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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

|      |  |                                                    
|----- |  | ---------------------------------------------------
|[X]   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|      |  | THE SECURITIES EXCHANGE ACT OF 1934                
|      |  |                                                    
|      |  | For quarterly period ended December 31, 2003       
|      |  |                                                    
|      |  | OR                                                 
|      |  |                                                    
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  
|      |  | OF THE SECURITIES EXCHANGE ACT OF 1934             
|      |  |                                                    
|      |  | For the transition period from ________ to ________
|      |  |                                                    
|      |  | Commission File Number 1-5341                      

ELKCORP




(Exact name of Registrant as specified in its charter)


|                                                                 |  |                    
|---------------------------------------------------------------- |  | -------------------
|DELAWARE                                                         |  | 75-1217920         
|                                                                 |  |                    
|(State or other jurisdiction of                                  |  | (I.R.S. Employer   
|incorporation or organization)                                   |  | Identification No.)
|                                                                 |  |                    
|14911 QUORUM DRIVE, SUITE 600, DALLAS, TEXAS                     |  | 75254-1491         
|                                                                 |  |                    
|(Address of principal executive offices)                         |  | (Zip Code)         
|                                                                 |  |                    
|Registrants telephone number, including area code (972)851-0500 |  |                    

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] .
No [   ].

Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes [X] . No [   ].

As of close of business on January 30, 2004, the Registrant had
outstanding 19,634,067 shares of Common Stock, par value $1 per share.





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TABLE OF CONTENTS



|                                             |                                                                                               |                                            |  |  |  |  |  | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION               
|                                             | Item 1. Financial Statements                                                                 
|                                             |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                             |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS     
|                                             |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                             |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                             | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                             | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                  
|                                             | Item 4: Submission of Matters to a Vote of Security Holders                                  
|                                             | Item 5: Other Information                                                                    
|                                             | Item 6: Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                  
|Index to Exhibits                           
|Fifth Amendment to Credit Agreement         
|Certification of CEO Pursuant to Section 302
|Certification of CFO Pursuant to Section 302
|Certificate of CEO Pursuant to Section 906  
|Certificate of CFO Pursuant to Section 906  



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ELKCORP AND SUBSIDIARIES

FOR THE QUARTER ENDED DECEMBER 31, 2003

INDEX

|                                          |         |                                                                                                            |    |      |       | 
|----------------------------------------- | ------- | ---------------------------------------------------------------------------------------------------------- | -- | ---- | ----- | 
|                                          |         |                                                                                                            |    | Page
|                                          |         |                                                                                                            |    |     
|Part I. FINANCIAL INFORMATION (unaudited) |         |                                                                                                            |    |     
|                                          | Item 1. | Financial Statements                                                                                       |    |      |       | 
|                                          |         | Consolidated Balance Sheets as of
December 31, 2003 and June 30, 2003                                      |    |      | 1     | 
|                                          |         | Consolidated Statements of Operations for the Three Months and
Six Months Ended December 31, 2003 and 2002 |    |      | 2     | 
|                                          |         | Consolidated Statements of Cash Flows for the Six Months Ended
December 31, 2003 and 2002                  |    |      | 3     | 
|                                          |         | Notes to Consolidated Financial Statements                                                                 |    |      | 4-13  | 
|                                          | Item 2. | Managements Discussion and Analysis of Financial Condition
and Results of Operations                      |    |      | 14-22 | 
|                                          | Item 3. | Quantitative and Qualitative Disclosures About Market Risk                                                 |    |      | 23    | 
|                                          | Item 4. | Controls and Procedures                                                                                    |    |      | 23    | 
|Part II. OTHER INFORMATION                |         |                                                                                                            |    |     
|                                          | Item 4. | Submission of Matters to a Vote of Security Holders                                                        |    |      | 24    | 
|                                          | Item 5. | Other
Information                                                                                          |    |      | 24    | 
|                                          | Item 6. | Exhibits and Reports on Form 8-K                                                                           |    |      | 25    | 
|SIGNATURES                                |         |                                                                                                            | 26 |     





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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




ELKCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, $ in thousands)

|                                                   |                                                               |                                    |         |              |         |          |         |          |         | 
|-------------------------------------------------- | ------------------------------------------------------------- | ---------------------------------- | ------- | ------------ | ------- | -------- | ------- | -------- | ------- | 
|                                                   |                                                               |                                    |         | December 31, |         | June 30,
|                                                   |                                                               |                                    |         | 2003         |         | 2003    
|                                                   |                                                               |                                    |         |              |         |         
|Assets                                             |                                                               |                                    |         |              |         |          |         |         
|Current Assets                                     |                                                               |                                    |         |              |         |          |         |         
|Cash and cash equivalents                          |                                                               | $                                  | 31,072  |              |         | $        | 5,056   |         
|Trade receivables, less allowance of $838 and $935 |                                                               |                                    | 81,117  |              |         |          | 118,252 |         
|Inventories                                       |                                                               |                                    |         |              |         |          |         |         
|                                                   | Finished goods                                                |                                    |         | 43,305       |         |          |         | 44,606   |        
|                                                   | Work-in-process                                               |                                    |         | 232          |         |          |         | 89       |        
|                                                   | Raw materials                                                 |                                    |         | 8,423        |         |          |         | 8,826    |        
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   | Total inventories                                             |                                    |         | 51,960       |         |          |         | 53,521   |        
|                                                   |                                                               |                                    |         |              |         |          |         |         
|Prepaid expenses and other                         |                                                               |                                    | 7,498   |              |         |          | 6,689   |         
|Deferred income taxes                              |                                                               |                                    | 3,812   |              |         |          | 2,372   |         
|Discontinued operations                            |                                                               |                                    | 2,641   |              |         |          | 13,958  |         
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | Total current assets               |         |              | 178,100 |          |         |          | 199,848 | 
|                                                   |                                                               |                                    |         |              |         |          |         |         
|Property, Plant and Equipment, at Cost             |                                                               |                                    | 378,254 |              |         |          | 348,888 |         
|                                                   | Less - accumulated depreciation                               |                                    |         | (127,379     | )       |          |         | (122,626 | )      
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | Property, plant and equipment, net |         |              | 250,875 |          |         |          | 226,262 | 
|                                                   |                                                               |                                    |         |              |         |          |         |         
|Other Assets                                       |                                                               |                                    | 11,832  |              |         |          | 15,745  |         
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | $                                  | 440,807 |              |         | $        | 441,855 |         
|                                                   |                                                               |                                    |         |              |         |          |         |         
|Liabilities and Shareholders Equity               |                                                               |                                    |         |              |         |          |         |         
|Current Liabilities                                |                                                               |                                    |         |              |         |          |         |         
|Accounts payable                                   |                                                               | $                                  | 25,557  |              |         | $        | 35,369  |         
|Accrued liabilities                                |                                                               |                                    | 21,982  |              |         |          | 18,958  |         
|Discontinued operations                            |                                                               |                                    | 1,657   |              |         |          | 1,212   |         
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | Total current liabilities          |         |              | 49,196  |          |         |          | 55,539  | 
|                                                   |                                                               |                                    |         |              |         |          |         |         
|Long-Term Debt                                     |                                                               |                                    | 148,402 |              |         |          | 152,526 |         
|Deferred Income Taxes                              |                                                               |                                    | 39,601  |              |         |          | 37,262  |         
|Shareholders Equity -                             |                                                               |                                    |         |              |         |          |         |         
|                                                   | Common stock ($1 par, 19,988,078 shares issued)               |                                    |         | 19,988       |         |          |         | 19,988   |        
|                                                   | Paid-in-capital                                               |                                    |         | 57,058       |         |          |         | 57,331   |        
|                                                   | Unearned compensation  unvested restricted stock             |                                    |         | (490         | )       |          |         | (385     | )      
|                                                   | Accumulated other comprehensive income                        |                                    |         | 73           |         |          |         |         |        
|                                                   | Retained earnings                                             |                                    |         | 133,301      |         |          |         | 126,969  |        
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               |                                    | 209,930 |              |         |          | 203,903 |         
|                                                   | Less  -  Treasury stock (366,139 and 451,185 shares, at cost) |                                    |         | (6,322       | )       |          |         | (7,375   | )      
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | Total shareholders equity         |         |              | 203,608 |          |         |          | 196,528 | 
|                                                   |                                                               |                                    |         |              |         |          |         |         
|                                                   |                                                               | $                                  | 440,807 |              |         | $        | 441,855 |         
|                                                   |                                                               |                                    |         |              |         |          |         |         

See accompanying notes to consolidated financial statements.

