SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

X                                  FORM 10-K

     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED] - FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                                                            -----------------


                        COMMISSION FILE NUMBER 33-63044
                                               --------




                                  VALCOR, INC.

             (Exact name of registrant as specified in its charter)


           DELAWARE                                             74-2678674
-------------------------------                            -------------------

(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                            Identification No.)


5430 LBJ FREEWAY, SUITE 1700, DALLAS, TEXAS                     75240-2697
-------------------------------------------                -------------------

 (Address of principal executive offices)                       (Zip Code)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:           (214) 233-1700
                                                           -------------------




SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

          None.


SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

          None.


INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR
THE PAST 90 DAYS.  YES  X   NO
                       ---     ---



THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF VALHI, INC. (FILE NO. 1-5467) AND
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS J(1)(A) AND (B) OF FORM
10-K FOR REDUCED DISCLOSURE FORMAT.


DOCUMENTS INCORPORATED BY REFERENCE:

          None.
                              [INSIDE FRONT COVER]

     Chart showing (i) Valhi's 100% ownership of Valcor and The Amalgamated
Sugar Company, 53% ownership of NL Industries, Inc. and 50% ownership of Waste
Control Specialists LLC and (ii) Valcor's 100% ownership of Medite Corporation,
National Cabinet Lock, Inc., Sybra. Inc.
                                     PART I




ITEM 1.   BUSINESS

GENERAL

     Valcor, Inc., based in Dallas, Texas, is engaged in the building products,
hardware products and fast food industries.  Information regarding the Company's
business segments and the wholly-owned operating subsidiaries conducting such
businesses is set forth below.  Business and geographic segment financial
information is included in Note 3 to the Consolidated Financial Statements,
which information is incorporated herein by reference.




Building Products                     Medite is a leading producer of medium
  Medite Corporation                  density fiberboard ("MDF"), a wood
                                      fiber-based engineered building board
                                      product serving as an alternative to
                                      certain traditional timber products.
                                      With MDF plants in the United States and
                                      Ireland, Medite currently has an
                                      estimated 11% market share in North
                                      America and a 7% share in Europe.
                                      Medite also conducts traditional timber
                                      products operations in Oregon where it
                                      owns 168,000 acres of timberland.

Hardware Products                     National Cabinet Lock is a leading North
  National Cabinet Lock, Inc.         American manufacturer of mechanical
                                      locks, workstations and precision ball
                                      bearing drawer slides for furniture and
                                      other markets.

Fast Food                             Sybra is the second-largest franchisee
  Sybra, Inc.                         of Arby's restaurants with over 150
                                      stores clustered principally in Texas,
                                      Michigan, Pennsylvania and Florida.


     Valcor, a Delaware corporation, is a wholly-owned subsidiary of Valhi, Inc.
(NYSE: VHI).  The Company was formed in 1993, and Valhi contributed to the
Company the stock of Medite, National Cabinet Lock and Sybra (collectively, the
"Combination").  For financial reporting purposes, the Combination was accounted
for as a combination of entities under common control in a manner similar to a
pooling of interests.

     Contran Corporation holds, directly or through subsidiaries, approximately
91% of Valhi's outstanding common stock.  Substantially all of Contran's
outstanding voting stock is held by trusts established for the benefit of the
children and grandchildren of Harold C. Simmons, of which Mr. Simmons is the
sole trustee.  Mr. Simmons is Chairman of the Board and Chief Executive Officer
of the Company, Valhi and Contran, and may be deemed to control each of such
companies.

BUILDING PRODUCTS - MEDITE CORPORATION

     Overview.  Medite's principal business is the international production and
sale of medium density fiberboard.  MDF is a wood fiber-based engineered
building board product manufactured primarily from pre-commercial forest
thinnings and forest product industry residuals (wood chips, shavings and
sawdust) which are bonded together with resins to form a machineable, consistent
panel.  Relative to traditional timber products, MDF generally has both lower
unit costs and physical characteristics which promote the use of MDF in a
variety of applications, including furniture, cabinetry, shop fittings,
moldings, millwork and joinery.  According to industry sources, furniture
currently accounts for approximately 75% of MDF use in Europe and 85% in the
United States.

     Medite's major markets are in North America (40% of 1995 MDF sales) and
Europe (54%).  The Company believes that Medite is the world's most recognized
MDF trademark.  In addition to standard Medite, the Company offers a wide range
of specialty MDF products which are sold for higher prices and generally result
in higher operating margins than standard MDF products.

     Medite's MDF production facilities are located in the Republic of Ireland,
Oregon and New Mexico.  A capacity addition completed in late 1994 at the Irish
plant increased Medite's annual production capacity by 15% (to 580,000 cubic
meters) in 1995 and will ultimately increase capacity to 635,000 M3 by 1998.

     In addition to its MDF operations, Medite owns 168,000 acres of timberland
in Southern Oregon containing approximately 660 million board feet ("MMBF") of
generally second-growth merchantable timber and operates facilities that produce
traditional timber products including logs, lumber, veneer and wood chips.
Medite actively manages its fee timberlands, which have become an increasingly
valuable resource in recent years as the volume of timber offered for sale in
the Pacific Northwest by U.S. government agencies has substantially declined.

     Medite's strategy is to continue to focus on MDF, including development of
specialty MDF products and enhancement of machineability in response to
increasing substitution in molding and similar applications, and to manage its
fee timber resources on a longer-term sustainable basis and seek to maximize the
operating contribution of its harvested timber.

     MDF products.  Medite's standard MDF product, Medite, was first introduced
in 1975 and is produced exclusively for interior applications such as furniture,
shelving, door frames, cabinet doors and interior paneling.  In 1995, standard
Medite accounted for approximately three-fourths of Medite's total MDF sales
dollars, with specialty products, described below, accounting for one-fourth.

     Specialty products include Medex, designed for exterior applications,
Medite 313 for interior applications that involve high-humidity environments,
Medite FR, developed by Medite primarily to address strict building code
requirements in Europe for flame/fire resistance, and Medite II developed to
meet specialized needs for a low formaldehyde-content interior MDF product.

     MDF production facilities and raw materials.  Medite uses the newer
technology continuous line press, more efficient in producing thin board MDF
(three to 15 millimeters), at its Irish MDF plant and uses an older multi-
opening press technology at all three of its facilities generally to produce
thicker MDF (16 to 30 millimeters).

     Medite's Clonmel, Republic of Ireland MDF plant produces standard and
specialty MDF products under the ISO 9000 quality management certification.  A
$32 million expansion completed in the fourth quarter of 1994 raised future
production capacity to 300,000 M3.  Production during 1995 amounted to
approximately 237,000 M3 (approximately 97% of 1995 capacity).  Approximately
28% of 1995 Clonmel production consisted of specialty MDF products.  Medite has
what it considers to be an attractive long-term supply contract with the Irish
Forestry Service, pursuant to which Medite has a reliable, fixed price supply of
pre-commercial thinnings from Irish forests.  See Note 13 to the Consolidated
Financial Statements.  These and other private sources of pre-commercial
thinnings accounted for approximately 60% of the Clonmel plant's fiber raw
materials in 1995.  The balance of fiber requirements are provided by wood chips
acquired from local sawmill operators, which Medite believes will be available
in adequate supply due to the continuing development of the Irish forest
products industry.

     Production at the Oregon MDF plant during 1995 was approximately 82% of its
175,000 M3 capacity, with standard Medite accounting for approximately 90% of
production.  The primary fiber sources are wood chips, shavings and sawdust,
almost all purchased from sawmills located in close proximity to the plant at
spot market prices.  Production at the New Mexico plant during 1995 was
approximately 78% of its 160,000 M3 capacity, approximately 95% of which was
standard Medite product.  The primary fiber sources are wood chips, shavings and
sawdust produced within a 150-mile radius of the plant, most of which are
purchased pursuant to short-term contracts.

     Through its Oregon fee timberlands, its long-term wood supply agreements
with the Irish Forestry Service and other sources, Medite believes it has access
to adequate fiber supplies to meet current and expected operating needs for its
existing facilities.  However, Medite anticipates increasing competition for
wood fiber in future years and, accordingly, there can be no assurance that
long-term future fiber supply will be adequate, with respect to quantity and
price, to maintain margins or to provide for future capacity expansion.

     Medite purchases urea formaldehyde resins for standard MDF products from
suppliers located in close proximity to its plants.  Resins for U.S. specialty
MDF products are purchased primarily from suppliers in Texas and Louisiana with
resins for specialty MDF products produced in Ireland purchased primarily from
U.K. suppliers.

     Traditional timber products - products, operations and properties.  Medite
produces and sells lumber used in residential and commercial construction, and
veneer which is used in the production of plywood and laminated veneer lumber
("LVL"), and wood chips, which are a basic raw material for the MDF and paper
industries.  Logs harvested from Medite's fee timberlands are utilized in the
production of lumber, veneer and wood chips.  Certain sizes and species of logs
harvested by Medite that are not used in its manufacturing operations are sold
to other mills in the Northwest.

     Medite owns approximately 168,000 acres of timberland which contain
approximately 660 million board feet of generally second-growth merchantable
timber. The dominant species is Douglas Fir and the average annual timber growth
rate is approximately 4%.  Medite's timber holdings are within close proximity
to its Oregon production facilities and are in relatively accessible terrain.

     Medite produces veneer in Rogue River, Oregon and stud lumber in White
City, Oregon.  Annual capacities of these plants are 80,000 square feet (3/8"
basis) of veneer and 70,000 board feet of lumber plus a combined annual wood
chip capacity of 70,000 bone dry units.  The Rogue River plant, completed in
late 1993 to replace a similar facility destroyed by fire in June 1992, is
designed to process cull (defective) logs from throughout the Southern Oregon
area and the smaller second-growth timber expected to be available from Company-
owned timberlands on a longer-term basis.  Veneer from this plant is sold to the
LVL industry as well as to traditional softwood and hardwood plywood products
manufacturers.  The White City mill produces primarily 2x4 studs, used in
residential construction in California, from small logs and "peeler cores", a
by-product of veneer conversion facilities.

     Distribution and sale of products.  Medite's manufactured products are sold
primarily to wholesalers of building materials.  Medite's major MDF markets
include the United Kingdom, Northern Europe and the Republic of Ireland; west
and central United States; the Pacific Rim and Mexico.  In 1995, approximately
40% of Medite's total MDF sales were in North America with 54% in Europe (29% in
the United Kingdom).  U.S. distribution is primarily by rail and common carrier
trucking, while most Irish production is shipped by containerized ocean cargo.

     Manufactured traditional timber products are sold primarily in Western U.S.
markets.  Logs are sold primarily to other Oregon mills.  Although logging
operations are seasonal due to inclement weather conditions during winter and
spring months, the production and sale of manufactured products is not
particularly seasonal in nature.

     Medite's operations are not dependent upon one or a few customers, the loss
of which would have a material adverse effect on its operations.  Medite's ten
largest customers accounted for about one-fifth of sales in each of the past
three years with at least six of such customers in each year located in the U.S.

     Cyclicality.  Demand for Medite's MDF products is in part derived from the
general level of economic activity in its principal markets (North America and
Europe).  Economic growth rates in Europe and North America slowed during 1995
and may continue to be relatively slow in 1996.  Demand for Medite's traditional
timber products is largely influenced by new U.S. construction, which is highly
cyclical in nature.  Medite expects its future operating performance will
continue to be affected in part by both general and industry specific economic
conditions, some of which are cyclical in nature.

     Competition.  Medite operates in highly competitive industries.  Within the
MDF segment of its business, Medite competes on the basis of quality, product
breadth, customer service and price.  In the traditional timber products
business, Medite competes primarily on the basis of price.  Transportation costs
generally limit the geographic markets in which Medite's and its competitors'
products are sold.

     During 1994, global demand for MDF exceeded availability and numerous
producers, including Medite, placed customers on allocation.  The high MDF
operating rates and increasing product prices, coupled with favorable forecasts
for increasing MDF demand, resulted in industry capacity additions during 1995
with additional capacity expected in 1996.  Such industry capacity additions,
coupled with lower-than-expected demand in Europe and North America, contributed
to lower MDF selling prices and operating rates in the last half of 1995 and are
expected to continue price and volume pressures in 1996 and reduce Medite's
market share from current levels.

     Medite's MDF operations compete in North America principally with a number
of producers of MDF and other composite board products such as particle board,
and in the Pacific Rim with Australian, New Zealand and other U.S.
manufacturers.  In Europe, Medite competes principally with other European Union
producers.  Medite's larger MDF competitors in Europe include Kronospan and
Gluntz AG and in North America include International Paper and Willamette
Industries.  The cost of shipping products, which is borne by the customer, is
significant and Medite may operate at a competitive disadvantage relative to
certain other producers who are located closer to certain markets.
Approximately 80% of Medite's MDF production capacity utilizes the older multi-
opening press technology and 20% utilizes the newer and generally more efficient
continuous press technology.  Medite understands that much of the 1995/1996
industry capacity additions utilize the newer press technology and may
ultimately subject Medite to certain competitive disadvantages.  In addition,
some of Medite's competitors may possess greater financial resources, including
in some cases the financial support of the governments of the countries in which
such competitors are located.  Due to periodic declines in the value of the U.S.
dollar relative to other currencies, Medite's Irish operations have also
experienced periodic competition from North American producers.

     Medite's traditional timber products operations compete primarily with
numerous other producers in the Pacific Northwest, Canada and, increasingly, the
Southern United States.  While Medite's fee timber is a valuable resource which
aids its ability to control product costs, other companies with greater supplies
of fee timber may have a competitive product cost advantage.

     Environmental matters and governmental regulation.  Medite's MDF and
traditional timber products manufacturing operations are subject to numerous
national, state and local laws and regulations relating to, among other things,
raw materials handling, production procedures, operating environment, emissions
and waste disposal, air and water quality, worker and product safety and
protection of the environment generally.  As Medite engages in manufacturing
activities in the United States and Europe, it must at times contend with
differing regulatory standards and requirements.  Except with respect to the New
Mexico MDF facility as discussed below, Medite believes that it currently is in
material compliance with existing regulations.  There can be no assurance,
however, that new or more rigorous regulations affecting Medite's products or
manufacturing operations will not be adopted or that future expenditures to
comply with any such regulations would not be material.

     In 1995, Medite was named as a defendant in a complaint filed in the New
Mexico District Court (New Mexico Environmental Department (`NMED'') v. Medite
Corporation, No. SF 95-2581(C)).  The complaint involved certain violations of
state air quality emission standards at Medite's New Mexico MDF facility.  In
1995, the New Mexico operations represented less than 15% of Medite's sales and
assets.  In December 1995, Medite entered into a settlement agreement with the
NMED wherein Medite paid fines of $200,000 to settle prior violations of air
quality emission standards and agreed to submit an application for new operating
permits and related compliance plans.  Medite will incur fines of $750 per day
of operation until a new operating permit for the facility is obtained.  Medite
currently expects to submit a new operating permit and compliance plan to the
NMED during 1996, however there can be no assurance that regulatory approval
will be obtained without modifications which may not be economically feasible
for this facility.

