inability to
recover the carrying value of the long-lived  asset,  thereby possibly
requiring an impairment charge to be recognized in the future.

o    Deferred income tax assets. The Company records a valuation  allowance
to  reduce  its  deferred  income  tax  assets to the  amount  that is
believed to be realizable under the "more-likely-than-not" recognition
criteria. The Company has considered future taxable income and ongoing
prudent and feasible tax planning strategies in assessing the need for
a valuation  allowance.  It is possible that in the future the Company
may  change its  estimate  of the  amount of the  deferred  income tax
assets  that  would  "more-likely-than-not"  be  realized.  This would
result in an  adjustment  to the deferred  income tax asset  valuation
allowance  that would  either  increase or  decrease,  as  applicable,
reported net income in the period the change in estimate is made.

Results of Operations

Net sales and operating income

Years ended December 31,          % Change
-------------------------      ----------------
1999       2000      2001   1999 - 2000  2000 - 2001
----       ----      ----   -----------  -----------
(In millions)

Net sales:
CompX Waterloo/CompX

Europe segment .............    $151.0     $168.3     $137.3       +11%    -18%
CompX Security
Products segment ...........      74.9       85.0       74.1       +13%    -13%
------     ------     ------

Total net sales ...........    $225.9     $253.3     $211.4       +12%    -17%
======     ======     ======

Operating income:
CompX Waterloo/CompX
Europe segment .............    $ 26.8     $ 24.8     $  5.2        -7%    -79%
CompX Security
Products segment ...........      13.2       12.5        7.3        -5%    -41%
------     ------     ------
Total operating
Income ...................    $ 40.0     $ 37.3     $ 12.5        -7%    -67%
======     ======     ======

Operating income margin:
CompX Waterloo/CompX
Europe segment .............        18%        15%        4%
CompX Security
Products segment ...........        18%        15%       10%

Year ended December 31, 2001 compared to year ended December 31, 2000

Net sales decreased $41.9 million,  or 17%, in 2001 compared to 2000 due to
decreased  demand for the Company's  products  resulting from the continued weak
economic conditions in the manufacturing sector in North America and Europe, and
to a lesser extent,  the negative  effects of fluctuations in currency  exchange
rates.  Net sales of slide  products in 2001  decreased 26% as compared to 2000,
while net sales of security  products and ergonomic  products each decreased 13%
during  the same  period.  Net  sales of the  CompX  Security  Products  segment
decreased 13% and net sales of the CompX Waterloo/CompX Europe segment decreased
18% in 2001.

Operating income for 2001 decreased $24.8 million,  or 67% compared to 2000
and operating  income margins  decreased to 6% in 2001 compared to 15% for 2000.
Reductions in  manufacturing,  fixed overhead and related overhead costs,  which
began in the first quarter of 2001,  partially offset the effects of the decline
in net sales in 2001. However, despite these cost reductions,  operating margins
in 2001 were adversely  impacted by the decline in volume levels and the related
impact on manufacturing efficiencies,  the effects of unfavorable changes in the
sales  mix  and  general  pricing  pressures.  Operating  income  at  the  CompX
Waterloo/CompX  Europe  segment  decreased 79% in 2001  compared to 2000,  while
operating income at the CompX Security  Products  segment  decreased 41% for the
same period. A pre-tax $2.7 million  restructuring  charge in the fourth quarter
of 2001 and a proportionately  larger impact of unfavorable changes in the sales
mix contributed to the more  substantial  operating  income decline at the CompX
Waterloo/CompX  Europe  segment  as  compared  to the  CompX  Security  Products
segment.

The fourth quarter 2001 restructuring  charge included headcount reductions
of  about  35  employees  at  CompX's  Maastricht,   the  Netherlands  facility,
substantially  all of which had been  implemented  by December 31, 2001.  Of the
$2.7 million charge,  approximately $.4 million has been paid in 2001, with $1.8
million  expected  to be paid in the first two  quarters of 2002 and $.5 million
expected to be paid in 2003. In addition,  approximately $3.0 million in pre-tax
charges  were  recorded  in  the  fourth   quarter  of  2001.   This  charge  is
predominately  comprised of $2.6 million related to various changes in estimates
with respect to reserves for obsolete and slow-moving  inventory,  approximately
$.1 million  related to  allowances  for doubtful  accounts,  with the remainder
related to other items.  Of the $3.0 million charge,  approximately  $.9 million
related to the CompX  Waterloo/CompX  Europe  segment  with the  remaining  $2.1
million related to the CompX Security Products segment.

Year ended December 31, 2000 compared to year ended December 31, 1999

Net sales increased $27.4 million,  or 12%, in 2000 compared to 1999 due to
the effect of  acquisitions.  Sales of security  products in 2000  increased 13%
compared to 1999, and sales of slide products  increased 18%. During 2000, sales
of CompX's  ergonomic  products  decreased 5% compared to 1999. Net sales of the
CompX  Security  Products  segment  increased  13%  while net sales of the CompX
Waterloo/CompX  Europe  segment  increased 11% in 2000.  Excluding the effect of
acquisitions,  net sales in 2000 were  essentially  flat compared to 1999,  with
sales of slide  products  up 8% and sales of  ergonomic  products  and  security
products down 5% and 7%,  respectively.  Excluding the effects of  acquisitions,
net sales of the CompX Waterloo/CompX  Europe segment increased 3% and net sales
at the CompX Security Product segment  decreased 7% in 2000 as compared to 1999.
Sales of the CompX Waterloo/CompX Europe segment were negatively impacted in the
second  half of 2000 by  softening  demand in the office  furniture  industry in
North America and loss of market share due to competition from imports. However,
strong sales of slide  products in the first part of 2000,  offset the softening
office furniture industry demand,  resulting in the overall increase in sales of
this  segment.  The lower  CompX  security  products  segment  sales were due to
weakness in the computer and related products industry and increased competition
from low-cost imports.

Operating  income for 2000 decreased $2.7 million,  or 7% compared to 1999.
Excluding the results of  acquisitions,  operating income decreased 11% from the
prior year. Operating income of the CompX Security Products segment decreased 5%
in 2000 as compared to 1999 (decreased 4% excluding the results of acquisitions)
and  declined  7% at the CompX  Waterloo/CompX  Europe  segment  (decreased  14%
excluding the results of  acquisitions)  during the same period.  Along with the
softening demand from the office furniture  industry,  operating income was also
impacted by a change in the product mix, with a lower  percentage of sales being
generated by certain higher-margin products in 2000 compared to 1999, as well as
incremental costs incurred in moving the operations of the Chicago Lock plant to
the Company's  Mauldin,  South Carolina plant,  higher costs associated with the
expansion  of  the   Company's   Byron   Center,   Michigan   plant  and  higher
administrative expenses.

General

The Company  expanded its offerings in the precision ball bearing slide and
ergonomic products markets in 1999 through its acquisitions of Thomas Regout for
approximately  $53 million and  Dynaslide  for  approximately  $12  million.  In
January 2000, the Company acquired  substantially all of the operating assets of
Chicago  Lock  Company for  approximately  $9  million,  further  expanding  its
security  products   capacity.   These  acquisitions  were  financed  through  a
combination  of  cash on hand  and  increased  borrowings  under  the  Company's
Revolving Senior Credit Facility.

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
38% of the Company's total cost of sales. In 1999 through 2001, steel prices did
not change  significantly  compared to the respective  prior years.  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  entered  into such  arrangements  for zinc,  coiled steel and
plastic resins in 2001 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 may
be affected by such raw material cost pressures.

At December  31, 2001,  none of the  Company's  employees in the U.S.,  the
Netherlands or Taiwan were  represented by bargaining  units, and wage increases
for  such  employees  historically  have  been in line  with  overall  inflation
indices.  Approximately 79% of the Company's Canadian employees are covered by a
three year collective bargaining agreement that expires in 2003 and provides for
annual wage increases of  approximately  3.5%. Wage increases for these Canadian
employees historically have also 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
1999 through 2001 have been consistent as a percentage of net sales.

CompX has  substantial  operations  and assets  located  outside the United
States (principally in Canada, the Netherlands and Taiwan). A portion of CompX's
sales generated from its non-U.S. operations are denominated in currencies other
than the U.S. dollar,  principally the Canadian dollar,  the Dutch guilder,  the
euro and the New  Taiwan  dollar.  In  addition,  a  portion  of  CompX's  sales
generated from its non-U.S.  operations  (principally in Canada) are denominated
in the U.S.  dollar.  Most raw materials,  labor and other  production costs for
such  non-U.S.   operations  are  denominated  primarily  in  local  currencies.
Consequently,  the  translated  U.S.  dollar value of CompX's  foreign sales and
operating results are subject to currency  exchange rate fluctuations  which may
favorably or unfavorably  impact reported earnings and may affect  comparability
of period-to--period  operating results.  During 2001, weakness primarily in the
euro and Canadian dollar  negatively  impacted the Company's  sales  comparisons
with  2000  (principally  with  respect  to slide  products).  Operating  income
comparisons  for this  period,  however,  were not  materially  impacted  by the
effects of currency.  Excluding  the effect of  currency,  the  Company's  sales
decreased  15% in 2001  compared  to 2000 and sales of the CompX  Waterloo/CompX
Europe segment decreased 16% for the same period. In 2000, excluding the effects
of currency and acquisitions, the Company's sales increased 2% compared to 1999,
and  operating  income  decreased 9%. Sales of the CompX  Waterloo/CompX  Europe
segment  increased  7% and  operating  income  decreased  12%,  exclusive of the
effects of currency and  acquisitions.  The effects of currency  fluctuations do
not materially affect the CompX Security Products segment.

Interest expense

Interest  expense  increased  $.6  million  in 2001  compared  to 2000  due
primarily  to higher  average  levels of  outstanding  indebtedness  on  CompX's
Revolving  Senior Credit  Facility.  Likewise,  interest  expense  increased $.7
million in 2000 compared to 1999 due to increased borrowings partially offset by
lower rates. Assuming interest rates do not increase significantly from year-end
2001 levels,  interest expense in 2002 is expected to be somewhat lower compared
to 2001 due to anticipated debt reduction in 2002 using available cash on hand.

Provision for income taxes

The principal  reasons for the difference  between CompX's effective income
tax rates and the U.S. federal  statutory income tax rates are explained in Note
9  to  the  Consolidated   Financial  Statements.   Income  tax  rates  vary  by
jurisdiction  (county and/or state),  and relative changes in the geographic mix
of CompX's pre-tax  earnings can result in fluctuations in the effective  income
tax rate.

As discussed in Note 14 to the Consolidated Financial Statements, effective
January 1, 2002, the Company will no longer recognize  periodic  amortization of
goodwill.  Under GAAP,  generally there is no income tax benefit  recognized for
financial reporting purposes attributable to goodwill amortization. Accordingly,
ceasing to  periodically  amortize  goodwill  beginning in 2002 will result in a
reduction in the Company's overall effective income tax rate in 2002 as compared
to 2001.

Other

As summarized in Note 11 to the Consolidated  Financial Statements,  "other
general  corporate  income,  net"  primarily  includes  interest  income and net
foreign currency transaction gains and losses. Interest income increased in 2001
compared  to 2000 due  primarily  to a  higher  level  of  funds  available  for
investment. Conversely, 2000 interest income decreased when compared to 1999 due
to lower levels of available funds for investment.  In 2001, a curtailment  gain
of  approximately  $.1 million was included in other general  corporate  income,
net. This  curtailment  gain, more fully described in Note 8 to the Consolidated
Financial  Statements,  relates to the  cessation  of  benefits  provided  under
CompX's defined benefit plan which covered substantially all full-time employees
of Thomas Regout B.V. As of December 31, 2001,  certain  obligations  related to
the terminated  plan had not yet been fully settled and are reflected in accrued
pension costs.  CompX expects to report a $.6 million  settlement  gain in 2002.
Also  reflected in the 2001 results of  operations is a $2.2 million gain on the
sale/leaseback of the Company's facility in the Netherlands,  which is discussed
more fully below and in Note 11 to the Consolidated Financial Statements.