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ELKCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, $ in thousands
except per share data)

|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |        |         |     |        |  
|----------------------------------------- | ------------------------------- | ------------------------------------ | ----------------------------------------- | ------ | ------ | ------------------ | ------- | ---------------- | ------ | ---- | ------- | ------ | ------- | ---- | ------- | ------ | ------- | --- | ------ | -
|                                          |                                 |                                      |                                           |        |        | Three Months Ended |         | Six Months Ended
|                                          |                                 |                                      |                                           |        |        | December 31,       |         | December 31,    
|                                          |                                 |                                      |                                           |        |        |                    |         |                 
|                                          |                                 |                                      |                                           |        |        | 2003               |         | 2002             |        | 2003 |         | 2002  
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |       
|Sales                                     |                                 | $                                    | 123,208                                   |        |        | $                  | 102,545 |                  |        | $    | 282,947 |        |         | $    | 218,023 |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Cost and Expenses                         |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 | Cost of sales                        |                                           |        | 95,950 |                    |         |                  | 83,688 |      |         |        | 222,541 |      |         |        | 174,911 |    
|                                          |                                 | Selling, general and administrative: |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |        |         |     |       
|                                          |                                 |                                      | Other selling, general and administrative |        |        |                    | 14,514  |                  |        |      | 13,239  |        |         |      | 30,080  |        |         |     | 26,480 |  
|                                          |                                 |                                      | Noncash stock option compensation         |        |        |                    |        |                  |        |      |        |        |         |      |        |        |         |     | (5,378 | )
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Income from Operations                    |                                 |                                      | 12,744                                    |        |        |                    | 5,618   |                  |        |      | 30,326  |        |         |      | 22,010  |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Interest Expense, Net                     |                                 |                                      | 1,331                                     |        |        |                    | 1,373   |                  |        |      | 2,714   |        |         |      | 3,053   |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Income From Continuing Operations         |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          | Before Income Taxes             |                                      |                                           | 11,413 |        |                    |         | 4,245            |        |      |         | 27,612 |         |      |         | 18,957 |        
|                                          |                                 | Provision for income taxes           |                                           |        | 4,399  |                    |         |                  | 1,652  |      |         |        | 10,541  |      |         |        | 7,068   |    
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Income From Continuing Operations         |                                 |                                      | 7,014                                     |        |        |                    | 2,593   |                  |        |      | 17,071  |        |         |      | 11,889  |       
|Income (Loss) From Discontinued           |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          | Operations, Net of Income Taxes |                                      |                                           | (7,857 | )      |                    |         | 223              |        |      |         | (8,777 | )       |      |         | (77    | )      
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Net Income (Loss)                         |                                 | $                                    | (843                                      | )      |        | $                  | 2,816   |                  |        | $    | 8,294   |        |         | $    | 11,812  |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Income (Loss) Per Share  Basic           |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 |                                      | Income from continuing operations         |        | $      | .36                |         |                  | $      | .13  |         |        | $       | .87  |         |        | $       | .61 |       
|                                          |                                 |                                      | Discontinued operations                   |        |        | (.40               | )       |                  |        | .01  |         |        |         | (.45 | )       |        |         |    |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 |                                      | Net income (loss)                         |        | $      | (.04               | )       |                  | $      | .14  |         |        | $       | .42  |         |        | $       | .61 |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Income (Loss) Per Share  Diluted         |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 |                                      | Income from continuing operations         |        | $      | .35                |         |                  | $      | .13  |         |        | $       | .86  |         |        | $       | .60 |       
|                                          |                                 |                                      | Discontinued operations                   |        |        | (.39               | )       |                  |        | .01  |         |        |         | (.44 | )       |        |         |    |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 |                                      | Net income (loss)                         |        | $      | (.04               | )       |                  | $      | .14  |         |        | $       | .42  |         |        | $       | .60 |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Dividends Per Common Share                |                                 | $                                    | .05                                       |        |        | $                  | .05     |                  |        | $    | .10     |        |         | $    | .10     |       
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|Average Common Shares Outstanding (000s) |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 | Basic                                |                                           |        | 19,587 |                    |         |                  | 19,484 |      |         |        | 19,566  |      |         |        | 19,473  |    
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       
|                                          |                                 | Diluted                              |                                           |        | 19,909 |                    |         |                  | 19,580 |      |         |        | 19,866  |      |         |        | 19,587  |    
|                                          |                                 |                                      |                                           |        |        |                    |         |                  |        |      |         |        |         |      |         |       

See accompanying notes to consolidated financial statements.

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ELKCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, $ in thousands)

|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |      |         |         |         |  
|---------------------------------------------- |  | --------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------- | ------- | ---------------- | ------ | ---- | ------- | ------- | ------- | -
|                                               |  |                                                                                                           |                                              |                                          |         | Six Months Ended
|                                               |  |                                                                                                           |                                              |                                          |         | December 31,    
|                                               |  |                                                                                                           |                                              |                                          |         |                 
|                                               |  |                                                                                                           |                                              |                                          |         | 2003             |        | 2002
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|Cash Flows From Operating Activities           |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  | Income from continuing operations                                                                         |                                              | $                                        | 17,071  |                  |        | $    | 11,889  |        
|                                               |  | Adjustments to reconcile income from continuing
operations to net cash provided by continuing
operations: |                                              |                                          |         |                  |        |      |         |        
|                                               |  |                                                                                                           | Depreciation and amortization                |                                          |         | 8,797            |        |      |         | 8,523   |        
|                                               |  |                                                                                                           | Deferred income taxes                        |                                          |         | 898              |        |      |         | 3,358   |        
|                                               |  |                                                                                                           | Changes in assets and liabilities:           |                                          |         |                  |        |      |         |         |        
|                                               |  |                                                                                                           |                                              | Trade receivables                        |         |                  | 37,135 |      |         |         | 27,401  |  
|                                               |  |                                                                                                           |                                              | Inventories                              |         |                  | 1,561  |      |         |         | (15,067 | )
|                                               |  |                                                                                                           |                                              | Prepaid expenses and other               |         |                  | (809   | )    |         |         | 1       |  
|                                               |  |                                                                                                           |                                              | Accounts payable and accrued liabilities |         |                  | (6,788 | )    |         |         | (8,191  | )
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  |                                                                                                           | Net cash provided by continuing operations   |                                          |         | 57,865           |        |      |         | 27,914  |        
|                                               |  |                                                                                                           | Net cash provided by discontinued operations |                                          |         | 2,987            |        |      |         | 1,101   |        
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  |                                                                                                           | Net cash provided by operating activities    |                                          |         | 60,852           |        |      |         | 29,015  |        
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|Cash Flows From Investing Activities           |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  | Additions to property, plant and equipment                                                                |                                              |                                          | (33,378 | )                |        |      | (19,292 | )      
|                                               |  | Acquisition of business                                                                                   |                                              |                                          |        |                  |        |      | (2,224  | )      
|                                               |  | Other                                                                                                     |                                              |                                          | (245    | )                |        |      | (324    | )      
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  |                                                                                                           | Net cash used for investing activities       |                                          |         | (33,623          | )      |      |         | (21,840 | )      
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|Cash Flows From Financing Activities           |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  | Dividends on common stock                                                                                 |                                              |                                          | (1,962  | )                |        |      | (1,948  | )      
|                                               |  | Proceeds from stock option purchases                                                                      |                                              |                                          | 749     |                  |        |      | 141     |        
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|                                               |  |                                                                                                           | Net cash used for financing activities       |                                          |         | (1,213           | )      |      |         | (1,807  | )      
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|Net Increase in Cash and Cash Equivalents      |  |                                                                                                           | 26,016                                       |                                          |         |                  | 5,368  |     
|Cash and Cash Equivalents at Beginning of Year |  |                                                                                                           | 5,056                                        |                                          |         |                  | 12,436 |     
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     
|Cash and Cash Equivalents at End of Period     |  | $                                                                                                         | 31,072                                       |                                          |         | $                | 17,804 |     
|                                               |  |                                                                                                           |                                              |                                          |         |                  |        |     

See accompanying notes to consolidated financial statements.

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ELKCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1  General

The attached condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. As a result, certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. The company believes that the disclosures included
herein are adequate to make the information presented not misleading. These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes included in the
companys Annual Report on Form 10-K for the fiscal year ended June 30, 2003.
The unaudited financial information contained herein has been prepared in
conformity with accounting principles generally accepted in the United States
of America on a consistent basis and does reflect all adjustments (consisting
of normal recurring accruals) which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the
three-month and six-month periods ended December 31, 2003 and 2002. Because of
seasonal, weather-related conditions in some of the companys market areas,
sales can vary at times, and results of any one quarter or other interim
reporting period should not necessarily be considered as indicative of results
for a full fiscal year.

Note 2  Company Segments

The Building Products segment consists of Elk Premium Building Products,
Inc. and its operating subsidiaries (collectively Elk). These companies
manufacture (1) premium laminated fiberglass asphalt shingles, (2) coated and
non-coated nonwoven fabrics used in asphalt shingles and other applications in
the building and construction, filtration, floor coverings and other
industries, and (3) nontoxic composite wood decking, marine dock, and fencing
products. Building Products accounted for 96% or more of consolidated sales
during all periods presented in this Form 10-Q.

Other, Technologies consists of the companys other operations. These
dissimilar operations are combined, as none individually meets the materiality
criteria for separate segment reporting. In fiscal 2003, operating profit from
the companys Engineering, Technologies business, which provides proprietary
technologies and related engineering services to the natural gas processing
industry as Ortloff Engineers, LTD (Ortloff), exceeded 10% of consolidated
operating profit. In accordance with Financial Accounting Standards Board
(FASB) Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures
about Segments of an Enterprise and Related Information, this business was
presented as a separate segment in fiscal 2003 because it exceeded this
quantitative threshold. However, this business has not historically met the
10% reporting test, is not expected to in fiscal 2004, nor will it typically be
expected to in the future. Accordingly, this business is included in Other,
Technologies in fiscal 2004. During the three-month period ended December
2003, the company made the decision to discontinue Cybershield Inc.
(Cybershield) and to sell Cybershield or its assets no later than
December 2004.

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Cybershield had previously been included in Other,
Technologies for segment reporting purposes. Prior periods have been restated
to present Cybershield as a discontinued operation in all periods presented.
Other, Technologies also includes Chromium Corporation (Chromium), which is a
leading provider of hard chrome and other surface finishes designed to extend
the life of steel machinery components operating in abrasive environments. An
additional operation, Elk Technologies, Inc., develops and markets fabrics
featuring VersaShield fire retardant coatings designed for use outside of
traditional building products applications, including home furnishings and
other consumer products. This business has not yet produced significant
commercial sales.