     Urea formaldehyde resin is used as a binding agent in the production of
standard MDF products.  Formaldehyde, which also occurs naturally in wood and
other natural resources, is listed as a "suspected" carcinogen by the U.S.
federal government based upon results of laboratory studies performed using
maximum tolerated doses.  While Medite's MDF products that contain urea
formaldehyde resins currently meet applicable regulations, there can be no
assurance that the MDF industry, including Medite, will not be compelled to
reduce or even eliminate the use of urea formaldehyde resins in the future.
Medite produces a `formaldehyde-free'' specialty MDF product, Medite II, which
represented a nominal amount of sales in 1995.

     Medite's MDF manufacturing operations also release formaldehyde into the
atmosphere as a waste by-product.  These emissions have been targeted for
increasingly stringent regulation under the U.S. Clean Air Act, although final
regulations for emissions are not scheduled to be promulgated by the
Environmental Protection Agency until 1997 and Medite cannot predict what, if
any, future pollution control technology may be required.  The cost of any such
future technology could be significant in the years in which it might be
required to be installed.

     Medite's traditional timber products operations are subject to a variety of
Oregon and federal laws and regulations dealing with timber harvesting,
reforestation and endangered species.  The Northern Spotted Owl is currently
designated as a threatened species under the Endangered Species Act ("ESA").
Generally, habitat for these owls is found in old-growth timber stands, and not
in Medite's predominantly second-growth timber.  Consequently, the Northern
Spotted Owl's ESA status has not todate had, and, Medite believes, will not in
the future have, a material adverse effect on its timber harvesting practices.
A 1994 amendment to the Oregon Forest Practices Act imposed more restrictive
regulations on the harvest of timber near rivers and streams, including
intermittent stream beds.  Medite believes that this amendment will not
materially impact its ability to harvest timber from its timberlands.  There can
be no assurance, however, that future legislation or governmental regulations
will not adversely affect Medite or its ability to harvest timber and sell logs
in the manner currently contemplated.

     Trademarks and patents.  Medite believes that the patents it holds for MDF
products and production processes are important to its MDF business.  Medite's
major MDF trademarks, Medite and Medex, are protected by registration in the
United States and certain other countries.  Medite also has a non-exclusive
worldwide license relating to application of resins in the manufacture of Medex
and a patent on the apparatus and method of manufacture of Medex.

     Employees.  As of December 31, 1995, Medite employed approximately 700
persons  including 500 in the United States and 200 in Europe. Approximately 30%
of U.S. employees and 70% of non-U.S. employees were represented by various
labor unions.  The collective bargaining agreements related to its veneer plant,
its Irish MDF plant and its Oregon MDF plant expire in June 1996, March 1997 and
September 1997, respectively.  Medite believes that its labor relations are
satisfactory.

     Risk of loss from fire or other casualties.  Medite assumes substantially
all risks of loss from fire and other casualties on its timberlands, as do the
owners of most other timber tracts in the United States.  Consistent with the
past practices of Medite and most other U.S. timber owners, Medite does not
maintain  fire insurance in respect to standing timber.  Medite is a participant
with state agencies and other timberland owners in cooperative fire fighting and
aerial fire surveillance programs.  The extensive roads on Medite's acreage also
serve as fire breaks and facilitate implementation of fire control techniques
and utilization of fire fighting equipment.  Medite's various timber tracts are
somewhat geographically dispersed, which also reduces the possibility of
significant fire damage.  The only significant forest fire on Medite's
timberlands during the past five years occurred in July 1994 and resulted in
damage to approximately 1,200 acres, which were salvaged with minimal loss.

     Medite's production facilities are susceptible to fire because of the
nature of their operations, and in 1992 the Rogue River veneer mill was
completely destroyed by fire.  To reduce the risk of significant fire damage,
Medite's present facilities employ sophisticated fire monitoring and detection
systems.  The Company also maintains property and business interruption
insurance to mitigate potential risk of loss arising from fires or other
casualty losses.

HARDWARE PRODUCTS - NATIONAL CABINET LOCK, INC.

     Products, operations and properties.  National Cabinet Lock manufactures
low and medium-security mechanical locks, precision ball bearing drawer slides,
computer workstations and other components for furniture and a variety of other
applications.  In 1995, each of the three major product lines (locks, drawer
slides and workstations) accounted for about one-third of the Company's total
hardware sales.  Locks are produced by National Cabinet Lock primarily in
Mauldin, South Carolina.  Drawer slides and workstations are produced in
Kitchener, Ontario under the Waterloo Furniture Components name.  The Company
believes its hardware products compete in relatively well-defined niche markets
and believes that it is (i) the largest U.S. cabinet lock producer, (ii) the
largest Canadian producer of drawer slides and (iii) the largest supplier of
computer keyboard support arms to the North American office furniture
manufacturing market.

     Purchased components, including zinc castings, are the principal raw
materials used in the manufacture of latching and security products.  Strip
steel is the major raw material used in the manufacture of drawer slides and
workstation products.  These raw materials are purchased from several suppliers
and are readily available.  The cost of zinc, copper and steel has generally
increased throughout the past two years.  Such increased raw material costs were
partially offset by responsive selling price increases.  There can be no
assurance that any future raw material cost increases can be fully recovered
through additional product price increases.

     Strategy.  National Cabinet Lock's strategy is to continue to improve
manufacturing efficiency and cost control, to develop specialty, patented
products focused on niche markets and to capitalize on future opportunities
which may emerge with targeted original equipment manufacturers.  The Company
will also search for synergistic acquisitions or product licensing to expand its
product base and seek to expand its established market positions by emphasizing
customer service, promoting its distribution programs and seeking greater
penetration of current markets.  In this regard, in August 1995 National Cabinet
Lock acquired the assets of a Canadian workstation and drawer slide competitor
for approximately $6 million.

     Competition and customer base.  Competition in the Company's hardware
products markets is based on product features, customer service, quality,
distribution channels, consumer brand preferences and price.  Approximately 30%
of lock sales are made through National Cabinet Lock's STOCK LOCKS distribution
program, a program believed to offer a competitive advantage because delivery
generally is made within 48 hours.  Most remaining lock sales are to original
equipment manufacturers' specifications.  Precision ball bearing drawer slides
and workstations are produced in Canada under the Waterloo Furniture Components
tradename.  The primary market for these products are office furniture
manufacturers in the United States and Canada.  Hardware products are marketed
primarily through the Company's own sales organization as well as select
manufacturers' representatives.

     Major competitors include Chicago Lock, ESP and Fort Lock (locks), Accuride
and Knape & Vogt (drawer slides) and Weber Knapp (workstations).  National
Cabinet Lock also competes with a large number of other manufacturers, and the
variety of relatively small competitors generally makes significant price
increases difficult.  The Company does not believe it is dependent upon one or a
few customers, the loss of which would have a material adverse effect on its
hardware operations.  The ten largest customers accounted for about one-third of
hardware products sales in each of the past three years, with the largest
customer less than 10% in each year.  In 1995, five of the ten largest customers
were located in the U.S. with five in Canada.  Of such customers, nine were
primarily purchasers of Waterloo Furniture Components' products and one was a
U.S. lock customer.

     Patents and trademarks.  National Cabinet Lock holds a number of patents
relating to its hardware products operations, none of which by itself is
considered significant, and owns a number of trademarks, including National
Cabinet Lock, STOCK LOCKS and Waterloo Furniture Components, which the Company
believes are well recognized in the hardware products industry.

     Employees.  As of December 31, 1995, National Cabinet Lock employed
approximately 750 persons, of which 220 were in the United States and 530 were
in Canada.  Approximately two-thirds of Canadian employees are covered by a
three-year collective bargaining agreement expiring February 1997.  National
Cabinet Lock believes that its labor relations are satisfactory.

     Regulatory and environmental matters.  The Company's hardware products
operations are subject to various federal, state, provincial and local
provisions regulating, among other things, worker and product safety and
protection, the discharge of materials into the environment and other
environmental protection matters.  National Cabinet Lock believes it is in
substantial compliance with existing permits and regulations and does not
believe future expenditures to comply with these regulations will be material.

FAST FOOD - SYBRA, INC.

     Products and operations.  Sybra (Arby's spelled backwards) operates over
150 Arby's restaurants clustered in four regions, principally in Michigan (47
stores), Texas (58), Pennsylvania (31) and Florida (22), pursuant to licenses
with Arby's, Inc.  According to information provided by Arby's, Sybra is the
second-largest franchisee in the Arby's restaurant system based upon the number
of restaurants operated and gross sales.  Arby's is a well-established fast food
restaurant chain and features a menu that highlights roast beef sandwiches along
with a variety of chicken sandwiches and products, deli sandwiches, potato
products and soft drinks.  Sybra's menu has evolved whereby roast beef accounts
for approximately two-thirds of sandwich sales compared to 80% five years ago.
In January 1996, Sybra introduced its first `dual-branded'' store, offering
ZuZu Handmade Mexican Food as well as the Arby's menu.  Sybra may introduce
additional dual-branded stores if returns are deemed satisfactory.

     Sybra's 158 Arby's restaurants at the end of 1995 represent a net decrease
of two  stores in the past three years (18 opened; 20 closed) during which
period Sybra also remodeled 18 of its older stores.  Sybra currently expects a
net decrease of at least five stores in 1996, as it plans to open one new
restaurant during the first quarter and has closed six stores during January and
February.

     Strategy.  Given the extremely competitive environment in which Sybra
operates, Sybra will continue its strong emphasis on operational details and
routinely review the profit contribution of each restaurant with a view toward
closing those stores which do not meet expectations.

     Properties.  At the end of 1995, approximately 80% of Sybra's 158 Arby's
restaurants were free-standing stores with the remainder located within shopping
malls or strip shopping centers.  Approximately 60% of total locations are
leased, with most leases being on a long-term basis and providing for base
monthly rents plus contingent rents based on sales.  Approximately 90% of the
leases of free-standing locations contain purchase options at fair market values
and/or various renewal options.  In most cases, Sybra expects that leases could
be renewed or replaced by other leases, although rental rates may increase.
Contingent rentals based upon various percentages of gross sales of individual
restaurants were less than 10% of Sybra's total rent expense in each of the past
three years.  Sybra also leases corporate or regional office space in five
states.

     Sybra has a Consolidated Development Agreement ("CDA") with Arby's, Inc.
which currently provides Sybra with exclusive development rights within certain
counties in the Dallas/Fort Worth, Texas area, and provides Sybra and Arby's
with joint development rights in the Tampa, Florida area.  As of December 31,
1995, Sybra is required to open an aggregate of 12 more stores in its existing
regional markets through various dates in 1997 (five in 1996).  The Company is
considering curtailing new store openings and, as a result, Sybra may not be in
compliance with the current terms of the CDA by the end of 1996.  In that event,
there can be no assurance that Sybra could renegotiate the CDA in order to
retain its exclusive development rights, in which case other Arby's competitors
would be free to enter the Dallas/Ft. Worth and Tampa markets.  Sybra does not
have any other territorial or development agreements which would prohibit others
from operating an Arby's restaurant in the general geographic markets in which
Sybra now operates, although each store is given certain narrow geographical
protection (generally a one to four mile radius) from other Arby's units.

     Food products and supplies.  Sybra and other Arby's franchisees are members
of ARCOP, Inc., a non-profit cooperative purchasing organization which
facilitates negotiations of national contracts for food and distribution, taking
advantage of the larger purchasing requirements of the member franchisees.
Since Arby's franchisees are not required to purchase any food products or
supplies from Arby's, Inc., ARCOP facilitates control over food supply costs and
avoids franchisor conflicts of interest.

     License terms and royalty fees.  Generally, franchise agreements relating
to each restaurant location require that Sybra comply with certain requirements
as to business operations and facility maintenance.  Currently, Sybra pays an
initial franchise fee of $25,000 and a royalty rate of 4% of sales for a
standard 20-year license.  Because some of Sybra's licenses were issued at times
when license terms were perpetual and lower royalty rates were in effect, 42% of
Sybra's franchise agreements have no fixed termination date and royalties for
all locations aggregated 2.8% to 2.9% of sales in each of the past three years.
Sybra's average royalty rate would be expected to increase over time if new
stores are opened, older stores are closed and existing 20-year licenses are
renewed at then-prevailing royalty rates.  The first of Sybra's 20-year licenses
expires in 2003.

     Advertising and marketing.  Sybra directs about 8% of sales towards
marketing.  All franchisees of Arby's, Inc. must belong to AFA Service
Corporation ("AFA"), a non-profit association of Arby's restaurant operators,
and must contribute a specified portion (currently .7%) of their gross revenues
as dues to AFA.  In return, AFA provides franchisees creative materials such as
television and radio commercials, ad mats for newspapers, point-of-purchase
graphics and other advertising materials.  Sybra also devotes approximately 3%
of sales to coupon sales promotions, including the direct cost of discounted
food, and newspaper and direct mail inserts, and approximately 4% of its
restaurant sales to local advertising.

     Competition and seasonality.  The fast food industry is extremely
competitive and subject to pressures from major business cycles and competition
from many established and new restaurant concepts.  According to industry data,
there is a significant disparity in the revenues and number of restaurants
operated by the largest restaurant systems and the Arby's system.  As a result,
some organizations and franchised restaurant systems have significantly greater
resources for advertising and marketing than the Arby's restaurant system or
Sybra, which is an important competitive factor.  Sybra's response to these
competitive factors has been to cluster its stores in certain geographic areas
where it can achieve economies of scale in advertising and other activities.

     Operating results of Sybra's restaurants have historically been affected by
both retail shopping patterns and weather conditions.  Accordingly, Sybra
historically has experienced its most favorable results during the fourth
calendar quarter (which includes the holiday shopping season) and its least
favorable results during the first calendar quarter (which includes winter
weather that can be adverse in certain markets).

     Employees.  As of December 31, 1995, Sybra had approximately 3,900
employees, of which 3,200 were part-time employees.  Approximately 3,800
employees work in Sybra's restaurants with the remainder in its corporate  or
regional offices.  Employees are not covered by collective bargaining agreements
and Sybra believes that its employee relations are satisfactory.

     Governmental regulation.  A significant portion of Sybra's restaurant
employees work on a part-time basis and are paid at rates related to the minimum
wage rate.  Restaurant labor costs currently are approximately 29% of sales.
Any increase in the minimum wage rate or legislation requiring mandatory medical
insurance benefits to part-time employees would increase Sybra's labor costs.
Although Sybra's competitors would likely experience similar increases, there
can be no assurance that Sybra will be able to increase sales prices to offset
future increases, if any, in these costs.

