(FRONT COVER - Picture of boot, brick and building block.)

                                JUSTIN INDUSTRIES
                                        
                                  ANNUAL REPORT
                                        
                                      1995
                                        
                                        
                                        
                        AN ENDURING TRADITION OF QUALITY
                                        
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(INSIDE FRONT COVER)

CONTENTS
Letter to Shareholders, 2
Report on Operations, 5
Management's Discussion and Analysis, 13
Consolidated Financial Statements, 18
Eleven-Year Financial Summary, 28
Shareholder Information, 30
Directors and Officers, 31
Manufacturing Locations - Map, 32


<TABLE>                                                                                                 
FINANCIAL HIGHLIGHTS                                                                                    
<CAPTION>                                                                                               
                                               1995        %        1994        %       1993         %
                                                        Change               Change               Change
---------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>       <C>       <C>       <C>        <C>
Net Sales                                    $461,448   -   4.5   $483,009  +   1.7   $474,931   +   4.8
Income (before change in accounting*)          25,651   -  30.5     36,905  +   2.4     36,035   +  33.0
Net Income                                     25,651   -  30.5     36,905  -    .6     37,141   +  37.1
Earnings Per Share (before change in              .94   -  29.3       1.33  +   3.1       1.29   +  31.6
accounting*)
Earnings Per Share                                .94   -  29.3       1.33     -          1.33   +  35.7
Return on Shareholders' Equity*                 11.6%   -  40.5      19.5%  -  15.9      23.2%   +   9.4
Capital Expenditures                           26,020   +  39.7     18,627  +   7.8     17,278   +  43.9
Working Capital                               181,385   -   2.3    185,722  +    .3    185,193   +  12.4
Total Assets                                  376,409   +    .4    374,921  +   8.1    346,680   +   9.6
Long-Term Debt                                 57,137   -  12.5     65,323  -  26.2     88,504   -  11.8
Shareholders' Equity                          236,489   +   6.6    221,900  +  17.5    188,803   +  21.6
Book Value Per Share                             8.88   +   9.0       8.15  +  17.3       6.95   +  20.9
Cash Dividends Per Share                          .16      -           .16     -           .16   +  14.3
Average Number of Shares Outstanding           27,411   -   1.4     27,810  -    .5     27,953   +    .7
---------------------------------------------------------------------------------------------------------
* before cumulative effect on prior years of                          in thousands, except per share data
  change in accounting for income taxes                                                                 
</TABLE>

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(PAGE 1)

1995

CORPORATE PROFILE

Justin Industries, headquartered in Fort Worth, Texas, is a leader in each of
its principal businesses:
                                        
     BUILDING MATERIALS -- including Acme Brick Company, one of the nation's
largest producers of face brick; Featherlite Building Products Corporation, the
Southwest leader in manufactured concrete building products; American Tile
Supply Company, a major Texas distributor of ceramic and marble floor and wall
tile; and Tradewinds Technologies, Inc., producer of Tradewinds evaporative
coolers for home and light commercial applications.

     FOOTWEAR -- consisting of Justin Boot Company, Nocona Boot Company, and
Tony Lama Company, whose products give Justin Industries a national identity as
the preeminent producer of western boots, and quality work and sport footwear.

     Northland Publishing, a distinguished publisher of western and southwestern
Americana, art, and Native American culture, is also part of Justin Industries.

     Justin Industries common stock is traded in the Nasdaq National Market
System using the symbol "JSTN."

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(PAGE 2)

TO OUR SHAREHOLDERS,

January 24, 1996

This was a very challenging year for Justin Industries.  While net income of
$25.7 million ($.94 per share) was the fourth highest in our history, it was
below our expectations.  Revenues of $461.4 million were also less than we had
hoped for.

     We are quite pleased with the achievements of our Building Materials
companies, spearheaded by Acme Brick Company and Featherlite Building Products
Corporation.  Both companies were able to capitalize on their strengths as
leaders in the brick and block manufacturing industries, with strong unit sales
and solid prices adding up to an excellent year.

     For our Footwear segment, 1995 was not a benchmark year.  Reduced levels of
consumer spending across the spectrum of retail business took a toll on western
boots, along with apparel, consumer electronics, and a myriad of other products.
Adding to the dilemma, rising raw material costs narrowed our margins, which
were already affected by an excess of footwear products competing for a reduced
amount of consumer dollars.  We have curtailed production in order to maintain
appropriate levels of inventory to service our dealers' needs and will continue
to monitor demand and adjust our output through 1996, conceivably through
further consolidation of manufacturing facilities.

     The western boot business, while performing below our hopes in 1995, is far
from extinct.  Unit sales, although tracking below the peak years of 1992-93,
were substantially ahead of the trough of the last down-cycle, due to the
broadening of the market for this universally appealing footwear.

     The consolidation of administrative activities in the Footwear segment is
now coming to full fruition, and the final result will achieve our major
objectives of reducing overhead expenses and improving our service to customers.
We expect that 1996 will see these objectives fully realized, and appreciable
cost reductions will accrue.

     Acme Brick Company's newest brick plant will open in 1996, at the site of
the "Mother Church" at Bennett Community near Millsap, Parker County, Texas,
about forty-five miles west of Fort Worth.  It was on these acres that George
Bennett, founder of Acme Brick, discovered a valuable deposit of shale and began
producing high- quality brick in 1891.  Acme's new plant will feature the
longest tunnel kiln continuous feed process west of the Mississippi, adding 8
percent to the company's total production and helping to assure our dominant
position in the North Texas market for quality building material.

     Featherlite Building Products Corporation will undertake a major expansion
and reconfiguration of its Dallas  Block Plant, adding new buildings and forming
equipment to enable the company to produce a wider range of products, including
paving block, at improved efficiency.  Located in West Dallas, the plant has a
long record of success, and, upon completion of this additional investment, will
be prepared to compete even more vigorously for a wider range of building
products sales.

     Featherlite's products, including its unique Texas Quarries limestone, will
be featured in the performing arts center now under construction in downtown
Fort Worth.  This center is the only such facility under construction in the
world at this time and when completed will be a jewel in the crown of North
Texas.

     Justin Industries' already solid financial position strengthened further in
1995, with shareholders' equity growing 7 percent to $236.5 million and total
interest-bearing debt declining 7 percent to $73.6 million at year-end.  These
improvements were realized while spending $7.3 million to acquire 677,000 shares
of treasury stock.

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(PAGE 3)

(Picture of John Justin and J. T. Dickenson)

     The value of our common stock, as measured by market trading during 1995,
has been quite restrained, no doubt because of the limitation on our growth
rates.  We are certainly desirous of seeing higher market prices for our stock,
along with paying regular dividends to our investors.  We strongly believe that
shareholder value will be enhanced by careful attention to our long-range plans,
which include maintaining strength in our balance sheet, investing wisely in
capital assets for future growth, and continuing to develop the new products and
services that will be required for the markets of 1996 and beyond.

     For 1996, we do not have a great deal of optimism that we will grandly
exceed 1995's financial performance.  Early reports from western-wear markets
are that retailers were generally disappointed with the level of holiday sales,
compared to past years when sales boomed during the Christmas period, and
consequently will be filling shelf space at a reduced level.

     On the positive side, if interest rates remain at an attractive level for
builders and home buyers and demand for housing continues, our building
materials companies should continue to enjoy good results.  But all of the early
part of 1996, and probably the ensuing many months, will depend on reasonable
solutions to political struggles and the following presidential campaign and
election.  Much of your company's future will be determined by these upcoming
economic and political events.

     We thank you for your investment in the Company and for your confidence in
its management team.  And finally, we express our continued gratitude to our
excellent employees and our board of directors.


/S/ John Justin
JOHN JUSTIN
Chairman and Chief Executive Officer


/S/ J. T. Dickenson
J. T. DICKENSON
President and Chief Operating Officer


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(PAGE 4)

(Picture of brick and block)

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(PAGE 5)

Report on Operations

BUILDING MATERIALS


Acme Brick Company
American Tile Supply Company
Featherlite Building Products Corp.
Tradewinds Technologies, Inc.


Justin Industries' Building Materials segment was again the major profit
contributor for the Company in 1995.  Improved levels of commercial construction
helped offset a slower year in home building, enabling this division to post
outstanding earnings, almost equal to the record high set in 1994.


ACME BRICK COMPANY'S primary sales territory experienced a decline in
residential construction in 1995.  Historically, a drop in construction forces
downward pressure on selling prices of building materials, and while unit brick
shipments fell approximately 10 percent in 1995, Acme was able not only to
maintain but actually increase average prices modestly during the year.  As a
result, Acme had the second most profitable year in its 104-year history,
narrowly missing the all-time record established in 1994.

     In 1995, Acme continued efforts to establish intrinsic value for its
products, contributing to the company's strong performance this year.  Acme's
long-term commitment to home builders and home buyers was reinforced by the
continuing program of imprinting brick with the Acme logo and by introducing
their exclusive One Hundred Year Limited Guarantee.  Radio and print ads,
billboards, numerous point-of-sales materials, and elaborate presentation
packets featuring football star Troy Aikman were used to introduce the guarantee
in Acme's major markets.  Additionally, a successful publicity campaign placed
Acme's message in twenty-four regional and national publications, and customers
can now access additional information about Acme Brick Company at its Internet
address, http://www.eden.com/acmebrick.

     Acme also took a leading role in a Texas-wide brick marketing council
program educating consumers on the impermanence of certain competitive building
materials.  Also in 1995, Acme's team of registered engineers gave over two
hundred presentations to universities and architectural firms on the latest
technology in masonry construction.

     Construction of the new state-of-the-art brick plant at Bennett, Texas,
progressed well in 1995.  With start up scheduled for late April 1996, this
plant will add 8 percent to Acme's total capacity.

     Periodic kilns are used to produce about one-fifth of Acme's brick output,
with the remainder produced from continuous process tunnel kilns.  While the
periodic kiln technology is used primarily in older plants, it enables the
production of unique brick products that yield premium prices and also have the
capability to remain cost effective even at widely varying levels of production.
New programmable logic controllers and simplified combustion systems have been
developed and recently installed in these plants to improve fuel efficiency,
safety, and overall performance.

     One of the company's goals is to use applied technology, wherever possible,
and this year that resulted in the incorporation of new raw material analysis
equipment.  Similar equipment has been installed at the research and production
service facility in Denton, Texas, and is enabling evaluation of new and
prospective raw materials, and the control and quality assurance of existing raw
materials and product mixes.  Also, at the Denton laboratory, a new software
system has been installed that greatly improves analysis of clay reserves and
assists in the development of efficient mining plans for clay withdrawal.