Financial information by company segment is summarized as follows:

|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------------- |  | ------------------ | ------- | ---------------- |  | ---- | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                 |  | (In thousands)     |         | (In thousands)  
|                                                                 |  | Three Months Ended |         | Six Months Ended
|                                                                 |  | December 31,       |         | December 31,    
|                                                                 |  |                    |         |                 
|                                                                 |  | 2003               |         | 2002             |  | 2003 |         | 2002
|                                                                 |  |                    |         |                  |  |      |         |     
|Sales from Continuing Operations                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|Building Products                                                |  | $                  | 119,042 |                  |  | $    | 98,622  |      |  | $ | 276,409 |   |  | $ | 211,938 |  
|Other, Technologies                                              |  |                    | 4,166   |                  |  |      | 3,923   |      |  |   | 6,538   |   |  |   | 6,085   |  
|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|                                                                 |  | $                  | 123,208 |                  |  | $    | 102,545 |      |  | $ | 282,947 |   |  | $ | 218,023 |  
|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|Operating Profit from Continuing Operations                      |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|Building Products                                                |  | $                  | 14,908  |                  |  | $    | 7,491   |      |  | $ | 36,812  |   |  | $ | 21,989  |  
|Other, Technologies                                              |  |                    | 1,315   |                  |  |      | 1,099   |      |  |   | 702     |   |  |   | 537     |  
|Corporate and other, excluding
noncash stock option
compensation |  |                    | (3,479  | )                |  |      | (2,972  | )    |  |   | (7,188  | ) |  |   | (5,894  | )
|Noncash stock option
compensation                                |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   | 5,378   |  
|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|                                                                 |  |                    | 12,744  |                  |  |      | 5,618   |      |  |   | 30,326  |   |  |   | 22,010  |  
|Interest expense, net                                            |  |                    | 1,331   |                  |  |      | 1,373   |      |  |   | 2,714   |   |  |   | 3,053   |  
|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  
|Income from continuing
operations, before income
taxes           |  | $                  | 11,413  |                  |  | $    | 4,245   |      |  | $ | 27,612  |   |  | $ | 18,957  |  
|                                                                 |  |                    |         |                  |  |      |         |      |  |   |         |   |  |   |         |  

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|                              |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|----------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                              |  | (In thousands)     |        | (In thousands)  
|                              |  | Three Months Ended |        | Six Months Ended
|                              |  | December 31,       |        | December 31,    
|                              |  |                    |        |                 
|                              |  | 2003               |        | 2002             |  | 2003 |        | 2002
|                              |  |                    |        |                  |  |      |        |     
|Depreciation and Amortization |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|Building Products             |  | $                  | 3,621  |                  |  | $    | 3,413  |      |  | $ | 7,172  |  |  | $ | 6,828  | 
|Other, Technologies           |  |                    | 139    |                  |  |      | 168    |      |  |   | 325    |  |  |   | 337    | 
|Corporate                     |  |                    | 670    |                  |  |      | 675    |      |  |   | 1,300  |  |  |   | 1,358  | 
|                              |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|                              |  | $                  | 4,430  |                  |  | $    | 4,256  |      |  | $ | 8,797  |  |  | $ | 8,523  | 
|                              |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|Capital Expenditures          |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|Building Products             |  | $                  | 15,006 |                  |  |      | 11,570 |      |  | $ | 30,574 |  |  | $ | 18,564 | 
|Other, Technologies           |  |                    | 21     |                  |  |      | 41     |      |  |   | 140    |  |  |   | 138    | 
|Corporate                     |  |                    | 1,238  |                  |  |      | 155    |      |  |   | 2,664  |  |  |   | 590    | 
|                              |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|                              |  | $                  | 16,265 |                  |  | $    | 11,766 |      |  | $ | 33,378 |  |  | $ | 19,292 | 
|                              |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 

|                        |  |          |         |          |  |   |         | 
|----------------------- |  | -------- | ------- | -------- |  | - | ------- | 
|                        |  | December |         | June 30,
|                        |  | 31, 2003 |         | 2003    
|                        |  |          |         |         
|Identifiable Assets     |  |          |         |          |  |   |         | 
|Building Products       |  | $        | 360,494 |          |  | $ | 376,110 | 
|Other, Technologies     |  |          | 18,313  |          |  |   | 18,582  | 
|Corporate               |  |          | 59,359  |          |  |   | 33,014  | 
|Discontinued Operations |  |          | 2,641   |          |  |   | 14,149  | 
|                        |  |          |         |          |  |   |         | 
|                        |  | $        | 440,807 |          |  | $ | 441,855 | 
|                        |  |          |         |          |  |   |         | 

Note 3  Product Sales

The following table summarizes sales from continuing operations by product
category, excluding intercompany sales, for the three-month and six-month
periods ended December 31, 2003 and December 31, 2002:

|                                         |  |                    |         |                  |  |      |         |      |  |   |         |  |  |   |         | 
|---------------------------------------- |  | ------------------ | ------- | ---------------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                         |  | (In thousands)     |         | (In thousands)  
|                                         |  | Three Months Ended |         | Six Months Ended
|                                         |  | December 31,       |         | December 31,    
|                                         |  |                    |         |                 
|                                         |  | 2003               |         | 2002             |  | 2003 |         | 2002
|                                         |  |                    |         |                  |  |      |         |     
|Premium roofing                          |  | $                  | 111,139 |                  |  | $    | 92,814  |      |  | $ | 258,800 |  |  | $ | 197,821 | 
|Performance nonwoven fabrics             |  |                    | 6,492   |                  |  |      | 5,725   |      |  |   | 15,466  |  |  |   | 14,034  | 
|Composite building products              |  |                    | 1,411   |                  |  |      | 83      |      |  |   | 2,143   |  |  |   | 83      | 
|Technology licensing and consulting fees |  |                    | 2,437   |                  |  |      | 2,057   |      |  |   | 2,887   |  |  |   | 2,253   | 
|Hard chrome and other surface finishes   |  |                    | 1,729   |                  |  |      | 1,866   |      |  |   | 3,651   |  |  |   | 3,832   | 
|                                         |  |                    |         |                  |  |      |         |      |  |   |         |  |  |   |         | 
|                                         |  | $                  | 123,208 |                  |  | $    | 102,545 |      |  | $ | 282,947 |  |  | $ | 218,023 | 
|                                         |  |                    |         |                  |  |      |         |      |  |   |         |  |  |   |         | 

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Note 4  Earnings (Loss) Per Share

Basic earnings (loss) per share is computed based on the average number
of common shares outstanding. Diluted earnings (loss) per share includes
outstanding stock options and restricted shares. In accordance with SFAS
No. 128, Earnings per Share, diluted earnings (loss) per share and diluted
earnings (loss) per share from discontinued operations presented on the
Consolidated Statements of Operations were computed utilizing the same
number of potential common shares used in computing the diluted per share
amount for income from continuing operations, regardless of whether those
amounts were antidilutive to their respective basic per share amounts. The
following table sets forth the computation of basic and diluted earnings per
share from continuing operations:

|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | - | ------------------ | --- | ---------------- | - | --------- | -- | ---- | - | ------- | --- |  | - | --------- | --- | 
|                                                                                                                                                                                                                           |                                              |   | ($ In thousands)   |     | ($ In thousands)
|                                                                                                                                                                                                                           |                                              |   | Three Months Ended |     | Six Months Ended
|                                                                                                                                                                                                                           |                                              |   | December 31,       |     | December 31,    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                 
|                                                                                                                                                                                                                           |                                              |   | 2003               |     | 2002             |   | 2003      |    | 2002
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |     
|Income from continuing
operations                                                                                                                                                                                          |                                              | $ | 7,014              |     |                  | $ | 2,593     |    |      | $ | 17,071  |     |  | $ | 11,889    |    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|Denominator for basic earnings
per share  weighted average
shares outstanding                                                                                                                                             |                                              |   | 19,587             |     |                  |   | 19,484    |    |      |   | 19,566  |     |  |   | 19,473    |    
|Effect of dilutive securities:                                                                                                                                                                                             |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|                                                                                                                                                                                                                           | Restricted shares and
employee stock options |   |                    | 322 |                  |   |           | 96 |      |   |         | 300 |  |   |           | 114 | 
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|Denominator for dilutive
earnings per share  adjusted
weighted average shares and
assumed issuance of shares
purchased under incentive
stock option plan and vesting
of restricted shares using the
treasury stock method |                                              |   | 19,909             |     |                  |   | 19,580    |    |      |   | 19,866  |     |  |   | 19,587    |    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|Basic earnings per share
from continuing operations                                                                                                                                                                        |                                              | $ | .36                |     |                  | $ | .13       |    |      | $ | .87     |     |  | $ | .61       |    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|Diluted earnings per share
from continuing operations                                                                                                                                                                      |                                              | $ | .35                |     |                  | $ | .13       |    |      | $ | .86     |     |  | $ | .60       |    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    
|Stock options excluded from
computation of diluted
earnings per share due to
anti-dilutive effect                                                                                                                          |                                              |   | 728,630            |     |                  |   | 1,666,237 |    |      |   | 727,630 |     |  |   | 1,602,723 |    
|                                                                                                                                                                                                                           |                                              |   |                    |     |                  |   |           |    |      |   |         |     |  |   |           |    

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Note 5  Accounting for Stock-Based Compensation