     Various federal, state and local laws affect Sybra's restaurant business,
including laws and regulations relating to minimum wages, overtime and other
working conditions, health, sanitation, employment and safety standards and
local zoning ordinances.  Sybra has not experienced and does not anticipate
unusual difficulties in complying with such laws and regulations.

FOREIGN OPERATIONS:

     The Company has substantial operations and assets located outside the
United States, primarily Ireland (Medite) and Canada (National Cabinet Lock).
Foreign operations are subject to, among other things, currency exchange rate
fluctuations and the Company's results of operations have in the past been both
favorably and unfavorably affected by fluctuations in currency exchange rates.
See Item 7 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

     Medite maintains a multi-currency revolving credit agreement with
borrowings thereunder used to mitigate exchange rate risk on receivables.
Medite has in the past used currency forward contracts to eliminate exchange
rate fluctuation risk on equipment purchase commitments denominated in foreign
currencies, and the Company's Irish and Canadian subsidiaries have from time-to-
time entered into short-term forward currency contracts to mitigate exchange
rate fluctuation risk for a portion of their sales denominated in various
currencies.  At December 31, 1995, no such contracts were outstanding.  See Note
9 to the Consolidated Financial Statements.

ITEM 2.   PROPERTIES

     The principal properties used in the operations of the Company are
described in the applicable business sections of Item 1 - "Business."  The
Company believes that its facilities are adequate and suitable for their
respective uses.

ITEM 3.   LEGAL PROCEEDINGS

     The information required by this Item is contained in Note 13 to the
Consolidated Financial Statements `Commitments and contingencies -- Legal
proceedings and -- Environmental matters,''which information is incorporated
herein by reference.

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

     Omitted pursuant to General Instruction "J" of Form 10-K.


                                    PART II


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

     All of Valcor's common stock is held by Valhi.  The Indenture governing
Valcor's 9 5/8% Senior Notes Due 2003 generally limits dividends or other
distributions to Valhi to 50% of the Company's consolidated net income, as
defined.  Valcor currently expects to continue to pay the dividends permitted by
the Indenture, however declaration and payment of future dividends and the
amount thereof is dependent upon the Company's results of operations, financial
condition, cash requirements for its businesses and other factors deemed
relevant by the Company's Board of Directors.  See Note 4 to the Consolidated
Financial Statements.


ITEM 6.  SELECTED FINANCIAL DATA

     The following selected consolidated financial data should be read in
conjunction with the Consolidated Financial Statements and Item 7 -
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."  For financial reporting purposes, the Combination in 1993 was
accounted for as a combination of entities under common control in a manner
similar to a pooling of interests.
<TABLE>
<CAPTION>
                                                                             YEARS ENDED DECEMBER 31,
                                                                    ------------------------------------------

                                                                     1991      1992     1993     1994     1995
                                                                     ----      ----     ----     ----     ----

                                                                                   (IN MILLIONS)
<S>                                                                  <C>     <C>       <C>      <C>     <C>
INCOME STATEMENT DATA:
  Net sales:
    Building products                                                $179.7  $194.8    $174.3   $189.9  $200.0
    Hardware products                                                  44.8    54.0      64.4     70.0    80.2
    Fast food                                                         101.5   103.8     111.6    115.5   115.4
                                                                     ------  ------    ------   ------  ------


                                                                     $326.0  $352.6    $350.3   $375.4  $395.6
                                                                     ======  ======    ======   ======  ======

  Operating income:
    Building products                                                $  8.0  $ 22.0    $ 26.3   $ 36.4  $ 25.2
    Hardware products                                                   7.9    10.7      17.5     20.9    19.9
    Fast food                                                           7.8     8.5       9.7      9.0     7.5
                                                                     ------  ------    ------   ------  ------


                                                                       23.7    41.2      53.5     66.3    52.6
  Other, net                                                            (.1)    4.0        .4      (.5)    (.5)
  Interest expense                                                     (8.1)   (5.1)     (6.4)   (17.6)  (19.8)
                                                                     ------  ------    ------   ------  ------





      Income before income taxes                                       15.5    40.1      47.5     48.2    32.3
  Income taxes                                                          5.4    15.0      19.2     17.1    12.8
                                                                     ------  ------    ------   ------  ------


  Income before cumulative effect of changes in
   accounting principles                                               10.1    25.1      28.3     31.1    19.5
  Cumulative effect of changes in accounting principles (1)             -        .9       -        -        -
                                                                     ------  ------    ------   ------   ------


      Net income                                                     $ 10.1  $ 26.0    $ 28.3   $ 31.1  $ 19.5
                                                                     ======  ======    ======   ======  ======

  Cash dividends (2)                                                 $  7.6  $ 21.1    $148.9   $  9.6  $  8.3
                                                                     ======  ======    ======   ======  ======

BALANCE SHEET DATA (AT YEAR END):
  Current assets                                                     $ 62.0  $ 69.0    $ 70.6   $ 90.6  $ 94.0
  Total assets                                                        244.5   256.0     272.5    320.7   327.6
  Current liabilities                                                  42.7    50.4      46.7     54.8    56.1
  Long-term debt                                                       61.4    45.1     185.7    201.8   198.6
  Stockholder's equity                                                129.8   134.7      13.9     34.9    44.2




</TABLE>




[FN]
(1)  Relates primarily to income tax accounting.

(2)  Dividends in 1993 include $135 million paid from proceeds of new long-term
     borrowings.

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

RESULTS OF OPERATIONS

OVERVIEW

     Operating income, margins and net income increased in 1994 and declined in
1995 largely due to results of the Company's MDF operations.  After rising
throughout 1994, MDF selling prices generally peaked in the second quarter of
1995 as increases in industry capacity and lower demand contributed to lower
prices and operating rates during the second half of 1995.

     The statements in this Annual Report on Form 10-K relating to matters that
are not historical facts are forward looking statements that involve risks and
uncertainties including, but not limited to, future supply and demand for the
Company's products, general economic conditions, competitive products, customer
and competitor strategies, the impact of pricing and production decisions,
government regulations and other risks and uncertainties discussed elsewhere
herein.

BUILDING PRODUCTS

     Results of operations during the past three years have been influenced by
Medite's ongoing strategy to emphasize MDF and to downsize its traditional
timber products operations.

<TABLE>
<CAPTION>
                               YEARS ENDED DECEMBER 31,        % CHANGE
                              -------------------------   ------------------

                               1993     1994     1995     1993-94    1994-95
                               ----     ----     ----     -------    -------

                                               (IN MILLIONS)
<S>                          <C>      <C>      <C>        <C>        <C>
Net sales:
  Medium density fiberboard  $112.1   $134.9   $149.5     +20%       +11%
  Traditional timber products  63.7     56.1     52.4     -12%       - 7%
  Eliminations                 (1.5)    (1.1)    (1.9)
                             ------   ------   ------


                             $174.3   $189.9   $200.0     + 9%       + 5%
                             ======   ======   ======

Operating income:
  Medium density fiberboard  $ 13.9   $ 27.1   $ 18.7     +95%       -31%
  Traditional timber products  12.4      9.3      6.5     -25%       -30%
                             ------   ------   ------


                             $ 26.3   $ 36.4   $ 25.2     +38%       -31%
                             ======   ======   ======

Operating income margins:




  Medium density fiberboard     12%      20%      13%
  Traditional timber products   19%      16%      12%
    Aggregate margin            15%      19%      13%

MDF sales volume
 (M3 thousands):
  Standard grade              419.7    385.7    400.8     - 8%       + 4%
  Specialty products           55.4     94.7     84.5     +71%       -11%
                             ------   ------   ------


                              475.1    480.4    485.3     + 1%       + 1%
                             ======   ======   ======


</TABLE>


     Medium density fiberboard.   Average MDF selling prices for all of 1995
were 10% higher than in 1994 (7% in billing currency terms), with aggregate MDF
volume up nominally.  However, MDF prices generally peaked in the second quarter
of 1995 and declined during the last half of the year.  Increases in industry
capacity, particularly in Europe, and slower economic growth in North America
and Europe contributed to the lower MDF prices and operating rates and
additional industry capacity additions are expected in 1996.  A 19% increase in
average per-unit costs resulting from higher material costs and lower capacity
utilization, along with lower specialty product sales, also diluted operating
margins.

     Improvements in MDF sales, operating income and margins in 1994 compared to
1993 were driven by both higher selling prices and higher volumes of higher-
priced/higher-margin specialty MDF products.  Overall average MDF selling prices
were up 19% in 1994 while average per-unit MDF costs increased approximately 6%.

     The U.S. dollar value of Medite's foreign sales and operating costs is
subject to currency exchange rate fluctuations which may favorably or adversely
impact reported earnings and affect the comparability of operating results.
Fluctuations in the value of the U.S. dollar relative to other currencies
accounted for about four percentage points of the 1995 increase in both MDF
selling prices and per-unit costs (one percentage point in 1994).  Approximately
56% of Medite's 1995 MDF sales were denominated in currencies other than the
U.S. dollar, principally the U.K. Pound Sterling and the European Currency Unit.
Medite's Irish operations accounted for approximately 47% of its MDF production
in 1995.  Fiber, labor and most other production costs in Ireland are
denominated principally in Irish punts, while Irish resins are purchased
primarily in Sterling.

     Economic conditions in North America and Europe and relative MDF industry
capacity/demand ratios, including the impact of industry capacity additions in
1995 and 1996, are currently expected to continue MDF price and volume pressures
in 1996 and reduce Medite's market share from current levels.

     Traditional timber products.  Medite allocates timber harvested from its
fee timberlands between log sales and its traditional timber products conversion
facilities depending upon prevailing market conditions.  Log sales accounted for
approximately 20% of traditional timber products sales dollars in 1995, down
from 32% in 1994 and 49% in 1993.

     Log volumes, prices and margins were higher in 1994 than in either 1995 or
1993.  Lumber prices declined significantly in 1995 while veneer volumes and
prices rose.  Overall traditional timber products margins in 1994 were aided by
a favorable impact of reductions in LIFO log inventories while being hindered by
veneer plant start-up costs.  In 1993, $1.9 million of business interruption
insurance from the 1992 Rogue River veneer mill fire had a significant
favorable, non-recurring effect on operating income margins as this income had
no associated cost.

HARDWARE PRODUCTS
<TABLE>
<CAPTION>




                              YEARS ENDED DECEMBER 31,        % CHANGE
                             -------------------------   ------------------

                            1993      1994      1995     1993-94    1994-95
                            ----      ----      ----     -------    -------

                                             (IN MILLIONS)
<S>                        <C>       <C>       <C>        <C>       <C>
Net sales                  $64.4     $70.0     $80.2      + 9%      +15%
Operating income            17.5      20.9      19.9      +19%      - 5%

Operating income margin      27%      30%       25%



</TABLE>

     National Cabinet Lock continues to add new products to its STOCK LOCKS
product line as well as to its Waterloo Furniture Components workstation and
drawer slide lines and reported new highs in sales in both 1994 and 1995.
Volumes increased in 1994 compared to 1993 in each of its three major product
lines (locks, workstation and drawer slides).  In 1995, volumes continued to
increase in both the workstation and drawer slide product lines however lock
volume from a government contract completed in early 1995 was only partially
replaced. The workstation product line continued to be the fastest growing line
with sales up 30% in 1995 following an 18% increase in 1994.

     Operating income margins in 1995 were impacted by both higher raw material
costs, as competitive pressures prevented full recovery through higher selling
prices, and costs associated with integrating the operations of a Canadian
competitor acquired in August 1995.  The acquired operations generated
approximately $3 million in sales in 1995, principally in the workstation and
drawer slide product lines.  The Company's principal facilities are operating at
a high rate of capacity, and overtime was used throughout 1994 and 1995 in order
to meet market demand.

     Over 70% of the Company's hardware products sales are generated by its
Canadian operations.  About two-thirds of these Canadian-produced sales are
denominated in U.S. dollars while substantially all of the related costs are
incurred in Canadian dollars.  As a result, fluctuations in the value of the
U.S. dollar relative to the Canadian dollar favorably impacted operating results
in both 1995 and 1994 compared to the respective prior year.

FAST FOOD

<TABLE>
<CAPTION>



                             YEARS ENDED DECEMBER 31,         % CHANGE
                            --------------------------   ------------------

                            1993      1994      1995     1993-94    1994-95
                            ----      ----      ----     -------    -------

                                             (IN MILLIONS)
<S>                         <C>      <C>       <C>          <C>      <C>
Net sales                   $111.6   $115.5    $115.4       +3%      - 0%
Operating income               9.7      9.0       7.5       -6%      -17%

Operating income margin         9%       8%        7%

Arby's units operated:
  At end of year              160       162       158       +1%      - 2%
  Average during the year     159       159       158       -        - 1%


</TABLE>


     Excluding the effect of a 53rd week in 1994, comparable store sales were
relatively flat during the past three years (up nominally in 1994 and down
nominally in 1995).  Despite stable to lower food costs, increased competitive
promotions and discounts and higher labor costs continue to reduce operating
results and margins.

     Sybra opened 18 new stores during the past three years (nine in 1995) and
plans to open one new restaurant in the first quarter of 1996.  Sybra
continually evaluates the profitability of its individual restaurants, closed 20
stores during the past three years (13 in 1995) and intends to continue to close
unprofitable stores when appropriate.  Costs associated with store closings were
$.6 million in 1993, $1.4 million in 1994 and $.9 million in 1995.  In addition
to six stores closed in January and February 1996, Sybra may close one to two
additional stores later in the year.

INTEREST EXPENSE

     Interest expense was $6.4 million in 1993, $17.6 million in 1994 and $19.8
million in 1995.  Interest expense increased in 1995 compared to 1994 primarily
due to higher average borrowing levels associated with facilities expansion.
The increase in interest expense in 1994 resulted primarily from borrowings
under Medite's secured credit facility obtained in August 1993 and the Valcor
Senior Notes issued in November 1993.  At December 31, 1995, approximately $150
million of the Company's indebtedness bears interest at fixed rates averaging
9.1%.  The average interest rate on approximately $60 million of floating rate
subsidiary borrowings outstanding at December 31, 1995 was 7.5% compared to
average variable interest rates of 7.8% at December 31, 1994 and 5.4% at
December 31, 1993.

PROVISION FOR INCOME TAXES

     Income tax rates vary by jurisdiction (country and/or state), and relative
changes in the geographic source of the Company's pre-tax earnings, and in the
related availability and usage of foreign tax credits, can result in
fluctuations in the Company's consolidated effective income tax rate.  In
addition, in 1995 the effective income tax rate was favorably impacted by a $1
million reduction in accumulated deferred income taxes resulting from enactment
of a new U.S./Canadian tax treaty.  See Note 10 to the Consolidated Financial
Statements.