Related party transactions

CompX is a party to certain  transactions with related parties. See Note 12
to the Consolidated Financial Statements.

Outlook

The Company  expects the weak economic  conditions  experienced  in 2001 to
continue  to have  significant  impact on its results  for 2002.  Although  some
recent  economic data shows positive  signs,  it is still too early to determine
the pace and extent of a  recovery  that might  occur in 2002.  Additionally,  a
significant  portion of CompX's  revenue  is derived  from the office  furniture
industry and the office  furniture  industry tends to lag in its recovery behind
the rest of the economy.  Given the uncertainty of the economic conditions,  the
Company  continues to balance its focus on  opportunities  outside of the office
furniture industry as well as continuing to drive operational efficiency through
cost  improvement  initiatives  and  prudent  balance  sheet  management.  These
measures are designed to minimize the adverse effect of lower furniture industry
sales and more  favorably  position  the Company to meet demand when the economy
recovers.  Additionally,  the periodic  amortization  of goodwill will no longer
impact operating results beginning in 2002.

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 1999,  2000 and 2001,  are generally  similar to the trends in the Company's
earnings.  Cash provided by operating activities totaled,  $28.4 million,  $28.4
million and $27.7 million for the years ended  December 31, 1999,  2000 and 2001
respectively,  compared to net income of $25.2  million,  $22.1 million and $7.1
million,  respectively.  Depreciation and amortization  increased during each of
the past  three  years  in part  due to the  acquisitions  discussed  above  and
additional expenditures on facilities expansion discussed below.

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 $84.6
million,  $32.4 million and $2.7 million for the years ended  December 31, 1999,
2000 and 2001, respectively.  Cash used by investing activities in 1999 includes
$65.0  million in cash for the  Thomas  Regout and  Dynaslide  acquisitions  and
approximately  $9.3 million in 2000 for the Chicago Lock  acquisition.  In 2001,
$10.0  million in cash was provided  from the  sale/leaseback  of the  Company's
plant facility in the Netherlands. 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.   Capital
expenditures in 1999 relates primarily to the additions of a fourth plating line
at the Company's  Kitchener  facility,  facility  expansions  in Kitchener,  the
acquisition of an adjoining manufacturing building at Fort Lock and the addition
of automation equipment at all facilities.  The capital expenditures in 2000 and
2001 relate  primarily to the  completion of the facility  expansions  mentioned
above and  additional  facility  expansions  at the  Company's  Byron Center and
Mauldin facilities.

Pursuant  to  the   sale/leaseback  of  the  Company's  plant  facility  in
Maastricht,  the Netherlands,  CompX sold the manufacturing  facility with a net
carrying value of $8.2 million for $10.0 million cash  consideration in December
2001, and CompX  simultaneously  entered into a leaseback of the facility with a
nominal  monthly  rental for  approximately  30 months.  CompX has the option to
extend the  leaseback  period  for up to an  additional  two years with  monthly
rentals of $40,000 to $100,000.  CompX may  terminate  the leaseback at any time
without  penalty.  In addition to the cash received up front,  CompX included an
estimate  of  the  fair  market   value  of  the  monthly   rental   during  the
nominal-rental  leaseback period as part of the sale proceeds.  A portion of the
gain from the sale of the facility after transaction costs, equal to the present
value of the monthly rentals over the expected  leaseback period  (including the
fair market  value of the monthly  rental  during the  nominal-rental  leaseback
period),  has been deferred and will be amortized  into income over the expected
leaseback period. CompX will recognize rental expense over the leaseback period,
including  amortization  of the prepaid rent  consisting of the  estimated  fair
market value of the monthly rental during the  nominal-rental  leaseback period.
Pursuant to the agreement,  CompX is also obligated to acquire  approximately 10
acres from the municipality of Maastricht for approximately  $1.8 million within
the next one to three years.

Capital  expenditures for 2002 are estimated at approximately  $11 million,
the  majority of which relate to projects  that  emphasize  improved  production
efficiency  and  shifting  production  capacity to lower cost  facilities.  Firm
purchase  commitments  for  capital  projects  in process at  December  31, 2001
approximated $2.5 million.

Financing  activities.  Net cash provided by (used in) financing activities
totaled  $17.0  million,  $2.1  million  and ($1.8)  million for the years ended
December  31,  1999,  2000 and 2001,  respectively.  The Company  paid its first
regular quarterly dividend since the initial public offering of $0.125 per share
in December 1999.  Total cash  dividends  paid in 1999,  2000 and 2001 were $2.0
million, $8.1 million and $7.6 million, respectively.

The Company's  board of directors has authorized the Company to purchase up
to  approximately  1.5  million  shares of its  common  stock in open  market or
privately-negotiated  transactions at unspecified prices and over an unspecified
period of time. As of December 31, 2001, the Company had purchased approximately
1,104,000   shares  for  an  aggregate  of  $11.3   million   pursuant  to  such
authorization  ($8.7  million  for 844,300  shares in 2000 and $2.6  million for
259,600 shares in 2001).

At December 31, 2001, the Company had $51 million of borrowing availability
under its Revolving  Senior  Credit  Facility,  which expires in February  2003.
Provisions   contained  in  CompX's  credit   agreement   could  result  in  the
acceleration of the indebtedness  prior to its stated maturity for reasons other
than  defaults  from failing to comply with  typical  financial  covenants.  For
example,  the Company's  credit  agreement  allows the lender to accelerate  the
maturity  of the  indebtedness  upon a change of  control  (as  defined)  of the
borrower. The terms of CompX's credit agreement could result in the acceleration
of all or a portion of the  indebtedness  following a sale of assets  outside of
the  ordinary  course  of  business.  See Note 7 to the  Consolidated  Financial
Statements.  Other than  certain  operating  leases  discussed in Note 13 to the
Consolidated Financial Statements,  neither CompX nor any of its subsidiaries or
affiliates are parties to any off-balance sheet financing arrangements.

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.  To the extent that
actual  developments differ from the Company's  expectations,  CompX's liquidity
could be adversely affected.

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 has in the past and may in the future seek to raise additional  capital,
refinance or restructure indebtedness,  issue additional securities,  repurchase
shares of its common stock,  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.

Contractual  obligations.  As more  fully  described  in the  notes  to the
Consolidated  Financial  Statements,  the  Company is  obligated  to make future
payments  under  certain  debt  and  lease  agreements,  and is a party to other
commitments. The following table summarizes these obligations as of December 31,
2001.

Payments due by period
--------------------------
Less than   1 - 3    4 - 5
Total   1 year     years    years
(In thousands)

Long-term debt .............................   $49,000   $ --     $49,000   $--
Capital lease obligations ..................        56       56      --      --
Operating leases ...........................     2,796      990     1,432    374
Unconditional purchase obligations .........     2,500    2,500      --      --
Other long-term obligation - Maastricht
real estate acquisition obligation ........     1,800     --       1,800    --
-------   ------   -------   ----

Total contractual cash obligations .........   $56,152   $3,546   $52,232   $374
=======   ======   =======   ====

In  addition,  the  Company is a party to  certain  other  agreements  that
contractually and  unconditionally  commit the Company to pay certain amounts in
the future. While the Company believes it is probable that amounts will be spent
in the future under such contracts,  the amount and/or the timing of such future
payments will vary depending on certain  provisions of the applicable  contract.
Agreements  to which the Company is a party that fall into this  category,  more
fully described in Note 13 to the Consolidated Financial Statements, are CompX's
patent license  agreements  under which it pays royalties based on the volume of
certain products manufactured in Canada and sold in the United States.

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  periodically  uses
currency  forward  contracts to manage a portion of foreign  exchange  rate risk
associated  with  receivables,  or similar  exchange rate risk  associated  with
future  sales,  denominated  in a currency  other than the  holder's  functional
currency. 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, 2000 and 2001. See Note 1 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,  2000  and  2001,  substantially  all  of  the  Company's
outstanding  indebtedness  were variable  rate  borrowings.  Such  borrowings at
December  31, 2001 related  principally  to $49 million ($39 million at December
31,  2000) in  borrowings  under  the  Revolving  Senior  Credit  Facility.  The
outstanding  balances at December  31,  2000 and 2001  (which  approximate  fair
value)  had a  weighted-average  interest  rate of 6.7% and 4.2%,  respectively.
Amounts  outstanding  under this credit  facility are due in 2003. The remaining
indebtedness outstanding at December 31, 2000 and 2001 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  outside the United States  (principally
Canada,  Western Europe and Taiwan).  A portion of CompX's sales  generated from
its  non-U.S.  operations  are  denominated  in  currencies  other than the U.S.
dollar,  principally the Canadian dollar, the euro and the New Taiwan dollar. In
addition,  a portion of CompX's  sales  generated  from its non-U.S.  operations
(principally in Canada) are denominated in the U.S. dollar.  Most raw materials,
labor and other  production  costs for such non-U.S.  operations are denominated
primarily in local currencies. Consequently, the translated U.S. dollar value of
CompX's  foreign  sales and operating  results are subject to currency  exchange
rate  fluctuations  which may favorably or unfavorably  impact reported earnings
and may affect comparability of period-to-period operating results.

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  receivables,   or  similar  exchange  rate  risk
associated  with future  sales,  at December  31, 2000 CompX had entered  into a
series of short-term  forward exchange  contracts maturing through March 2001 to
exchange  an  aggregate  of $9.1  million for an  equivalent  amount of Canadian
dollars at an exchange rate of Cdn $1.48 per U.S. dollar.  At each balance sheet
date,  outstanding  currency  forward  contracts are  marked-to-market  with any
resulting gain or loss recognized in income  currently.  The difference  between
the  estimated  fair  value and the face value of all such  outstanding  forward
contracts at December 31, 2000 is not material.  No foreign  exchange  contracts
were outstanding at December 31, 2001.

Other.  Beginning  January 1, 1999,  eleven of the  fifteen  members of the
European  Union  ("EU"),  including  the  Netherlands,  adopted  a new  European
currency  unit (the  "euro")  as their  common  legal  currency.  Following  the
introduction  of the euro,  the  participating  countries'  national  currencies
remained 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.

During 2001,  the  functional  currencies  of the  Company's  Thomas Regout
operations in Maastricht, the Netherlands,  completed the conversion to the euro
from its national  currency.  The euro conversion did not materially  impact the
Company's operations.

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.  Such  forward-looking  statements  are
subject  to  certain  risks  and  uncertainties  some of  which  are  listed  in
"Business-General."

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-1).

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 12 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-1) are filed as part of this  Annual
Report.

(b)                Reports on Form 8-K

No  reports  on Form 8-K were  filed for the  quarter  ended
December 31, 2001.

(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
Contran  Corporation  effective  as of  January  1,  2001  -
incorporated   by   reference   to   Exhibit   10.1  of  the
Registrant's  Quarterly  Report on Form 10-Q for the quarter
ended June 30, 2001.

10.2*           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).

10.3*           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.

10.4            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).

10.5            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).

Item No.                            Exhibit Item

10.6            $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).

10.7            Amendment  No. 1 to  Credit  Agreement  between  Registrant,
Bankers  Trust  Company,   as  Agent  and  various   lending
institutions,  dated  December  15, 1999 -  incorporated  by
reference to Exhibit 10.8 of the Registrant's  Annual Report
on Form 10-K for the year ended December 31, 1999.