The company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, and its related interpretations to measure compensation expense
for stock-based compensation plans. Refer to Note 6  Noncash Stock Option
Compensation on page 9 of this Form 10-Q for a more detailed description of
the companys application of APB No. 25. If compensation cost for
stock-based compensation plans had been determined under SFAS No. 123, pro
forma net income, stock option compensation expense, and basic and diluted
earnings per common share for the three-month and six-month periods ended
December 31, 2003 and 2002, assuming all options granted in 1996 and
thereafter were valued at grant date using the Black-Scholes model, would
have been as follows (in thousands, except per share amounts):

|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |        |  
|--------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | ---- | ---------------- | - | ----- | ---- | ---- | - | ----- | ------ | - | - | ------ | ------ | -
|                                  |                                                                                                                                                          |   | Three Months Ended |      | Six Months Ended
|                                  |                                                                                                                                                          |   | December 31,       |      | December 31,    
|                                  |                                                                                                                                                          |   |                    |      |                 
|                                  |                                                                                                                                                          |   | 2003               |      | 2002             |   | 2003  |      | 2002
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |     
|Net income (loss) as reported     |                                                                                                                                                          | $ | (843               | )    |                  | $ | 2,816 |      |      | $ | 8,294 |        |   | $ | 11,812 |       
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|Add:                              | Stock-based employee
compensation expense
(benefit) included in
reported net income, net of
related tax effects                                          |   |                    |     |                  |   |       |     |      |   |       |       |   |   |        | (3,496 | )
|Deduct:                           | Total stock-based
compensation expense
determined under fair value
based method for all awards
granted since January 1,
1996, net of related tax
effects |   |                    | (797 | )                |   |       | (654 | )    |   |       | (1,351 | ) |   |        | (1,168 | )
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|Pro forma earnings (loss)         |                                                                                                                                                          | $ | (1,640             | )    |                  | $ | 2,162 |      |      | $ | 6,943 |        |   | $ | 7,148  |       
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|Earnings (loss) per common share: |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|                                  | Basic  as reported                                                                                                                                      |   | $                  | (.04 | )                |   | $     | .14  |      |   | $     | .42    |   |   | $      | .61    |  
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|                                  | Basic  pro forma                                                                                                                                        |   | $                  | (.08 | )                |   | $     | .11  |      |   | $     | .35    |   |   | $      | .37    |  
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|                                  | Diluted  as reported                                                                                                                                    |   | $                  | (.04 | )                |   | $     | .14  |      |   | $     | .42    |   |   | $      | .60    |  
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       
|                                  | Diluted  pro forma                                                                                                                                      |   | $                  | (.08 | )                |   | $     | .11  |      |   | $     | .35    |   |   | $      | .36    |  
|                                  |                                                                                                                                                          |   |                    |      |                  |   |       |      |      |   |       |        |   |   |        |       

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Note 6  Noncash Stock Option Compensation

The companys 1998 Incentive Stock Option Plan contained a cashless
exercise provision that permitted an optionee to relinquish vested options to
the company in exchange for common shares having a current market value equal
to the net exercised market value of the relinquished options. Under APB No.
25, the aforementioned cashless relinquishment feature can cause options issued
under the 1998 Plan to be considered stock appreciation rights (SARs) in
substance, if not in form, unless past experience and economic incentives
indicate that optionees are more likely to exercise, rather than relinquish,
the options. Under APB No. 25, SARs are accounted for using variable
accounting whereby income is charged (or credited) during each accounting
period to reflect any excess of the market value of shares underlying vested
SARs, over the exercise price of vested SARs.

It was never the companys intention to issue SARs under the 1998 Plan.
In keeping with the companys original intent, effective August 13, 2002, the
Compensation Committee of the Board of Directors terminated the availability of
the relinquishment alternative under the 1998 Plan. Based on this action,
together with a decline in the companys share price subsequent to June 30,
2002, the company recorded a reversal of fiscal 2002 noncash stock option
compensation expense of $5,378,000 in the first quarter of fiscal 2003.
Subsequent to August 13, 2002, the company is again utilizing the fixed
method of stock option accounting.

Note 7  Comprehensive Income (Loss)

Total comprehensive income (loss) for the three-month and six-month
periods ended December 31, 2003 and 2002 was as follows:

|                                  |  |                    |      |                  |  |      |       |      |  |   |       |  |  |   |        |  
|--------------------------------- |  | ------------------ | ---- | ---------------- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ------ | -
|                                  |  | (In thousands)     |      | (In thousands)  
|                                  |  | Three Months Ended |      | Six Months Ended
|                                  |  | December 31,       |      | December 31,    
|                                  |  |                    |      |                 
|                                  |  | 2003               |      | 2002             |  | 2003 |       | 2002
|                                  |  |                    |      |                  |  |      |       |     
|Net income (loss)                 |  | $                  | (843 | )                |  | $    | 2,816 |      |  | $ | 8,294 |  |  | $ | 11,812 |  
|Derivative transactions           |  |                    | 73   |                  |  |      | (15   | )    |  |   | 73    |  |  |   | (31    | )
|                                  |  |                    |      |                  |  |      |       |      |  |   |       |  |  |   |        |  
|Total comprehensive income (loss) |  | $                  | (770 | )                |  | $    | 2,801 |      |  | $ | 8,367 |  |  | $ | 11,781 |  
|                                  |  |                    |      |                  |  |      |       |      |  |   |       |  |  |   |        |  

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Note 8  Long-Term Debt

Senior Notes (Notes) having a principal balance of $145,000,000 were
outstanding at December 31, 2003 and June 30, 2003. In June 2002, the
company entered into an interest rate swap to effectively convert the
interest rate from fixed to floating on $60,000,000 of debt through 2012.
For this fair value hedge, both the fair value of the derivative and the
underlying hedged item are reported in the balance sheet. Changes in the
fair value of the derivative and the underlying hedged item offset and are
recorded each period in other income or expense, as applicable.
Accordingly, long-term debt reflected on the balance sheet is summarized as
follows:

|                                 |  |              |         |          |  |   |         | 
|-------------------------------- |  | ------------ | ------- | -------- |  | - | ------- | 
|                                 |  | December 31, |         | June 30,
|(In thousands)                   |  | 2003         |         | 2003    
|                                 |  |              |         |         
|Senior Notes  principal balance |  | $            | 145,000 |          |  | $ | 145,000 | 
|Fair value of interest rate swap |  |              | 3,402   |          |  |   | 7,526   | 
|                                 |  |              |         |          |  |   |         | 
|                                 |  | $            | 148,402 |          |  | $ | 152,526 | 
|                                 |  |              |         |          |  |   |         | 

At June 30, 2003 the company also had $100,000,000 of primary credit
available under a Revolving Credit Facility (Facility), including up to a
maximum of $10,000,000 in letters of credit through November 30, 2005. On
December 5, 2003, the Facility was increased to $110,000,000 of primary
credit, with no change to the maximum amount in letters of credit, and the
expiration date was extended to November 30, 2008. There were no changes to
the financial covenants or other significant provisions of the Facility. No
borrowings were outstanding on the Facility at December 31, 2003 or June 30,
2003, although letters of credit totaling $2,597,000 were outstanding at
both dates.

Note 9  Product Warranties

The company provides its customers with limited warranties on certain
products. Limited warranties relating to products sold by the Building
Products segment generally range from 20 to 50 years. Warranties relating
to the Other, Technologies companies are not significant to their
operations. Warranty reserves are established based on known or probable
claims, together with historical experience factors. The company
periodically assesses the adequacy of its recorded warranty liability and
adjusts the amount as necessary. Changes in the companys warranty
liability during the current year period were as follows:

|                             |  |           |        |  
|---------------------------- |  | --------- | ------ | -
|                             |  | Warranty 
|(In thousands)               |  | Liability
|                             |  |          
|Balance at June 30, 2003     |  | $         | 2,675  |  
|Amounts charged to expense   |  |           | 1,221  |  
|Warranty settlements         |  |           | (1,125 | )
|                             |  |           |        |  
|Balance at December 31, 2003 |  | $         | 2,771  |  
|                             |  |           |        |  

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Note 10  Environmental Risk

Chromium has engaged in limited remediation activities at its former
plating operation, which is located on the site of Cybershields Lufkin,
Texas manufacturing facility. Soil sampling results from a pre-closing
environmental evaluation of the site indicated the necessity of localized
cleanup. Chromium has entered the property into the Texas Voluntary Cleanup
Program (VCP). Under this program, the Texas Commission on Environmental
Quality (TCEQ) reviews the voluntary cleanup plan the applicant submits,
and, when the work is complete, issues a certificate of completion,
evidencing cleanup to levels protective of human health and the environment
and releasing prospective purchasers and lenders from liability to the
state. Properties entered into the VCP are protected from TCEQ enforcement
actions.

Under the VCP, Chromium submitted a testing program, which the TCEQ has
approved, for a supplemental groundwater and soil assessment at the facility.
This program was designed to, among other things, further define the cleanup
requirements at the site. Once the investigation is complete, Chromium intends
to clean up the site under the VCP to a site specific risk-based cleanup
standard as prescribed by the Texas Risk Reduction Program. Preliminary
results from recent groundwater and soil assessments indicate that there has
been no environmental impairment beyond company property boundaries or to any
groundwater. However, until Chromium has the final results from its
supplemental assessment and completes its cleanup plan, the estimate of costs
to remediate the site are not determinable, nor can the company determine at
this point in time if it is reasonably possible that it will incur material
additional costs at the site. If a remediation plan similar to a plan
successfully used at another Chromium plant is approved by TCEQ, remediation
costs will be immaterial to the companys consolidated results of operations,
financial position and liquidity. However, other potential scenarios, none of
which are reasonably expected at this time, could potentially result in
material costs to the company. The company previously reported that an
estimate of exposure might be determinable by December 31, 2003.
However, hydrological testing is not complete and continues. It is
not possible to estimate potential environmental exposure until this
testing is complete. The company believes that sufficient information
for establishing a reserve for this environmental exposure in accordance with
SFAS No. 5,Accounting for Contingencies, may be available by the end of
the first quarter of fiscal 2005, and further anticipates that it may be in a position at that time
to determine if it is reasonably possible that the company will incur material
additional costs with regard to this site.