LIQUIDITY AND CAPITAL RESOURCES:

CONSOLIDATED CASH FLOWS

     Cash flows from operating activities. Cash flow from operating activities
before changes in assets and liabilities was $40 million in 1995 compared to $53
million in 1994 and $46 million in 1993 generally reflecting relative changes in
earnings.  Changes in assets and liabilities, which used cash in each of the
past three years, result primarily from the timing of production, sales and
purchases.  In 1995, MDF production exceeded MDF sales by approximately 4% and
contributed substantially to the relative change in inventory levels.  Higher
receivable levels in 1995 resulted in part from increased sales to non-core
international MDF markets which have longer standard payment terms.

     Semi-annual interest payments on the Valcor Senior Notes began in 1994 and
accounted for about 80% of the comparative increase in cash interest payments in
1994 compared to 1993.

     Cash flows from investing activities.  Capital expenditures during the past
three years aggregated $100 million and included $32 million related to Medite's
Irish MDF expansion and the rebuilding of Medite's Rogue River chipping and
veneer plant.   Capital expenditures were higher in 1994 than either 1993 or
1995 due primarily to Medite's Irish MDF expansion.  Capital expenditures for
1996 are estimated at approximately $23 million, down $3 million from 1995 due
primarily to lower planned spending by Sybra for store expansion, and are
expected to be financed primarily from the respective subsidiary's operations or
credit facilities.

     The 1996 capital budget includes an estimated $3 million for environmental
protection and improvement programs, however such amount could be modified
depending upon the ultimate outcome of Medite's ongoing evaluation of
alternative compliance plans for its New Mexico MDF plant.  See Item 1 -
`Business -- Building Products -- Environmental matters and government
regulation.''

     Cash flows from financing activities.  Net repayments of indebtedness in
1995 include $16 million of payments under Medite's bank term loans and
additional Sybra borrowings primarily for expansion.  Net borrowings in 1994
included approximately $21 million of project financing for Medite's Irish MDF
expansion while net borrowings in 1993 include the Valcor Senior Notes ($100
million) and net new borrowings under Medite's secured credit facility ($39
million).  At December 31, 1995, unused credit available under existing
subsidiary credit facilities approximated $35 million.

     Dividends paid to Valhi in 1993 include special dividends aggregating $135
million from the proceeds of borrowings under Medite's Timber Credit Agreement
and the Valcor Senior Notes.

BUILDING PRODUCTS

     Medite completed a second MDF production line in Ireland in 1994 and
intends to continue the upgrading and debottlenecking of its existing MDF
production facilities.  As discussed elsewhere herein, Medite currently expects
to submit a new operating permit and compliance plan to the New Mexico
Environmental Department during 1996.  However, there can be no assurance that
regulatory approval will be obtained without modifications which may not be
economically feasible for this facility.  In addition, the Company understands
that much of the 1995/1996 industry capacity additions utilize the newer, more
efficient continuous press technology.  Approximately 20% of Medite's MDF
production capacity utilizes the newer technology and Medite may need to upgrade
certain of its older facilities over the next few years in order to avoid
certain competitive disadvantages.  Capital costs associated with potential
future facilities upgrades could, under certain scenarios, be relatively
significant.

     At December 31, 1995, amounts available for borrowing under Medite's
existing bank credit agreements aggregated $17 million.

     Medite has agreed to exchange certain property held for sale with a nominal
carrying amount and $1 million cash for approximately 660 acres of state-owned
timberlands containing over eight million board feet of timber.  Medite
currently expects to complete the transaction in early 1996.  Medite has also
granted a three-year option to a real estate development company to acquire
certain other of Medite's property held for sale.

HARDWARE PRODUCTS

     National Cabinet Lock's major plants have operated at a high rate of
capacity during the past few years and capital spending continues to address
market demands.  In this regard, an additional production facility was acquired
through the purchase of a Canadian competitor in August 1995.  The Company
continues to explore additional expansion and/or acquisition opportunities for
its hardware products business.

     At December 31, 1995, National Cabinet Lock had $5.5 million of borrowing
availability under existing Canadian credit agreements.

FAST FOOD

     Sybra, like most restaurant businesses, is able to operate with nominal
working capital because sales are for cash, inventory turnover is rapid, and
payments to trade suppliers are generally not due for 30 days.  At December 31,
1995, Sybra had $12 million of borrowing availability under its existing
revolving credit agreements.

     Approximately one-half of Sybra's $5 million 1996 capital budget relates to
its continuing program to remodel and update existing stores.  The Company is
considering curtailing new store openings and, as a result, Sybra may not be in
compliance with the current terms of its CDA with Arby's, Inc. by the end of
1996.  There can be no assurance that Sybra could renegotiate the CDA in order
to retain its exclusive development rights, in which case other Arby's
competitors would be free to enter the Dallas/Ft. Worth and Tampa markets.
Sybra does not believe that loss of its development rights would have a material
adverse effect on its financial position, results of operations or liquidity.

GENERAL CORPORATE

     Valcor's operations are conducted through its subsidiaries (Medite,
National Cabinet Lock and Sybra).  Accordingly, Valcor's long-term ability to
meet its parent company level obligations (principally debt service on the
Senior Notes) is largely dependent on the receipt of dividends or other
distributions from its subsidiaries.  Various subsidiary credit agreements
contain customary limitations on the payment of dividends, typically a
percentage of net income or cash flow.  Valcor has not guaranteed any
indebtedness of its subsidiaries.  See Note 4 to the Consolidated Financial
Statements.  The Company believes that future distributions from its
subsidiaries will be sufficient to enable Valcor to meet its obligations.
Valcor dividends to Valhi are generally limited to 50% of consolidated net
income, as defined in the Senior Notes Indenture.

     The Company routinely compares its liquidity requirements and alternative
uses of capital against the estimated future cash flows to be received from its
subsidiaries and the estimated sales value of those units.  As a result of this
process, the Company may in the future seek to raise additional capital,
refinance or restructure indebtedness, modify its dividend policy, consider the
sale of interests in subsidiaries, business units or other assets, or take a
combination of such steps or other steps, to increase liquidity, reduce
indebtedness and fund future activities.  The Company may also evaluate
acquisitions of interests in, or combinations with, companies related to its
current businesses.  The Company and its subsidiaries intend to consider such
acquisition activities in the future and, in connection with this activity, may
consider issuing additional equity securities and increasing the indebtedness of
the Company and its subsidiaries.  In this regard, the Valcor Senior Notes
Indenture contains limitations on the ability of the Company and its
subsidiaries to incur indebtedness or hold noncontrolling interests in business
units.  See Note 4 to the Consolidated Financial Statements.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The information called for by this Item is contained in a separate section
of this Annual Report.  See "Index of Financial Statements and Schedules" on
page F-1.

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

          None.


                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Omitted pursuant to General Instruction "J" of Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

     Omitted pursuant to General Instruction "J" of Form 10-K.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Omitted pursuant to General Instruction "J" of Form 10-K.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Omitted pursuant to General Instruction "J" of Form 10-K.



                                    PART IV


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

 (a) and (d)   Financial Statements and Schedules





               The consolidated financial statements and schedules listed on the
               accompanying Index of Financial Statements and Schedules (see
               page F-1) are filed as part of this Annual Report.

 (b)           Reports on Form 8-K

               Reports on Form 8-K filed for the quarter ended December 31, 1995
               and the month of January 1996.

               October 23, 1995 - Reported Items 5 and 7.
               January 26, 1996 - Reported Items 5 and 7.

 (c)           Exhibits

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


           PAGE NUMBER:
            MANUALLY
ITEM NO.   SIGNED COPY                     EXHIBIT INDEX
--------   -----------                     -------------




 3.1                    Certificate of Incorporation of the Registrant -
                        incorporated by reference to Exhibit 3.1 to a
                        Registration Statement on Form S-1 (No. 33-63044)
                        filed by the Registrant.

 3.2                    By-Laws of the Registrant - incorporated by reference
                        to Exhibit 3.2 to a Registration Statement on Form S-1
                        (No. 33-63044) filed by the Registrant.

 4.1                    Indenture dated November 1, 1993 governing the Valcor,
                        Inc. 9 5/8% Senior Notes Due 2003, including form of
                        Note - incorporated by reference to Exhibit 4.1 of a
                        Quarterly Report on Form 10-Q  for the quarter ended
                        September 30, 1993 filed by the Registrant (File No.
                        33-63044).

10.1                    Form of Intercorporate Services Agreement between the
                        Registrant and Valhi - incorporated by reference to
                        Exhibit 10.1 to a Registration Statement on Form S-1
                        (No. 33-63044) filed by the Registrant.

10.2                    Agreement between the Master for Fisheries and
                        Forestry of Ireland and Medite of Ireland Limited
                        dated March 18, 1981 - incorporated by reference to
                        Exhibit 10.2 to a Registration Statement on Form S-1
                        (No. 33-63044) filed by the Registrant.

10.3                    Form of License Agreement between Arby's, Inc. and
                        Sybra, Inc. - incorporated by reference to Exhibit
                        10.5 to a Registration Statement on Form S-1 (No. 33-
                        63044) filed by the Registrant.

10.4                    Consolidation of Development Agreements dated August
                        31, 1992 between Arby's, Inc. and Sybra,
                        Inc./Subsidiary, Inc. - incorporated by reference to
                        Exhibit 10.6 to a Registration Statement on Form S-1
                        (No. 33-63044) filed by the Registrant.

10.5                    Letter amendment to the Consolidated Development
                        Agreement between Arby's, Inc. and Sybra, Inc. dated
                        May 26, 1994 - incorporated by reference to Exhibit
                        10.1 of the Registrant's Quarterly Report on Form 10-Q
                        (File No. 33-63044) for the quarter ended June 30,
                        1994.

10.6                    Loan Agreement between Medite Corporation and United
                        States National Bank of Oregon dated July 16, 1993 -
                        incorporated by reference to Exhibit 10.1 of a
                        Quarterly Report on Form 10-Q for the quarter ended
                        June 30, 1993 filed by Valhi, Inc. (File No. 1-5467).

10.7                    Loan Extension Agreement among Medite Corporation,
                        United States National Bank of Oregon, NationsBank of
                        North Carolina, N.A. and Societe Generale, Southwest
                        Agency as of September 30, 1994 - incorporated by
                        reference to Exhibit 10.5 to a Registration Statement
                        on Form S-1 (No. 33-57891) filed by Medite.

10.8                    Modification Agreement among Medite Corporation,
                        United States National Bank of Oregon, NationsBank of
                        North Carolina, N.A. and Societe Generale, Southwest
                        Agency dated as of February 14, 1995 - incorporated by
                        reference to Exhibit 10.11 to a Registration Statement
                        on Form S-1 (No. 33-57891) filed by Medite.

10.9                    Extension Agreement among Medite Corporation, United
                        States National Bank of Oregon, NationsBank of North
                        Carolina, N.A. and Societe Generale, Southwest Agency
                        as of September 30, 1995.

27.1                    Financial Data Schedule for the year ended December
                        31, 1995.



                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                   VALCOR, INC.
                                   (Registrant)


                                   By: /s/ Harold C. Simmons
                                   ------------------------------------

                                   Harold C. Simmons, February 20, 1996
                                   (President)



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





 /s/ Harold C. Simmons                    /s/ Glenn R. Simmons
-------------------------------------   ------------------------------------

Harold C. Simmons, February 20, 1996    Glenn R. Simmons, February 20, 1996
(Chairman of the Board, President and   (Vice Chairman of the Board)
 Chief Executive Officer)


 /s/ Robert W. Singer                    /s/ William C. Timm
-------------------------------------   -----------------------------------

Robert W. Singer, February 20, 1996     William C. Timm, February 20, 1996
(Vice President and Director)           (Vice President-Finance, Treasurer
                                         and Chief Financial Officer)


                                         /s/ J. Thomas Montgomery, Jr.
                                        ------------------------------------

                                        J. Thomas Montgomery, Jr.,
                                        February 20, 1996
                                        (Vice President, Controller and
                                         Chief Accounting Officer)


                                   SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.





                                   VALCOR, INC.
                                   (Registrant)


                                   By:
                                   ------------------------------------

                                   Harold C. Simmons, February 20, 1996
                                   (President)



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



Harold C. Simmons, February 20, 1996    Glenn R. Simmons, February 20, 1996
(Chairman of the Board, President and   (Vice Chairman of the Board)
 Chief Executive Officer)


Robert W. Singer, February 20, 1996     William C. Timm, February 20, 1996
(Vice President and Director)           (Vice President-Finance, Treasurer
                                         and Chief Financial Officer)


                                        J. Thomas Montgomery, Jr.,
                                        February 20, 1996
                                        (Vice President, Controller and


                   ANNUAL REPORT ON FORM 10-K

                    ITEMS 8, 14(A) AND 14(D)

           INDEX OF FINANCIAL STATEMENTS AND SCHEDULES


FINANCIAL STATEMENTS                                                 PAGE

  Reports of Independent Accountants                                F-2/F-3

  Consolidated Balance Sheets - December 31, 1994 and 1995          F-4/F-5

  Consolidated Statements of Income - Years ended
   December 31, 1993, 1994 and 1995                                 F-6

  Consolidated Statements of Stockholder's Equity - Years ended
   December 31, 1993, 1994 and 1995                                 F-7

  Consolidated Statements of Cash Flows - Years ended
   December 31, 1993, 1994 and 1995                                 F-8/F-9

  Notes to Consolidated Financial Statements                        F-10/F-27



FINANCIAL STATEMENT SCHEDULES

  Reports of Independent Accountants                                S-1/S-2

  Schedule I  - Condensed financial information of Registrant       S-3/S-7

  Schedule II - Valuation and qualifying accounts                   S-8






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


                REPORT OF INDEPENDENT ACCOUNTANTS



To the Stockholder and Board of Directors of Valcor, Inc.:

    We have audited the accompanying consolidated balance sheets of Valcor,
Inc. as of December 31, 1994 and 1995, and the related consolidated statements
of income, stockholder's 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 did not audit the
financial statements of Medite Corporation, which subsidiary constituted
approximately three-fifths of consolidated assets as of December 31, 1994 and
1995, respectively, and approximately one-half of consolidated net sales for
each of the three years in the period ended December 31, 1995.  These statements
were audited by other auditors whose report thereon has been furnished to us,
and our opinion, insofar as it relates to amounts included for Medite, is based
solely upon their report.

    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 and the report of other auditors provide a reasonable
basis for our opinion.

    In our opinion, based upon our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Valcor, Inc. as of December 31, 1994 and
1995, 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.





                                         COOPERS & LYBRAND L.L.P.

Dallas, Texas
February 12, 1996


            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Stockholder of Medite Corporation:

    We have audited the consolidated balance sheets of Medite Corporation as of
December 31, 1994 and 1995, and the related consolidated statements of income,
redeemable preferred stock and common stockholder's equity and cash flows for
each of the three years in the period ended December 31, 1995 (not presented
separately herein).  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 consolidated financial statements (not presented
separately herein) referred to above present fairly, in all material respects,
the consolidated financial position of Medite Corporation as of December 31,
1994 and 1995, 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.