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(PAGE 6)

(Picture of brick)

     New maintenance systems were installed at most plants during 1995 to
improve efficiency and lower costs.  These systems monitor repair expenses and
schedule preventive maintenance for individual pieces of equipment.

     The company continued its outstanding safety performance in 1995, setting
the pace for the brick industry.  Acme's incidence of lost-time injuries is
dramatically better than the national average.  Not only do the company's
employees have a working environment with minimal risk of injury, but the
company realizes cost savings from the continuing focus on safety.

     Acme Brick Company has closely followed its long range strategic plan and
eagerly anticipates the challenges of 1996 and following years.


AMERICAN TILE SUPPLY COMPANY completed its first full year as a member of the
Justin Industries' Building Materials family.  Acquired in August 1994, American
Tile offers the largest selection of premier domestic and European tile in the
Southwest.  To expand its leadership role, two new sales locations have been
opened in Houston, giving the company its first entry into that large market.
In addition, property was purchased in far-north Houston for the construction of
another sales facility.  Also in 1995, a new distribution location was opened in
the Fort Worth-Dallas area, bringing the total number of sales locations in
operation to seventeen.

     The first phase of an inventory stocking system for smaller markets was
begun in 1995 when American Tile acquired a unique delivery vehicle.  Currently
used on a scheduled route from West Texas to Louisiana, the forty-five-foot-long
trailer is equipped with vinyl sides that open accordion-style to allow easy 
off-loading of inventory.  This new delivery concept allows smaller sales 
offices to offer a wider selection of tile with delivery time of only a few
days.

     The outlook for growth in the tile business is very good.  While still
behind worldwide average use, the United States' tile usage per capita has
doubled since the early 1980s and is expected to continue growing.  American
Tile Supply is well positioned to take advantage of this anticipated growth.


FEATHERLITE BUILDING PRODUCTS CORPORATION recorded another year of sales and
earnings growth in 1995.  With the continued strong commercial construction
market, most of Featherlite's production facilities operated at historically
high levels.  Optimum production rates, along with improved prices, led to
record earnings.

     The company is dedicated to upgrading its facilities in order to meet both
the growth potential of its markets and to achieve greater manufacturing
efficiency and flexibility.  Featherlite completed the installation of a new,
fully automated plant at its location just north of Austin in Round Rock, Texas,
in 1995.  This new plant has proven to be much superior to non-automated
facilities in operating ease and efficiency.  In 1996, a major expansion will
begin at the Dallas location with the installation of a state-of-the-art
facility capable of producing a variety of concrete masonry products including
block, pavers, and landscape products.  This expansion will position Featherlite
to continue its dominance in the Fort Worth-Dallas concrete block market and to
aggressively market other, more profitable, specialty concrete products.

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(PAGE 7)

(Picture of concrete building block)

     Texas Quarries, Featherlite's architectural limestone division, also had an
outstanding year in 1995.  The quality of workmanship of Texas Quarries
limestone is the focus of its employees, and Texas Quarries' products are the
standard by which others are judged.  Capital improvements in equipment and
facilities in recent years helped to enhance the already excellent quality of
its product and to expand volume potential.  Those improvements allowed this
operation to craft over 50 percent more stone than in any previous year.  With
good backlogs going into 1996, Texas Quarries is poised for another excellent
year.

     Featherlite completed the third year of its Total Quality Management
program.  With the help of ad hoc committees comprised of employees and
management working together, many goals were reached in 1995 that helped
Featherlite attain the success it has enjoyed.  Featherlite and its employees
are committed to the quality of its products, services, and total operations.


TRADEWINDS TECHNOLOGIES, INC.'s evaporative cooler sales in both the wholesale
and retail segments were hampered by unusually cool weather in 1995.  With lower
revenues, profits dipped slightly for the year.  Product quality, durability,
and ease of maintenance continue to be important in the consumer's buying
decision, however, and for these reasons Tradewinds coolers continue to gain
market acceptance.

     Responding to requests from contractors and homeowners, a new residential
model, the TS571 large side-draft, was introduced in 1995.  This product opens a
new market segment in large residential and commercial projects requiring side-
draft units with higher output.  Tooling was completed in February and first-
year sales were on target.  Also during the year, further product development
continued for the single inlet evaporative cooler, resulting in a sturdier and
easier-to-assemble design.

     Tradewinds continued its aggressive advertising, telemarketing, and direct
mail campaigns, which have strengthened the Tradewinds brand recognition in all
markets.  Specifications have been written for several large public sector and
privately owned projects for 1996

     Tradewinds expects to be well positioned for growth in unit sales and
profitability in 1996 because of quality products and expansion in retail
outlets within key markets, as well as enhancement of the product line.

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(PAGE 8)

(Picture of boots)

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(PAGE 9)

(Picture of boot)

Report on Operations

FOOTWEAR


Justin Boot Company
Nocona Boot Company
Tony Lama Company
Chippewa Shoe Company


Justin Industries' Footwear group experienced its second consecutive year of
revenue declines.  Hoped-for improvements in business conditions did not
materialize, and margins were negatively affected by the reduced sales volume
and the expense of reorganizing production facilities and administrative
functions.

     As 1995 unfolded, it became increasingly apparent that retail apparel sales
could be expected to decline over the course of the year.  This trend was
particularly noticeable in the "big ticket" segment of apparel, of which western
boots are a part.  Industry-wide sales of boots and other apparel continued to
edge downward as western specialty shops experienced a decrease in consumer
spending.  Justin Industries' Footwear group, however, was able to maintain or
improve its market share.

     The outlook for 1996 is encouraging, as there has been renewed interest in
western apparel and accessories, not only domestically, but also in the European
market.  Trends in Europe generally foretell fashions in the United States.
There is a developing trend in the ladies' market as fashion editors and
designers incorporate the "western look" in layouts where the models display
western boots with upscale, non-western attire.  Exposure is also coming from
traditionally non-western designers who are using western accessories with their
clothing lines.

     Western boots have become a staple part of the casual wardrobe of fashion-
conscious individuals; therefore, the downturn the Footwear operations
experienced over the last two years is considered to be temporary, and should
turn around as the divisions continue to produce boots with the highest
standards of quality, up-to-date styling, and competitive pricing.

     Each of Footwear's branded boot divisions -- Justin, Nocona, and Tony Lama
-- is seeking to make the most of existing markets by continuing to diversify
into new product categories and new market niches.  The Tony Lama division has
introduced a line of children's cowboy boots that has been well received, and
complements the established line of Justin children's ropers and lacers.

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(PAGE 10)

(Picture of boots)

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(PAGE 11)

(Picture of boot)

     The Justin division has further developed a category of functional and
casual footwear, with a variety of styles of "Specialty Ropers and Lacers"
designed to capture a share of the fastest growing segment of the boot business.
In addition, Justin has been focusing on assisting retailers with visual
merchandising by providing more sophisticated fixtures, intended to better
display products at the critical point of sale, as well as differentiating and
highlighting Justin's own brands.

     At Nocona, the introduction of the new "Fit Wall" concept has been
exceptionally successful.  As the smallest division in the Footwear group,
Nocona has been disadvantaged by a relative lack of shelf space, a less-than-
adequate representation of styles, and lower visibility.  The Nocona Fit Wall
"store within a store" enables a retailer to purchase at least one pair of every
style boot, to be displayed along with samples of every size (from 3AAA to
15EEE), in one section of the store.  Consumers are then able to select the
styles of their choice in their own particular sizes, with delivery guaranteed
within three weeks.  This marketing effort has moved the Nocona brand to the
forefront of the thirty-nine stores that were utilizing this technique by the
end of 1995, and has resulted in increased sales of Nocona boots in each of
these locations.  In 1996, 111 additional independently owned stores are
scheduled to begin using the "Fit-Wall" concept.

     Sales of Footwear products in Europe have thus far been short of
expectations.  However, the company continues to believe that the market has
very good potential, and therefore more aggressive advertising and promotional
programs are planned for 1996.  Moreover, the marketing thrust that has
previously been focused entirely on fashion issues has been expanded. There is
significant equestrian activity in Europe, particularly in Germany, Italy, and
France.  Initial incursions into these markets have been encouraging, and the
company intends to develop this opportunity further.

     Footwear operations reacted to the slowdown in mainstream retail by
reducing production and employee levels at the plants in 1995.  Inventory levels
were lowered during the year and a key goal is to further improve inventory
turnover by matching production of finished goods to consumer demand in 1996.

     While western boots experienced declines in unit shipments in 1995, sales
of Chippewa shoe products were relatively unchanged from 1994.  Chippewa has
been able to generate demand by positioning the brand as the premier quality
utilitarian footwear available in the market today.  Chippewa's marketing
efforts have emphasized outdoor lifestyles.  New product programs have been
developed for 1996 to expand the line and increase business.

     The administrative consolidation of Footwear operations started in 1994 was
completed in late 1995, and the efficiencies gained by eliminating redundant
activities will benefit the Company's future earnings through reduced overhead
expenses.  Analysis of other activities is ongoing to develop further cost
savings and improve all aspects of Footwear operations.

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(PAGE 12)

(Picture of brick, block, and boots)

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(PAGE 13)

(Graph of Net Sales by Line of Business)

MANAGEMENT'S DISCUSSION AND ANALYSIS


Following five consecutive years of increased profitability, earnings for Justin
Industries declined in 1995, as both of the Company's business segments,
Building Materials and Footwear, experienced lower profitability.  While the
Building Materials' profits were only 6% below the record high of 1994,
Footwear's declined about 60% from the previous year, as weak consumer spending
on apparel and similar goods depressed sales of western boots.  Footwear
earnings were also impacted by costs associated with the now-completed
reorganization of administrative functions and workforce reductions.  Net income
of $25.7 million, while less than the previous three years, was the fourth
highest in the Company's history.

Operations

Consolidated net sales in 1995 were $461.4 million, a decrease of 4.5% from
1994.  Revenues of $483 million in 1994 were 1.7% above those of 1993.