The companys operations are subject to extensive federal, state and local
laws and regulations relating to environmental matters. Other than the
possible costs associated with the previously described Chromium matter, the
company does not believe it will be required to expend amounts which will have
a material adverse effect on the companys consolidated financial position or
results of operations by reason of environmental laws and regulations. Such
laws and regulations are frequently changed and could result in significantly
increased cost of compliance. Further, certain of the companys manufacturing
operations utilize hazardous materials in their production processes. As a
result, the company incurs costs for recycling or disposal of such materials
and may incur costs for remediation activities at its facilities and off-site
from time to time. The company establishes and maintains reserves for such
known or probable remediation activities in accordance with SFAS No. 5.

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Note 11  Income Taxes

In August 2003, the Internal Revenue Service (IRS) completed audits of the
companys consolidated tax returns through fiscal 2001. A notice of proposed
adjustment disallowing the timing of certain deductions for tax years 1998
through 2001 was rendered in connection with these audits. In December 2003,
the company reached a tentative agreement with the IRS. The tentative
agreement had no impact on net income (loss) or earnings (loss) per share. The
deferred tax balance and income tax receivable were each reduced by
approximately $400,000 at December 31, 2003 to reflect the tentative agreement.

Note 12  Discontinued Operations

In December 2003, company management and the Board of Directors concluded
that the risk and prospects for future success of Cybershield do not justify
the additional investment of capital and other resources that would be required
to continue Cybershields operations. Accordingly, the decision was made to
discontinue Cybershields operations and to sell Cybershield or its assets.
The company expects that the sale of Cybershield or its assets will be
completed no later than December 2004. As a result, Cybershield is classified
as a discontinued operation in the Condensed Consolidated Financial Statements
pursuant to SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Cybershield had previously been included in Other,
Technologies for segment reporting purposes, and prior periods have been
restated to present Cybershield as a discontinued operation in all periods
presented.

In the three-month and six-month periods ended December 31, 2003, the
company reported losses from discontinued operations of $7,857,000 and
$8,777,000, net of tax. Included in these losses was a write-down of
Cybershields net assets to a fair market value of $984,000. In accordance
with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, other costs to exit or dispose of Cybershield, including severance
costs, termination of contractual obligations, and ongoing plant costs will be
recorded as liabilities are incurred, most of which are expected to be incurred
during the remainder of fiscal 2004.

Net assets of discontinued operations at December 31, 2003 ($000) are
summarized as follows:

|                     |                                          |  |       |       | 
|-------------------- | ---------------------------------------- |  | ----- | ----- | 
|Current Assets:      |                                          |  |       |      
|                     | Trade receivables                        |  | $     | 1,189 | 
|                     | Inventory                                |  |       | 525   | 
|                     | Long-lived assets held for sale          |  |       | 551   | 
|                     | Other                                    |  |       | 376   | 
|                     |                                          |  |       |       | 
|                     |                                          |  | 2,641 |      
|                     |                                          |  |       |       | 
|Current Liabilities: |                                          |  |       |      
|                     | Accounts payable and accrued liabilities |  |       | 1,657 | 
|                     |                                          |  |       |       | 
|                     | Net Assets                               |  | $     | 984   | 
|                     |                                          |  |       |       | 

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Summary operating results of discontinued operations are summarized as follows:

|                                               |  |                    |         |                  |  |      |       |      |  |   |         |   |  |   |        |  
|---------------------------------------------- |  | ------------------ | ------- | ---------------- |  | ---- | ----- | ---- |  | - | ------- | - |  | - | ------ | -
|                                               |  | (In thousands)     |         | (In thousands)  
|                                               |  | Three Months Ended |         | Six Months Ended
|                                               |  | December 31,       |         | December 31,    
|                                               |  |                    |         |                 
|                                               |  | 2003               |         | 2002             |  | 2003 |       | 2002
|                                               |  |                    |         |                  |  |      |       |     
|Sales                                          |  | $                  | 3,066   |                  |  | $    | 6,518 |      |  | $ | 4,671   |   |  | $ | 11,122 |  
|Cost of sales                                  |  |                    | 3,980   |                  |  |      | 5,444 |      |  |   | 6,343   |   |  |   | 9,648  |  
|Selling, general and
administrative            |  |                    | 678     |                  |  |      | 731   |      |  |   | 1,335   |   |  |   | 1,592  |  
|Write-down of assets                           |  |                    | 10,496  |                  |  |      |      |      |  |   | 10,496  |   |  |   |       |  
|                                               |  |                    |         |                  |  |      |       |      |  |   |         |   |  |   |        |  
|Operating income (loss)                        |  |                    | (12,088 | )                |  |      | 343   |      |  |   | (13,503 | ) |  |   | (118   | )
|Provision (credit) for income
taxes            |  |                    | (4,231  | )                |  |      | 120   |      |  |   | (4,726  | ) |  |   | (41    | )
|                                               |  |                    |         |                  |  |      |       |      |  |   |         |   |  |   |        |  
|Net income (loss) from
discontinued operations |  | $                  | (7,857  | )                |  | $    | 223   |      |  | $ | (8,777  | ) |  | $ | (77    | )
|                                               |  |                    |         |                  |  |      |       |      |  |   |         |   |  |   |        |  

Note 13  New Accounting Standards

SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and
Hedging Activities, amends and clarifies financial accounting and reporting
for derivative instruments, including certain derivative instruments embedded
in other contracts and for hedging activities under SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities. It is effective for
contracts entered into or modified after June 30, 2003, except as stated within
the statement, and should be applied prospectively. The company does not
expect this statement to have a material effect on its financial statements.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

This discussion summarizes the significant factors affecting the
consolidated results of operations and financial condition of the company for
the periods ended December 31, 2003 and December 31, 2002. The discussion
should be read in conjunction with the Consolidated Condensed Financial
Statements and Notes to Consolidated Condensed Financial Statements included in
this quarterly report on Form 10-Q. For further information, refer to the
Consolidated Financial Statements and Notes to Consolidated Financial
Statements included in the companys annual report on Form 10-K for the year
ended June 30, 2003.

The following table and subsequent discussions set forth operating data
from continuing operations of the company as a percentage of net sales for the
periods indicated. The following discussion and analysis should be read in
conjunction with the Condensed Consolidated Financial Statements and Notes to
Consolidated Condensed Financial Statements included elsewhere herein.

|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |      |  
|----------------------------------------------------- | ----------------------------------------- |  | ------------------ | ---- | ---------------- |  | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- | -
|                                                      |                                           |  | Three Months Ended |      | Six Months Ended
|                                                      |                                           |  | December 31,       |      | December 31,    
|                                                      |                                           |  |                    |      |                 
|                                                      |                                           |  | 2003               |      | 2002             |  | 2003  |      | 2002
|                                                      |                                           |  |                    |      |                  |  |       |      |     
|Sales                                                 |                                           |  | 100.0              | %    |                  |  | 100.0 | %    |      |  | 100.0 | %    |  |  | 100.0 | %   
|Cost of sales                                         |                                           |  | 77.9               |      |                  |  | 81.6  |      |      |  | 78.7  |      |  |  | 80.2  |     
|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     
|                                                      | Gross margin                              |  |                    | 22.1 |                  |  |       | 18.4 |      |  |       | 21.3 |  |  |       | 19.8 |  
|Selling, general and
administrative:                  |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     
|                                                      | Other selling, general and
administrative |  |                    | 11.8 |                  |  |       | 12.9 |      |  |       | 10.6 |  |  |       | 12.2 |  
|                                                      | Noncash stock option
compensation         |  |                    |     |                  |  |       |     |      |  |       |     |  |  |       | (2.5 | )
|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     
|                                                      | Income from operations                    |  |                    | 10.3 |                  |  |       | 5.5  |      |  |       | 10.7 |  |  |       | 10.1 |  
|Interest expense, net                                 |                                           |  | 1.0                |      |                  |  | 1.4   |      |      |  | 0.9   |      |  |  | 1.4   |     
|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     
|Income from continuing
operations before income taxes |                                           |  | 9.3                |      |                  |  | 4.1   |      |      |  | 9.8   |      |  |  | 8.7   |     
|Provision for income taxes                            |                                           |  | 3.6                |      |                  |  | 1.6   |      |      |  | 3.8   |      |  |  | 3.3   |     
|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     
|Income from continuing operations                     |                                           |  | 5.7                | %    |                  |  | 2.5   | %    |      |  | 6.0   | %    |  |  | 5.4   | %   
|                                                      |                                           |  |                    |      |                  |  |       |      |      |  |       |      |  |  |       |     

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CHANGES IN THE THREE-MONTH PERIOD ENDED DECEMBER 31, 2003 COMPARED TO THE
THREE-MONTH PERIOD ENDED DECEMBER 31, 2002.