10.8            Amendment  No. 2 to  Credit  Agreement  between  Registrant,
Bankers  Trust  Company,   as  Agent  and  various   lending
institutions, dated December 2001.

10.9            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.

10.10*          Release  agreement  between  the  Registrant  and  Joseph S.
Compofelice, effective as of November 6, 2000.

10.11*          Employment   agreement  between  Registrant  and  Wouter  J.
Dammers,   effective  August  30,  1999  -  incorporated  by
reference  to  Exhibit  10.1 of the  Registrant's  Quarterly
Report on Form 10-Q for the quarter ended March 31, 2001.

10.12           Asset   sale/leaseback   agreement   between  Thomas  Regout
International  BV and the  municipality  of Maastricht,  the
Netherlands  dated  December 21, 2001  (English  translation
from Dutch language document).

21.1           Subsidiaries of the Registrant.

23.1           Consent of PricewaterhouseCoopers LLP.

99.1           Annual  Report of the  CompX  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, 2001.

*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/ Brent A. Hagenbuch                      
-----------------------------------------------
Brent A. Hagenbuch
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/ Glenn R. Simmons             Chairman of the Board           March 21, 2002
-----------------------------   
Glenn R. Simmons

/s/ Brent A. Hagenbuch           President and                   March 21, 2002
-----------------------------    Chief Executive Officer
Brent A. Hagenbuch               (Principal Executive
Officer)

/s/ David A. Bowers              Vice Chairman of the Board      March 21, 2002
-----------------------------    and Chief Operating Officer
David A. Bowers

/s/ Stuart M. Bitting            Vice President and              March 21, 2002
-----------------------------    Chief Financial Officer
Stuart M. Bitting                (Principal Financial Officer)

/s/ Darryl R. Halbert            Vice President and              March 21, 2002
-----------------------------    Controller (Principal
Darryl R. Halbert                Accounting Officer)

/s/ Edward J. Hardin             Director                        March 21, 2002
-----------------------------
Edward J. Hardin

/s/ Paul M. Bass, Jr.            Director                        March 21, 2002
-----------------------------
Paul M. Bass, Jr.

/s/ Ann Manix                    Director                        March 21, 2002
-----------------------------
Ann Manix

/s/ Steven L. Watson             Director                        March 21, 2002
-----------------------------
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-2

Consolidated Balance Sheets - December 31, 2000 and 2001           F-3

Consolidated Statements of Income -
Years ended December 31, 1999, 2000 and 2001                      F-5

Consolidated Statements of Comprehensive Income -
Years ended December 31, 1999, 2000 and 2001                      F-6

Consolidated Statements of Cash Flows -
Years ended December 31, 1999, 2000 and 2001                      F-7

Consolidated Statements of Stockholders' Equity -
Years ended December 31, 1999, 2000 and 2001                      F-9

Notes to Consolidated Financial Statements                        F-10

Financial Statement Schedule

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  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, 2000 and 2001, and the  consolidated  results of their  operations and their
cash flows for each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United States of
America.  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 these  financial
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  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 our opinion.

PricewaterhouseCoopers LLP

Dallas, Texas
March 1, 2002

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2000 and 2001

(In thousands, except share data)

ASSETS                                        2000          2001
----          ----

Current assets:

Cash and cash equivalents ........................      $  9,820      $ 33,309
Accounts receivable, less allowance for
doubtful accounts of $487 and $841 ..............        30,833        23,422
Income taxes receivable from affiliates ..........           305           351
Refundable income taxes ..........................         2,165         2,032
Inventories ......................................        36,246        30,902
Prepaid expenses and other current assets ........         2,408         2,902
Deferred income taxes ............................         1,209         1,944
--------      --------

Total current assets .........................        82,986        94,862
--------      --------

Other assets:
Goodwill .........................................        42,213        38,882
Other intangible assets ..........................         2,646         2,440
Deferred income taxes ............................         1,813         3,132
Prepaid rent .....................................          --           1,079
Other ............................................           868           577
--------      --------

Total other assets ...........................        47,540        46,110
--------      --------

Property and equipment:
Land .............................................         5,709         4,368
Buildings ........................................        34,500        26,182
Equipment ........................................        78,357        92,683
Construction in progress .........................         9,787         4,618
--------      --------
128,353       127,851
Less accumulated depreciation ....................        33,394        42,815
--------      --------

Net property and equipment ...................        94,959        85,036
--------      --------

$225,485      $226,008

See accompanying notes to consolidated financial statements.

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

December 31, 2000 and 2001

(In thousands, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY                      2000          2001
----          ----

Current liabilities:

Current maturities of long-term debt .................   $   1,638    $      56
Accounts payable and accrued liabilities .............      26,487       23,168
Payable to affiliate .................................        --             15
Income taxes .........................................         648        1,000
Deferred income taxes ................................         103          291
---------    ---------

Total current liabilities ........................      28,876       24,530
---------    ---------

Noncurrent liabilities:
Long-term debt .......................................      39,000       49,000
Deferred income taxes ................................       4,852        7,573
Accrued pension costs ................................       1,168          660
Deferred gain on sale/leaseback ......................        --          1,221
Other ................................................         626         --
---------    ---------

Total noncurrent liabilities .....................      45,646       58,454
---------    ---------

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; 6,204,680 and 6,207,180
shares issued .......................................          62           62
Class B common stock, $.01 par value;
10,000,000 shares authorized, issued and outstanding          100          100
Additional paid-in capital ...........................     119,194      119,224
Retained earnings ....................................      51,395       50,966
Accumulated other comprehensive income -
currency translation ................................     (11,123)     (16,013)
Treasury stock, at cost - 844,300 and 1,103,900 shares      (8,665)     (11,315)
---------    ---------

Total stockholders' equity .......................     150,963      143,024
---------    ---------

$ 225,485    $ 226,008

Commitments and contingencies (Notes 1, 11 and 13)

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Years ended December 31, 1999, 2000 and 2001

(In thousands, except per share data)

1999         2000         2001
----         ----         ----

Net sales ...................................................   $ 225,888    $ 253,294    $ 211,422
Cost of sales ...............................................     160,628      187,299      167,884
---------    ---------    ---------
65,260       65,995       43,538

Selling, general and administrative expense .................      25,220       28,693       28,310
Restructuring charge ........................................        --           --          2,742
---------    ---------    ---------

Operating income ......................................      40,040       37,302       12,486

Gain on sale of plant facility ..............................        --           --          2,246
Other general corporate income, net .........................         676          443        1,009
Interest expense ............................................      (1,554)      (2,302)      (2,859)
---------    ---------    ---------

Income before income taxes and
minority interest ....................................      39,162       35,443       12,882

Provision for income taxes ..................................      14,102       13,390        5,758

Minority interest in losses .................................        (103)          (3)        --
---------    ---------    ---------

Net income ............................................   $  25,163    $  22,056    $   7,124
=========    =========    =========

Basic and diluted earnings per common share .................   $    1.56    $    1.37    $     .47
=========    =========    =========

Cash dividends per share ....................................   $    .125    $     .50    $     .50
=========    =========    =========

Shares used in the calculation of earnings per share amounts:
Basic earnings per share ..................................      16,146       16,115       15,144
Dilutive impact of stock options ..........................           3           32            6
---------    ---------    ---------

Diluted earnings per share ................................      16,149       16,147       15,150
=========    =========    =========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 1999, 2000 and 2001

(In thousands)

1999         2000         2001
----         ----         ----

Net income ...............................    $ 25,163     $ 22,056     $ 7,124
--------     --------     -------

Other comprehensive income -
currency translation adjustment:
Pre-tax amount .......................      (3,875)      (5,159)     (5,097)
Less income tax benefit ..............        --           (323)       (207)
--------     --------     -------

Total other comprehensive income .....      (3,875)      (4,836)     (4,890)
--------     --------     -------

Comprehensive income ...............    $ 21,288     $ 17,220     $ 2,234
========     ========     =======

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 1999, 2000 and 2001

(In thousands)

1999       2000         2001
----       ----         ----

Cash flows from operating activities:

Net income ..................................   $ 25,163    $ 22,056    $  7,124
Depreciation and amortization ...............      9,406      12,416      14,769
Deferred income taxes .......................      1,423       2,310       1,355
Gain on sale of plant facility ..............       --          --        (2,246)
Minority interest ...........................       (103)         (3)       --
Other, net ..................................       (243)        (73)        465
Change in assets and liabilities:
Accounts receivable .......................     (3,186)       (826)      6,112
Inventories ...............................     (1,992)     (7,421)      4,075
Accounts payable and accrued liabilities ..     (2,470)      2,746      (3,983)
Accounts with affiliates ..................        532        (284)        (38)
Income taxes ..............................     (1,579)     (1,033)        202
Other, net ................................      1,471      (1,458)       (172)
--------    --------    --------

Net cash provided by operating activities     28,422      28,430      27,663
--------    --------    --------

Cash flows from investing activities:
Capital expenditures ........................    (19,703)    (23,128)    (13,283)
Proceeds from sale of plant facility ........       --          --        10,000
Purchase of business units ..................    (64,975)     (9,346)       --
Other, net ..................................         54         111         605
--------    --------    --------

Net cash used by investing activities ...    (84,624)    (32,363)     (2,678)
--------    --------    --------

Cash flows from financing activities:
Long-term debt:
Borrowings ................................     20,000      20,274      14,919
Principal payments ........................     (1,009)     (2,454)     (6,511)
Issuance of common stock ....................       --         1,027        --
Dividends paid ..............................     (2,018)     (8,076)     (7,553)
Common stock reacquired .....................       --        (8,665)     (2,650)
Other .......................................       --            13        --
--------    --------    --------

Net cash provided (used) by financing
activities .............................     16,973       2,119      (1,795)
--------    --------    --------

Net increase (decrease) .......................   $(39,229)   $ (1,814)   $ 23,190
========    ========    ========

See accompanying notes to consolidated financial statements.

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Years ended December 31, 1999, 2000 and 2001

(In thousands)

1999          2000          2001
----          ----          ----

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

activities .....................      $(39,229)      $ (1,814)      $23,190
Business units acquired .........         4,785           --            --
Currency translation ............          (750)          (535)          299
Balance at beginning of year ......        47,363         12,169         9,820
--------       --------       -------

Balance at end of year ............      $ 12,169       $  9,820       $33,309
========       ========       =======

Supplemental disclosures:
Cash paid for:
Interest ........................      $  1,253       $  2,086       $ 3,238
Income taxes ....................        13,284         12,562         4,126

Net assets consolidated -
business units acquired:
Cash and cash equivalents .......      $  4,785       $   --         $  --   
Goodwill ........................        22,700          4,837          --
Other intangible assets .........          --              254          --
Other non-cash assets ...........        54,966          7,144          --
Liabilities .....................       (17,476)        (2,889)         --
--------       --------       -------

Cash paid .......................      $ 64,975       $  9,346       $  --
========       ========       =======

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Years ended December 31, 1999, 2000 and 2001

(In thousands)

Accumulated other
comprehensive
Additional              income -                   Total
Common stock   paid-in   Retained     currency    Treasury   stockholders'
Class A Class B capital   Earnings    translation   stock        equity
----   ----   -------   --------   -----------    -----        ------

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

Net income .................    --    --        --       22,056        --          --         22,056
Other comprehensive income .    --    --        --         --        (4,836)       --         (4,836)
Cash dividends .............    --    --        --       (8,076)       --          --         (8,076)
Issuance of common stock ...     1    --       1,072       --          --          --          1,073
Common stock reacquired ....    --    --        --         --          --        (8,665)      (8,665)
Other ......................    --    --          55       --          --          --             55
---   ----   --------   --------    --------    --------    ---------

Balance at December 31, 2000    62    100    119,194     51,395     (11,123)     (8,665)     150,963

Net income .................    --    --        --        7,124        --          --          7,124
Other comprehensive income .    --    --        --         --        (4,890)       --         (4,890)
Cash dividends .............    --    --        --       (7,553)       --          --         (7,553)
Issuance of common stock ...    --    --          30       --          --          --             30
Common stock reacquired ....    --    --        --         --          --        (2,650)      (2,650)
---   ----   --------   --------    --------    --------    ---------

Balance at December 31, 2001   $62   $100   $119,224   $ 50,966    $(16,013)   $(11,315)   $ 143,024
===   ====   ========   ========    ========    ========    =========

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of significant accounting policies:

Organization.  CompX  International Inc. (NYSE: CIX) is 69% owned by Valhi,
Inc. (NYSE: VHI) and Valhi's  wholly-owned  subsidiary Valcor,  Inc. at December
31, 2001. The Company  manufactures and sells component products (precision ball
bearing  slides,  security  products and ergonomic  computer  support  systems).
Contran Corporation holds, directly or through  subsidiaries,  approximately 94%
of Valhi's outstanding common stock.  Substantially all of Contran's outstanding
voting stock is held by trusts  established for the benefit of certain  children
and  grandchildren  of Harold C. Simmons,  of which Mr. Simmons is sole trustee.
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 accounting  principles  generally  accepted in the United States of America
("GAAP")  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.  Actual results may differ
from previously-estimated amounts under different assumptions or conditions.