     In the Building Materials segment, revenues in 1995 increased for the
seventh consecutive year to $240.1 million, a new high.  This amount was 7.1%
greater than 1994 net sales.  Total Building Materials sales in 1994 of $224.2
million were 24.7% above 1993.  The Building Materials group includes Acme Brick
Company and its subsidiary American Tile Supply Company (acquired in August
1994), along with Featherlite Building Products Corporation and Tradewinds
Technologies, Inc.  Net sales at Acme (including American Tile) increased 7.4%
in 1995 from 1994 due to the inclusion of American Tile revenues for a full
year, versus only five months in 1994.  Acme's revenues would have declined 6.6%
in 1995 had American Tile been excluded in all years.  In 1995, Acme sold 10.3%
fewer brick than in 1994 due to lower levels of residential construction in its
market areas.  The average selling price, however, was 3.6% greater in 1995 than
1994.  Sales of purchased products at Acme (excluding American Tile) declined 4%
in 1995.  Acme's total revenues in 1994 were 26.7% above 1993.  Of this
increase, 16.1% related to existing operations, with the remainder resulting
from the acquisition of American Tile.  Among the components of Acme's 1994
revenue growth were unit brick sales gains of 6.2%, growth in the average
selling price of 7.7%, and an almost 20% gain in the sale of purchased products
(excluding American Tile).

     Featherlite's revenues increased 7.6% in 1995, following a 19.3% gain in
1994.  Featherlite has benefited from increasing levels of commercial
construction in Texas.  Gains in both years are attributable to increased
revenues of all product lines, which include concrete block, cut limestone, and
purchased products.  In addition, the average selling price of concrete block
products has increased in each of the last two years.

     Tradewinds sold fewer evaporative coolers in 1995 as wet weather conditions
prevailed for much of their selling season, resulting in a 6% decline in sales.
Tradewinds represents only 2% of segment revenues.

     Footwear revenues declined to $221.4 million in 1995, down 14.5% from
1994's net sales of $258.8 million.  Sales in 1994 were 12.3% below the record
high of $295.2 million set in 1993.  In 1995, unit sales of footwear products
were 19.8% below those of 1994, while the average selling price increased 6.5%
in 1995.

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(PAGE 14)

(Graph of Income from Continuing Operations)

(Graph of Net Income)

     Unit shipments in 1994 were approximately 15% less than 1993, while the
average selling price in 1994 increased 2.5% over that of 1993.  The western
boot business is not only seasonal in nature, but is also cyclical in that sales
are subject to trends in men's and women's fashions as well as consumer spending
patterns in general.  Since mid-1993, sales of the Company's footwear products
have declined on a quarterly as well as annual basis.  The slowness has been in
all western boot lines, with a greater reduction in the more fashion-sensitive
ladies' segment.  As noted above, average selling prices have increased since
1993.  Changes in the product mix have brought about higher average prices as
the percentage of exotic skin boot sales has grown.

     Justin Industries' Building Materials business operates primarily in a
seven-state region in the central and southwestern United States, while Footwear
segment sales are made to customers nationwide.

     As a percentage of sales, cost of sales was 65.2% in 1995, compared to
65.1% in 1994 and 66.2% in 1993.  Consolidated gross profit margins were
relatively unchanged in 1995 from 1994 because of the higher percentage of
Building Materials sales in 1995; however, individually the two business
segments realized lower gross margins in 1995.  Gross profit margins in the
Building Materials segment were 41.2% in 1995, 41.7% in 1994, and 39.4% in 1993.
Product mix is a major factor in margin fluctuation.  Brick is the highest
margin product in the Company, and although gross profit margins in the brick
business were higher in 1995 due to the above-mentioned pricing gains, brick
revenues decreased both in actual dollars and as a percentage of Building
Materials sales, as Featherlite reached new revenue highs and American Tile
Supply contributed twelve months of revenues versus only five in 1994.
Featherlite's margins also improved in 1995 as concrete block were sold at
higher average prices than in the previous year.  The overall improvement in the
Building Materials' gross profit margin in 1994 from 1993 was due to significant
brick volume and pricing gains at Acme, resulting from increased levels of
residential construction.  Acme's manufacturing costs have remained about the
same over the last three years as production levels have been at or near
capacity.  In 1994, Featherlite's gross profit margin was less than in 1993 due
to product mix and higher maintenance costs.  Tradewinds' margins declined
slightly in 1995 due to volume.

     Footwear gross profit margins were 27.9% in 1995, 29.0% in 1994, and 30.3%
in 1993.  As revenues have declined over the last two years, production levels
have been lowered.  As a result, gross profit margins have been adversely
affected.  In addition, 1995 margins were impacted by approximately $700,000 in
costs incurred with the reconfiguration of the Fort Worth Justin Boot plant.
Expenses were related to the temporary closure of the plant, workforce
reductions, and changes to production lines to accommodate more efficient
manufacturing techniques.

     Selling, general, and administrative expenses as a percentage of net sales
were 25.0% in 1995 versus 22.1% in 1994.  The total of these expenses increased
approximately $8.6 million in 1995 from the prior year.  Approximately $6
million of the increase resulted from including American Tile for the full year
versus the five months in 1994.  Also in 1995, advertising costs were $2.8
million more than in 1994, and the Footwear segment spent approximately $2
million in 1995 to complete the consolidation of administrative departments.
Footwear sales commissions were lower in 1995 because of reduced volume.  The
increase in selling, general, and administrative costs in 1994 from 1993 was
primarily due to the August 1994 acquisition of American Tile and general
inflation.  In addition, approximately $500,000 of costs were incurred in 1994
in connection with the Footwear administrative consolidation.

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(PAGE 15)

(Graph of Capital Expenditures)

(Graph of Interest-Bearing Debt)

     Due to the decrease in interest rates during 1995, the discount rate used
to determine the Company's pension obligations as of December 31, 1995, and the
related expense for 1996, has been reduced.  The effect on 1996 income should be
minimal, however, due to the higher-than-expected return on assets in 1995.

     Interest expense in 1995 was $5.03 million, compared to $4.06 million in
1994 and $4 million in 1993.  Interest rates on most of the Company's borrowings
are based on short-term money market indices, and while total interest-bearing
indebtedness has declined almost $36 million since 1992, interest rates have
risen as the Federal Reserve Bank adjusted the discount rate.  As a result, the
Company's average effective interest rate was 6.3% in 1995 compared to 4.7% in
1994 and 3.9% in 1993.  Note 4 to the Consolidated Financial Statements on page
22 describes the Company's borrowing arrangements.

     Income tax expense, as a percentage of pre-tax income, was 36.2% in 1995,
35.8% in 1994, and 35.7% in 1993.  The federal statutory rate was 35% for all
three years.  See Note 7 to the Consolidated Financial Statements on page 25 for
a reconciliation of the actual tax rate to the federal statutory tax rate and
other information relating to income tax.

     In the first quarter of 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes.  This statement,
issued in 1992, established new financial accounting reporting standards for the
effect of income taxes that result from the Company's activities during the
current and preceding years.  A credit to net income of $1.106 million was
realized in 1993, resulting from the cumulative effect of the change in
accounting for income taxes under the new statement.

     The table on page 30, Quarterly Financial Data, presents summarized
operating results for each quarter in the two years ended December 31, 1995.
The Company's businesses are seasonal in nature, with Building Materials
operations generating greater activity in the second and third quarters and
Footwear operations accelerating in the third and fourth.  As a result, first
quarter earnings are generally the lowest, with the fourth quarter usually
producing the highest.  In 1995, each three-month period's earnings were less
than the comparable 1994 quarter, as Footwear profitability was down due to
weaker revenues.

     The Company's Building Materials operations are dependent on levels of
construction activity which are influenced somewhat by interest rates.  Changes
in interest rates therefore can affect the Company's future earnings prospects.

     Inflation has not had a significant impact on the Company's operations in
recent years; however, the Company attempts to recover any cost increases
through improvements to its manufacturing processes and through increases in
price where competitively feasible.

================================================================================

(PAGE 16)

(Graph of Shareholders' Equity)

(Graph of Book Value Per Share)

Financial Condition, Liquidity and Capital Resources

The Company's financial condition strengthened further in 1995 due to another
solid earnings performance, as well as to continued focus on the goal of
leverage ratio improvement through reduced borrowings and equity growth.  In
1995, borrowings were lowered $5.7 million, and equity increased $14.6 million.
As a result, the ratio of total interest-bearing debt to shareholders' equity
declined to .31:1 at December 31, 1995, from .36:1 a year earlier.  The ratio of
long-term debt to equity was lowered from .29:1 at December 31, 1994, to .24:1
at year-end 1995.

     The Balance Sheet Trends table on page 17 reflects the percentage
relationship of the major asset, liability and equity accounts to total assets.
In 1995, total assets increased .4% to $376.4 million.  Working capital of
$181.4 million at December 31, 1995 was $4.3 million less than a year ago,
although the current ratio improved to 3.6:1 from 3.5:1 at year-end 1994.

     Net cash provided by operating activities totaled $37.8 million in 1995,
compared to $45.7 million in 1994 and $42.8 million in 1993.  In addition to
paying down debt, significant usages in 1995 included capital additions,
treasury stock purchases, and cash dividends.  The company spent $26 million in
1995 for fixed asset additions.  Approximately 70% of these expenditures were by
Acme Brick for upgrading production equipment and distribution facilities, as
well as initial construction costs for its new plant west of Fort Worth.
Approximately $11 million will be spent in the first half of 1996 to complete
the new brick plant.  During the year, the company spent $7.3 million to
purchase 677,000 shares of treasury stock pursuant to a one-million-share
repurchase program.  Dividends for the year were unchanged from 1994 at $.16 a
share and totaled $4.3 million.

     The Company's primary source of cash is from operations.  In addition, the
Company has credit facilities available from commercial banks.  The Company
believes that its borrowing arrangements are adequate to support its
requirements for the foreseeable future.  During 1995, the Company reduced its
revolving credit facility from $72 million to $52 million.  Unused lines of
credit available to the Company at December 31, 1995, were approximately $50
million.

Backlogs

The Company maintains information on sales backlogs in order to plan for future
production levels and to project sales volume.  At December 31, 1995, the
backlog for clay brick was $16.5 million, compared with $21.2 million at year-
end 1994.  The sales backlog for Footwear products at year-end 1995 was $8.3
million, compared with $13.0 million in 1994.