Overall Performance

Sales from continuing operations of $123,208,000 during the three-month
period ended December 31, 2003 (fiscal 2004) were 20.2% higher than
$102,545,000 in the same period of the prior fiscal year (fiscal 2003). During
the three-month period ended December 31, 2003, operating income from
continuing operations of $12,744,000 was 126.8% higher than $5,618,000 for the
same period last year.

The relationship of costs of sales to sales improved during the current
year quarter compared to the prior year, as significantly better shingle
pricing was achieved relative to asphalt and other raw materials costs.
Although other selling, general and administrative costs (Other SG&A) increased
9.6% year-to-year, due primarily to increased business activity, the
relationship of Other SG&A to sales improved in the current year quarter
compared to the same period in the prior fiscal year.

In December 2003, the companys management and Board of Directors made the
decision to exit Cybershields plastic metallization business. Cybershields
results for all periods presented are reported as discontinued operations.
Discontinued operations for the three-month period ended December 31, 2003
included a $1,592,000 pretax loss from operations, combined with pretax,
noncash write-downs of $10,496,000 to reduce the book value of Cybershields
assets to fair value. For the three-month period ended December 31, 2002,
Cybershield reported a $343,000 operating profit.

Interest expense, net, was $1,331,000 in the second quarter of fiscal 2004
compared to $1,373,000 in the same prior year period. In the second quarter of
fiscal 2004, interest expense of $735,000 was capitalized related to the
construction of an additional shingle plant in Tuscaloosa, Alabama, and other
significant capital projects. In the second quarter of fiscal 2003, $201,000
of interest was capitalized.

The companys effective tax rate for continuing operations was 38.5%
during the second quarter of fiscal 2004 compared to 38.9% for the same period
in fiscal 2003. For the full fiscal year 2004, the company expects the
effective tax rate from continuing operations to approximate 38.2%.

Results of Business Segments

Sales in the Building Products segment increased 20.7% to $119,042,000 for
the three months ended December 31, 2003 compared to $98,622,000 in the same
prior year period. The significant year-to-year increase in sales is primarily
the result of an $18,325,000 increase in premium roofing sales. Compared to
the same quarter last year, unit shingle shipments increased 11.6%. Average
shingle pricing increased approximately 6.6% compared to the year-ago quarter.
For the three-month period ended December 31, 2003, external sales of
performance nonwoven fabrics increased $767,000, or 13.4%, compared to the
second quarter last year. Sales of composite building products were $1,411,000
in the second quarter of fiscal 2004. The company entered the composite wood
business during the second quarter of fiscal 2003, but had only $83,000 of
sales in the prior year quarter.

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Operating income for the Building Products segment of $14,908,000 for the
three-month period ended December 31, 2003 increased 99.0% compared to
$7,491,000 achieved in the same three-month period of fiscal 2003. Even though
unit asphalt costs in the current year quarter were 2.3% higher than in the
same quarter last year, significantly better shingle pricing relative to
asphalt and other raw material costs, higher shingle and related internal
nonwoven volumes, and lower glass fiber costs were largely responsible for the
year-to-year profit improvement.

Operating income gains attributable to higher premium roofing product
sales were partially offset by an operating loss of approximately $1,000,000
for the composite wood business during the second quarter of fiscal 2004,
compared to an operating loss of approximately $500,000 in last years second
quarter. Sales of composite wood products during the seasonally slower quarter
ended December 31, 2003 were nearly double those of the immediately preceding
first quarter of fiscal 2004, as the companys CrossTimbers brand of composite
decking and fencing products became more established in distribution channels.
Manufacturing efficiency continued to improve in the three-month period ended
December 31, 2003, and production of a new generation, lighter-weight, voided
product began during the quarter. The new product design reduces weight,
without sacrificing product strength, while significantly reducing costs.
Although sales improved sequentially from the first quarter to the second
quarter of fiscal 2004, the sale of higher cost inventories, manufactured in
previous quarters, inhibited significant profit improvement during the second
quarter of fiscal 2004. Management expects a migration of its inventories from
previously manufactured products to this new higher margin product by the
fourth quarter of fiscal 2004, when this new business is anticipated to achieve
operating profitability.

Operating income for performance nonwoven fabrics increased during the
second quarter of fiscal 2004 compared to the same period last year, primarily
as a result of increased sales volumes and lower glass fiber costs.

The Other, Technologies companies reported combined sales of $4,166,000 in
the three months ended December 31, 2003 compared to $3,923,000 in the same
period last year. Ortloff recognized license fee and consulting income of
$2,437,000 in the three-month period ended December 31, 2003 compared to
$2,057,000 in the comparable period last year. Chromiums sales were
marginally lower in the second quarter of fiscal 2004 compared to the same
period last year. Elk Technologies had no significant sales of fire retardant
mattress fabrics during the second quarter of fiscal 2004.

Other, Technologies companies had combined operating income of $1,315,000
in the three-month period ended December 31, 2003, compared to $1,099,000 in
the same period last year. Ortloff accounted for the majority of operating
income in the second quarter of both 2004 and 2003. The higher level of
profitability achieved in the current year period is primarily the result of
higher license and consulting fees. Chromium was modestly profitable in the
second quarter of fiscal year 2004 compared to reporting a small operating loss
in the second quarter of fiscal 2003.

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CHANGES IN THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2003 COMPARED TO THE
SIX-MONTH PERIOD ENDED DECEMBER 31, 2002.

Results of Operations

Overall Performance

Sales from continuing operations of $282,947,000 during the six-month
period ended December 31, 2003 (fiscal 2004) were 29.8% higher than
$218,023,000 in the first six months of the prior fiscal year (fiscal 2003).
During the six-month period ended December 31, 2003, income from continuing
operations of $17,071,000 was 43.6% higher than $11,889,000 for the same period
last year. Included in income from continuing operations in the first half of
fiscal 2003 was $3,496,000 of benefit, net of tax, from the reversal of noncash
stock option compensation (see note 6  Noncash Stock Option Compensation).
Income from continuing operations in the first half of fiscal 2004 was 103.4%
higher than pro forma income from continuing operations of $8,393,000 in the
year-ago half (which excludes the $3,496,000 after tax stock option
compensation benefit in the year-ago period). For comparative purposes,
management believes this comparison is appropriate, since the benefit resulted
solely from changes in the companys stock price and not from operations.

Consolidated operating income from continuing operations of $30,326,000 in
the period ended December 31, 2003 was 37.8% higher than $22,010,000 in the
same period in the prior fiscal year. Operating income from continuing
operations in the prior year period increased $5,378,000 as a result of the
pretax benefit of the aforementioned noncash stock option compensation.
Consolidated operating income from continuing operations in the first half of
fiscal 2004 was 82.3% higher than pro forma consolidated operating income from
continuing operations of $16,632,000 (which excludes the $5,378,000 noncash
stock option compensation benefit in the year-ago quarter). For comparative
purposes, management believes this comparison is appropriate, since the benefit
resulted solely from changes in the companys stock price and not from
operations.

As a percentage of sales, operating income from continuing operations was
10.7% in the first half of fiscal 2004 compared to 10.1% (7.6% on a pro forma
basis which excludes the noncash stock option compensation benefit of 2.5% of
sales) for the same period in fiscal 2003. Cost of sales was 78.7% of sales in
the first half of fiscal 2004 compared to 80.2% in the prior year period.
Higher asphalt and other raw material costs during the current year period were
largely offset by better shingle pricing and increased shingle production,
which reduced per unit manufacturing costs. Other selling, general and
administrative (Other SG&A) costs in the six-month period ended December 31,
2003 were 13.6% higher than in the first half of the prior fiscal year,
primarily as a result of increased business activity; however, as a percentage
of sales, the relationship between sales and Other SG&A costs was significantly
better in the current year.

In December 2003, the companys management and Board of Directors made the
decision to exit Cybershields plastic metallization business. Cybershields
results for all periods presented are reported as discontinued operations.
Discontinued operations for the six-month period ended December 31, 2003
included a $3,007,000 pretax loss from operations, combined with pretax,
noncash write-downs of $10,496,000 to reduce the book value of Cybershields
assets to fair value. For the six-month period ended December 31, 2002,
Cybershield reported a $118,000 operating loss.

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Interest expense, net, was $2,714,000 in the first half of fiscal 2004
compared to $3,053,000 in the same prior year period. In the first half of
fiscal 2004, interest expense of $1,312,000 was capitalized related to the
construction of an additional shingle plant in Tuscaloosa, Alabama, and other
significant capital projects. In fiscal 2003, $248,000 of interest was
capitalized.

The companys effective tax rate from continuing operations was 38.2%
during the first half of fiscal 2004 compared to 37.3% for the same period in
fiscal 2003. The difference between years primarily relates to the impact of
noncash stock option compensation benefit on the effective tax rate in fiscal
2003.

Results of Business Segments

Sales in the Building Products segment increased 30.4% to $276,409,000 for
the six months ended December 31, 2003 compared to $211,938,000 in the same
prior year period. The significant year-to-year increase in sales is primarily
the result of a $60,979,000 increase in premium roofing sales. Compared to the
same period last year, unit shingle shipments increased 23.1%, with most
regions of the United States of America experiencing strong year-to-year growth. A significant portion of the unit
volume increase, particularly during the first quarter of fiscal 2004, was
attributable to strong roof replacement demand in hail-damaged Texas markets.
Average shingle pricing increased about 5.6% compared to the year-ago period.
For the six-month period ended December 31, 2003, external sales of performance
nonwoven fabrics increased $1,432,000, or 10.2%, compared to the same period
last year. Sales of composite building products were $2,143,000 in the first
half of fiscal 2004. The company entered the composite wood business in the
second quarter of fiscal 2003 and reported $83,000 in sales during the first
half of fiscal 2003.