Fair value of  financial  instruments.  The  carrying  amounts of  accounts
receivable and accounts payable  approximates fair value due to their short-term
nature.  The carrying amount of indebtedness  approximates fair value due to the
stated  interest rate  approximating  a market rate.  These estimated fair value
amounts  have  been  determined  using  available  market  information  or other
appropriate valuation methodologies.

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, 1999,  2000 and 2001 each consisted of
52 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.

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 and title and other
risks and rewards of ownership  have passed to the customer.  Shipping terms are
generally F.O.B. shipping point, although in some instances,  shipping terms are
F.O.B. destination point. Amounts charged to customers for shipping and handling
are not material.  The related costs incurred for shipping and handling are also
not material.

Accounts  receivable.  The  Company  provides  an  allowance  for  doubtful
accounts for known and potential  losses rising from sales to customers based on
a periodic review of these accounts.

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.

Goodwill and other intangible assets. Goodwill,  representing the excess of
cost over fair value of individual net assets acquired in business  combinations
accounted for by the purchase method, is stated net of accumulated  amortization
of $5.1  million at December  31, 2000 and $7.3  million at December  31,  2001.
Through December 31, 2001,  goodwill was amortized by the  straight-line  method
over not more than 20 years. Upon adoption of Statement of Financial  Accounting
Standards  ("SFAS") No. 142,  Goodwill and Other  Intangible  Assets,  effective
January 1, 2002,  goodwill  will no longer be subject to periodic  amortization.
See Notes 5 and 14.

Other intangible assets,  consisting of the estimated fair value of certain
patents  acquired,  have been and will  continue to be upon adoption of SFAS No.
142 effective January 1, 2002,  amortized by the  straight-line  method over the
lives of such  patents  (approximately  11.25 years  remaining  at December  31,
2001),  with no assumed  residual  value at the end of the life of the  patents.
Other  intangible  assets  are  stated net of  accumulated  amortization  of $.8
million at December 31, 2000 and $1.0 million at December 31, 2001. Amortization
expense of intangible assets was $207,000 in 1999, $361,000 in 2000 and $229,000
in 2001,  and is expected to be  approximately  $250,000 in each of 2002 through
2006.

Through  December  31,  2001,  when  events  or  changes  in  circumstances
indicated  that  goodwill  or  other  intangible  assets  may  be  impaired,  an
evaluation was performed to determine if an impairment  existed.  Such events or
circumstances  included,  among  other  things,  significant  current  and prior
periods or current and projected  periods with  operating  losses related to the
applicable  business unit. All relevant  factors were  considered in determining
whether  an  impairment  existed.  If an  impairment  was  determined  to exist,
goodwill and, if appropriate,  the underlying  long-lived assets associated with
the goodwill,  were written down to reflect the estimated future discounted cash
flows  expected to be generated by the underlying  business.  As of December 31,
2001,  no such  impairments  were  identified.  Effective  January 1, 2002,  the
Company  will assess  impairment  of  goodwill  and other  intangible  assets in
accordance with SFAS No. 142. See Notes 5 and 14.

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  and
software.  Accelerated depreciation methods are used for income tax purposes, as
permitted. Upon sale or retirement of an asset, the related cost and accumulated
depreciation are removed from the accounts and any gain or loss is recognized in
income currently.

When  events or  changes  in  circumstances  indicate  that  assets  may be
impaired,  an evaluation is performed to determine if an impairment exists. Such
events or changes in circumstances  include, among other things, (i) significant
current  and prior  periods or current  and  projected  periods  with  operating
losses,  (ii) a significant  decrease in the market value of an asset or (iii) 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.  Through  December 31, 2001, 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 was also 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.  Effective January 1, 2002, the Company will assess impairment of
goodwill in accordance with SFAS No. 142, and the Company will assess impairment
of other  long-lived  assets (such as property and equipment) in accordance with
SFAS No. 144. See Notes 5 and 14.

Derivatives  and  hedging  activities.  The Company  adopted  SFAS No. 133,
Accounting  for  Derivative  Instruments  and  Hedging  Activities,  as amended,
effective January 1, 2001. Under SFAS No. 133, all derivatives are recognized as
either assets or  liabilities  and measured at fair value.  The  accounting  for
changes  in fair  value of  derivatives  depends  upon the  intended  use of the
derivative,  and such  changes  are  recognized  either  in net  income or other
comprehensive  income.  As permitted by the transition  requirements of SFAS No.
133, as amended,  the  Company has  exempted  from the scope of SFAS No. 133 all
host contracts  containing  embedded  derivatives  which were issued or acquired
prior to  January  1,  1999.  Other  than  certain  currency  forward  contracts
discussed  below,  the Company was not a party to any significant  derivative or
hedging  instrument  covered by SFAS No. 133 at January 1, 2001.  The accounting
for  such  currency  forward  contracts  under  SFAS No.  133 is not  materially
different from the accounting for such contracts under prior GAAP, and therefore
the impact to the Company of adopting SFAS No. 133 was not material.

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 or similar exchange rate risk associated with future sales.
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
as part of net currency  transactions.  To manage such  exchange  rate risk,  at
December  31, 2000 the Company held  contracts  maturing  through  March 2001 to
exchange an aggregate of U.S. $9.1 million for an equivalent  amount of Canadian
dollars at an exchange rate of Cdn. $1.48 per U.S. dollar. At December 31, 2000,
the actual exchange rate was Cdn. $1.50 per U.S. dollar.  No such contracts were
held at December 31, 2001.

The  Company  periodically  uses  interest  rate  swaps and other  types of
contracts  to manage  interest  rate risk with  respect to  financial  assets or
liabilities.  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.
The Company was not a party to any such contract during 1999, 2000 and 2001.

Income taxes. The Company is a separate U.S. federal income taxpayer and is
not a member of Contran's  consolidated  United States federal income tax group.
The Company is however a part of  consolidated  tax returns  filed by Contran in
certain  U.S.  state  jurisdictions.  For such  consolidated  state tax returns,
intercompany  allocations  of state tax  provisions  are  computed on a separate
company  basis.  Payments  are made to, or received  from Contran in the amounts
that would have been paid to or received from the respective state tax authority
had CompX not been a part of the consolidated state tax return.

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 in the various taxing  jurisdictions in which it operates 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  aggregated  $48  million at  December  31,  2000 and $54  million at
December 31, 2001.

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  excluded  from the  calculation  of diluted  earnings  per share
because  their  impact  would have been  antidilutive  aggregated  approximately
473,000 in 1999, 848,000 in 2000 and 746,000 in 2001.

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 greater  than or equal to 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 $1,030,000 in 1999,
$931,000  in 2000  and  $1,026,000  in 2001.  Research  and  development  costs,
expensed as incurred,  were $1,032,000 in 1999,  $1,082,000 in 2000 and $510,000
in 2001.

Note 2 - Business units acquired:

In January 1999, the Company  acquired Thomas Regout Holding N.V.  ("Thomas
Regout"), a precision ball bearing slide producer based in the Netherlands for a
cash purchase price of NLG 98 million ($53.2  million),  using funds on hand and
$20 million of borrowings  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")  for a cash purchase price of $11.8 million using
funds on hand. In January 2000, the Company  acquired  substantially  all of the
operating  assets of Chicago  Lock  Company  for a cash  purchase  price of $9.4
million, using borrowings under the revolving credit facility.

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

Note 3 - Business and geographic segments:

Prior to the fourth quarter of 2001, the Company operated in one reportable
segment - the  manufacture  and sale of  mechanically-engineered  components for
office  furniture  and other  markets.  During the fourth  quarter of 2001,  the
Company  implemented  certain  operational and other changes at all of its plant
facilities,  revising the  Company's  organizational  structure  and causing the
composition  of the reportable  segments to change.  The Company now defines its
operations in terms of three operating segments - CompX Security Products, CompX
Waterloo  and  CompX  Europe.   The  CompX  Security  Products   segment,   with
manufacturing  facilities in South Carolina and Illinois,  manufactures  locking
mechanisms  and  other  security  products  for sales to the  office  furniture,
banking,  vending,  computer and other  industries.  The CompX Waterloo segment,
with  facilities in Canada,  Michigan and Taiwan,  and the CompX Europe segment,
with  facilities  in the  Netherlands,  both  manufacture  a  complete  line  of
precision  ball  bearing  slides for use in office  furniture,  computer-related
equipment, tool storage cabinets and other applications,  and ergonomic computer
support  systems  for  office   furniture.   Because  of  the  similar  economic
characteristics  between the CompX Waterloo and CompX Europe segments and due to
the identical products,  customer types,  production  processes and distribution
methods shared by these two segments,  they have been  aggregated  into a single
reportable  segment  for  segment  reporting  purposes.   Prior  period  segment
information has been reclassified to reflect the new operating segments.

The chief operating  decision maker evaluates segment  performance based on
segment  operating  income,  which is defined  as income  before  income  taxes,
minority interest and interest  expense,  exclusive of certain general corporate
income  and  expense  items  (including  interest  income and  foreign  exchange
transaction  gains and losses) and special items. All corporate office operating
expenses are allocated to the two  reportable  segments based upon the segments'
net sales. 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
combinations accounted for by the purchase method. See Note 2.

Segment assets are comprised of all assets  attributable  to the reportable
segments.  Corporate assets are not  attributable to the operating  segments and
consist primarily of cash and cash equivalents.  For geographic information, net
sales are  attributable  to the place of  manufacture  (point of origin) and the
location of the customer  (point of  destination);  property and  equipment  are
attributable to their physical location.  At December 31, 2000 and 2001, the net
assets of non-U.S. subsidiaries included in consolidated net assets approximated
$92 million and $91 million, respectively.