                                              ARTHUR ANDERSEN LLP

Portland, Oregon,
January 27, 1996

                                  VALCOR, INC.

                          CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 1994 AND 1995

                       (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
              ASSETS
                                                            1994      1995
                                                            ----      ----

<S>                                                      <C>       <C>
Current assets:
  Cash and cash equivalents                              $ 23,256  $ 17,618
  Accounts receivable, net of allowance of $570
   and $800                                                26,888    30,949
  Receivable from affiliates                                4,285     3,538
  Inventories                                              31,016    36,385
  Prepaid expenses                                          3,553     3,105
  Deferred income taxes                                     1,595     2,409
                                                         --------  --------


      Total current assets                                 90,593    94,004
                                                         --------  --------


Other assets:
  Timber and timberlands                                   53,114    53,099
  Intangible assets                                        19,202    18,145
  Other                                                    11,947     8,630
                                                         --------  --------


      Total other assets                                   84,263    79,874
                                                         --------  --------


Property and equipment:
  Land                                                     19,186    22,290
  Buildings                                                44,345    50,007
  Equipment                                               177,790   184,240
  Construction in progress                                  2,001     8,393
                                                         --------  --------

                                                          243,322   264,930
  Less accumulated depreciation                            97,483   111,216
                                                         --------  --------




      Net property and equipment                          145,839   153,714
                                                         --------  --------


                                                         $320,695  $327,592
                                                         ========  ========

</TABLE>

                                  VALCOR, INC.

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)

                           DECEMBER 31, 1994 AND 1995

                       (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
   LIABILITIES AND STOCKHOLDER'S EQUITY
                                                            1994      1995
                                                            ----      ----

<S>                                                      <C>       <C>
Current liabilities:
  Current maturities of long-term debt                   $ 12,738  $ 12,383
  Accounts payable                                         16,207    19,933
  Accrued liabilities                                      24,430    21,470
  Payable to affiliates                                        69        17
  Income taxes                                              1,318     2,275
                                                         --------  --------


      Total current liabilities                            54,762    56,078
                                                         --------  --------


Noncurrent liabilities:
  Long-term debt                                          201,796   198,584
  Deferred income taxes                                    25,938    24,461
  Other                                                     3,349     4,245
                                                         --------  --------


      Total noncurrent liabilities                        231,083   227,290
                                                         --------  --------


Stockholder's equity:
  Preferred stock, $1 par value; 1,000 shares
   authorized; none issued                                   -        -
  Common stock, $1 par value; 1,000 shares
   authorized, issued and outstanding                           1         1
  Additional paid-in capital                                  520       520
  Retained earnings                                        34,623    45,871
  Adjustments:

    Currency translation                                     (294)       30
    Pension liabilities                                      -       (2,198)
                                                         --------  --------





      Total stockholder's equity                           34,850    44,224
                                                         --------  --------


                                                         $320,695  $327,592
                                                         ========  ========

</TABLE>


[FN]
Commitments and contingencies (Note 13)


                                  VALCOR, INC.

                       CONSOLIDATED STATEMENTS OF INCOME

                  YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                  1993      1994      1995
                                                  ----      ----      ----

<S>                                            <C>       <C>       <C>
Revenues and other income:
  Net sales                                    $350,309  $375,378  $395,568
  Other income, net                               3,637     2,580     2,652
                                               --------  --------  --------


                                                353,946   377,958   398,220
                                               --------  --------  --------

Costs and expenses:
  Cost of sales                                 277,162   287,547   318,337
  Selling, general and administrative            22,882    24,581    27,742
  Interest                                        6,359    17,591    19,819
                                               --------  --------  --------


                                                306,403   329,719   365,898
                                               --------  --------  --------


    Income before income taxes                   47,543    48,239    32,322

Provision for income taxes                       19,193    17,141    12,776
                                               --------  --------  --------


    Net income                                 $ 28,350  $ 31,098  $ 19,546
                                               ========  ========  ========

</TABLE>

                                       VALCOR, INC.

                     CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

                       YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                                      (IN THOUSANDS)
<TABLE>
<CAPTION>

                                   INVESTMENT           ADDITIONAL
                                    OF PARENT  COMMON    PAID-IN     RETAINED
                                    COMPANY    STOCK     CAPITAL     EARNINGS
                                   ----------  ------   ----------   --------

<S>                                <C>          <C>     <C>         <C>
Balance at December 31, 1992       $ 60,521     $-      $   -       $ 73,677

Net income                             -         -          -         28,350
Capitalization                      (60,521)      1       60,520       -
Dividends                              -         -       (60,000)   (88,932)
Other, net                             -         -          -           -
                                   --------     ---     --------    --------


Balance at December 31, 1993           -          1          520     13,095

Net income                             -         -          -        31,098
Dividends                              -         -          -        (9,570)
Other, net                             -         -          -           -
                                   --------     ---     --------    --------


Balance at December 31, 1994           -          1          520     34,623

Net income                             -         -          -        19,546
Dividends                              -         -          -        (8,298)
Other, net                             -         -          -           -
                                   --------     ---     --------    --------


Balance at December 31, 1995       $   -        $ 1     $    520    $ 45,871
                                   ========     ===     ========    ========

</TABLE>

<TABLE>
<CAPTION>
                                          ADJUSTMENTS
                                   ------------------------

                                                               TOTAL
                                    CURRENCY      PENSION   STOCKHOLDER'S
                                   TRANSLATION  LIABILITIES    EQUITY
                                   -----------  ----------- -------------

<S>                                  <C>         <C>         <C>
Balance at December 31, 1992         $ 511       $  -        $ 134,709

Net income                             -            -           28,350
Capitalization                         -            -             -
Dividends                              -            -         (148,932)
Other, net                            (276)         -             (276)
                                     -----       -------     ---------


Balance at December 31, 1993           235          -           13,851

Net income                             -            -           31,098
Dividends                              -            -           (9,570)
Other, net                            (529)         -             (529)
                                     -----       -------     ---------


Balance at December 31, 1994          (294)         -           34,850

Net income                             -            -           19,546
Dividends                              -            -           (8,298)
Other, net                             324        (2,198)       (1,874)
                                     -----       -------     ---------


Balance at December 31, 1995         $  30       $(2,198)    $  44,224
                                     =====       =======     =========

</TABLE>

                          VALCOR, INC.

              CONSOLIDATED STATEMENTS OF CASH FLOWS

          YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                         (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                 1993       1994      1995
                                                 ----       ----      ----

<S>                                          <C>        <C>        <C>
Cash flows from operating activities:
  Net income                                 $  28,350  $ 31,098   $ 19,546
  Depreciation, depletion and amortization      16,378    17,320     19,701
  Deferred income taxes                          2,600     3,343       (831)
  Other, net                                    (1,157)    1,690      1,537
                                             ---------  --------   --------

                                                46,171    53,451     39,953
  Change in assets and liabilities:
    Accounts receivable                         (1,522)   (1,601)    (4,347)
    Inventories                                  1,008    (2,416)    (4,624)
    Accounts payable and accrued liabilities       284     4,005      2,036
    Accounts with affiliates                    (2,512)   (4,878)       695
    Other, net                                     660      (262)     1,508
                                             ---------  --------   --------


      Net cash provided by operating
       activities                               44,089    48,299     35,221
                                             ---------  --------   --------


Cash flows from investing activities:
  Capital expenditures                         (27,779)  (46,246)   (26,279)
  Purchase of business unit                      -          -        (5,982)
  Other, net                                      (463)     (163)       (22)
                                             ---------  --------   --------


      Net cash used by investing activities    (28,242)  (46,409)   (32,283)
                                             ---------  --------   --------


Cash flows from financing activities:
  Indebtedness:
    Borrowings                                237,060     89,878     45,706
    Principal payments                       (102,986)   (70,120)   (49,273)
  Dividends                                  (148,932)    (9,570)    (8,298)




  Grants and other                                -        1,235      2,916
                                             ---------  --------   --------


      Net cash provided (used) by financing
       activities                             (14,858)    11,423     (8,949)
                                             ---------  --------   --------


Net cash provided (used)                     $     989  $ 13,313   $ (6,011)
                                             =========  ========   ========

</TABLE>

                          VALCOR, INC.

        CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

          YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                         (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                   1993      1994      1995
                                                   ----      ----      ----

<S>                                             <C>       <C>       <C>
Cash and cash equivalents:
  Net increase (decrease) from operating,
   investing and financing activities           $   989   $13,313   $ (6,011)
  Currency translation                             (212)     (420)       373
                                                -------   -------   --------

                                                    777    12,893     (5,638)
  Balance at beginning of year                    9,586    10,363     23,256
                                                -------   -------   --------


  Balance at end of year                        $10,363   $23,256   $ 17,618
                                                =======   =======   ========

Supplemental disclosures - cash paid for:
  Interest, net of amount capitalized           $ 4,437   $16,319   $ 19,113
  Income taxes                                   17,635    18,971     12,238
</TABLE>

                          VALCOR, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 -ORGANIZATION AND BASIS OF PRESENTATION:

    Valcor, Inc., a Delaware corporation, is a wholly-owned subsidiary of
Valhi, Inc. (NYSE: VHI).  Valcor was formed in 1993 at which time Valhi
contributed to Valcor the stock of the Company's operating subsidiaries - Medite
Corporation (building products), National Cabinet Lock, Inc. (hardware products)
and Sybra, Inc. (fast food) - (collectively, the "Combination").  For financial
reporting purposes, the Combination was accounted for as a combination of
entities under common control in a manner similar to a pooling of interests.
Accordingly, the Company's financial statements for periods prior to the
Combination represent the combined financial position, results of operations and
cash flows of the entities comprising the Company following the Combination.

    All of Valcor's outstanding common stock is held by Valhi.  Contran
Corporation holds, directly or through subsidiaries, approximately 91% of
Valhi's outstanding common stock.  Substantially all of Contran's outstanding
voting stock is held by trusts established for the benefit of the children and
grandchildren of Harold C. Simmons, of which Mr. Simmons is the sole trustee.
Mr. Simmons, the Chairman of the Board and Chief Executive Officer of Valcor,
Valhi and Contran, may be deemed to control each of such companies.

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

    Principles of consolidation and management's estimates.  The consolidated
financial statements include the accounts of Valcor and its wholly-owned
subsidiaries (collectively, the "Company").  All material intercompany accounts
and balances have been eliminated.  The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amount of revenues and expenses
during the reporting period.  Ultimate actual results may, in some instances,
differ from previously estimated amounts.

    Translation of foreign currencies.  Assets and liabilities of subsidiaries
whose functional currency is deemed to be other than the U.S. dollar are
translated at year-end rates of exchange and revenues and expenses are
translated at average exchange rates prevailing during the year.  Resulting
translation adjustments, net of related deferred income tax effects, are
accumulated in the currency translation adjustments component of stockholder's
equity.  Currency transaction gains and losses are recognized in income
currently.

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

    Inventories and cost of sales.  Inventories are stated at the lower of cost
or market.  The last-in, first-out method is used to determine the cost of
approximately 40% of total inventories at December 31, 1995 (50% at December 31,
1994).  Other inventory costs are generally based on average cost.

    Timber and timberlands and depletion.  Timber and timberlands are stated at
cost less accumulated depletion.  Fertilization and other forest management
costs are expensed; costs of reforestation and road improvements are
capitalized.  Depletion is computed by the unit-of-production method.

    Intangible assets and amortization.  Goodwill, representing the excess of
cost over fair value of individual net assets acquired in business combinations
accounted for by the purchase method, is amortized by the straight-line method
over 40 years.  Fast food restaurant franchise fees and other intangible assets
are amortized by the straight-line method over the periods (10 to 20 years)
expected to be benefited.

    Property, equipment and depreciation.  Property and equipment are stated at
cost.  Maintenance, repairs and minor renewals are expensed; major improvements
are capitalized.  Interest costs related to major long-term capital projects are
capitalized as a component of construction costs and were $410,000 in 1993,
$616,000 in 1994 and nil in 1995.

    Depreciation is computed principally by the straight-line and unit-of-
production methods over the estimated useful lives of eight to 40 years for
buildings and three to 12 years for equipment.

    Income taxes.  Valcor, its qualifying subsidiaries and Valhi are members of
Contran's consolidated United States federal income tax group (the "Contran Tax
Group"). The policy for intercompany allocation of federal income taxes provides
that subsidiaries included in the Contran Tax Group compute the provision for
income taxes on a separate company basis.  Subsidiaries of Valhi make payments
to or receive payments from Valhi in the amounts they would have paid to or
received from the Internal Revenue Service had they not been members of the
Contran Tax Group.  The separate company provisions and payments are computed
using the tax elections made by Contran.

    Deferred income tax assets and liabilities are recognized for the expected
future tax consequences of temporary differences between the income tax and
financial reporting carrying amounts of assets and liabilities, including
investments in the Company's non-U.S. subsidiaries (which are not members of the
Contran Tax Group).

    Other.  Sales are recorded when products are shipped (fast food sales at
the time of retail sale).

    Accounting and funding policies for retirement plans and postretirement
benefits other than pensions ("OPEB") are described in Note 11.

    Advertising costs, expensed as incurred, were $9.6 million in 1993, $9.8
million in 1994 and $10.7 million in 1995.  Research and development costs,
expensed as incurred, were $300,000 in 1993 and $400,000 in each of 1994 and
1995.

NOTE 3 -BUSINESS AND GEOGRAPHIC SEGMENTS:

<TABLE>
<CAPTION>
Business segments                                  YEARS ENDED DECEMBER 31,
                                                 ---------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                        (IN MILLIONS)
<S>                                             <C>      <C>        <C>
Net sales:
  Building products - Medite                    $174.3   $189.9     $200.0
  Hardware products - National Cabinet Lock       64.4     70.0       80.2
  Fast food - Sybra                              111.6    115.5      115.4
                                                ------   ------     ------


                                                $350.3   $375.4     $395.6
                                                ======   ======     ======

Operating income:
  Building products                             $ 26.3   $ 36.4     $ 25.2
  Hardware products                               17.5     20.9       19.9
  Fast food                                        9.7      9.0        7.5
                                                ------   ------     ------

                                                  53.5     66.3       52.6
General corporate and other items, net              .4      (.5)       (.5)
Interest expense                                  (6.4)   (17.6)     (19.8)
                                                ------   ------     ------


    Income before income taxes                  $ 47.5   $ 48.2     $ 32.3
                                                ======   ======     ======

Depreciation, depletion and amortization:
  Building products                             $  8.5   $  9.6     $ 11.5
  Hardware products                                1.7      1.8        2.2
  Fast food                                        6.2      5.9        6.0
                                                ------   ------     ------




                                                $ 16.4   $ 17.3     $ 19.7
                                                ======   ======     ======

Capital expenditures:
  Building products                             $ 20.8   $ 32.0     $ 12.3
  Hardware products                                2.7      3.4        2.0
  Fast food                                        4.3     10.8       12.0
                                                ------   ------     ------


                                                $ 27.8   $ 46.2     $ 26.3
                                                ======   ======     ======

</TABLE>

    Capital expenditures include additions to property and equipment and timber
and timberlands, excluding amounts attributable to business units acquired in
business combinations accounted for by the purchase method.  In 1995, the
Company's Canadian hardware products subsidiary purchased certain assets of a
competitor for approximately $6 million cash.