Operating income for the Building Products segment of $36,812,000 for the
six-month period ended December 31, 2003 increased 67.4% compared to
$21,989,000 achieved in the first half of fiscal 2003. Higher operating income
from premium roofing products resulted primarily from higher unit volumes,
combined with an improved relationship between shingle pricing and asphalt
costs. Operating income gains attributable to higher premium roofing product
sales were partially offset by an operating loss of approximately $2,100,000
for the composite wood business during the first half of fiscal 2004. The
composite wood business had an approximate $500,000 operating loss in the
six-month period ended December 31, 2002.

The Other, Technologies companies reported combined sales of $6,538,000 in
the first six months of fiscal 2004 compared to $6,085,000 in the same period
in fiscal 2003. Ortloff recognized higher license fee and consulting income in
the six-month period ended December 31, 2003 compared to the same period last
year. Chromiums sales were marginally lower in the first half of fiscal 2004
compared to the same period last year. During the first quarter of fiscal
2004, Chromium and the Electro-Motive Division of General Motors (GM EMD)
signed a manufacturers representation agreement whereby GM EMD will promote
and market Chromiums reciprocating engine components through the extensive GM
EMD sales network in international and specific domestic markets. Elk
Technologies had no significant sales of fire retardant mattress fabrics during
the first half of fiscal 2004.

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Other, Technologies companies had combined operating income of $702,000 in
the six-month period ended December 31, 2003, compared to $537,000 in the same
period last year. Chromium was modestly profitable in the first half of fiscal
year 2004 and incurred a small operating loss in the first half of fiscal 2003.
Ortloff had an operating income of approximately $1,000,000 in the fiscal 2004
period, compared to approximately $700,000 operating income in the fiscal 2003
period. Elk Technologies incurred approximately $350,000 in start-up costs in
the first half of fiscal 2004. It had not yet begun operations in the first
half of fiscal 2003.

Financial Condition

Cash flows from operating activities are generally the result of income
from operations, deferred taxes, depreciation and amortization, and changes in
working capital. During the first six months of fiscal 2004, the company
generated operating cash flows from operating activities of $60,852,000,
compared to $29,015,000 for the first six months in fiscal 2003. Due primarily
to seasonal factors, trade receivables at December 31, 2003 were $37,135,000
lower than at June 30, 2003. The current ratio was 3.6 to 1 at both December
31, 2003 and June 30, 2003. Historically, working capital requirements
fluctuate during the year because of seasonality in some market areas.
Generally, working capital requirements and related borrowings are higher in
the spring and summer months, and lower in the fall and winter months. The
company expects a significant increase in working capital between December 31,
2003 and June 30, 2004, primarily due to the normal increase in trade
receivables during the calendar 2004 roofing season, which typically runs from
March until mid-November.

Cash flows from investing activities primarily reflect the companys
capital expenditure strategy. Net cash used for investing activities was
$33,623,000 in the first six months of fiscal 2004 compared to $21,840,000 in
the same period last year. Approximately $24,400,000 of current year capital
expenditures relate to construction of a second shingle manufacturing plant at
the Tuscaloosa, Alabama facility, including the installation of certain
infrastructure and material handling improvements designed to enhance the
overall efficiency of the expanded facility. This new facility is scheduled to
begin limited manufacturing operations in the fourth quarter of fiscal 2004 and
is expected to be fully operational in early fiscal 2005. Capital expenditures
are projected to be approximately $64,000,000 in fiscal 2004, including
approximately $37,000,000 (inclusive of the aforementioned $24,400,000) to
complete the new Tuscaloosa plant, approximately $6,000,000 for productivity
enhancement projects, and approximately $6,000,000 to upgrade certain key
information technology platforms. After fiscal 2004, capital expenditures are
currently expected to be approximately $15,000,000  $20,000,000 per year,
excluding any future major capacity initiatives that may be undertaken.

Cash flows from financing activities generally reflect changes in the
companys borrowings during the period, together with dividends paid on common
stock, treasury stock transactions and exercises of stock options. Net cash
used for financing activities was $1,213,000 in the first half of fiscal 2004
compared to $1,807,000 in the same period in fiscal 2003. There was no change
in the amount of principal debt outstanding during the first half of fiscal
2004. The decrease in long-term debt during the first half of fiscal 2004 was
the result of a $4,124,000 adjustment in the fair value of long-term debt
resulting from a decline in the value of the interest rate swap to

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effectively convert the interest rate from fixed to floating on
$60,000,000 of long-term debt through 2012. The decline in the value of the
swap was the result of swap payments received and an increase in market
interest rates since June 30, 2003. This fair market adjustment to the
carrying amount of long-term debt is offset by recording a corresponding amount
in other assets for the value of the interest rate swap instrument.

At December 31, 2003, liquidity consisted of $31,072,000 of cash and cash
equivalents and $107,403,000 of available borrowings under the companys
$110,000,000 committed Revolving Credit Facility. The debt to capital ratio
(after deducting cash and cash equivalents from $145,000,000 of principal debt)
was 35.9%. The company has no off-balance sheet arrangements or transactions
with unconsolidated, special purpose entities.

The companys Board of Directors has authorized the purchase of common
stock from time to time on the open market. As of December 31, 2003, the
company has repurchase authority of approximately $10,600,000 remaining.

See footnote 10 on page 11 of this Form 10-Q for a summary of the
companys environmental risk and footnote 13 on page 13 for a discussion of new
accounting standards.

Management believes that current cash and cash equivalents, projected cash
flows from operations, and its existing debt capacity should be sufficient
during fiscal 2004 and beyond to fund the Tuscaloosa, Alabama plant
construction, other planned capital expenditures, working capital needs,
dividends, stock repurchases and other cash requirements.

Critical Accounting Policies

The companys condensed consolidated financial statements were prepared in
conformity with accounting principles generally accepted in the United States
of America. As such, management is required to make certain estimates,
judgments and assumptions it believes are reasonable based on the information
available. The accounting policies which management believes are the most
critical to fully understanding and evaluating the companys reported financial
results are:



| | - |  | Collectibility of Accounts Receivable                                                                                        
| | - |  | -----------------------------------------------------------------------------------------------------------------------------
|
| | - |  | Accruals for Loss Contingencies, including product warranties,
litigation, environmental exposure and self-insurance reserves
|
| | - |  | Inventories                                                                                                                  
|
| | - |  | Revenue Recognition                                                                                                          
|
| | - |  | Impairment of Long-Lived Assets                                                                                              

These critical accounting policies are described in Managements
Discussion and Analysis of Financial Condition and Results of Operations on
pages 24 through 26 in the companys Form 10-K for its fiscal year ended June
30, 2003. There were no significant changes in critical accounting policies
during the six-month period ended December 31, 2003.

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Forward-Looking Statements

In an effort to give investors a well-rounded view of the companys
current condition and future opportunities, managements discussion and
analysis of the results of operations and financial condition and other
sections of this Form 10-Q contain forward-looking statements that involve
risks and uncertainties about its prospects for the future. The statements
that are not historical facts are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements
usually are accompanied by words such as optimistic, outlook, believe,
estimate, potential, project, expect, anticipate, plan, predict,
could, should, may, likely, possible, or similar words that convey
the uncertainty of future events or outcomes. These statements are based on
judgments the company believes are reasonable; however, actual results could
differ materially from those discussed in these forward-looking statements.
Factors that could cause or contribute to such differences could include, but
are not limited to:



| | 1. |  | The companys building products business is substantially
non-cyclical, but can be affected by weather, the availability of
financing, insurance claims paying practices, and general economic
conditions. In addition, the asphalt roofing products manufacturing
business is highly competitive. Actions of competitors, including
changes in pricing, or slowing demand for asphalt roofing products
due to general or industry economic conditions or the amount of
inclement weather could result in decreased demand for the companys
products, lower prices received or reduced utilization of plant
facilities. Further, changes in building and insurance codes and
other standards from time to time can cause changes in demand, or
increases in costs that may not be passed through to customers.                                                                                                                                                                                                                                                            
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | In the building products business, the significant raw materials
are ceramic-coated granules, asphalt, glass fibers, resins and mineral
filler. Increased costs of raw materials can result in reduced
margins, as can higher energy, trucking and rail costs. Historically,
the company has been able to pass some of the higher raw material,
energy and transportation costs through to the customer. Should the
company be unable to recover higher raw material, energy and/or
transportation costs, including anticipated higher trucking costs
resulting from recent regulatory changes in the trucking industry,
from price increases of its products, operating results could be
adversely affected and/or lower than projected.                                                                                                                                                                                                                                                                                                                                  
|
| | 3. |  | Temporary shortages or disruption in supply of raw materials
or transportation do result from time to time from a variety of
causes. If the company experiences temporary shortages or
disruption of supply of raw materials, operating results could be
adversely affected and/or lower than projected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | 4. |  | The company has been involved in a significant expansion plan
over the past several years, including the construction of new
facilities and the expansion of existing facilities. The new
Tuscaloosa, Alabama facility is scheduled to begin limited
manufacturing operations in the fourth quarter of fiscal 2004 and is
expected to be fully operational in early fiscal 2005. The company
expects that fixed operating costs will increase approximately
$14,000,000 annually as a result of this new facility. However, the
company also believes that during fiscal 2005, higher asphalt shingle sales resulting from growth in market demand and expanded manufacturing capacity will offset these higher
operating costs. Progress in
achieving anticipated operating efficiencies and financial results
is difficult to predict for new and expanded plant facilities. If
such progress is slower than anticipated, or if demand for products
produced at new or expanded plants does not meet current
expectations, operating results could be adversely affected.