================================================================================

(PAGE 17)

Balance Sheet Trends                                                        
                                                                            
Percent of Total Assets                                                     
                                                                        
ASSETS:                             1995    1994    1993    1992    1991
------------------------------------------------------------------------
  Receivables                        21%     22%     22%     26%     24%
  Inventories                        42      43      42      41      41
  Property, plant, and equipment     26      23      23      24      27
  All other assets                   11      12      13       9       8
                                   -----   -----   -----   -----   -----
                                    100%    100%    100%    100%    100%
                                   =====   =====   =====   =====   =====
                                                                        
LIABILITIES AND EQUITY:                                                    
------------------------------------------------------------------------
  Interest-bearing debt              19%     21%     27%     35%     40%
  All other liabilities              18      20      19      16      17
  Equity                             63      59      54      49      43
                                   -----   -----   -----   -----   -----
                                    100%    100%    100%    100%    100%
                                   =====   =====   =====   =====   =====
                                                                        
------------------------------------------------------------------------

Operating Trends  
            
Percent of Net Sales  
                                                                               
                                         1995    1994    1993    1992    1991
--------------------------------------------------------------------------------
Net sales                               100.0%  100.0%  100.0%  100.0%  100.0%
Cost of sales                            65.2    65.1    66.2    69.3    70.8
                                        ------  ------  ------  ------  ------
Gross profit                             34.8    34.9    33.8     30.7    29.2
Operating expenses                       26.1    23.0    22.0     21.4    25.4
Income taxes                              3.1     4.3     4.2      3.3     1.4
                                        ------  ------   ------  ------  ------
Income from continuing operations         5.6     7.6     7.6      6.0     2.4
Discontinued operations                     -       -       -        -     2.8
Cumulative effect on prior years of                                            
  change in accounting for income taxes     -       -      .2        -       -
                                        ------  ------   ------  ------  ------
Net income                                5.6%    7.6%    7.8%     6.0%    5.2%
                                        ======  ======   ======  ======  ======
--------------------------------------------------------------------------------

<TABLE>
Five-Year Analysis of Sales and Operating Profit from Continuing Operations by
Product Lines

(in thousands of dollars)

<CAPTION>
                                       1995                1994                1993                1992                1991
                                 Amount   Percent    Amount   Percent    Amount   Percent    Amount   Percent    Amount   Percent
-----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Building Materials:                                                                                                        
  Net sales                     $240,094    52%     $224,213    46%     $179,740    38%     $158,808    35%     $123,004    33%
  Operating profit                42,107    82        44,600    66        31,445    48        16,423    31         4,979    18
Footwear:                                                                                                               
  Net sales                      221,354    48       258,796    54       295,191    62       294,459    65       245,346    67
  Operating profit                 9,234    18        22,871    34        34,168    52        36,054    69        22,934    82
-----------------------------------------------------------------------------------------------------------------------------------
Totals:                                                                                                                     
  Net sales                     $461,448   100%     $483,009   100%     $474,931   100%     $453,267   100%     $368,350   100%
  Operating profit              $ 51,341   100%     $ 67,471   100%     $ 65,613   100%     $ 52,477   100%     $ 27,913   100%
Less interest and parent                                                                                                       
  company operations              11,137               9,995               9,583              10,080              14,180         
-----------------------------------------------------------------------------------------------------------------------------------
Income from continuing
  operations before income
  taxes and cumulative effect
  on prior years of change in
  accounting for income taxes   $ 40,204            $ 57,476            $ 56,030            $ 42,397            $ 13,733         
===================================================================================================================================
</TABLE>                                             

================================================================================

(PAGE 18)

CONSOLIDATED BALANCE SHEET                                            
                                                                      
In Thousands of Dollars, Except Share Data, at
December 31,                                          1995        1994
--------------------------------------------------------------------------
ASSETS                                                                
--------------------------------------------------------------------------
Current assets:                                                       
  Cash                                              $  2,180    $  6,071
  Accounts receivable, less allowance for doubtful                    
    accounts of $3,340 and $3,219, respectively       78,213      82,266
  Inventories                                        158,330     160,894
  Federal and state income taxes                       9,800       8,387
  Prepaid expenses                                     2,155       1,953
--------------------------------------------------------------------------
      Total current assets                           250,678     259,571
Other assets, at cost                                 24,195      24,367
Assets held for sale                                   4,879       5,523
Property, plant, and equipment, at cost:                              
  Land                                                18,558      17,204
  Buildings and equipment                            222,576     208,513
  Construction in progress                            11,069       3,935
--------------------------------------------------------------------------
                                                     252,203     229,652
  Less accumulated depreciation                      155,546     144,192
--------------------------------------------------------------------------
      Net property, plant, and equipment              96,657      85,460
--------------------------------------------------------------------------
                                                    $376,409    $374,921
==========================================================================
                                                                      
LIABILITIES AND SHAREHOLDERS' EQUITY                                  
--------------------------------------------------------------------------
Current liabilities:                                                  
  Notes payable to banks                            $ 10,000    $  5,000
  Trade accounts payable                              14,152      19,087
  Accrued payroll items                               11,786      11,775
  Accrued insurance                                   15,283      15,839
  Accrued state and local taxes                        2,141       2,769
  Other accrued expenses                               8,424       9,359
  Dividends payable                                    1,071       1,089
  Current portion of long-term debt                    6,436       8,931
--------------------------------------------------------------------------
    Total current liabilities                         69,293      73,849
Long-term debt, less current portion                  57,137      65,323
Deferred income taxes                                 13,490      13,849
Shareholders' equity:                                                 
  Voting preferred stock, $2.50 par value;                            
    1,000,000 shares authorized -- Series Two                         
    convertible, 100 shares issued and outstanding         -           -
  Common stock, $2.50 par value; 100,000,000                          
    shares authorized, 27,869,888 shares issued       69,674      69,674
  Capital in excess of par value                      16,800      16,959
  Retained earnings                                  161,932     140,593
  Treasury stock, at cost, 1,234,585 and 637,237                      
    shares, respectively                             (11,917)     (5,326)
--------------------------------------------------------------------------
      Total shareholders' equity                     236,489     221,900
--------------------------------------------------------------------------
                                                    $376,409    $374,921
==========================================================================
                                                                      
See accompanying notes.                                               

================================================================================

(PAGE 19)

CONSOLIDATED STATEMENT OF INCOME                                            
                                                                            
In Thousands of Dollars, Except Per Share                                   
Data, for Years Ending on December 31,          1995      1994       1993
------------------------------------------------------------------------------
Net sales                                     $461,448   $483,009   $474,931
Costs and expenses:                                                         
  Cost of goods sold                           300,842    314,661    314,431
  Selling, general, and                                                     
    administrative expenses                    115,370    106,814    100,465
  Interest expense                               5,032      4,058      4,005
------------------------------------------------------------------------------
                                               421,244    425,533    418,901
------------------------------------------------------------------------------
Income before income taxes and cumulative                                   
  effect on prior years of change in                                        
  accounting for income taxes                   40,204     57,476     56,030
Income taxes                                    14,553     20,571     19,995
------------------------------------------------------------------------------
Income before cumulative effect                                             
  on prior years of change in accounting                                    
  for income taxes                              25,651     36,905     36,035
------------------------------------------------------------------------------
Cumulative effect on prior years of change                                  
  in accounting for income taxes                     -          -      1,106
------------------------------------------------------------------------------
Net income                                    $ 25,651   $ 36,905   $ 37,141
==============================================================================
Earnings per share:                                                         
  Before cumulative effect on prior years of                                
    change in accounting for income taxes     $    .94   $   1.33   $   1.29
  Cumulative effect on prior years of change                                
    in accounting for income taxes                   -          -        .04
------------------------------------------------------------------------------
                                              $    .94   $   1.33   $   1.33
==============================================================================
                                                                            
See accompanying notes.                                                     

<TABLE>                                                                                                                 
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY                                                                          
                                                                                                                        
<CAPTION>                                                                  Capital in                                    
In Thousands of Dollars, Except Share Data, for    Preferred    Common     excess of     Retained     Treasury    ESOP loan
Years Ending on December 31, 1995, 1994, and 1993    stock       stock     par value     earnings      stock      guarantee
----------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>          <C>          <C>          <C>          <C>          <C>
Balance January 1, 1993                            $     -      $34,837      $16,510      $110,072     $(5,899)     $(250)
----------------------------------------------------------------------------------------------------------------------------
Issuance of 13,934,944 shares in connection                                                                             
  with a 2-for-1 stock split effected in the form                                                                       
  of a 100% stock dividend                               -       34,837            -       (34,837)          -          -
Issuance of 157,668 shares of stock from treasury                                                                       
  upon exercise of stock options                         -            -          537             -         (57)         -
Repayment of ESOP debt                                   -            -            -             -           -        250
Net income                                               -            -            -        37,141           -          -
Cash dividends declared -- $.16 per share                -            -            -        (4,338)          -          -
----------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1993                          $     -      $69,674      $17,047      $108,038     $(5,956)     $   -
----------------------------------------------------------------------------------------------------------------------------
Issuance of 76,165 shares of stock from treasury                                                                         
  upon exercise of stock options                         -            -          (88)            -         630          -
Net income                                               -            -            -        36,905           -          -
Cash dividends declared -- $.16 per share                -            -            -        (4,350)          -          -
----------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1994                          $     -      $69,674      $16,959      $140,593     $(5,326)     $   -
----------------------------------------------------------------------------------------------------------------------------
Purchase of 677,000 shares of stock for treasury         -            -            -             -      (7,259)         -
Issuance of 79,652 shares of stock from treasury                                                                        
  upon exercise of stock options                         -            -         (159)            -         668          -
Net income                                               -            -            -        25,651           -          -
Cash dividends declared -- $.16 per share                -            -            -        (4,312)          -          -
----------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1995                          $     -      $69,674      $16,800      $161,932    $(11,917)     $   -
============================================================================================================================
<FN>                                                                                                                    
See accompanying notes.                                                                                                 
</TABLE>                                           

================================================================================

(PAGE 20)

<TABLE>                                                                            
CONSOLIDATED STATEMENT OF CASH FLOWS                                               
<CAPTION>                                                                          
In Thousands of Dollars                                                            
for Years Ending on December 31,                        1995       1994       1993
--------------------------------------------------------------------------------------
<S>                                                   <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                              
  Net income                                           $25,651    $36,905    $37,141
  Adjustments to reconcile net income to cash                                      
    provided by operating activities:                                              
    Cumulative effect of change in accounting                                      
      method for income taxes                                -          -     (1,106)
    Depreciation                                        14,742     13,852     13,473
    Provision for losses on accounts receivable          1,347        866      1,004
    Gain on sale of property, plant, and equipment        (167)      (122)      (589)
    Deferred income taxes                               (1,198)    (3,190)    (2,566)
    Changes in current assets and liabilities:                                     
      (Increase) decrease in accounts receivable         2,706     (1,624)     4,494
      (Increase) decrease in inventories                 2,564     (7,398)   (17,077)
      (Increase) decrease in other current assets         (776)      (240)     3,042
      Increase (decrease) in accounts payable and                                  
        accrued expenses                                (7,043)     6,628      4,839
      Effect of adoption of SFAS No. 109                     -          -        107
--------------------------------------------------------------------------------------
        Net cash provided by operating activities       37,826     45,677     42,762
                                                                                   