<TABLE>
<CAPTION>

Geographic segments                                YEARS ENDED DECEMBER 31,
                                                 ---------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                        (IN MILLIONS)
<S>                                             <C>      <C>        <C>
  Net sales - point of origin:
    United States                               $261.5   $270.5     $254.3
    Republic of Ireland                           47.1     58.8       83.2
    Canada                                        41.7     46.1       58.1
                                                ------   ------     ------


                                                $350.3   $375.4     $395.6
                                                ======   ======     ======

  Net sales - point of destination:
    United States                               $260.5   $275.4     $271.7
    Europe                                        44.2     58.5       81.3
    Other North America                           22.0     26.3       28.1
    Pacific Rim and other                         23.6     15.2       14.5
                                                ------   ------    -------


                                                $350.3   $375.4     $395.6
                                                ======   ======     ======

  Operating income:
    United States                               $ 36.5   $ 40.9     $ 23.4
    Republic of Ireland                            6.4     12.3       15.8
    Canada                                        10.6     13.1       13.4
                                                ------   ------     ------


                                                $ 53.5   $ 66.3     $ 52.6
                                                ======   ======     ======

</TABLE>

<TABLE>
<CAPTION>
Identifiable assets                                             DECEMBER 31,
                                                               --------------

                                                                1994    1995
                                                                ----    ----

                                                               (IN MILLIONS)
<S>                                                           <C>     <C>
  Business segments:
    Building products                                         $208.1  $200.4
    Hardware products                                           37.8    44.4
    Fast food                                                   68.6    74.3
    Corporate                                                   27.4    22.9
    Eliminations                                               (21.2)  (14.4)
                                                              ------  ------


                                                              $320.7  $327.6
                                                              ======  ======

  Geographic segments:
    United States                                             $221.3  $227.7
    Republic of Ireland                                         75.3    70.1
    Canada                                                      24.1    29.8
                                                              ------  ------


                                                              $320.7  $327.6
                                                              ======  ======

</TABLE>

    Corporate assets consist principally of cash, cash equivalents and loans to
subsidiaries.  Eliminations consist principally of intercompany receivables,
including loans to subsidiaries.  At December 31, 1995, the net assets of
non-U.S. subsidiaries included in consolidated net assets were approximately $57
million.

NOTE 4 -LONG-TERM DEBT:
<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                          -----------------

                                                            1994      1995
                                                            ----      ----

                                                            (IN THOUSANDS)
<S>                                                      <C>       <C>
Valcor - Senior Notes                                    $100,000  $100,000
                                                         --------   -------


Medite:
  Bank term loans                                          89,411    73,770
  Bank working capital facilities                           8,802    10,830
  Other                                                     4,360     4,117
                                                         --------  --------

                                                          102,573    88,717
                                                         --------  --------


Other:
  Sybra bank credit agreements                              5,500    16,770
  Sybra capital lease obligations                           6,321     5,382
  National Cabinet Lock capital lease obligation              140        98
                                                         --------  --------

                                                           11,961    22,250
                                                         --------  --------

                                                          214,534   210,967
Less current maturities                                    12,738    12,383
                                                         --------  --------


                                                         $201,796  $198,584
                                                         ========  ========

</TABLE>

    Valcor.  Valcor's 9 5/8% Senior Notes Due November 2003 are redeemable at
the Company's option beginning November 1998, initially at 104.813% of principal
amount declining to 100% after November 2000.  In the event of a Change of
Control, as defined, Valcor would be required to make an offer to purchase the
Senior Notes at 101% of principal amount.  At December 31, 1994 and 1995, the
quoted market price of the Senior Notes was $89.60 and $99.00, respectively.

    The Indenture governing the Senior Notes limits, among other things, the
incurrence of additional indebtedness by Valcor and its subsidiaries, the
creation of liens and transactions and co-investing with affiliates.  The
Indenture generally limits the ability of the Company to pay dividends or make
other distributions to Valhi to 50% of consolidated net income, as defined,
subsequent to 1993.  At December 31, 1995, less than $1 million was available
for dividends.

    Medite.  Medite's U.S. bank credit agreement (the "Timber Credit
Agreement") provides for (i) term loan financing ($59 million outstanding at
December 31, 1995) due in annual installments of $8 million through 1999 with
the balance due in 2000, and (ii) a $15 million revolving working capital
facility ($4 million outstanding at December 31, 1995) through September 1997.
Borrowings generally bear interest at rates 1.5% to 2% over LIBOR, are
collateralized by Medite's timber and timberlands, and borrowings under the
working capital facility are also collateralized by Medite's U.S. receivables
and inventories.  Medite has entered into interest rate swaps to mitigate the
impact of changes in interest rates for $26 million of the term loan due in
1998-2000 that results in a weighted average interest rate of 7.6% for such
borrowings.  The Company is exposed to interest rate risk in the event of
nonperformance by the other parties to the agreements, although it does not
anticipate nonperformance by such parties.  See Note 9.

    Medite's Irish subsidiary, Medite of Europe Limited, has bank credit
agreements providing for (i) a bank term loan ($14.8 million outstanding at
December 31, 1995) repayable in installments through 2000 and (ii) a $12 million
multi-currency revolving working capital facility ($6.8 million outstanding at
December 31, 1995) through April 1997.  Borrowings under both facilities are
collateralized by substantially all of Medite/Europe's assets.  The term loan
bears interest at a weighted average fixed rate of 8.3% while borrowings under
the revolving facility bear interest at rates based upon LIBOR.

    At December 31, 1995, the weighted average interest rates on Medite's
outstanding U.S. and non-U.S. bank borrowings, including the effect of the
interest rate swaps discussed above, were 7.6% and 7.8%, respectively (1994 -
7.8% and 7.9%, respectively).  Amounts available for borrowing under the
existing bank credit facilities aggregated $17 million at December 31, 1995.

    Other Medite indebtedness consists principally of a State of Oregon term
loan that matures in monthly installments through March 2008, bears interest at
6.9% and is collateralized by certain of Medite's property and equipment.

    Other.  Sybra's revolving bank credit agreements provide for unsecured
credit facilities aggregating $29 million with interest generally at LIBOR plus
1.5%.  Borrowings under these agreements mature through July 1997.  At December
31, 1995, the weighted average interest rate on outstanding revolving borrowings
was 7.5% (1994 - 7.7%).  Amounts available for borrowing aggregated $12.2
million at December 31, 1995.

    Capital lease obligations are stated net of imputed interest.  Future
minimum payments under capital lease obligations at December 31, 1995, including
amounts representing interest, are approximately $1.4 million in each of the
next three years, $.6 million in each of the following two years and an
aggregate of $3.2 million thereafter.  The gross amount of assets recorded under
capital leases, included in property and equipment, was $6.5 million and $6.2
million at December 31, 1994 and 1995, respectively.  Accumulated amortization
of assets recorded under capital leases was $4.0 million and $4.3 million at
December 31, 1994 and 1995, respectively.

    National Cabinet Lock has a Canadian bank credit agreement which currently
provides for approximately $5.5 million of U.S. or Canadian dollar borrowings,
with interest generally at LIBOR plus .5% and collateralized by substantially
all of National Cabinet Lock's Canadian assets.  At December 31, 1995, the full
amount of this facility was available for borrowing.

    Credit agreements of subsidiaries typically require the respective
subsidiary to maintain minimum levels of equity, require the maintenance of
certain financial ratios, limit dividends and additional indebtedness, and
contain other provisions and restrictive covenants customary in lending
transactions of this type.  At December 31, 1995, the restricted net assets of
the Company's subsidiaries approximated $110 million.

Aggregate maturities of long-term debt at December 31, 1995

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,                                         AMOUNT
-------------------------                                         ------

                                                              (IN THOUSANDS)
  <S>                                                          <C>
  1996                                                         $ 13,000
  1997                                                           40,581
  1998                                                           12,933
  1999                                                           12,242
  2000                                                           10,490
  2001 and thereafter                                           124,988
                                                               --------

                                                                214,234
  Less amounts representing interest on capital leases            3,267
                                                               --------


                                                               $210,967
                                                               ========

</TABLE>


NOTE 5 -INVENTORIES:
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                             ----------------

                                                              1994     1995
                                                              ----     ----

                                                              (IN THOUSANDS)
<S>                                                         <C>      <C>
Raw materials:
  Building products                                         $13,050  $12,404
  Hardware products                                           1,313    1,927
  Fast food                                                   1,426    1,379
                                                            -------  -------

                                                             15,789   15,710
                                                            -------  -------


In process products:
  Building products                                           1,481    2,187
  Hardware products                                           4,437    4,320
                                                            -------  -------

                                                              5,918    6,507
                                                            -------  -------


Finished products:
  Building products                                           2,711    6,131
  Hardware products                                           2,510    2,921
                                                            -------  -------

                                                              5,221    9,052
                                                            -------  -------


Supplies                                                      4,088    5,116
                                                            -------  -------


                                                            $31,016  $36,385
                                                            =======  =======

</TABLE>


    The current cost of LIFO inventories exceeded the net carrying value of
such inventories by approximately $4.1 million and $4.2 million at December 31,
1994 and 1995, respectively.  The effect of reductions in certain building
products LIFO inventory quantities increased operating income by $.5 million in
1993, $3.2 million in 1994 and $.5 million in 1995.

NOTE 6 -OTHER INCOME:
<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                                 --------------------------

                                                   1993      1994     1995
                                                   ----      ----     ----

                                                        (IN THOUSANDS)
<S>                                              <C>      <C>       <C>
Interest income                                  $  313   $  671    $1,042
Business interruption insurance                   1,900     -         -
Currency transaction gains (losses), net           (114)     896       419
Disposal of property and equipment                  304       23        80
Other, net                                        1,234      990     1,111
                                                 ------   ------    ------


                                                 $3,637   $2,580    $2,652
                                                 ======   ======    ======

</TABLE>

     Business interruption insurance related to a 1992 fire at Medite's veneer
and chipping plant was recognized as a component of operating income through
August 1993.

NOTE 7 -INTANGIBLE AND OTHER NONCURRENT ASSETS:
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                             ----------------

                                                              1994     1995
                                                              ----     ----

                                                              (IN THOUSANDS)
<S>                                                         <C>      <C>
Intangible assets, net of accumulated
 amortization of $8,551 and $9,572:
  Goodwill                                                  $ 5,328  $ 5,162
  Franchise fees                                             6,299     5,605
  Intangible pension asset                                    -          403
  Other                                                       7,575    6,975
                                                            -------  -------


                                                            $19,202  $18,145
                                                            =======  =======

Other assets:
  Deferred financing costs                                  $ 3,537  $ 3,003
  Prepaid pension cost                                        4,363    1,501
  Property held for sale                                      3,979    3,920
  Other                                                         68       206
                                                            -------  -------


                                                            $11,947  $ 8,630
                                                            =======  =======

</TABLE>

    Property held for sale is carried at the lower of cost or estimated net
realizable value under current market conditions.  Medite has entered into an
agreement to exchange certain property held for sale with a nominal carrying
value and $1 million cash for certain state-owned timber and timberland.  The
transaction is currently expected to be completed in early 1996.  Medite has
also granted an option to a real estate development company to acquire, over a
three-year period, certain other property held for sale.

NOTE 8 -ACCRUED LIABILITIES:
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                             ----------------

                                                              1994     1995
                                                              ----     ----

                                                              (IN THOUSANDS)
<S>                                                         <C>      <C>
Current accrued liabilities:
  Employee benefits                                         $ 9,978  $ 7,894
  Interest                                                    2,221    3,636
  Insurance claims and expenses                               3,412    2,357
  Equipment purchases                                         2,157      416
  Other                                                       6,662    7,167
                                                            -------  -------


                                                            $24,430  $21,470
                                                            =======  =======

Other noncurrent liabilities:
  Insurance claims and expenses                             $ 1,339  $ 1,066
  Accrued pension cost                                        -          635
  Accrued OPEB cost                                             298      322
  Other                                                       1,712    2,222
                                                            -------  -------


                                                            $ 3,349  $ 4,245
                                                            =======  =======

</TABLE>

NOTE 9 - FINANCIAL INSTRUMENTS:
<TABLE>
<CAPTION>
                                                                      DECEMBER 31,            DECEMBER 31,
                                                                         1994                    1995
                                                                 --------------------    --------------------

                                                                  CARRYING       FAIR      CARRYING       FAIR
                                                                   AMOUNT        VALUE      AMOUNT        VALUE
                                                                 ---------       -----    ---------       -----

                                                                                  (IN MILLIONS)
<S>                                                                <C>           <C>        <C>          <C>
Cash and cash equivalents                                          $ 23.3        $23.3      $ 17.6       $ 17.6

Long-term debt (excluding capitalized leases):
  Valcor Senior Notes                                              $100.0        $89.6      $100.0       $ 99.0
  Medite debt with rates fixed via interest rate swaps               26.0         23.3        26.0         26.0
  Other fixed-rate debt                                              26.8         26.0        18.9         19.2
  Variable rate debt                                                 55.3         55.3        60.6         60.6
</TABLE>

    Fair value of the Valcor Senior Notes is based upon quoted market prices
(per $100 principal amount) of $89.60 at December 31, 1994 and $99.00 at
December 31, 1995.  See Note 4.

    The fair value of Medite debt on which interest rates have been effectively
fixed through the use of interest rate swaps is deemed to approximate the book
value of the debt plus or minus the fair value of the related swaps.  See Note
4.  Fair values of Medite's interest rate swaps are estimated to be a $2.7
million receivable at December 31, 1994 and approximate the contract amount at
December 31, 1995.  Such fair values represent the estimated amounts Medite
would receive if it were to terminate the swap agreements at those dates, and
are based upon quotes obtained from the counter party financial institution.

    Fair values of other fixed rate debt have been estimated based upon
relative changes in the Company's variable borrowing rates since the dates the
interest rates were fixed.  Fair values of variable interest rate debt are
deemed to approximate book value.

     At December 31, 1994, Medite had entered into certain currency forward
contracts to eliminate certain exchange rate fluctuation risk of approximately
$1 million of equipment purchase commitments denominated principally in Deutsche
Marks.  Such currency forward contracts effectively fixed the U.S. dollar cost
of the related equipment and matured during 1995.