Years ended December 31,
1999          2000           2001
----          ----           ----
(In thousands)

Net sales:

CompX Waterloo/CompX Europe ..........      $150,947      $168,276      $137,351
CompX Security Products ..............        74,941        85,018        74,071
--------      --------      --------

Total net sales ....................      $225,888      $253,294      $211,422
========      ========      ========

Years ended December 31,
1999          2000         2001
----          ----         ----
(In thousands)

Operating income:

CompX Waterloo/CompX Europe ...........   $  26,833    $  24,822    $   5,166
CompX Security Products ...............      13,207       12,480        7,320
---------    ---------    ---------

Total operating income ..............      40,040       37,302       12,486

Interest expense ......................      (1,554)      (2,302)      (2,859)
Gain on sale of plant facility ........        --           --          2,246
Other general corporate income, net ...         676          443        1,009
---------    ---------    ---------

Income before income taxes and
minority interest ..................   $  39,162    $  35,443    $  12,882
=========    =========    =========

Depreciation and amortization:
CompX Waterloo/CompX Europe ...........   $   5,526    $   7,697    $   9,136
CompX Security Products ...............       3,880        4,719        5,633
---------    ---------    ---------

$   9,406    $  12,416    $  14,769
=========    =========    =========

Capital expenditures:
CompX Waterloo/CompX Europe ...........   $  14,179    $  13,611    $   6,831
CompX Security Products ...............       5,524        9,517        6,452
---------    ---------    ---------

$  19,703    $  23,128    $  13,283
=========    =========    =========

Net sales:
Point of origin:
Canada ..............................   $  96,915    $  99,088    $  81,326
United States .......................      89,036      106,294       88,302
The Netherlands .....................      36,834       35,767       32,216
Taiwan ..............................         706       12,145        9,578
Other ...............................       2,397         --           --
---------    ---------    ---------

$ 225,888    $ 253,294    $ 211,422
=========    =========    =========

Point of destination:
United States .......................   $ 133,700    $ 159,658    $ 130,534
Canada ..............................      43,556       43,903       35,475
Europe ..............................      41,498       34,858       37,097
Other ...............................       7,134       14,875        8,316
---------    ---------    ---------

$ 225,888    $ 253,294    $ 211,422
=========    =========    =========

Total assets:
CompX Waterloo/CompX Europe ...........   $ 129,458    $ 133,520    $ 131,634
CompX Security Products ...............      72,570       90,321       92,503
Corporate and eliminations ............         884        1,644        1,871
---------    ---------    ---------

$ 202,912    $ 225,485    $ 226,008
=========    =========    =========

December 31,
1999        2000          2001
----        ----          ----
(In thousands)

Goodwill:

CompX Waterloo/CompX Europe ...........      $19,962      $17,055      $15,139
CompX Security Products ...............       21,735       25,158       23,743
-------      -------      -------

$41,697      $42,213      $38,882
=======      =======      =======

Net property and equipment:
United States .........................      $34,235      $47,555      $48,863
Canada ................................       25,217       24,410       23,420
The Netherlands .......................       17,602       17,259        7,323
Other Europe ..........................        1,281         --           --
Taiwan ................................        4,910        5,735        5,430
-------      -------      -------

$83,245      $94,959      $85,036
=======      =======      =======

Note 4 -       Inventories:

December 31,
2000               2001
----               ----
(In thousands)

Raw materials ............................            $11,866            $ 9,677
Work in process ..........................             11,454             12,619
Finished products ........................             12,811              8,494
Supplies .................................                115                112
-------            -------

$36,246            $30,902

Note 5 - Goodwill:

Changes in the carrying  amount of goodwill  during the past three years is
presented  in  the  table  below.   Goodwill  was  generated   principally  from
acquisitions of certain business units during 1998, 1999 and 2000.

CompX
CompX Waterloo/ Security
CompX Europe   Products     Total
(In millions)

Balance at December 31, 1998 ...............      $--         $22.3       $22.3
Goodwill acquired during the year ..........       22.8          .7        23.5
Changes in currency
exchange rates ............................       (2.2)       --          (2.2)
Periodic amortization ......................        (.7)       (1.2)       (1.9)
-----       -----       -----

Balance at December 31, 1999 ...............       19.9        21.8        41.7

Goodwill acquired/adjusted during
the year ..................................        (.6)        4.7         4.1
Changes in currency
exchange rates ............................       (1.2)       --          (1.2)
Periodic amortization ......................       (1.0)       (1.4)       (2.4)
-----       -----       -----

Balance at December 31, 2000 ...............       17.1        25.1        42.2

Changes in currency
exchange rates ............................       (1.0)       --          (1.0)
Periodic amortization ......................        (.9)       (1.4)       (2.3)
-----       -----       -----

Balance at December 31, 2001 ...............      $15.2       $23.7       $38.9
=====       =====       =====

Upon adoption of SFAS No. 142 effective  January 1, 2002 (see Note 14), the
goodwill  related to the CompX  Security  Products  segment  will be assigned to
reporting  units (as  defined  in SFAS No.  142)  consisting  of the  reportable
operating segments to which the goodwill relates.

Note 6 - Accounts payable and accrued liabilities:

December 31,
2000             2001
----             ----
(In thousands)

Accounts payable ...............................         $12,560         $ 9,459
Accrued liabilities:
Employee benefits ............................           7,898           6,619
Insurance ....................................             311             361
Royalties ....................................             470             223
Restructuring ................................            --             2,278
Deferred gain on sale/leaseback ..............            --               479
Other ........................................           5,248           3,749
-------         -------

$26,487         $23,168

In 2001, a charge of $2.7 million was recorded  related to a  consolidation
and rationalization of CompX's European  operations.  This restructuring  effort
included headcount reductions of about 35 employees at the Company's Maastricht,
the Netherlands  facility,  substantially  all of which had been  implemented by
December 31, 2001.  Through  December  31, 2001,  approximately  $400,000 of the
total  charge has been paid.  Of the  remainder,  $1.8 million is expected to be
paid in 2002 and $500,000 in 2003.

Note 7 - Indebtedness:

December 31,
2000            2001
----            ----
(In thousands)

Revolving bank credit facility ...................        $39,000        $49,000
Capital lease obligations and other ..............          1,638             56
-------        -------
40,638         49,056
Less current portion .............................          1,638             56
-------        -------

$39,000        $49,000

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
4.2% at December 31, 2001) and is due no later than  February  2003.  Borrowings
are  available  for  the  Company's   general  corporate   purposes,   including
acquisitions.  At December 31, 2001,  $51 million was  available  for  borrowing
under this facility.  The facility  contains certain  covenants and restrictions
customary  in lending  transactions  of this type,  which,  among other  things,
restricts the ability of CompX and its  subsidiaries to incur debt, incur liens,
pay  dividends  and requires  maintenance  of specified  levels of net worth (as
defined).  In the event of a change of control of CompX, as defined, the lenders
would have the right to  accelerate  the maturity of the  facility.  CompX would
also be required under certain  conditions to use the net proceeds from the sale
of assets  outside  the  ordinary  course  of  business  to  reduce  outstanding
borrowings  under the facility,  and such a  transaction  would also result in a
permanent  reduction of the size of the facility.  In December  2001, the credit
facility  was  amended to permit the  sale/leaseback  of the  Company'  land and
facility in the Netherlands  without  requiring the use of the net proceeds from
such  transaction  to reduce  outstanding  borrowings  under the  facility or to
result in a permanent  reduction in the size of the facility.  (See Note 11). At
December 31, 2001,  $13.5 million is available for dividends  under the terms of
the agreement.

Other indebtedness at December 31, 2000 includes approximately $1.2 million
in debt relating to a short-term bank borrowing. This borrowing,  denominated in
New Taiwan  dollars,  bore  interest at an  interest  rate of 6.8% and was fully
repaid in January 2001.

Capital lease obligations, stated net of imputed interest, are due in 2002.

Aggregate  maturities  of long-term  debt at December 31, 2001 are shown in
the table below.

Years ending December 31,                                Amount
(In thousands)

2002                                                  $    56
2003                                                   49,000
-------

$49,056

Note 8 - 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  $1,472,000 in 1999,
$1,608,000 in 2000 and $1,720,000 in 2001.

Defined benefit plans.  Through  January 1, 2001, the Company  maintained a
defined benefit pension plan covering  substantially all full-time  employees of
Thomas  Regout  B.V.  Variances  from  actuarially  assumed  rates  resulted  in
increases or decreases in accumulated pension  obligations,  pension expense and
funding requirements. As of January 1, 2001, the Company ceased providing future
benefits under the plan, thus reducing certain pension benefit  obligations.  In
connection with this curtailment,  the Company  recognized a curtailment gain of
approximately  $116,000 in 2001.  See Note 11. As of December 31, 2001,  certain
obligations  related to the  terminated  plan had not yet been fully settled and
are reflected in accrued pension costs.

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

December 31,
2000              2001
----              ----

Discount rate                                      4.0%                 6.25%
Rate of increase in future
compensation levels                               3.0%          Not applicable
Long-term rate of return on assets                 4.0%                 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.

Years ended December 31,
2000         2001
----         ----
(In thousands)

Change in projected benefit obligations 
("PBO"):

PBO at beginning of the year .......................     $ 2,261      $ 2,301
Service cost .......................................         131         --
Interest cost ......................................          80         --
Actuarial gains ....................................        --           (766)
Curtailment gain ...................................        --           (116)
Change in foreign exchange rates ...................        (171)        (140)
-------      -------

PBO at end of the year .........................     $ 2,301      $ 1,279
=======      =======

Change in fair value of plan assets:
Fair value of plan assets at
beginning of the year .............................     $   990      $ 1,055
Actual return on plan assets .......................          35           61
Employer contributions .............................          54         --
Participant contributions ..........................          51         --
Change in foreign exchange rates ...................         (75)         (97)
-------      -------

Fair value of plan assets at end of year .......     $ 1,055      $ 1,019
=======      =======

Funded status at year-end:
Plan assets less than PBO ..........................     $ 1,246      $   260
Unrecognized gains .................................        --            640
-------      -------
$ 1,246      $   900
=======      =======

Amounts recognized in the balance sheet -
accrued pension costs:
Current ..........................................     $    78      $   240
Noncurrent .......................................       1,168          660
-------      -------

$ 1,246      $   900
=======      =======

Years ended December 31,
1999         2000         2001
----         ----         ----
(In thousands)

Net periodic pension cost (benefit):

Service cost benefits ....................       $ 151        $ 131        $--  
Interest cost on PBO .....................          92           80         --
Expected return on plan assets ...........         (41)         (35)        (61)
Unrecognized gains .......................        --           --            19
-----        -----        ----
$ 202        $ 176        $(42)
=====        =====        ====

Note 9 - 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,
1999        2000         2001
----        ----         ----
(In thousands)
Components of pre-tax income (loss):

United States ............................   $ 14,112    $  7,746    $   (998)
Non-U.S ..................................     25,050      27,697      13,880
--------    --------    --------

$ 39,162    $ 35,443    $ 12,882
========    ========    ========

Provision for income taxes:
Currently payable (refundable):
U.S. federal and state .................   $  4,493    $  2,385    $   (844)
Foreign ................................      8,186       8,695       5,247
--------    --------    --------

12,679      11,080       4,403
--------    --------    --------
Deferred income taxes (benefit):
U.S ....................................         38       1,034       1,941
Foreign ................................      1,385       1,276        (586)
--------    --------    --------

1,423       2,310       1,355
--------    --------    --------

$ 14,102    $ 13,390    $  5,758
========    ========    ========

Expected tax expense, at the U.S. federal
statutory income tax rate of 35% ..........   $ 13,708    $ 12,405    $  4,509
Non-U.S. tax rates .........................        241         (90)       (353)
Incremental U.S. tax on earnings of
foreign subsidiary ........................       --           198         330
No tax benefit for goodwill amortization ...        625         610         693
State income taxes and other, net ..........       (472)        267         579
--------    --------    --------

$ 14,102    $ 13,390    $  5,758
========    ========    ========

Comprehensive provision for income taxes
(benefit) allocable to:
Pre-tax income ...........................   $ 14,102    $ 13,390    $  5,758
Other comprehensive income -
currency translation ....................       --          (323)       (207)
--------    --------    --------

$ 14,102    $ 13,067    $  5,551
========    ========    ========

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

December 31,
2000        2001
----        ----
(In thousands)

Tax effect of temporary differences related to:

Inventories ............................................   $   283    $   630
Property and equipment .................................    (7,505)    (7,890)
Accrued liabilities and other deductible differences ...     2,674      2,987
Tax loss and credit carryforwards ......................     3,890      4,831
Other taxable differences ..............................    (1,275)    (3,346)
Valuation allowance ....................................      --         --
-------    -------

$(1,933)   $(2,788)
=======    =======

Net current deferred tax assets ..........................   $ 1,209    $ 1,944
Net current deferred tax liabilities .....................      (103)      (291)
Net noncurrent deferred tax assets .......................     1,813      3,132
Net noncurrent deferred tax liabilities ..................    (4,852)    (7,573)
-------    -------

$(1,933)   $(2,788)
=======    =======

At  December  31,  2000,  the Company had $.7 million of foreign tax credit
carryforwards which expired unused during 2001.