CASH FLOWS FROM INVESTING ACTIVITIES:                                              
  Proceeds from the sale of property, plant,                                       
    and equipment                                          261        841      1,080
  Purchase of property, plant, and equipment           (26,020)   (18,627)   (17,278)
  (Increase) decrease in other long-term assets            803       (115)     1,151
  Payment for purchase of business, net of                                         
    cash acquired                                            -     (9,332)         -
--------------------------------------------------------------------------------------
        Net cash used in investing activities          (24,956)   (27,233)   (15,047)
                                                                                   
CASH FLOWS FROM FINANCING ACTIVITIES:                                              
  Borrowings                                            41,000     57,500     41,058
  Repayment of borrowings                              (46,681)   (76,655)   (56,862)
  Dividends paid                                        (4,330)    (4,347)    (4,197)
  Purchase of treasury stock                            (7,259)         -          -
  Proceeds from exercise of stock options                  509        542        480
--------------------------------------------------------------------------------------
        Net cash used in financing activities          (16,761)   (22,960)   (19,521)
--------------------------------------------------------------------------------------
Net increase (decrease) in cash                         (3,891)    (4,516)     8,194
Cash at beginning of year                                6,071     10,587      2,393
--------------------------------------------------------------------------------------
Cash at end of year                                    $ 2,180    $ 6,071    $10,587
======================================================================================
                                                                               
SUPPLEMENTAL DISCLOSURES OF CASH INFORMATION:                                      
  Cash paid during the year for:                                                   
    Interest                                           $ 5,129    $ 4,105    $ 4,335
    Income taxes, net of refunds                       $16,140    $23,286    $17,801
                                                                                    
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING                                         
AND FINANCING ACTIVITIES:                                                          
  Purchase of business:                                                            
    Fair value of assets acquired                      $     -    $17,757    $     -
    Cash paid for assets and related costs                   -     (9,332)         -
    Subordinated debt issued                                 -     (5,000)         -
--------------------------------------------------------------------------------------
      Liabilities assumed                              $     -    $ 3,425    $     -
  Decrease in ESOP loan guarantee                      $     -    $     -    $  (250)
======================================================================================
<FN>                                                                                   
See accompanying notes.                                                            
</TABLE>

================================================================================

(PAGE 21)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           Years ending on December 31

 1.  Summary of Significant Accounting Policies

NATURE OF OPERATIONS.  Justin Industries, Inc. (the "Company") is a
manufacturing and distribution company whose principal lines of business are 1)
building materials -- including face brick, concrete block, and floor and wall
tile; and 2) footwear products, primarily western-style boots.  Based on 1995
revenues, the two segments are approximately equal in size.  Building materials
are sold directly through Company sales offices primarily in a seven-state area
consisting of Texas, Oklahoma, Arkansas, Louisiana, Kansas, Missouri, and
Tennessee.  Approximately 60% of Building Materials' sales are in Texas.
Building Materials' sales are dependent upon construction levels within market
areas served with face brick sales specifically influenced by housing starts.
Footwear products are sold primarily through independent western-wear retailers
in the United States, with approximately 30% of sales in Texas.

     PRINCIPLES OF CONSOLIDATION.  The consolidated financial statements include
the accounts of the Company and its subsidiaries.  All material intercompany
accounts and transactions are eliminated upon consolidation.  Certain
reclassifications have been made in December 31, 1994 and 1993, amounts to
conform with the 1995 presentation.

     USE OF ESTIMATES.  The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.

     INVENTORIES.  Inventories are valued at the lower of cost or market.
Finished products and work-in-process are costed using an average cost method,
while raw materials and manufacturing supplies are costed on the first-in, 
first-out method.

     PROPERTY, PLANT, AND EQUIPMENT.  Depreciation is computed principally by
the straight-line method for financial reporting purposes.  The annual
depreciation provision has been based upon the following estimated lives:

                  Buildings        10 to 20 years
                  Equipment        3 to 15 years

     INTANGIBLES RESULTING FROM BUSINESS ACQUISITIONS.  Intangible assets
resulting from business acquisitions consist of trademarks/tradenames and the
excess of the acquisition cost over the fair value of the net assets of
businesses acquired.  Intangibles are amortized on a straight-line basis over 40
years.  As of December 31, 1995 and 1994, intangibles were $14.9 million and
$15.2 million, respectively, net of accumulated amortization of $1.3 million and
$.9 million, respectively.

     REVENUE RECOGNITION.  Revenue from sale of manufactured products is
recognized primarily upon passage of title to the customer, which generally
coincides with physical delivery and acceptance.

     ADVERTISING.  The Company's policy is to expense advertising costs as
incurred.  Total advertising expense for the years ended December 31, 1995,
1994, and 1993, was $16,999,000, $14,242,000, and $15,020,000, respectively.

     EARNINGS PER SHARE.  Earnings per share is determined by dividing net
income by the average number of common shares outstanding, plus common stock
equivalents.  Common stock equivalents include shares issuable under outstanding
stock options reduced by shares assumed to be purchased from the proceeds of
such options upon exercise and the effect of the possible conversion of the
voting preferred stock.  Earnings per share, as presented, is both primary and
fully diluted.

     PENSION AND EMPLOYEE BENEFIT PLANS.  The Company and its subsidiaries have
pension plans for the benefit of substantially all employees.  Benefits are
primarily based on years of service and the employees' average compensation
during the last five years of employment.  The Company's policy is to fund
pension cost accrued, but not in excess of the maximum allowable deduction for
federal income tax purposes.

================================================================================

(PAGE 22)

     The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of
grant.  The Company accounts for stock option grants in accordance with APB
Opinion No. 25, Accounting for Stock Issued to Employees, and, accordingly,
recognizes no compensation expense for the stock option grants.  Proceeds from
common stock issued pursuant to the Company's employee stock option plans are
credited to common stock or treasury stock and capital in excess of par value at
the time an option is exercised.

     The Company has no postretirement health benefits and, therefore, realized
no effect from recent accounting requirements under Statement of Financial
Accounting Standards (SFAS) No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions.

     STATEMENT OF CASH FLOWS.  For purposes of reporting cash flows, cash
includes cash on hand and unrestricted time deposits that have an original
maturity of three months or less.

     IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS.  In March 1995, the
Financial Accounting Standards Board issued SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount.  SFAS 121 also addresses the accounting for long-lived assets
that are expected to be disposed of.  The Company will adopt SFAS No. 121 in the
first quarter of 1996 and, based on current conditions, does not believe the
effect of adoption will be material.

 2.  Acquisition

Effective August 1, 1994, the Company purchased American Tile Supply Company and
its  related  companies  ("American  Tile")  for  a  total  purchase  price   of
approximately  $16,000,000.   American Tile  distributes  floor  and  wall  tile
primarily in Texas.  Operations of the business are included in the Consolidated
Statement of Income from date of acquisition.

 3.  Inventories

Inventories include the following:
(in thousands of dollars)

                                             1995           1994
                                           --------       --------
Finished products                          $121,835       $124,340
Work-in-process                               6,068          6,834
Raw materials and supplies                   30,427         29,720
                                           --------       --------
                                           $158,330       $160,894
                                           ========       ========

 4.  Borrowings

Long-term debt consists of the following:
(in thousands of dollars)

                                             1995           1994
                                           --------       --------
Revolving credit loans                      $22,000        $21,000
Term loan                                    21,000         26,000
Industrial Revenue Bonds                     17,515         17,900
Note payable to bank                          3,000          4,500
Subordinated notes payable                        -          4,750
Other, unsecured                                 58            104
                                           --------       --------
                                             63,573         74,254
Less current portion                          6,436          8,931
                                           --------       --------
                                            $57,137        $65,323
                                           ========       ========

     The Company may borrow up to a total of $52,000,000 in revolving credit
loans pursuant to an agreement among four commercial banks originally entered
into in May 1989.  The revolving credit loans are repayable beginning in April
1998, when outstanding amounts are converted to term loans payable over three
years.  The conversion date may be extended annually for an additional twelve
months by consent of all participating banks.

     The $21,000,000 term loan is an agreement among three commercial banks
providing for annual principal reductions that began in November 1992, of
$2,000,000, increasing $1,000,000 each year thereafter until 1998, when the
final payment is due.

     Borrowings under the revolving credit and term loan agreements bear
interest at rates determined on certain margins based on prime, certificates of
deposit, and the London Interbank Offered Rate ("LIBOR").  Interest on all of
these borrowings at December 31, 1995, was based on LIBOR in effect at the time
of origination plus 50 basis points, and averaged 6.2%.  Interest rate margins
may fluctuate in increments of 12.5 basis points based on attaining certain
quarterly funded debt-to-equity ratios stipulated in the loan agreements.  The
loans are unsecured; however, the loan agreements contain certain minimum
requirements as to working capital, cash flow from operations, and tangible net
worth, redemption of outstanding stock, and change in control of the Company.
As of December 31, 1995, the Company was in compliance with all such
requirements and restrictions.

================================================================================

(PAGE 23)

     The Industrial Revenue Bonds are payable in varying amounts through 2014,
plus interest at fixed rates of 6.6% and varying rates based on certain indices
(approximately 5.3% at December 31, 1995), secured by property, plant, and
equipment with a net book value of approximately $13,629,000.  In certain
circumstances, the Company may be required to purchase up to $16,250,000 of its
Industrial Revenue Bonds prior to their maturity.  In such circumstances, the
Company may borrow the purchase price under long-term standby letter of credit
agreements, and also has the right to resell the bonds.

     During 1995, subordinated notes payable to American Tile's former
shareholders were paid off prior to maturity.

     Note payable to bank is an unsecured borrowing due in 1997. Interest is
based on LIBOR plus 50 basis points, and was 6.3% at December 31, 1995.

     Notes payable to bank included in current liabilities in 1995 are unsecured
borrowings due in 1996 pursuant to a $10,000,000 one-year credit facility from a
commercial bank.  Interest is based on LIBOR plus 50 basis points and was 6.2%
at December 31, 1995.

     The aggregate maturities of long-term debt through 2000 are as follows:
1996, $6,436,000; 1997, $10,407,000; 1998, $11,827,000; 1999, $7,493,000; and
2000, $7,493,000.

     At December 31, 1995, unused lines of credit for short-term, revolving, and
term credit agreements were approximately $50,000,000.  Outstanding standby
letters of credit at December 31, 1995, amounted to approximately $21,995,000.

     Since interest rates on the majority of the Company's borrowings float with
prevailing market rates, the fair value of such debt approximates carrying value
at December 31, 1995 and 1994.  Based on fixed interest rates currently
available to the Company for bank loans and industrial revenue bonds with
similar terms and maturities, the fair value of fixed rate borrowings
approximates carrying value at December 31, 1995 and 1994.