NOTE 10 - INCOME TAXES:
<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                                    ------------------------

                                                      1993    1994     1995
                                                      ----    ----     ----

                                                          (IN MILLIONS)
<S>                                                   <C>     <C>      <C>
Components of pretax income:
  United States                                       $31.1   $23.7    $ 5.5
  Non-U.S. subsidiaries                                16.4    24.5     26.8
                                                      -----   -----    -----


                                                      $47.5   $48.2    $32.3
                                                      =====   =====    =====

Expected tax expense, at U.S. federal statutory
 income tax rate of 35%                               $16.6   $16.9    $11.3
Non-U.S. tax rates                                     (1.8)   (2.4)    (3.1)
Incremental U.S. tax on non-U.S. earnings               3.6     1.7      3.5
Rate change adjustment of deferred taxes                 .4     -       (1.0)
Other, net                                               .4      .9      2.1
                                                      -----   -----    -----


                                                      $19.2   $17.1    $12.8
                                                      =====   =====    =====

Components of income tax expense:
  Currently payable:
    U.S. federal                                      $11.7   $ 7.9    $ 5.8
    U.S. state                                           .6     1.0      1.6
    Non-U.S.                                            4.3     4.9      6.2
                                                      -----   -----    -----

                                                       16.6    13.8     13.6
                                                      -----   -----    -----

  Deferred income taxes:




    U.S. federal and state                              2.7     1.9     (2.1)
    Non-U.S.                                            (.1)    1.4      1.3
                                                      -----   -----    -----

                                                        2.6     3.3      (.8)
                                                      -----   -----    -----


                                                      $19.2   $17.1    $12.8
                                                      =====   =====    =====

Comprehensive provision for income tax expense
 allocable to:
  Pretax income                                       $19.2   $17.1    $12.8
  Stockholder's equity - deferred taxes allocable
   to adjustments components                            (.1)    (.3)    (1.2)
                                                      -----   -----    -----


                                                      $19.1   $16.8    $11.6
                                                      =====   =====    =====

</TABLE>

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                       ----------------------

                                                          1994        1995
                                                          ----        ----

                                                           (IN MILLIONS)
<S>                                                     <C>         <C>
Tax effect of temporary differences relating to:
  Inventories                                           $ (1.6)     $  (.8)
  Timber and timberlands                                 (11.1)      (10.8)
  Property and equipment                                  (7.1)       (9.1)
  Capital lease assets and obligations                     1.5         1.3
  Accrued liabilities and other deductible differences     4.8         4.6
  Other taxable differences                               (8.4)       (6.2)
  Investments in non-U.S. subsidiaries                    (2.4)       (1.1)
                                                        ------      ------


    Net deferred tax liabilities                        $(24.3)     $(22.1)
                                                        ======      ======

Current deferred tax assets                             $  1.6      $  2.4
Noncurrent deferred tax liabilities                      (25.9)      (24.5)
                                                        ------      ------


                                                        $(24.3)     $(22.1)
                                                        ======      =======

</TABLE>

NOTE 11 -   EMPLOYEE BENEFIT PLANS:

Company-sponsored pension plans

    Approximately 30% of the Company's worldwide full and part-time employees
(about three-fourths of full-time employees) participate in one or more company-
sponsored defined benefit or defined contribution pension plans.  Defined
pension benefits are generally based on years of service and compensation under
fixed dollar, final pay or career average formulas, and the related expenses are
based on independent actuarial valuations.  The funding policies for U.S.
defined benefit plans are to contribute amounts satisfying funding requirements
of the Employee Retirement Income Security Act of 1974, as amended.  Non-U.S.
defined benefit plans are funded in accordance with applicable statutory
requirements.

    Defined contribution plans.  Over 90% of the Company's full-time U.S.
employees are eligible to participate in contributory savings plans with Company
contributions based on matching or other formulas.  Defined contribution plan
expense aggregated $1.7 million in 1993, $1.8 million in 1994 and $1.6 million
in 1995.

    Defined benefit plans.  About one-third of the Company's worldwide full-
time employees are covered by defined benefit plans.  The rates used in
determining the actuarial present value of benefit obligations were (i) discount
rate - 7.5% (1994 - 8.5%), and (ii) rate of increase in future compensation
levels - 4%.  The expected long-term rates of return on assets used ranged from
7.5% to 10%.  The plans' assets are comprised primarily of mutual funds.

     The adjustment required to recognize minimum pension liability (accumulated
pension benefit obligation in excess of plan assets) relates to Medite's U.S.
plans.  Variances from actuarially assumed rates will result in increases or
decreases in accrued pension liabilities, pension expense and funding
requirements in future periods.  A one percentage point decrease in the discount
rate would increase the aggregate actuarial present value of accumulated benefit
obligations at December 31, 1995 by approximately $4 million.

<TABLE>
<CAPTION>
                                                   YEARS ENDED DECEMBER 31,
                                                 ---------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                       (IN THOUSANDS)
<S>                                             <C>      <C>       <C>
Net periodic pension cost:
  Service cost                                  $   484  $   519   $   531
  Interest cost on PBO                            1,524    1,592     1,679
  Actual return on plan assets                   (2,395)     594    (3,589)
  Net amortization and deferral                     (63)  (2,922)    1,473
                                                -------  -------   -------


    Net expense (credit)                        $  (450) $  (217)  $    94
                                                =======  =======   =======

</TABLE>

<TABLE>
<CAPTION>
                                                                    PLAN ASSETS EXCEED     ACCUMULATED BENEFITS
                                                                   ACCUMULATED BENEFITS     EXCEED PLAN ASSETS
                                                                   --------------------    --------------------

                                                                        December 31,            December 31,
                                                                     -----------------       -----------------

                                                                     1994        1995        1994        1995
                                                                     ----        ----        ----        ----

                                                                                  (IN THOUSANDS)
<S>                                                                <C>          <C>         <C>         <C>
Actuarial present value of benefit obligations:
  Vested benefits                                                  $16,573      $1,217      $ -         $20,290
  Nonvested benefits                                                 1,102       1,163        -             470
                                                                   -------      ------      ------      -------


  Accumulated benefit obligations                                   17,675       2,380        -          20,760
  Effect of projected salary increases                               1,558       1,456        -             386
                                                                   -------      ------      ------      -------


  Projected benefit obligations ("PBO")                             19,233       3,836        -          21,146
Plan assets at fair value                                           21,080       4,315        -          19,776
                                                                   -------      ------      ------      -------


Plan assets over (under) PBO                                         1,847         479        -          (1,370)
Unrecognized net loss from experience different from
 actuarial assumptions                                               2,703       1,044        -           4,331
Unrecognized prior service cost                                        448        -           -             403
Unrecognized net assets being amortized over periods of
 9 to 11 years                                                        (635)        (22)       -            (342)
Adjustment to recognize minimum liability                             -           -           -          (4,006)
                                                                   -------      ------      ------      -------


Total prepaid (accrued) pension cost                                 4,363       1,501        -            (984)
Current portion and reclassification, net                             -           -           -            (349)
                                                                   -------      ------      ------      -------




    Noncurrent prepaid (accrued) pension cost                      $ 4,363      $1,501      $ -         $  (635)
                                                                   =======      ======      ======      =======

</TABLE>

Postretirement benefits other than pensions

    Certain Medite retirees receiving benefits from Medite's U.S. salaried
pension plan are eligible to participate in Medite's group health program until
age 65, and contribute to the cost of such benefits.

    The rates used in determining the actuarial present value of the
accumulated OPEB obligation were (i) discount rate - 7.5% (1994 - 8.5%), (ii)
rate of increase in future compensation levels - 4% annually and (iii) rate of
increase in future health care costs - 13% in 1996, gradually declining to 6% in
2016 and thereafter.  If the health care cost trend rate was increased by one
percentage point for each year, OPEB expense would have increased $5,000 in
1995, and the actuarial present value of accumulated OPEB obligation at December
31, 1995 would have increased $35,000.  In addition, a one percentage point
change in the discount rate would change the actuarial present value of
accumulated OPEB obligation at December 31, 1995 by approximately $25,000.
<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                                    ------------------------

                                                     1993     1994     1995
                                                     ----     ----     ----

                                                         (IN THOUSANDS)
<S>                                                  <C>     <C>      <C>
Net periodic OPEB cost:
  Service cost                                       $28     $24      $20
  Interest cost                                       21      20       22
  Net amortization and deferrals                      -       -        (2)
                                                     ---     ---      ---


                                                     $49     $44      $40
                                                     ===     ===      ===

</TABLE>

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                                -------------

                                                                1994   1995
                                                                ----   ----

                                                               (IN THOUSANDS)
<S>                                                            <C>    <C>
Actuarial present value of accumulated OPEB obligation:
  Retiree benefits                                             $ 50   $ 58
  Other fully eligible active plan participants                  20     25
  Other active plan participants                                203    242
                                                               ----   ----

                                                                273    325
Unrecognized net gain from experience different
 from actuarial assumptions                                      37     13
                                                               ----   ----


Total accrued OPEB cost                                         310    338
Less current portion                                             12     16
                                                               ----   ----


  Noncurrent accrued OPEB cost                                 $298   $322
                                                               ====   ====

</TABLE>

Multiemployer pension plans

    Employees of certain former operations were covered by union-sponsored,
collectively-bargained multiemployer pension plans.  Contributions to
multiemployer plans based upon collectively-bargained agreements were $8,000 in
1993 and, based upon information provided by the multiemployer plans'
administrators, such plans had no unfunded vested benefits.

NOTE 12 - RELATED PARTY TRANSACTIONS:

    The Company may be deemed to be controlled by Harold C. Simmons.  See
Note 1.  The Indenture governing the Valcor Senior Notes prohibits co-investment
with affiliates and contains restrictions on other transactions with affiliates.
It is the policy of the Company to engage in transactions with related parties
on terms, in the opinion of the Company, no less favorable to the Company than
could be obtained from unrelated parties.

    Loans historically were made between the Company and Valhi pursuant to term
and demand notes, principally for cash management purposes.  Such loans
generally bore interest at rates related to credit agreements with unrelated
parties.  Interest expense on loans from Valhi was $1,000 in 1993.

    Receivables from affiliates at December 31, 1995 include $3.5 million for
refundable income taxes (1994 - $4.1 million).

    Under the terms of Intercorporate Services Agreements with Valhi, Valhi
provides certain management and administrative services to the Company on a fee
basis.  Such fees are based upon estimates of time devoted to affairs of the
Company by individual Valhi employees and the salaries of such persons.  Fees
charged to the Company were $760,000 in 1993, $920,000 in 1994, and $764,000 in
1995.  Net charges from related parties for services provided in the ordinary
course of business, principally charges for insuring property and other risks
and foreign sales corporation commissions, aggregated $2.9 million in 1993, $2.2
million in 1994 and $2.1 million in 1995.  Such charges are principally pass-
through in nature and, in the Company's opinion, are not materially different
from those that would have been incurred on a stand-alone basis.

    Certain employees of the Company have been awarded shares of restricted
Valhi common stock and/or granted options to purchase Valhi common stock under
the terms of Valhi's stock option plans.  The Company will pay Valhi the
aggregate difference between the option price and the market value of Valhi's
common stock on the exercise date of the options.  For financial reporting
purposes, the Company accounts for the related option expense (credit) of
$(5,000) in 1993, $433,000 in 1994 and $(72,000) in 1995 in a manner similar to
accounting for stock appreciation rights.  At December 31, 1995, employees of
the Company held options to purchase 735,000 Valhi shares at prices ranging from
$4.76 to $14.66 per share (358,000 shares at prices lower than the December 31,
1995 quoted market price of $6.375 per share).

    Restricted stock is forfeitable unless certain periods of employment are
completed.  The Company pays Valhi the market value of restricted shares on the
dates the restrictions expire, and accrues the related expense over the
restriction period.  Expense related to restricted stock was $15,000 in 1993,
$65,000 in 1994 and $15,000 in 1995.  At December 31, 1995, 4,000 shares of
Valhi common stock, restricted for periods of up to six months, were held by
Valhi in escrow for employees for the Company.


NOTE 13 - COMMITMENTS AND CONTINGENCIES:

    Legal proceedings.  Medite's Irish subsidiary has been named as a defendant
in a complaint filed in the High Court for the Republic of Ireland (Woodfab
Limited v. Coillte Teoranta and Medite of Europe Limited, 1995 No. 1154P).  The
complaint alleges that a timber supply contract entered into in 1981 between
Medite/Europe and Coillte violate certain provisions of the Competition Act of
1991 and the European Community Treaty.  The complaint seeks to, among other
things, declare that the timber supply contract is invalid and therefore should
be rescinded.  Hearings for this matter are currently expected in June 1996
although no trial date has been set.  Medite believes that the allegations are
without merit and intends to defend this action vigorously.

    Environmental matters.  The Company's operations are governed by various
federal, state, local and foreign environmental laws and regulations.  From time
to time, the Company may be subject to environmental regulatory enforcement
under various statutes, resolution of which typically involves the establishment
of compliance programs.  The Company's policy is to comply with environmental
laws and regulations at all of its plants and to continually strive to improve
environmental performance in association with applicable industry initiatives.
Except with respect to the New Mexico MDF facility as discussed below, the
Company believes that its operations are in substantial compliance with
applicable requirements of environmental laws.  The imposition of more strict
standards or requirements under environmental laws and resolutions could result
in expenditures in excess of amounts currently estimated to be required for such
matters.

    In 1995, Medite was named as a defendant in a complaint filed in the New
Mexico District Court (New Mexico Environmental Department (`NMED'') v. Medite
Corporation, No. SF 95-2581(C)).  The complaint involved certain violations of
state air quality emission standards at Medite's New Mexico MDF facility which
in 1995 represented less than 15% of the building products sales and assets.  In
December 1995, Medite entered into a settlement agreement with the NMED wherein
Medite paid fines of $200,000 to settle prior violations of air quality
standards and agreed to submit an application for new operating permits for the
facility and related compliance plans as necessary to the NMED.  Medite will
incur fines of $750 per day of operation until a new operating permit for the
facility is obtained.  Medite currently expects to submit a new operating permit
and compliance plan during 1996, however there can be no assurance that
regulatory approval will be obtained without modifications which may not be
economically feasible for this facility.

    In addition to the litigation described above, the Company is involved in
various environmental, contractual, product liability and other claims and
disputes incidental to its business.  The Company currently believes that the
disposition of all claims and disputes, individually or in the aggregate, should
not have a material adverse effect on the Company's consolidated financial
condition, results of operations or liquidity.

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

    Capital expenditures.  At December 31, 1995, the estimated cost to complete
capital projects in process approximated $10 million.

    Timber cutting contracts.  Deposits are made on timber cutting contracts
with public and private sources from which Medite obtains a portion of its
timber requirements.  Medite records only the cash deposits and advances on
these contracts because it does not obtain title to the timber until it has been
harvested.  At December 31, 1995, timber and log purchase obligations aggregated
$10 million under agreements expiring through 1997.