At  December  31,  2001,   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
carryforwards  is  limited  to  approximately  $400,000  annually.  The  Company
utilized  NOL   carryforwards   of  $300,000  in  1999  and  none  of  such  NOL
carryforwards  in 2000 and 2001. At December 31, 2001,  the Company also has the
equivalent  of  approximately  $4.7  million  of tax loss  carryforwards  in the
Netherlands   with  no  expiration   date.  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 10 - Stockholders' equity:

Shares of common stock             Class B
Class A                   Issued and
Issued      Treasury     Outstanding   outstanding

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

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

Balance at December 31, 1999   6,147,380         --       6,147,380    10,000,000

Issued .....................      57,300         --          57,300          --   
Reacquired .................        --       (844,300)     (844,300)         --
---------   ----------    ----------    ----------

Balance at December 31, 2000   6,204,680     (844,300)    5,360,380    10,000,000

Issued .....................       2,500         --           2,500          --
Reacquired .................        --       (259,600)     (259,600)         --
---------   ----------    ----------    ----------

Balance at December 31, 2001   6,207,180   (1,103,900)    5,103,280    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.

Reacquired  common stock.  The Company's  Board of Directors has authorized
the  Company to purchase up to  approximately  1.5 million  shares of its common
stock in open market or privately-negotiated  transactions at unspecified prices
and over an unspecified period of time. As of December 31, 2001, the Company had
purchased  approximately  1,104,000  shares for an  aggregate  of $11.3  million
pursuant to such authorization.

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,  vest over five  years and expire ten years from the
date of grant.

The following  table sets forth changes in  outstanding  options during the
past three years.

Amount
Exercise          payable
price per           upon
Share           share           exercise

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

Granted                                        292       12.50 - 19.63          5,360
Exercised                                      (57)      17.94 - 20.00         (1,073)
Canceled                                      (171)      15.88 - 20.00         (3,290)
----      --------------        -------

Outstanding at December 31, 2000               722       12.50 - 20.00         13,781

Granted                                        330       10.00 - 13.00          4,071
Canceled                                      (196)      13.00 - 20.00         (3,691)
----      --------------        -------

Outstanding at December 31, 2001               856      $10.00 - 20.00        $14,161
====      ==============        =======

Outstanding options at December 31, 2001 represent approximately 17% of the
Company's outstanding Class A common shares at that date and expire through 2011
with a weighted-average remaining term of 8 years. At December 31, 2001, options
to purchase  255,000 of the Company's  shares were exercisable at prices ranging
from $10.00 to $20.00 per share, or an aggregate amount payable upon exercise of
$4.8 million,  with a weighted average exercise price of $16.57 per share. These
exercisable  options are  exercisable  through 2011.  Substantially  all of such
exercisable options are exercisable at prices higher than the Company's December
31, 2001 market  price of $12.97 per share.  At December  31,  2001,  options to
purchase  161,000  shares are  scheduled  to become  exercisable  in 2002 and an
aggregate of 417,000 shares were available for future grants.

Other.  The  following  pro forma  information,  required  by 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 1999,  2000 and 2001 were
$11.56, $7.86 and $4.53 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 37% to 45%,
risk-free rates of return of 5.1% to 6.9%, dividend yields of nil to 5.0% 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 $1.0 million,  $1.3 million and $1.5
million in 1999,  2000 and 2001  respectively,  or $.06, $.08 and $.10 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 11 - Other general corporate income, net

Years ended December 31,
1999       2000        2001
----       ----        ----
(In thousands)

Net foreign currency transaction gain (loss) ....   $(290)   $  (117)   $   636
Interest income .................................     862        569        574
Defined benefit plan curtailment gain ...........    --         --          116
Other income, net ...............................     104         (9)      (317)
-----    -------    -------

$ 676    $   443    $ 1,009
=====    =======    =======

Other income,  net in 2001 includes a $2.2 million  pre-tax gain related to
the  sale/leaseback  of  CompX's  manufacturing  facility  in  the  Netherlands.
Pursuant to the sale/leaseback, CompX sold the manufacturing facility with a net
carrying value of $8.2 million for $10.0 million cash  consideration in December
2001, and CompX  simultaneously  entered into a leaseback of the facility with a
nominal  monthly  rental for  approximately  30 months.  CompX has the option to
extend the  leaseback  period  for up to an  additional  two years with  monthly
rentals of $40,000 to $100,000.  CompX may  terminate  the leaseback at any time
without  penalty.  In addition to the cash received up front,  CompX included an
estimate  of  the  fair  market   value  of  the  monthly   rental   during  the
nominal-rental  leaseback period as part of the sale proceeds.  A portion of the
gain from the sale of the facility after transaction costs, equal to the present
value of the monthly rentals over the expected  leaseback period  (including the
fair market  value of the monthly  rental  during the  nominal-rental  leaseback
period),  has been deferred and will be amortized  into income over the expected
leaseback period. CompX will recognize rental expense over the leaseback period,
including  amortization  of the prepaid rent  consisting of the  estimated  fair
market value of the monthly rental during the  nominal-rental  leaseback period.
Pursuant to the agreement,  CompX is also obligated to acquire  approximately 10
acres from the municipality of Maastricht for approximately  $1.8 million within
the next 1 to 3 years.  Also  include  in  other  income,  net in 2001 is a $2.7
million pre-tax restructuring charge related to CompX's European operations. See
Note 6.

Note 12 - 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.

Under the terms of Intercorporate Service Agreements ("ISAs") with Contran,
Valhi and NL Industries,  Inc. , a majority-owned  subsidiary of Valhi, Contran,
Valhi and NL Industries,  Inc. have performed certain management,  tax planning,
financial  and  administrative  services for the Company on a fee basis over the
past three  years.  Such fees are based upon  estimates  of time  devoted to the
affairs of the  Company by  individual  Contran,  Valhi or NL  Industries,  Inc.
employees and the  compensation of such persons.  Because of the large number of
companies  affiliated with Contran,  the Company  believes it benefits from cost
savings  and  economies  of  scale  gained  by not  having  certain  management,
financial and  administrative  staffs  duplicated at each entity,  thus allowing
certain  individuals  to provide  services  to  multiple  companies  but only be
compensated  by  one  entity.  These  ISAs  are  reviewed  and  approved  by the
applicable  independent  directors  of the  companies  that are  parties  to the
agreement.  In  addition,  certain  occupancy  and related  office  services are
provided based upon square footage  occupied.  Fees pursuant to these agreements
aggregated $433,000 in 1999, $689,000 in 2000 and $1,245,000 in 2001.

Certain of the Company's  insurance coverages are arranged for and brokered
by EWI Re, Inc.  Parties  related to Contran own all of the  outstanding  common
stock of EWI.  Through  December 31,  2000,  a  son-in-law  of Harold C. Simmons
managed the operations of EWI.  Subsequent to December 31, 2000, such son-in-law
provides  advisory  services to EWI as requested  by 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
$431,000 in 1999,  $563,000 in 2000 and $422,000 in 2001. These fees and charges
are principally pass-through in nature.

Note 13 - 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  material
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.

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%, 35% and 36% of sales in 1999, 2000
and 2001, respectively,  with no single customer accounting for more than 10% of
sales.

Other.  Royalty  expense was  $1,097,000  in 1999,  $1,073,000  in 2000 and
$672,000 in 2001. Royalties relate principally to certain products  manufactured
in Canada and sold in the United States under the terms of a third-party  patent
license agreement.

Rent expense,  principally for equipment,  was $609,000 in 1999, $1,072,000
in 2000 and  $1,861,000 in 2001. At December 31, 2001,  future  minimum  rentals
under  noncancellable  operating  leases  are  approximately  $990,000  in 2002,
$730,000  in 2003,  $385,000  in 2004,  $317,000  in 2005,  $242,000 in 2006 and
$132,000 thereafter.

Firm purchase  commitments for capital  projects in process at December 31,
2001 approximated $2.5 million.

Note 14 - Accounting principles not yet adopted:

Goodwill.  The  Company  will  adopt  SFAS  No.  142,  Goodwill  and  Other
Intangible Assets, effective January 1, 2002. Under SFAS No. 142, goodwill, will
not be amortized on a periodic  basis.  Instead,  goodwill will be subject to an
impairment  test to be performed  at least on an annual  basis,  and  impairment
reviews  may result in future  periodic  write-downs  charged to  earnings.  The
Company would have reported net income of  approximately  $9.4 million,  or $.62
per  diluted  share,  in  2001  if the  goodwill  amortization  included  in the
Company's reported net income had not been recognized.

As  discussed  in Note 5, the  Company  has  assigned  its  goodwill to two
reporting  units.  Under SFAS No. 142,  such  goodwill  will be deemed to not be
impaired if the estimated  fair value of the CompX  Security  Products and CompX
Waterloo/CompX  Europe reporting units exceeds the respective net carrying value
of such reporting units,  including the allocated goodwill. If the fair value of
the reporting unit is less than carrying value, then a goodwill  impairment loss
would be recognized  equal to the excess,  if any, of the net carrying  value of
the  reporting  unit  goodwill  over its  implied  fair  value  (up to a maximum
impairment equal to the carrying value of the goodwill).  The implied fair value
of  reporting  unit  goodwill  would be the  amount  equal to the  excess of the
estimated  fair  value of the  reporting  unit  over the  amount  that  would be
allocated  to the  tangible  and  intangible  net assets of the  reporting  unit
(including  unrecognized  intangible  assets) as if such reporting unit had been
acquired in a purchase  business  combination  accounted for in accordance  with
SFAS No. 141.

In determining the estimated fair value of the reporting units, the Company
will use discounted cash flows valuation techniques.

The Company has completed  its initial,  transitional  goodwill  impairment
analysis under SFAS No. 142 as of January 1, 2002,  and no goodwill  impairments
were deemed to exist. In accordance  with the  requirements of SFAS No. 142, the
Company will review  goodwill of the reporting  units for impairment  during the
third quarter of each year starting in 2002.  Goodwill will also be reviewed for
impairment   at  other  times  during  each  year  when  events  or  changes  in
circumstances indicate that an impairment might be present.