 5.  Shareholders' Equity

The average number of common shares outstanding plus common stock equivalents
used to calculate earnings per share was 27,411,000 in 1995; 27,810,000 in 1994;
and 27,953,000 in 1993.

     The Company has outstanding options to purchase its common stock under
qualified incentive stock option plans and non-qualified stock option agreements
(the Plans) with certain of its employees.  The Plans, as amended, provide for
the granting of either incentive stock options or stock options that are not
qualified under the Internal Revenue Code, at the discretion of the Compensation
Committee of the Board of Directors.  The amended Plans also provide for
exercise of stock options without regard to the sequence of dates of original
grants.  All outstanding stock options are non-qualified and expire over a
period of ten years.  Options are granted at the fair market value at the date
of grant and vest over a five year period.  Stock option activity is summarized
as follows:

                                     1995            1994            1993
                                --------------  --------------  --------------
                                                                       
Outstanding at January 1             1,481,286       1,406,877       1,542,856
Granted                                160,600         155,300         152,250
Canceled                               (25,370)         (2,680)        (38,206)
Exercised                              (92,449)        (78,211)       (250,023)
                                --------------  --------------  --------------
Outstanding at December 31           1,524,067       1,481,286       1,406,877
                                ==============  ==============  ==============
                                                                              
Exercise price per share        $2.42 - $18.00  $2.42 - $18.00  $2.42 - $18.00
                                ==============  ==============  ==============
                                                                              
Aggregate purchase price (in                                                  
thousands)                           $  13,283       $  12,376       $  11,201
                                ==============  ==============  ==============
                                                                              
Exercisable options outstanding      1,001,717         841,394         641,787
                                ==============  ==============  ==============

================================================================================

(PAGE 24)

     At December 31, 1995, approximately 713,000 additional shares were reserved
for future grants under these Plans.

     In September 1995, the Board of Directors adopted, subject to the approval
of the shareholders at the annual meeting in April 1996, a non-employee
directors stock option plan that permits the issuance of up to 200,000 shares of
common stock to directors who are not employees of the Company.  Under this
plan, options to purchase common stock, at the fair market value on the date of
the grant are granted to each non-employee director annually.  As of December
31, 1995, no options have been granted under this plan.

     The preferred stock is convertible into 2,826 shares of common stock at
December 31, 1995.  The Board of Directors is empowered to set the dividend,
redemption, and liquidation rights pertaining to the preferred stock and to
establish the voting rights and any special rights or restrictions.

     One Common Stock Purchase Right is outstanding for each share of common
stock.  Following Board of Directors approval, a) the rights will be exercisable
at an exercise price of $13.33 if a person or group acquires 20% or more of the
Company's common stock or announces a tender offer that would result in
ownership of 30% or more of the common stock; or b) the rights may be redeemed
at $.05 per right at any time before a 20% position has been acquired.  The
rights expire on October 6, 1999.

 6.  Retirement Plans

The following table sets forth the plans' funded status and amounts
recognized in the Company's balance sheet at December 31, 1995 and 1994, related
to the Company's pension plans:  (in thousands of dollars)

                                                      1995             1994
                                                    --------         --------
Actuarial present value of benefit obligations:
  Vested                                            $ 46,768         $ 35,233
  Non-vested                                           2,742            2,088
                                                    --------         --------
                                                    $ 49,510         $ 37,321
                                                    ========         ========

Projected benefit obligations for service
  rendered to date                                  $(56,629)        $(44,191)

Plan assets at fair value                             80,717           66,477
                                                    --------         --------
Plan assets in excess of projected
  benefit obligations                                 24,088           22,286
Unrecognized net gain from past experience
  different from that assumed and effects
  of changes in assumptions                          (13,282)         (11,349)
Prior service cost not yet recognized in net
  periodic pension cost                               (1,114)          (1,229)
Unrecognized net asset at January 1, 1985,
  being recognized over 15 years                      (3,163)          (3,954)
                                                    --------         --------
Prepaid pension cost                                $  6,529         $  5,754
                                                    ========         ========

     Plan assets at December 31, 1995, are invested primarily in listed stocks
and bonds or cash equivalents.  The Company's own common stock accounts for
approximately 13.3% of plan assets at December 31, 1995.

     Net pension credit includes the following components:  (in thousands of
dollars)

                                               1995        1994         1993
                                             --------    --------     --------
Service cost - benefits earned
  during the period                          $ 1,903      $ 2,347     $ 1,731
Interest cost on projected benefit
  obligation                                   3,864        3,531       3,439
Actual (return) loss on plan assets          (16,590)       4,125      (1,337)
Net amortization and deferral                 10,048      (10,180)     (4,191)
                                            --------     --------    --------
Net pension credit                           $  (775)     $  (177)    $  (358)
                                            ========     ========    ========

     The weighted-average discount rates used in determining the actuarial
present value of the projected benefit obligations were 7.25% in 1995 and 9.0%
in 1994.  The rate of increase in future compensation was 4% in 1995 and 4.5% in
1994.  The expected long-term rate of return on assets was 9% for all years
above.

================================================================================

(PAGE 25)

     Contributions to the plans, limited by federal income tax regulations, were
$0 in 1995 and 1994 and $9,400 in 1993.

     The Company also has an Employee Stock Ownership Plan (ESOP) for the
benefit of substantially all employees.  Eligible employees may contribute up to
the lesser of 15% of their compensation or the maximum amount authorized by the
Company ($9,240 in 1995 and 1994, and $8,994 in 1993).  In 1995 and 1994, 50% of
the amount contributed by all employees was matched by the Company, up to 5% of
total compensation.  In 1993, contributions by "highly compensated" and "non-
highly compensated" employees, as defined by the Internal Revenue Code (IRC),
were matched 25% and 50%, respectively, up to 5% of total compensation.
Pursuant to Internal Revenue Service Regulation 401(k), the employees'
contributions are on a pre-tax basis.  For 1996, employees may contribute up to
the lessor of 15% of their compensation or the maximum allowable amount under
IRS regulations ($9,500).

     The amount of Company contributions made to the ESOP and charged to expense
was $1,239,000, $1,260,000, and $896,000 in 1995, 1994, and 1993, respectively.

 7.  Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Significant components
of the Company's deferred tax liabilities and assets as of December 31, 1995 and
1994, are as follows:  (in thousands of dollars)

                                                            1995        1994
                                                          --------    --------
Deferred tax assets:
  Insurance and claims accruals                           $ 6,495     $ 6,539
  Asset valuation allowances                                5,092       4,225
  Employee benefit plans                                      216         318
  Other                                                       830         712
                                                         --------    --------
                                                          $12,633     $11,794
                                                         ========    ========
Deferred tax liabilities:
  Intangible assets                                       $ 4,265     $ 4,412
  Depreciation                                              7,716       8,137
  Employee benefit plans                                    1,509       1,300
                                                         --------    --------
                                                          $13,490     $13,849
                                                         ========    ========

     Significant components of the provision for income taxes are as follows:


                                               1995        1994         1993
                                             --------    --------     --------
Current                                      $15,751      $23,761     $22,561
Deferred                                      (1,198)      (3,190)     (2,566)
                                            --------     --------    --------
Total income tax expense                     $14,553      $20,571     $19,995
                                            ========     ========    ========

     In addition, the Company recognized income tax benefits of $192,000,
$221,000, and $1,420,000 in 1995, 1994, and 1993, respectively, upon employees'
exercise of non-qualified stock options.  Such benefits were recognized as an
increase in shareholders' equity when realized.

     A reconciliation of the statutory federal income tax rate and the effective
tax rate follows:

                                                  1995         1994        1993
                                                 ------       ------      ------
Statutory tax rate                                35.0%        35.0%       35.0%
State taxes                                        1.8          1.2          .3
Federal income tax rate increase                    -            -           .4
Other                                              (.6)         (.4)         -
                                                 ------       ------      ------
Effective tax rate                                36.2%        35.8%       35.7%
                                                 ======       ======      ======

     In connection with the acquisition of Tony Lama, the Company acquired a tax
net operating loss carryforward. None of the carryforward was utilized in 1995,
1994, or 1993.  Approximately $802,000 of the acquired carryforward is available
to offset future taxable income.  The carryforward will expire in 2004.  Future
utilization of such carryforward will be recognized through adjustment of the
value of acquired net assets.

     During 1993, the Company adopted SFAS No. 109, Accounting for Income Taxes,
effective January 1, 1993.  Under SFAS No. 109, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse.
As of January 1, 1993, the Company recognized a one-time benefit to consolidated
income of $1,106,000 for the change in accounting for income taxes from the
deferred method to the liability method, as required by SFAS No. 109.

================================================================================

(PAGE 26)

 8.  Financial Information By Product Lines

The five-year analysis of sales and operating profit from continuing
operations by product lines on page 17, as it pertains to the last three years,
is an integral part of the Company's consolidated financial statements.  A
discussion of the Company's products and business is located on pages 5 to 11.
The following additional information is presented by industry segments:  (in
thousands of dollars)

                                     Identifiable   Depreciation     Capital
                                        Assets        Expense      Expenditures
                                     ------------   ------------   ------------
     1995
Building Materials                     $150,440        $ 9,595        $23,013
Footwear                                198,870          4,910          2,990
Corporate assets                         22,220            237             17
Assets held for sale                      4,879              -              -
                                       --------       --------       --------
     Total                             $376,409        $14,742        $26,020
                                       ========       ========       ========
     1994
Building Materials                     $135,857        $ 8,616        $14,725
Footwear                                211,126          5,008          3,825
Corporate assets                         22,415            228             77
Assets held for sale                      5,523              -              -
                                       --------       --------       --------
     Total                             $374,921        $13,852        $18,627
                                       ========       ========       ========
     1993
Building Materials                     $110,310        $ 8,175        $11,232
Footwear                                210,839          5,035          5,931
Corporate assets                         20,008            263            115
Assets held for sale                      5,523              -              -
                                       --------       --------       --------
     Total                             $346,680        $13,473        $17,278
                                       ========       ========       ========

     Assets held for sale relate primarily to idled facilities.

     During 1995, the Footwear segment implemented and completed a program to
reduce general and administrative costs on a long-term basis.  Costs of
approximately $2,000,000 were incurred in 1995 associated with this
reorganization.