    Royalties.  Royalty expense, which relates principally to fast food
operations, approximated $4.0 million each of the past three years.  Fast food
royalties are paid to the franchiser based upon a percentage of gross sales, as
specified in the franchise agreement related to each individual restaurant.

    Concentrations of credit risk.  Medite's sales are made primarily to
wholesalers of building materials located principally in the western United
States, Pacific Rim, European countries and Mexico.  In each of the past three
years, Medite's ten largest customers accounted for approximately one-fifth of
its sales with at least six of such customers in each year located in the U.S.

    Hardware products are sold primarily to original equipment manufacturers in
the U.S. and Canada.  In each of the past three years, the ten largest customers
accounted for approximately one-third of hardware products sales with at least
five of such customers in each year located in the U.S.

    Sybra's restaurants are clustered in four regions, principally Texas,
Michigan, Pennsylvania and Florida.  All fast food sales are for cash.

    At December 31, 1995, about 25% of the Company's cash and cash equivalents
was on deposit with a single Canadian bank and 10% was on deposit with a single
Irish bank (1994 - 20% on deposit with a single Irish bank and 20% invested in
U.S. treasury securities).

    Development agreement.  Sybra has a Consolidated Development Agreement
(`CDA'') with Arby's, Inc. which provides Sybra with exclusive development
rights within certain counties in the Dallas/Fort Worth, Texas area and provides
Sybra and Arby's with joint development rights in the Tampa, Florida area.  As
of December 31, 1995, the CDA requires Sybra to open an aggregate of 12 more
stores in its existing regional markets through various dates in 1997 (five
stores in 1996).

    The Company is considering curtailing new store openings and, as a result,
Sybra may not be in compliance with the current terms of the CDA by the end of
1996.  In such event, there can be no assurance that the terms of the CDA can be
renegotiated in order for Sybra to retain its exclusive development rights.  The
Company does not believe that relinquishing these rights would have a material
adverse effect on its consolidated financial position, results of operations or
liquidity.

    Operating leases.  The Company leases various fast food retail and other
facilities and equipment.  Most of the leases contain purchase and/or various
term renewal options at fair market and fair rental values, respectively.  In
most cases the Company expects that, in the normal course of business, leases
will be renewed or replaced by other leases. Net rent expense approximated $5.0
million in each of 1993, 1994 and 1995.  Contingent rentals based upon gross
sales of individual fast food restaurants were less than 10% of total rent
expense in each of the past three years.

    At December 31, 1995, substantially all future minimum payments under
noncancellable operating leases having an initial or remaining term of more than
one year relate to fast food restaurant facilities.

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31,                                         AMOUNT
-------------------------                                         ------

                                                              (IN THOUSANDS)
<S>                                                             <C>
  1996                                                          $ 4,490
  1997                                                            3,732
  1998                                                            2,864
  1999                                                            2,422
  2000                                                            2,033
  2001 and thereafter                                             8,249
                                                                -------

                                                                 23,790
  Less minimum rentals due under noncancellable subleases         2,166
                                                                -------


      Net minimum commitments                                   $21,624
                                                                =======

</TABLE>


NOTE 14 -   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
<TABLE>
<CAPTION>
                                                 QUARTER ENDED
                                   -----------------------------------------

                                   MARCH 31   JUNE 30   SEPT. 30   DEC. 31
                                   --------   --------  --------   --------

                                                 (IN THOUSANDS)
<S>                               <C>        <C>       <C>        <C>
Year ended December 31, 1995

  Net sales                       $105,546   $97,434   $95,144    $97,444
  Operating income                  16,884    15,223    11,044      9,484
  Net income                         6,753     6,730     3,583      2,480

Year ended December 31, 1994

  Net sales                        $84,746   $98,454   $95,240    $96,938
  Operating income                  11,844    18,894    17,547     17,986
  Net income                         4,251     9,069     9,010      8,768

Year ended December 31, 1993

  Net sales                        $80,128   $87,134   $92,400    $90,647
  Operating income                  10,338    13,406    13,267     16,444
  Net income                         6,133     7,680     6,470      8,067
</TABLE>







                REPORT OF INDEPENDENT ACCOUNTANTS
                ON FINANCIAL STATEMENT SCHEDULES



To the Stockholder and Board of Directors of Valcor, Inc.:

    Our report on the consolidated financial statements of Valcor, Inc. as of
December 31, 1994 and 1995 and for each of the three years in the period ended
December 31, 1995 is herein included in this Annual Report on Form 10-K.  In
connection with our audits of such financial statements, we have also audited
the related financial statement schedules listed in the index on page F-1 of
this Annual Report on Form 10-K.  These consolidated financial statement
schedules are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated financial
statement schedules based on our audits.  We did not audit the financial
statements of Medite Corporation, which subsidiary constituted approximately
three-fifths of consolidated assets as of December 31, 1994 and 1995, and
approximately one-half of consolidated net sales for each of the three years in
the period ended December 31, 1995.  These statements were audited by other
auditors whose report thereon was furnished to us and our opinion expressed
herein, insofar as it relates to amounts included for Medite, is based solely
upon their report.

    In our opinion, based upon our audits and the report of other auditors, the
financial statement schedules referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.





                                         COOPERS & LYBRAND L.L.P.


Dallas, Texas
February 12, 1996







            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                ON FINANCIAL STATEMENT SCHEDULES



To the Stockholder and Board of Directors of Medite Corporation:

    We have audited in accordance with generally accepted auditing standards
the consolidated financial statements (not presented separately herein) of
Medite Corporation as of December 31, 1994 and 1995 and for each of the three
years in the period ended December 31, 1995, and have issued our report thereon
dated January 27, 1996.  Our audits of the financial statements were made for
the purpose of forming an opinion on the basic financial statements taken as a
whole.  The financial statement schedule II (not presented separately herein) is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and are not a
required part of the basic financial statements.  This schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.





                                              ARTHUR ANDERSEN LLP






Portland, Oregon,
January 27, 1996


                          VALCOR, INC.

   SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                    CONDENSED BALANCE SHEETS

                   DECEMBER 31, 1994 AND 1995

                         (IN THOUSANDS)

<TABLE>
<CAPTION>
              ASSETS                                       1994       1995
                                                           ----       ----

<S>                                                     <C>        <C>
Current assets:
  Cash and cash equivalents                             $    922   $  5,332
  Demand loans to subsidiaries                            21,250     14,000
  Income taxes receivable from affiliates, net             2,238        936
  Other                                                        3         10
                                                        --------   --------


      Total current assets                                24,413     20,278
                                                        --------   --------


Other assets:
  Investment in subsidiaries                             109,092    122,941
  Deferred financing costs                                 3,025      2,656
                                                        --------   --------


      Total other assets                                 112,117    125,597
                                                        --------   --------


                                                        $136,530   $145,875
                                                        ========   ========

   LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
  Accrued interest                                      $  1,604   $  1,604
  Payable to affiliates                                       62        -
  Other                                                       14         47
                                                        --------   --------


      Total current liabilities                           1,680      1,651

Long-term debt - Senior Notes Due 2003                  100,000    100,000





Stockholder's equity                                      34,850     44,224
                                                        --------   --------


                                                        $136,530   $145,875
                                                        ========   ========
</TABLE>




                          VALCOR, INC.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)

                 CONDENSED STATEMENTS OF INCOME

          YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                         (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                  1993      1994      1995
                                                  ----      ----      ----

<S>                                            <C>       <C>       <C>
Interest income                                $    23   $ 1,099   $  1,195
General and administrative expenses                (55)     (172)      (633)
Interest expense                                (1,482)   (9,968)    (9,994)
                                               -------   -------   --------


    Loss before income taxes                    (1,514)   (9,041)    (9,432)

Income tax benefit                                 530     5,523      3,255
                                               -------   -------   --------

                                                  (984)   (3,518)    (6,177)

Equity in earnings of subsidiaries              29,334    34,616     25,723
                                               -------   -------   --------


    Net income                                 $28,350   $31,098   $ 19,546
                                               =======   =======   ========

</TABLE>



                          VALCOR, INC.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)

               CONDENSED STATEMENTS OF CASH FLOWS

          YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995

                         (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                 1993      1994       1995
                                                 ----      ----       ----

<S>                                           <C>        <C>        <C>
Cash flows from operating activities:
  Net income                                  $  28,350  $ 31,098   $ 19,546
  Undistributed earnings of subsidiaries:
    Equity in earnings                          (29,334)  (34,616)   (25,723)
    Distributions                                76,382    12,380     10,000
  Other, net                                         57       343        369
  Change in assets and liabilities, net             988    (1,549)     1,266
                                              ---------  --------   --------


      Net cash provided by operating
       activities                                76,443     7,656      5,458
                                              ---------  --------   --------


Cash flows from investing activities - loans
 to subsidiaries, net                           (22,000)      750      7,250
                                              ---------  --------   --------


Cash flows from financing activities:
  Additions to long-term debt                   100,000      -          -
  Deferred financing costs                       (3,425)     -          -
  Dividends to Valhi                           (148,932)   (9,570)    (8,298)
                                              ---------  --------   --------


      Net cash used by financing activities     (52,357)   (9,570)    (8,298)
                                              ---------  --------   --------


Net increase (decrease) in cash                   2,086    (1,164)     4,410
Balance at beginning of year                       -        2,086        922
                                              ---------  --------   --------


Cash and cash equivalents at end of year      $   2,086  $    922   $  5,332
                                              =========  ========   ========







Supplemental disclosures - cash paid
 (received) for:
  Interest expense                            $       8  $  9,438   $  9,625
  Income taxes, net                                -       (3,811)    (4,476)


</TABLE>



                          VALCOR, INC.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONTINUED)

            NOTES TO CONDENSED FINANCIAL INFORMATION



NOTE 1 -GENERAL:

    The Company's Consolidated Financial Statements are incorporated herein by
reference.  Certain prior year amounts have been reclassified.

NOTE 2 -INVESTMENT IN SUBSIDIARIES:
<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                         -------------------

                                                           1994       1995
                                                           ----       ----

                                                            (IN THOUSANDS)
<S>                                                     <C>         <C>
Medite                                                  $ 54,940    $ 59,349
National Cabinet Lock                                     26,187      32,612
Sybra                                                     27,965      30,980
                                                        --------    --------


                                                        $109,092    $122,941
                                                        ========    ========

</TABLE>

NOTE 3 -EQUITY IN EARNINGS OF SUBSIDIARIES:
<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                                ----------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                       (IN THOUSANDS)
<S>                                            <C>       <C>       <C>
Medite                                         $14,894   $18,347   $10,607
National Cabinet Lock                            9,528    11,919    12,101
Sybra                                            4,912     4,350     3,015
                                               -------   -------   -------


                                               $29,334   $34,616   $25,723
                                               =======   =======   =======

</TABLE>

NOTE 4 -CASH DIVIDENDS FROM SUBSIDIARIES:
<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                                ---------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                       (IN THOUSANDS)
<S>                                            <C>       <C>       <C>
Medite                                         $67,000   $ 2,800   $ 4,000
National Cabinet Lock                            4,382     4,580     6,000
Sybra                                            5,000     5,000      -
                                               -------   -------   -------


                                               $76,382   $12,380   $10,000
                                               =======   =======   =======

</TABLE>


NOTE 5 -CASH PAID FOR INCOME TAXES:
<TABLE>
<CAPTION>
                                                   YEARS ENDED DECEMBER 31,
                                                 ---------------------------

                                                  1993      1994      1995
                                                  ----      ----      ----

                                                       (IN THOUSANDS)
<S>                                             <C>       <C>       <C>
Received from subsidiaries:
  Medite                                        $ 7,435   $ 8,140   $ 6,389
  National Cabinet Lock                           3,002     3,506     2,350
  Sybra                                           3,857     3,465     1,549
                                                -------   -------   -------


                                                 14,294    15,111    10,288
Paid to Valhi                                    14,294    11,300     5,812
                                                -------   -------   -------


    Cash received for income taxes, net         $  -      $(3,811)  $(4,476)
                                                =======   =======   =======

</TABLE>

    Medite's Irish subsidiary (Medite of Europe Limited) and National Cabinet
Lock's Canadian subsidiary (Waterloo Furniture Components Limited) are not
members of the consolidated federal income tax group of which Valcor, Medite,
Sybra and National Cabinet Lock are members.
                                       VALCOR, INC.

                     SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                      (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                         ADDITIONS
                                                            BALANCE AT  CHARGED TO
                                                            BEGINNING    COSTS AND
            DESCRIPTION                                      OF YEAR     EXPENSES
------------------------------------                        ----------  ----------

<S>                                                         <C>          <C>
Year ended December 31, 1993:
  Allowance for doubtful accounts                           $1,223       $   11
                                                            ======       ======

  Amortization of intangible assets:
    Goodwill                                                $  842       $  166
    Franchise fees and other                                 5,424        1,571
                                                            ------       ------


                                                            $6,266       $1,737
                                                            ======       ======

Year ended December 31, 1994:
  Allowance for doubtful accounts                           $  888       $  184
                                                            ======       ======

  Amortization of intangible assets:
    Goodwill                                                $1,008       $  172
    Franchise fees and other                                 6,848        1,423
                                                            ------       ------


                                                            $7,856       $1,595
                                                            ======       ======

Year ended December 31, 1995:




  Allowance for doubtful accounts                           $  570       $  313
                                                            ======       ======

  Amortization of intangible assets:
    Goodwill                                                $1,180       $  166
    Franchise fees and other                                 7,371        1,308
                                                            ------       ------


                                                            $8,551       $1,474
                                                            ======       ======

</TABLE>




<TABLE>
<CAPTION>


                                                                        BALANCE
                                                                        AT END
            DESCRIPTION                                     DEDUCTIONS  OF YEAR
------------------------------------                        ----------  -------

<S>                                                          <C>        <C>
Year ended December 31, 1993:
  Allowance for doubtful accounts                            $  (346)   $  888
                                                             =======    ======

  Amortization of intangible assets:
    Goodwill                                                 $  -       $1,008
    Franchise fees and other                                    (147)    6,848
                                                             -------    ------


                                                             $  (147)   $7,856
                                                             =======    ======

Year ended December 31, 1994:
  Allowance for doubtful accounts                            $  (502)   $  570
                                                             =======    ======

  Amortization of intangible assets:
    Goodwill                                                 $  -       $1,180
    Franchise fees and other                                    (900)     7,371
                                                             -------    -------


                                                             $  (900)   $8,551
                                                             =======    ======

Year ended December 31, 1995:




  Allowance for doubtful accounts                            $   (83)   $  800
                                                             =======    ======

  Amortization of intangible assets:
    Goodwill                                                 $  -       $1,346
    Franchise fees and other                                    (453)    8,226
                                                             -------    ------


                                                             $  (453)   $9,572
                                                             =======    ======

</TABLE>