Impairment  of  long-lived  assets.  The  Company  will adopt SFAS No. 144,
Accounting  for the  Impairment  or Disposal  of  Long-Lived  Assets,  effective
January 1, 2002.  SFAS No. 144 retains the  fundamental  provisions  of existing
GAAP with  respect  to the  recognition  and  measurement  of  long-lived  asset
impairment  contained  in  SFAS  No.  121,  Accounting  for  the  Impairment  of
Long-Lived  Assets and for Lived-Lived  Assets to be Disposed Of. However,  SFAS
No. 144 provides new guidance intended to address certain  implementation issues
associated  with SFAS No.  121,  including  expanded  guidance  with  respect to
appropriate  cash  flows  to be used to  determine  whether  recognition  of any
long-lived  asset  impairment  is  required,  and if required how to measure the
amount of the  impairment.  SFAS No. 144 also requires that any net assets to be
disposed of by sale are to be  reported  at the lower of carrying  value or fair
value less cost to sell, and expands the reporting of discontinued operations to
include any  component of an entity with  operations  and cash flows that can be
clearly distinguished from the rest of the entity. Adoption of SFAS No. 144 will
not have a significant effect on the Company as of January 1, 2002.

Asset  retirement  obligations.  The  Company  will  adopt  SFAS  No.  143,
Accounting  for Asset  Retirement  Obligations,  no later than  January 1, 2003.
Under  SFAS No.  143,  the fair  value of a  liability  for an asset  retirement
obligation  covered  under the scope of SFAS No. 143 would be  recognized in the
period in which the liability is incurred,  with an  offsetting  increase in the
carrying amount of the related  long-lived asset. Over time, the liability would
be accreted to its present value,  and the capitalized cost would be depreciated
over the useful life of the related asset. Upon settlement of the liability,  an
entity would either  settle the  obligation  for its recorded  amount or incur a
gain or loss upon  settlement.  The Company is still  studying  this standard to
determine,  among other things,  whether it has any asset retirement obligations
which are covered  under the scope of SFAS No. 143,  and the effect,  if any, to
the Company of adopting SFAS No. 143 has not yet been determined.

Note 15 -      Quarterly results of operations (unaudited):

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

2000:

Net sales ...............................   $   66.1 $   65.1 $   63.0 $   59.0
Operating income ........................       10.7     11.5      9.1      5.9
Net income ..............................        6.6      7.1      5.5      2.9

Basic and diluted earnings per share ....   $     .41$     .44$     .34$     .18

2001:
Net sales ...............................   $   59.6 $   53.4 $   51.5 $   47.0
Operating income (loss) .................        6.8      5.3      4.1     (3.8)
Net income (loss) .......................        3.7      2.7      2.1     (1.4)

Basic and diluted earnings (loss)
per share ..............................   $     .24$     .18$     .14$    (.09)

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.

During the fourth  quarter of 2001,  the  Company  recorded  the  following
significant adjustments:

o    A $2.7 million  pre-tax  restructuring  charge related to CompX's  European
operations. See Note 6.

o    A $2.2 million  pre-tax  gain on the  sale/leaseback  of its  manufacturing
facility located in Maastricht, the Netherlands. See Note 11.

o    A $3.0 million  pre-tax charge related to changes in estimates with respect
to  reserves  for  obsolete  and  slow-moving  inventory  and other  items.
Approximately  $2.1  million of this charge  related to the CompX  Security
Products  segment  with the  remaining  $.9  million  relating to the CompX
Waterloo/CompX Europe segment.

The aggregate effect of these fourth quarter 2001 adjustments was a pre-tax
charge of $3.5 million ($2.0 million,  or $.13 per diluted share,  net of income
taxes).

REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

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

Our audits of the  consolidated  financial  statements  referred  to in our
report dated March 1, 2002,  appearing on page F-2 of this 2001 Annual Report on
Form 10-K of CompX  International  Inc., also included an audit of the financial
statement  schedule  listed in the index on page F-1 of this Form  10-K.  In our
opinion,  this financial  statement  schedule  presents fairly,  in all material
respects,  the information  set forth therein when read in conjunction  with the
related consolidated financial statements.

PricewaterhouseCoopers LLP

Dallas, Texas
March 1, 2002

COMPX INTERNATIONAL INC. AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

Additions
Balance at charged to                                 Balance
beginning costs and                 Net     Currency  at end
Description                  of year   expenses  Deductions translation Other(a) of year
------------------                 ------- ----------  --------    --------    -----    -------

Year ended December 31, 1999:

Allowance for doubtful accounts .......   $  310   $    10    $ (101)    $   12     $  494  $  725
======   =======    ======     ======     ======  ======

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

Amortization of other intangible assets   $  216   $   207    $ --       $    3     $ --    $  426
======   =======    ======     ======     ======  ======

Year ended December 31, 2000:

Allowance for doubtful accounts .......   $  725   $  (123)   $  (79)    $  (36)    $ --    $  487
======   =======    ======     ======     ======  ======

Amortization of goodwill ..............   $2,730   $ 2,390    $ --       $  (55)    $ --    $5,065
======   =======    ======     ======     ======  ======

Amortization of other intangible assets   $  426   $   361    $ --       $   (2)    $ --    $  785
======   =======    ======     ======     ======  ======

Year ended December 31, 2001:

Allowance for doubtful accounts .......   $  487   $   636    $ (296)    $   14     $ --    $  841
======   =======    ======     ======     ======  ======

Amortization of goodwill ..............   $5,065   $ 2,304    $ --       $  (75)    $ --    $7,294
======   =======    ======     ======     ======  ======

Amortization of other intangible assets   $  785   $   229    $ --       $   (4)    $ --    $1,010
======   =======    ======     ======     ======  ======

(a)     Business units acquired.

Note - certain  prior  year  amounts  have been  reclassified  to conform to the
current year presentation.

COMPX INTERNATIONAL INC.

AMENDMENT NO. 2 TO THE
CREDIT AGREEMENT

Dated as of December 20, 2001

BANKERS TRUST COMPANY,
As Agent

And

VARIOUS LENDING INSTITUTIONS

AMENDMENT NO. 2 TO
CREDIT AGREEMENT

This Amendment No. 2 to Credit Agreement (this "Agreement") is entered into
as of December  20,  2001,  by 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.

(a) Section 1.1 of the Credit  Agreement is amended by  inserting  the
following new defined term in alphabetical order therein:

"Maastricht Sale and Leaseback Transaction" means the sale by Thomas Regout
International  B.V.  ("TRI")  of the  operating  plant  and  plant  site in
Maastricht,   the  Netherlands  to  the   municipality  of  Maastricht  for
approximately  NLG 25 million,  the concurrent  leaseback of such plant and
plant site by TRI for approximately two years and the related obligation of
TRI to  purchase  an  alternative  plant  site  from  the  municipality  of
Maastricht in 2002 or thereafter for approximately NLG 4.4 million.

(b)  Section  1.1  of the  Credit  Agreement  is  further  amended  by
inserting a semicolon in place of the period at the end of the clause (x) of the
definition  of  "Indebtedness"  contained  therein and  inserting  the following
proviso at the conclusion of the definition of "Indebtedness"

provided,  that  notwithstanding  the  foregoing,  the obligation of TRI to
purchase  an  alternate  plant  site  as  provided  in  the  definition  of
Maastricht  Sale  and  Leaseback  Transaction  shall  not be  deemed  to be
Indebtedness.

(c) Section 4.3(c) of the Credit Agreement is amended by inserting the
parenthetical   clause   "(other  than  the   Maastricht   Sale  and   Leaseback
Transaction)"  immediately  following  the  words  "Asset  Disposition"  in such
Section.

(d) Section 8.10 of the Credit  Agreement is amended by inserting  the
phrase "other than pursuant to the Maastricht Sale and Leaseback Transaction" at
the conclusion of 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.  Amendment Fee. In  consideration  of the execution of this Agreement by
the Agent and the Lenders, the Company hereby agrees to pay to each Lender which
executes  this  Agreement  on or prior to 12:00  P.M.  (New York  City  time) on
December  20,  2001 a fee  (the  "Amendment  Fee")  in an  amount  equal to such
Lender's Revolving Commitment multiplied by 0.05%.

4. 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 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)  Payment  of  Amendment  Fee.  The  Company  shall  have  paid the
Amendment Fee in full to the Agent for ratable  distribution to the Lenders that
have executed and delivered  this  Agreement on or prior to 12:00 P.M. (New York
City time) on December 20, 2001; provided, however, that the Amendment Fee shall
be  payable  only in the event  that this  Agreement  has been  executed  by the
Persons described in Section 4(a) above.

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

5. 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.

6. 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.

7.  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.

COMPX INTERNATIONAL INC., a Delaware
corporation

By:      /s/ Stuart M. Bitting                  
---------------------------------------

Name:    Stuart M. Bitting                  
---------------------------------------

Title:   VP, CFO & Treasurer                    
---------------------------------------

BANKERS TRUST COMPANY, individually as a
Lender and as Agent

By:       /s/ Robert Telesca                    
--------------------------------------

Name:     Robert Telesca                     
--------------------------------------

Title:    Vice President                        
--------------------------------------

FIRST UNION NATIONAL BANK,
As a Lender

By:       /s/ Thomas F. Snider                  
--------------------------------------

Name:     Thomas F. Snider                   
--------------------------------------

Title:    Vice President                        
--------------------------------------

WACHOVIA BANK, N.A. as a Lender

By:        /s/ Lee R. Gray                    
-------------------------------------

Name:      Lee R. Gray                      
-------------------------------------

Title:     Senior Vice President                
-------------------------------------

Official Translation of
Principle Agreement

The private company "Thomas Regout  International BV", according to its Articles
of  Association  with its corporate  seat in  Maastricht,  hereinafter:  "Thomas
Regout  International",  in the  present  matter  duly  represented  by Mr. W.J.
Dammers.

and

the public law entity, the municipality of Maastricht,  with seat in Maastricht,
hereinafter: "the Municipality",  in the present matter duly represented by: Mr.
Ph.J.I.M. Houben.

Whereas

Thomas Regout International is the legal owner of several parcels of land on the
"Bosscherveld" industrial estate in Maastricht;

The  Municipality  requires  the title to these  parcels  and others in order to
realize the transformation process of the west bank of the Maas;

Thomas Regout International is willing to transfer the title of these parcels to
the Municipality,  if and to the extent that it is paid a realistic market price
and is given the opportunity to relocate to an alternative  industrial property,
and if the  relocation  can be  arranged  in  such a way as not to  disrupt  its
production process.

Do hereby agree as follows:

A.   The sale of the  parcels  of land  currently  belonging  to  Thomas  Regout
International

Article 1: The sale of the parcels of land currently  belonging to Thomas Regout
International

1.1  Thomas Regout International  hereby sells to the Municipality,  in the
same way that the  Municipality  hereby  purchases  from Thomas Regout
International,  the parcels of property  known at the Land Registry as
Municipality  of  Maastricht,  section H,  number  2597,  measuring  2
hectares, 89 ares and 65 centiares,  section D, number 3877, measuring
8 ares  and 50  centiares,  both  parcels  known  locally  as no.  40,
Industrieweg,  and section H,  number  2555,  measuring  93 ares and 9
centiares,  known  locally  as  no.  41-43,  Sandersweg,   hereinafter
jointly: "the property".

1.2  The  Municipality  of  Maastricht  intends to use the property for the
transformation  process  of the west bank of the Maas,  in  connection
with  which the  Municipality  of  Maastricht  will enter into a joint
venture with Stichting  Bedrijfspensioenfonds  voor de  Bouwnijverheid
and ING Vastgoed.  Thomas Regout International does not object to this
proposed use, to the extent it will not affect its business operations
on its present location, or the orderly relocation of that business.