 9.  Commitments

At December 31, 1995, approximate future minimum rental commitments for all
noncancellable operating leases are as follows:  (in thousands of dollars)

                    1996          $3,605
                    1997           2,719
                    1998           1,513
                    1999             664
                    2000             315
                    Thereafter       615
                                --------
                                  $9,431
                                ========

     Total rent expense for all operating leases amounted to approximately
$4,682,000, $3,976,000, and $3,359,000 in 1995, 1994, and 1993, respectively.

     The Company began construction of a new brick manufacturing facility during
1995.  Approximately $11 million will be spent in the first half of 1996 to
complete the facility, which will increase brick production capacity by
approximately 8%.

================================================================================

(PAGE 27)

REPORT OF ERNST & YOUNG LLP

Independent Auditors

Board of Directors
Justin Industries, Inc.

We have audited the accompanying consolidated balance sheets of Justin
Industries, Inc. as of December 31, 1995 and 1994, and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the three
years in the period ended December 31, 1995.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Justin Industries,
Inc. at December 31, 1995 and 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.

As discussed in Note 7 to the financial statements, in 1993 the Company changed
its method of accounting for income taxes.


/S/ Ernst & Young LLP


Fort Worth, Texas
January 24, 1996




MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Consolidated Financial Statements for Justin Industries, Inc., and its
subsidiaries are prepared by the Company in conformity with consistently
applied, generally accepted accounting principles.  Management selects
appropriate accounting principles, makes necessary estimates, and uses its
judgment to ensure the objectivity, accuracy, and integrity of the data
presented.  The Company has established and maintains systems of management
reporting and internal controls that are designed to provide reasonable
assurance that Company policies are followed and that Company assets are
safeguarded.  These systems are constantly monitored and revised where necessary
to meet changing requirements and to strengthen controls while maintaining a
cost-effective method of providing credible and timely information necessary to
the operations of Justin Industries.

The Board of Directors carries out its oversight responsibility for the
financial statements through its Audit Committee.  This committee is composed of
directors who are neither officers nor employees of the Company.  The committee
meets periodically with the independent auditors and representatives of
management to assure that each is carrying out its responsibilities.  To ensure
the integrity of the Audit Committee function, the Company's outside auditors
have complete access to the committee, without company representatives present.
The results of their audits and their reviews of the adequacy of internal
controls and the quality of financial reporting are freely discussed during
these conferences.

================================================================================

(PAGE 28 and PAGE 29)

<TABLE>
ELEVEN-YEAR FINANCIAL SUMMARY                                                          
<CAPTION>                                                                              
Years ending on December 31,           1995     1994     1993     1992     1991     1990
------------------------------------------------------------------------------------------
<S>                                  <C>      <C>      <C>      <C>      <C>      <C>
SUMMARY OF OPERATIONS: (see note)                                                      
  (in thousands of dollars)                                                            
  Net sales:                                                                           
    Building Materials               240,094  224,213  179,740  158,808  123,004  118,943
    Footwear                         221,354  258,796  295,191  294,459  245,346  181,370
------------------------------------------------------------------------------------------
                                     461,448  483,009  474,931  453,267  368,350  300,313
------------------------------------------------------------------------------------------
  Operating profit:                                                                    
    Building Materials                42,107   44,600   31,445   16,423    4,979    3,698
    Footwear                           9,234   22,871   34,168   36,054   22,934   17,748
------------------------------------------------------------------------------------------
                                      51,341   67,471   65,613   52,477   27,913   21,446
------------------------------------------------------------------------------------------
  Selected costs and expenses:                                                         
    Cost of goods sold               300,842  314,661  314,431  313,961  260,968  211,559
    Selling, general, and
      administrative                 115,370  106,814  100,465   91,695   84,167   70,666
    Interest                           5,032    4,058    4,005    5,214    9,482    6,815
    Depreciation                      14,742   13,852   13,473   13,837   12,338   10,164
    Income taxes                      14,553   20,571   19,995   15,304    5,280    3,697
------------------------------------------------------------------------------------------
  Income:                                                                              
    From continuing operations                                                         
      (before accounting change
      in 1993)                        25,651   36,905   36,035   27,093    8,453    7,576
    Net income                        25,651   36,905   37,141   27,093   19,233    7,293
------------------------------------------------------------------------------------------
  Income per share:                                                                    
    From continuing operations                                                         
      (before accounting change
      in 1993)                           .94     1.33     1.29      .98      .32      .29
    Net income                           .94     1.33     1.33      .98      .73      .28
------------------------------------------------------------------------------------------
  Dividends declared per share           .16      .16      .16      .14     .135     .135
  Capital expenditures*               26,020   18,627   17,278   12,006   10,666   12,646
------------------------------------------------------------------------------------------
YEAR-END STATISTICS:  (in thousands                                                    
of dollars)
  Working capital                    181,385  185,722  185,193  164,822  151,588  147,307
  Net property, plant, and equipment  96,657   85,460   80,270   76,544   78,750   84,653
  Total assets                       376,409  374,921  346,680  316,368  295,947  292,923
  Long-term debt                      57,137   65,323   88,504  100,362  116,040  124,724
  Shareholders' equity               236,489  221,900  188,803  155,270  127,549  111,135
KEY FINANCIAL RATIOS:                                                                  
  Pre-tax profit margin (%)*            8.71    11.90    11.80     9.35     3.73     3.75
  Income-return on sales (%)*           5.56     7.64     7.59     5.98     2.29     2.52
  Return on shareholders' equity (%)*  11.56    19.55    23.21    21.24     7.61     7.12
  Return on assets (%)*                 6.83    10.23    10.87     8.85     2.87     3.00
  Effective income tax rate (%)*        36.2     35.8     35.7     36.1     38.4     32.8
  Ratio of long-term debt to
    shareholders' equity               .24:1    .29:1    .47:1    .65:1    .91:1   1.12:1
  Ratio of total interest-bearing                                                      
    debt to shareholders' equity       .31:1    .36:1    .49:1    .70:1    .93:1   1.14:1
  Ratio of current assets to current
    liabilities                        3.6:1    3.5:1    4.4:1    4.0:1    4.4:1    4.1:1
OTHER STATISTICS:                                                                      
  Average number of shares
    outstanding (in thousands)        27,411   27,810   27,953   27,772   26,382   26,412
  Book value per share                  8.88     8.15     6.95     5.75     4.92     4.31
  Dividends as a percent of
    net income                          16.8     11.8     11.7     13.7     17.9     47.1
  Market price of common stock:                                                        
    High                              12 1/8   16 3/4   25 3/8       19        6    5 7/8
    Low                                9 1/2    9 3/4   11 3/4    5 5/8    3 5/8    3 5/8
==========================================================================================
<FN>                                                                                   
*Continuing Operations (before accounting change in 1993)

Note:  Per share income amounts have been computed on the average number of
common and common equivalent shares outstanding during each year and
include preferred stock as common share equivalents.  Book value per
equivalent share of common stock has been computed on the number of common
shares outstanding at December 31.  All per share information has been
adjusted for 3-for-2 stock splits in 1989 and 1992, and a 2-for-1 stock
split in 1993.  Operating profit for the business segments is income before
interest, allocation of parent-company overhead expenses, and income taxes.
</TABLE>
<TABLE>
<CAPTION>
ELEVEN-YEAR FINANCIAL SUMMARY (Continued)

Years ending on December 31,           1989     1988     1987     1986     1985           
---------------------------------------------------------------------------------
<S>                                  <C>      <C>      <C>      <C>      <C>             
SUMMARY OF OPERATIONS: (see note)                                                      
  (in thousands of dollars)                                                            
  Net sales:                                                                           
    Building Materials               113,662  108,864  113,204  119,104  134,454         
    Footwear                         142,707  123,455  109,662  101,195  103,892         
---------------------------------------------------------------------------------
                                     256,369  232,319  222,866  220,299  238,346         
---------------------------------------------------------------------------------
  Operating profit:                                                                    
    Building Materials                   604    4,369    6,685    7,437   17,861         
    Footwear                          15,650   12,223   10,184    9,946    9,997         
---------------------------------------------------------------------------------
                                      16,254   16,592   16,869   17,383   27,858         
---------------------------------------------------------------------------------
  Selected costs and expenses:                                                         
    Cost of goods sold               182,365  164,596  154,600  148,503  158,231         
    Selling, general, and
      administrative                  60,251   54,590   53,590   57,682   53,565
    Interest                           6,402    4,574    4,369    4,140    4,975         
    Depreciation                      10,003   10,263   10,152   10,218    8,839         
    Income taxes                       2,432    2,696    3,121    4,131    8,980         
---------------------------------------------------------------------------------
  Income:                                                                              
    From continuing operations                                                         
      (before accounting change
      in 1993)                         5,281    5,954    7,382    5,843   16,131
    Net income                         7,198    7,469      752    5,033   15,050         
---------------------------------------------------------------------------------
  Income per share:                                                                    
    From continuing operations                                                         
      (before accounting change
      in 1993)                           .21      .24      .29      .22      .61
    Net income                           .28      .30      .03      .19      .57         
---------------------------------------------------------------------------------
  Dividends declared per share           .10      .09      .09      .09      .09         
  Capital expenditures*                7,405    8,681    4,540    5,922   30,047         
---------------------------------------------------------------------------------
YEAR-END STATISTICS:  (in thousands                                                    
of dollars)
  Working capital                     97,983  105,114   90,206   87,407   78,873         
  Net property, plant, and equipment  64,261   67,682   75,205   80,362   84,743         
  Total assets                       211,308  214,403  219,013  224,608  231,119         
  Long-term debt                      56,238   69,590   70,509   69,489   68,089         
  Shareholders' equity               106,431   98,687   92,938   96,321   95,382         
KEY FINANCIAL RATIOS:                                                                  
  Pre-tax profit margin (%)*            3.01     3.72     4.71     3.47    10.54         
  Income-return on sales (%)*           2.06     2.56     3.31     2.08     6.77         
  Return on shareholders' equity (%)*   5.35     6.41     7.66     4.81    19.19         
  Return on assets (%)*                 2.48     2.75     3.33     2.01     7.49         
  Effective income tax rate (%)*        31.5     31.2     29.7     40.0     35.8         
  Ratio of long-term debt to
    shareholders' equity               .53:1    .71:1    .76:1    .72:1    .71:1
  Ratio of total interest-bearing                                                      
    debt to shareholders' equity       .56:1    .73:1    .79:1    .75:1    .77:1         
  Ratio of current assets to
    current liabilities                3.5:1    3.9:1    2.9:1    2.8:1    2.4:1
OTHER STATISTICS:                                                                      
  Average number of shares
    outstanding (in thousands)        25,668   25,134   25,408   26,218   26,358
  Book value per share                  4.15     3.98     3.76     3.78     3.71         
  Dividends as a percent of
    net income                          35.1     29.5    296.7     45.5     15.3
  Market price of common stock:                                                        
    High                               5 5/8    3 5/8    3 7/8    4 5/8    4 5/8         
    Low                                3 3/8    2 5/8    2 1/4    2 7/8    3 1/8         
=================================================================================
<FN>
*Continuing Operations (before accounting change in 1993)

Note:  Per share income amounts have been computed on the average number of
common and common equivalent shares outstanding during each year and
include preferred stock as common share equivalents.  Book value per
equivalent share of common stock has been computed on the number of common
shares outstanding at December 31.  All per share information has been
adjusted for 3-for-2 stock splits in 1989 and 1992, and a 2-for-1 stock
split in 1993.  Operating profit for the business segments is income before
interest, allocation of parent-company overhead expenses, and income taxes.
</TABLE>

================================================================================

(PAGE 30)

SHAREHOLDER INFORMATION

Annual Meeting

The annual meeting of shareholders will be held on Thursday, April 11, 1996, at
the Fort Worth Club Building, twelfth floor, 306 West Seventh Street, Fort
Worth, Texas, at 10:30 a.m.  All shareholders are cordially invited to attend
and are urged to be represented by proxy if unable to attend.