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| | 5.  |  | Certain facilities of the companys subsidiaries must utilize
hazardous materials in their production process. As a result, the
company could incur costs for remediation activities at its
facilities or off-site, and other related exposures from time to time
in excess of established reserves for such activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 6.  |  | The companys litigation is subject to inherent and case-specific
uncertainty. The outcome of such litigation depends on numerous
interrelated factors, many of which cannot be predicted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | 7.  |  | Although the company currently anticipates that most of its
needs for new capital in the near future will be met with internally
generated funds or borrowings under its available credit facilities,
significant increases in interest rates could substantially affect
its borrowing costs or its cost of alternative sources of capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | 8.  |  | Each of the companys businesses is subject to the risks of
technological changes and competition that is based on technology
improvement or labor savings. These factors could affect the demand
for or the relative cost of the companys technology, products and
services, or the method and profitability of the method of
distribution or delivery of such technology, products and services.
In addition, the companys businesses each could suffer significant
setbacks in revenues and operating income if it lost one or more of
its largest customers, or if its customers plans and/or markets
should change significantly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | 9.  |  | Although the company insures itself against physical loss to
its manufacturing facilities, including business interruption losses,
natural or other disasters and accidents, including but not limited
to fire, earthquake, damaging winds, and explosions, operating
results could be adversely affected if any of its manufacturing
facilities became inoperable for an extended period of time due to
these or other events, including but not limited to acts of God, war
or terrorism.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | 10. |  | Each of the companys businesses is actively involved in the
development of new products, processes and services which are
expected to contribute to the companys ongoing long-term growth and
earnings. Products using VersaShield fire retardant coatings have
not yet produced significant commercial sales. Its market potential
may be dependent on the stringency of federal and state regulatory
requirements, which are difficult to predict. Further, the companys
CrossTimbers brand of composite decking and fencing products is migrating its inventories from previously manufactured
products to a new-generation, lighter-weight, lower cost product.
The company believes that this migration of products will allow this
business to achieve operating profitability. If such development
activities are not successful, regulatory requirements are less
stringent than currently predicted, market demand is less than
expected, or the company cannot provide the requisite financial and
other resources to successfully commercialize such developments, the
growth of future sales and earnings may be adversely affected.

Parties are cautioned not to rely on any such forward-looking beliefs or
judgments in making investment decisions.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

In addition to the risks inherent in its operations, the company is
exposed to financial, market, political and economic risks. The following
discussion provides additional detail regarding the companys exposure to the
risks of changing commodity prices and interest rates. The company has no
significant foreign exchange risk. Derivatives are held from time to time only
as part of a formally documented risk management program. Derivatives are held
to mitigate uncertainty, volatility or to cover underlying exposures. No
derivatives are held for trading purposes. The company has entered into
derivative transactions related to interest rate risk and its exposure to
natural gas used in its manufacturing plants, as summarized in the following
paragraphs.

The company is required to purchase natural gas for use in its
manufacturing facilities. These purchases expose the company to the risk of
higher natural gas prices. To hedge this risk, in November 2003, the company
entered into a hedge transaction to fix the price on 50% of its projected
natural gas usage from December 1, 2003 through April 30, 2004. It is
anticipated that similar hedging strategies will be utilized in the future.
The fair value of the hedge for natural gas was $118,000 ($73,000 net of tax)
at December 31, 2003.

The company uses interest rate swaps to help maintain a reasonable balance
between fixed and floating rate debt. The company has entered into an interest
rate swap to effectively convert the interest rate from fixed to floating on
$60,000,000 of its outstanding debt at December 31, 2003. The fair value of
this swap was $3,402,000 at December 31, 2003. Based on outstanding debt at
December 31, 2003, the companys interest costs would increase or decrease
$600,000 for each theoretical 1% increase or decrease in the floating interest
rate.




Item 4. Controls and Procedures



| | a) |  | Evaluation of Disclosure Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | The company completed an evaluation, under the supervision and with the
participation of management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation
of the companys disclosure controls and procedures pursuant to Exchange
Act Rule 13a-15 as of the end of the period covered by this report. Based
upon that evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that the companys disclosure controls and procedures
are effective to timely alert them to any material information relating to
the company (including its consolidated subsidiaries) that must be
included in the companys periodic SEC filings.
|
| | b) |  | Changes in Internal Control                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |    |  | In connection with the evaluation described above, we identified no change
in our internal control over financial reporting that occurred during our
fiscal quarter ended December 31, 2003 and that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                 

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PART II. OTHER INFORMATION




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



| | (a) |  | The companys Annual Meeting of Shareholders was held on October 28,
2003 for the purpose of electing two directors and ratifying the
appointment of the companys independent auditors.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Directors Elected                                                                                                                                                                       

|                |  |                 |            |         |  |          |         |  |  |  |         | 
|--------------- |  | --------------- | ---------- | ------- |  | -------- | ------- |  |  |  | ------- | 
|                |  | NUMBER OF VOTES
|                |  |                
|                |  | FOR             |            | AGAINST |  | WITHHELD
|                |  |                 |            |         |  |         
|Thomas D. Karol |  |                 | 17,523,079 |         |  |          | 272,064 |  |  |  | 693,929 | 
|Dale V. Kesler  |  |                 | 17,387,519 |         |  |          | 407,624 |  |  |  | 693,929 | 



| | (c) |  | Other Directors Whose Term Continued After the Meeting:
| | --- |  | -------------------------------------------------------

|                  
|------------------
|James E. Hall     
|Harold K. Work    
|Michael L. McMahan
|Richard A. Nowak  
|David W. Quinn    



| | (d) |  | Other matters voted upon at the meeting and the number of affirmative
votes, negative votes and abstentions.
| | --- |  | ------------------------------------------------------------------------------------------------------------

|                                                                                                                       |  |  |  |  |  |                 |            |         |  |             |         |  |  |  |         | 
|---------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  | --------------- | ---------- | ------- |  | ----------- | ------- |  |  |  | ------- | 
|                                                                                                                       |  |  |  |  |  | NUMBER OF VOTES
|                                                                                                                       |  |  |  |  |  |                
|                                                                                                                       |  |  |  |  |  | FOR             |            | AGAINST |  | ABSTENTIONS
|                                                                                                                       |  |  |  |  |  |                 |            |         |  |            
|Ratification of
PricewaterhouseCoopers
as independent auditors of
the company for the fiscal
year ending June 30, 2004 |  |  |  |  |  |                 | 17,258,494 |         |  |             | 773,095 |  |  |  | 187,483 | 




Item 5: Other Information

On February 2, 2004, the company announced that effective March 15, 2004,
Gregory J. Fisher, Senior Vice President and Controller will succeed Harold
R. Beattie, Jr. as Chief Financial Officer, in addition to maintaining his current
responsibilities. Leonard R. Harral, Vice President and Chief Accounting
Officer, will assume the additional position of Treasurer. Mr. Beattie
resigned from the company to pursue other business opportunities
effective as of March 15, 2004. He will continue to serve as a financial advisor
to the company for a transition period until July 15, 2004.

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Item 6: Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits:
| | --- |  | ---------

|     |  |                                                                                                                                                                                                                                   
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.19 |  | Fifth Amendment to Credit Agreement dated as of
December 5, 2003 among the company, Bank One, N.A., as
Documentation Agent, and Bank of America N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer and
other lenders.
|     |  |                                                                                                                                                                                                                                   
|31.1 |  | Certification of Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|     |  |                                                                                                                                                                                                                                   
|31.2 |  | Certification of Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|     |  |                                                                                                                                                                                                                                   
|32.1 |  | Certificate of the Chief Executive Officer of
ElkCorp Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                                                                                                   
|     |  |                                                                                                                                                                                                                                   
|32.2 |  | Certificate of the Chief Financial Officer of
ElkCorp Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                                                                                                   



| | (b) |  | The company filed one report on Form 8-K during the quarter ended
December 31, 2003. The company filed a Form 8-K on October 17, 2003
relating to a press release containing preliminary earnings estimates
for the fiscal 2004 first quarter, including forward-looking
statements about its prospects for the future.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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SIGNATURES

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

|                       |  |                                                                                    
|---------------------- |  | -----------------------------------------------------------------------------------
|                       |  | ElkCorp                                                                            
|                       |  |                                                                                    
|DATE: February 9, 2004 |  | /s/ Harold R. Beattie, Jr.                                                         
|                       |  |                                                                                    
|                       |  | Harold R. Beattie, Jr.
Senior Vice President,
Chief Financial Officer and Treasurer
|                       |  |                                                                                    
|                       |  | /s/ Leonard R. Harral                                                              
|                       |  |                                                                                    
|                       |  | Leonard R. Harral
Vice President and Chief
Accounting Officer                      

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Index to Exhibits

|            |  |                                                                                                                                                                                                                                   
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                       
|4.19        |  | Fifth Amendment to Credit Agreement dated as of
December 5, 2003 among the company, Bank One, N.A., as
Documentation Agent, and Bank of America N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer and
other lenders.
|            |  |                                                                                                                                                                                                                                   
|31.1        |  | Certification of Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|            |  |                                                                                                                                                                                                                                   
|31.2        |  | Certification of Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|            |  |                                                                                                                                                                                                                                   
|32.1        |  | Certificate of the Chief Executive Officer of
ElkCorp Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002                                                                                                                   
|            |  |                                                                                                                                                                                                                                   
|32.2        |  | Certificate of the Chief Financial Officer of
ElkCorp Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002