Article 2: The purchase price

2.1  The  purchase  price of the  property is NLG  25,000,000  (twenty-five
million Dutch  guilders) (EUR  11.344.505,40).  The costs of transfer,
including the taxes due to the delivery and obtaining of the premises,
will  be paid  by the  Municipality.  In  case  VAT is due  above  the
purchase  price,  it is  expressly  agreed that the taxes due includes
VAT.

2.2  The Municipality will pay this purchase price on the Date of Transfer.

Article 3: The deed of delivery

3.1  The  property  will  be  delivered  beneficially  and  legally  to the
Municipality.  Delivery  expressly does not include the Sold machinery
on location,  company  installations  and  inventory,  among which the
supplementary  materials  should be included as  mentioned  in article
3.254 Civil Code. The purchase price does not include any compensation
for  the  Sold  machinery  on  location,   company  installations  and
inventory.  In as far  as  the  machinery,  company  installments  and
inventory fall under  property,  they will be expressly  excluded from
the economic transfer.

3.2  The deed of delivery of the property  will be executed  before a civil
law  notary to be  designated  by the  Municipality  at the  latest on
December 30, 2001, hereinafter: "Date of Transfer".

Article 4: The condition of the property upon transfer of the economic ownership

4.1  The property  will be delivered on the Date of the  Transfer,  free of
mortgages  and  attachments,  but  including any other real rights and
qualitative obligations with which the parcels may be charged.

Article 5:  Continued  use by lease 

5.1  After the Date of Transfer,  Thomas Regout  International  will remain
authorized to continue  using the property by lease until December 31,
2005  or  such  later  date  as  is   necessary   for  Thomas   Regout
International's  Alternative Parcel to be ready for occupancy,  plus a
reasonable period for relocating its business activities.

5.2  Thomas  Regout has to pay for the continue  use of the property  after
the Date of  Transfer a sum of NLG 11,02  (EUR 5,00) per month,  added
with VAT.

Two  years  after  the  property  is ready  for  construction  work to
commence  and the permits and  licenses  for the new  premises  become
final, especially the building and environmental permits and licenses,
the rent is  increased  to a sum of NLG 100,000  (EUR  45.378,02)  per
month, added with VAT, for the continued use of the property.

Subsequently each six months the rent per month will be increased with
NLG 50.000,-- (EUR  22.689,01),  added with VAT, till a maximum of NLG
250.000,-- (EUR 113.445,05) rent per month.

5.3  As long as Thomas Regout  International  continues using the property,
its  entire  maintenance  will be for  Thomas  Regout  International's
account.  Thomas  Regout  International  must keep the  property  in a
satisfactory  state  of  maintenance  until  the  date on  which it is
vacated.

5.4  All real charges,  taxes  (including  the property tax payable by both
the user and the owner) and  insurance  payable  during the  continued
use,  until the date on which the  property  is  vacated,  will be for
account of Thomas Regout International.

5.5  As long as Thomas Regout  International  continues using the property,
the  Municipality is authorized to obtain access in consultation  with
Thomas Regout  International,  in order to conduct  studies to prepare
the property for the future use proposed by the  Municipality,  to the
extent  these  studies do not damage the  property  and do not disrupt
Thomas Regout International's production process.

Article 6:  After  lease  termination  of the  Property  continuing  use for the
purpose of the production and storage of curtain rails

6.1  Thomas Regout  International  is using part of the property  measuring
circa 5,500 sq.m.  for the  purpose of the  production  and storage of
curtain  rails.  After  termination of the use as described in article
5.1, Thomas Regout  International  will be entitled to continue to use
by rent that  part of the  property  for this  purpose  until  further
notice.

6.2  Thomas Regout  International  has to pay for the continuing use of the
property  measuring  5,500 sq.m.  from the date of  termination of the
lease with respect to the whole  premises as described in article 5.1.
a rent of NLG 11,02 (EUR 5,00), added with VAT.

6.3  Thomas  Regout   International   must  give  one  month's   notice  of
termination.  The  Municipality  must  give  nine  month's  notice  of
termination. Either way notice of termination must be given in writing
and can be done without reason.

6.4  As long as Thomas Regout International continues using the part of the
property of 5.500 sq.m up to the actual  hand-over of this part of the
property,   its  entire   maintenance   will  be  for  Thomas   Regout
International account. All real charges, taxes (including the property
tax  payable  by both the user and the owner)  and  insurance  payable
during the  continued  use,  until the date on which the  property  is
vacated, will be for account of the Municipality.

Article 7: Actual hand-over of the property at the end of the continued use

7.1  Thomas  Regout  International  will  hand  over  the  property  to the
Municipality  empty and vacated,  and free of tenancies  and/or use at
the end of the  continued  use,  herein:  "vacated".  If Thomas Regout
International  opts of its right of  continued  use of the part of the
property as described in Article 6.1. Thomas Regout  International  is
only obliged to actual  hand-over  this part if the right of continued
use is ended .

7.2  Thomas  Regout  International  will  hand  over  the  property  to the
Municipality   with   its   fixtures.   Nonetheless,   Thomas   Regout
International will be authorized to remove from the property any items
which it needs for its business operations at the end of the continued
use as described in Article 5.1. and/or Article 6.1., whereupon Thomas
Regout  International  will not be  required to adjust any costs or to
pay the Municipality any compensation whatsoever.

Article 8: Soil contamination

8.1  The  Municipality  declares  that it is aware of the use which  Thomas
Regout  International  and/or any allied companies currently makes and
has made of the  property  in the past,  and that it has taken note of
the soil  inspection  reports,  as  mentioned  in detail in the letter
dated December 14th, 2001 and in particular the `Nader  bodemonderzoek
TR-1 te Maastricht' of November 20, 1998, drawn up by Tebodin B.V.

8.2  The Municipality hereby accepts the property together with the present
soil contamination,  and any soil contamination which may be caused by
Thomas  Regout  International's  and/or  any allied  companies  normal
business operations.

8.3  Thomas Regout International and/or any allied companies is only liable
for   contamination   and  required  to   compensate   the   resulting
decontamination  costs,  if  there  is  question  of  a  serious  soil
contamination  within the  meaning  of the `Wet  Bodemverontreiniging'
[the Dutch Soil  contamination  Act] which is caused after the signing
date of the  present  agreement  as a result  of a  deliberate  act or
omission by Thomas  Regout  International  and/or of  violation of the
environmental  permit and which is such that decontamination is urgent
on the basis of the current use of the property.

8.4  The Municipality will indemnify Thomas Regout International and/or any
allied  companies  against  liability for existing soil  contamination
against thirds, the Kingdom of the Netherlands included.

B.     Alternative location

Article 9: The sale

9.1  The  Municipality  will offer Thomas Regout  International a parcel of
land on the industrial estate on the "Eijsden-Maastricht"  zoning plan
with a maximum of 4 hectares, as marked as a hatched area in detail on
the site plan annexed hereto as annex 1 (hereinafter: "the Alternative
Parcel").

9.2  Upon first  request of Thomas  Regout the parties will fix the precise
location of the  Alternative  Parcel by joint consent,  taking account
not only of the expected  layout and the schedule of  requirements  of
the new Thomas  Regout  International  premises but also the extent in
which the remaining area can be usefully parceled out. In any case, it
will be an unbroken parcel that will not be separated by a road.

9.3  The Alternative  Parcel will be delivered ready for construction  work
to commence and will also be environmentally  suited for Thomas Regout
International proposed industrial use.

9.4  The Alternative  Parcel will be bought in the expectation  that Thomas
Regout   International  and/or  any  allied  companies  will  use  the
alternative parcel for production purposes. If, for any reason, Thomas
Regout  International  wishes to  dispose  of the  alternative  parcel
before  construction  work commences,  it will be required to offer it
first to the  Municipality  on the same financial  terms  specified in
article 10 as those on which it acquired the  Alternative  Parcel from
the Municipality.

9.5  The  Alternative  Parcel will be  delivered  together  with the public
utilities customary for this type of industrial estate.

Article 10: The Purchase price

10.1 The purchase  price of the  Alternative  Parcel is NLG 110 (EUR 49,92)
per m2,  excluding  VAT,  price level as of December 31, 2002.  At the
time of the legal  transfer of the  Alternative  Parcel,  the purchase
price  will be fixed on the basis of the  actual  surface  area  being
offered.

10.2 The purchase price of the Alternative  Parcel must be paid at the date
of the Deed of Transfer of the Alternative  Parcel. The purchase price
will be increased  with  interest at a rate of 7% per annum as soon as
Thomas  Regout   International   acquires   irrevocable  building  and
environmental permits and licenses,  but no earlier than as of January
1, 2003.

Article 11: The transfer of the legal ownership

11.1 The deed of delivery  for the  transfer of the legal  ownership of the
Alternative   Parcel  will  be  executed  before  a  civil-law  notary
designated by Thomas Regout  International 6 weeks after Thomas Regout
International  acquires valid building and  environmental  permits and
licenses  and the parcel  for the  alternative  location  is ready for
construction work to commence.

Article 12: The development of the new Thomas Regout International premises

12.1 Thomas  Regout  International  will  realize  its new  premises on the
alternative parcel on the industrial estate after the notarial deed of
delivery is executed for the property.

12.2 Thomas Regout  International  will form a construction team to develop
the construction  plan,  which will include a representative  from the
Municipality.  The construction  team may not adopt resolutions on the
development  of the  plan  and the new  premises,  and  Thomas  Regout
International will have sole and exclusive control at all times.

The  construction  team will discuss,  `inter alia',  which public law
procedures   will  need  to  be  followed  for  the   development  and
realization, and for the operation and preservation of the permits and
licenses   necessary  for  Thomas  Regout   International's   business
operations. This team will also discuss which planning procedures must
be  followed  in order  to  realize  the new  premises.  The  point of
departure for scheduling the  construction of the new premises is that
these  premises  must have an  irrevocable  zoning  scheme,  necessary
permits and  licenses  and  production  must be able to commence on or
around June 30 2005.

12.3 Thomas Regout  International will develop a plan for new construction,
for which building and environmental  permits and licenses before July
1, 2003. Thomas Regout  International is obliged to render without any
delay  all  necessary  information  for the  permits  asked for to the
Municipality upon request by the responsible civil-servant.

C.     Final provisions

Article 13: Further agreements

13.1 The  Municipality  and Thomas Regout  International  will enter into a
deed of delivery for the property  with due  observance of the present
agreement.

13.2 The  Municipality  and Thomas Regout  International  will enter into a
deed of legal transfer for the Alternative  Parcel with due observance
of the present agreement.

Article 14: Reservation

14.1 Thomas Regout  International  enters into the present agreement on the
condition  that it obtains  the  approval of its  shareholder  and the
shareholder of Thomas Regout International Holding B.V.

14.2 The parties are required to submit to each other the present agreement
for approval as soon as possible after signing and to notify the other
party of the outcome.  If either  party fails to obtain the  necessary
approval,  the  present  agreement  will  become  ineffective  and the
parties will jointly negotiate the new situation.

Thus done...

EXHIBIT 21.1     SUBSIDIARIES OF THE REGISTRANT

% of Voting
Securities
Jurisdiction of               Held at December
Incorporation or                      31,
Name of Corporation                               Organization                       2001
-----------------------------------            ----------------                    -------

Waterloo Furniture Components Limited             Canada                             100

CompX Security Products Inc.                      Delaware                           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
CompX (H.K.) Corp.                            British Virgin                     100
Islands
CompX SFC, Inc.                                   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 CompX Contributory  Retirement Plan, of our report dated March
1, 2002 on our audits of the  consolidated  financial  statements  and financial
statement schedule of CompX International Inc. and Subsidiaries included in this
Annual Report on Form 10-K for the year ended December 31, 2001.

PricewaterhouseCoopers LLP

Dallas, Texas
March 20, 2002