Dividend Reinvestment and Shareholder Savings Program

Any shareholder of record may have dividends automatically reinvested, or make
voluntary investments in the company's common stock through a service offered by
Society National Bank.  For additional information, contact Vice President
Finance, Justin Industries, Inc., P. O. Box 425, Fort Worth, Texas 76101 (817)
336-5125; or Society National Bank, c/o KeyCorp Shareholder Services, Inc., 1201
Elm Street, Suite 5050, Dallas, Texas 75270 (800) 527-7844 or (214) 871-8844.

Form 10-K/10-Q

Investors who wish to receive a copy of the company's annual report on Form 10-K
or quarterly 10-Q reports filed with the Securities and Exchange Commission, or
other shareholder mailings, may obtain them upon request to Investor Relations,
Justin Industries, Inc., P. O. Box 425, Fort Worth, Texas 76101 (817) 336-5125.

Stock Listing

Justin Industries, Inc., common stock trades on the Nasdaq National Market tier
of The Nasdaq Stock Market under the symbol "JSTN."

Stock Transfer and Dividend Disbursing Agent

Society National Bank, c/o KeyCorp Shareholder Services, Inc., 1201 Elm Street,
Suite 5050, Dallas, Texas 75270 (800) 527-7844 or (214) 871-8844.

Independent Auditors

Ernst & Young LLP, 500 Throckmorton Street, Suite 2200, Fort Worth, Texas 76102.

Executive Offices

Justin Industries, Inc., 2821 West Seventh Street, Fort Worth, Texas 76107 (817)
336-5125.

<TABLE>                                                                                           
QUARTERLY FINANCIAL DATA

The following table presents summarized quarterly operating results for the
two-year period ending December 31, 1995.

Unaudited - In thousands, except per share data

<CAPTION>
                                                    Quarter Ended
               --------------------------------------------------------------------------------------
                                  1995                                        1994                              
               ------------------------------------------  ------------------------------------------
                  3/31       6/30       9/30      12/31       3/31       6/30       9/30      12/31
               ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
<S>             <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Net sales       $113,654   $109,918   $112,421   $125,455   $109,891   $114,894   $119,692   $138,532
Gross profit      38,951     39,276     39,811     42,568     36,995     41,149     43,173     47,031
Net income         5,268      6,034      5,778      8,571      6,669      9,452      9,440     11,344
Per share:                                                                                         
  Net income         .19        .22        .21        .32        .24        .34        .34        .41
Dividends paid       .04        .04        .04        .04        .04        .04        .04        .04
</TABLE>                 


Market Makers
as of January 24, 1996

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Jefferies & Co., Inc.
Knight Securities L.P.
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Merrill Lynch, Pierce, Fenner and Smith, Inc.
Nash Weiss/Div. of Shatkin Inv.
PaineWebber, Inc.
Parker/Hunter, Inc.
Principal Financial Securities
Sherwood Securities Corp.
Smith Barney, Inc.
Southwest Securities, Inc.
Troster Singer Corp.



Market Price
of Common Stock
                                           
                          Price            
 Year       --------------------------------
Quarter       High         Low        Close
 1993                                      
   1         25 3/8      17 5/8      24 3/4
   2         24 7/8      16 1/2      17 1/2
   3         22 1/4      15          18
   4         19          11 3/4      14 3/4
 1994                                   
   1         16 3/4      13          14
   2         15          11 1/2      12
   3         13 3/4      10          12 7/8
   4         13 3/4       9 3/4      11 7/8
 1995                                   
   1         12 1/8       9 1/2       9 5/8
   2         12           9 5/8      11
   3         11 5/8      10 1/2      11
   4         11 3/8       9 7/8      11

================================================================================

(PAGE 31)

                                    DIRECTORS
                                        
                                   JOHN JUSTIN
            Chairman and Chief Executive Officer of Justin Industries
                                        
                                 J. T. DICKENSON
           President and Chief Operating Officer of Justin Industries
                                        
                               BAYARD H. FRIEDMAN
                               Investment Advisor
                                        
                                 MARVIN GEARHART
              Chairman of the Board of Rock Bit International, Inc.
                                        
                                 ROBERT E. GLAZE
                              Personal Investments
                                        
                                  DEE J. KELLY
                   Shareholder and Director of the law firm of
                              Kelly, Hart & Hallman
                                        
                               JOSEPH R. MUSOLINO
                      Vice Chairman of NationsBank of Texas
                                        
                                  JOHN V. ROACH
                     Chairman and Chief Executive Officer of
                                Tandy Corporation
                                        
                              DR. WILLIAM E. TUCKER
                    Chancellor of Texas Christian University
                                        
                                        
                                        
                                        
                                   COMMITTEES
                                        
                                 Audit Committee
                                        
                               BAYARD H. FRIEDMAN
                                 ROBERT E. GLAZE
                              DR. WILLIAM E. TUCKER
                                        
                             Compensation Committee
                                        
                               BAYARD H. FRIEDMAN
                                 MARVIN GEARHART
                                        
                                        
                                        
                                        
                                    OFFICERS
                                        
                                   JOHN JUSTIN
                Chairman of the Board and Chief Executive Officer
                                        
                                 J. T. DICKENSON
                      President and Chief Operating Officer
                                        
                                RICHARD J. SAVITZ
                      Vice President Finance and Treasurer
                                        
                                 JON M. BENNETT
                   Vice President Administration and Secretary
                                        
                              EDWARD L. STOUT, JR.
                         Vice President Brick Operations
                                        
                                FRANK A. SCIVETTI
                       Vice President Footwear Operations
                                        
                                 JUDY B. HUNTER
                                   Controller
                                        
                                 W. O. BURROUGH
                               Assistant Treasurer
                                        


(Picture of bronze statue of Mr. John Justin)

On January 8, 1996, John Justin was singularly honored with the unveiling of a
life-size bronze, appropriately titled The Chairman, to commemorate his years of
leadership of the Fort Worth Livestock Show and Rodeo, which observes its
centennial year in 1996.  The economic growth of Fort Worth, North and West
Texas, and Justin Industries has been due in no small measure to the annual
Livestock Show and Rodeo and its visitors, exhibitors, performers, and patrons.

================================================================================

(PAGE 32 and PAGE 33)

(Picture of map of the United States)

MANUFACTURING AND DISTRIBUTION LOCATIONS

ACME BRICK COMPANY
 Manufacturing - Brick
   Bennett, Texas
   Bridgeport, Texas
   Denton, Texas
   Elgin, Texas
   Garrison, Texas
   McQueeney, Texas
   San Felipe (Houston), Texas
   Fort Smith, Arkansas
   Malvern, Arkansas
   Perla, Arkansas (2)
   Kanopolis, Kansas
   Weir, Kansas
   Jamestown, Louisiana
   Oklahoma City, Oklahoma
   Tulsa, Oklahoma

 Manufacturing - Brick
   Baton Rouge, Louisiana (Concrete Block)

 Distribution
   Abilene, Texas
   Amarillo, Texas
   Austin, Texas
   Beaumont, Texas
   Dallas, Texas
   Denton, Texas
   Fort Worth, Texas
   Houston, Texas
   Longview, Texas
   Lubbock, Texas
   Midland, Texas
   San Antonio, Texas
   Texarkana, Texas
   Wichita Falls, Texas
   Alexandria, Louisiana
   Baton Rouge, Louisiana
   Lafayette, Louisiana
   Lake Charles, Louisiana
   Monroe, Louisiana
   New Orleans, Louisiana
   Shreveport, Louisiana
   Fort Smith, Arkansas
   Little Rock, Arkansas
   Russellville, Arkansas
   Springdale, Arkansas
   Joplin, Missouri
   Springfield, Missouri
   St. Louis, Missouri
   Oklahoma City, Oklahoma
   Tulsa, Oklahoma
   Kansas City, Kansas
   Wichita, Kansas
   Memphis, Tennessee (2)

AMERICAN TILE SUPPLY COMPANY
 Distribution
   Austin, Texas
   Dallas, Texas, area (8)
   Fort Worth, Texas, area (2)
   Houston, Texas, area (2)
   Longview, Texas
   San Antonio, Texas, area (2)

FEATHERLITE BUILDING PRODUCTS CORPORATION
 Manufacturing - Concrete Block
   Abilene, Texas
   Amarillo, Texas
   Austin, Texas, area
   Beaumont/Port Arthur, Texas
   Dallas, Texas
   El Paso, Texas
   Lubbock, Texas
   San Antonio, Texas

 Manufacturing - Architectural Stone
     Cedar Park, Texas
     d/b/a Texas Quarries

 Distribution
   Corpus Christi, Texas
   Midland, Texas
   Las Cruces, New Mexico

TRADEWINDS TECHNOLOGIES, INC.
   Phoenix, Arizona

JUSTIN BOOT COMPANY
 Manufacturing
   Fort Worth, Texas
   Carthage, Missouri
   Cassville, Missouri (2)
   Sarcoxie, Missouri

NOCONA BOOT COMPANY
 Manufacturing
   Nocona, Texas

TONY LAMA COMPANY
 Manufacturing
   El Paso, Texas

NORTHLAND PUBLISHING COMPANY, INC.
   Flagstaff, Arizona

================================================================================

(BACK COVER - Picture of boot, brick and building block.)



                             JUSTIN INDUSTRIES, INC.
                       2821 West Seventh Street - Box 425
                    Fort Worth, Texas 76101  -  817-336-5125