<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------
 
                                   FORM 10-K
                             ---------------------
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
FOR FISCAL YEAR ENDED JUNE 30, 1998                COMMISSION FILE NUMBER 1-5341
 
                               ELCOR CORPORATION
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                                    <C>
                      DELAWARE                                              75-1217920
           (State or other jurisdiction of                               (I.R.S. Employer
           incorporation or organization)                               Identification No.)
                14643 DALLAS PARKWAY
            WELLINGTON CENTRE, SUITE 1000
                    DALLAS, TEXAS                                           75240-8871
      (Address of principal executive offices)                              (Zip Code)
</TABLE>
 
       Registrant's telephone number, including area code: (972) 851-0500
 
          Securities registered pursuant to Section 12(b) of the Act:
 
<TABLE>
<CAPTION>
                                                                     NAME OF EACH EXCHANGE ON
                 TITLE OF EACH CLASS                                     WHICH REGISTERED
                 -------------------                                 ------------------------
<S>                                                    <C>
         Common Stock Par Value $1 Per Share                        The New York Stock Exchange
     Rights to Purchase Series A Preferred Stock                    The New York Stock Exchange
</TABLE>
 
          Securities registered pursuant to Section 12(g) of the Act:
 
<TABLE>
<CAPTION>
                                             NONE
                                       ----------------
<S>                                    <C>               <C>
                                       (Title of Class)
</TABLE>
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [ ]
 
     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] No [ ]
 
     The aggregate market value of Common Stock held by nonaffiliates as of
September 1, 1998, was $232,040,462. This amount is based on the closing price
of the Registrant's Common Stock on the New York Stock Exchange on September 1,
1998. Shares of stock held by directors and officers of the Registrant as well
as shares allocated to such persons under the Employee Stock Ownership Plan of
the Registrant were not included in the above computation; however, the
Registrant has made no determination that such entities are "Affiliates" within
the meaning of Rule 405 under the Securities Act of 1993, as amended.
 
     As of the close of business on September 1, 1998, the Registrant had
13,133,621 shares of Common Stock outstanding.
 
     Documents incorporated by reference. Listed below are the documents, any
portion of which are incorporated by reference and the parts of this report into
which such portions are incorporated:
 
                    PROXY STATEMENT DATED SEPTEMBER 18, 1998
                             PART III OF FORM 10-K
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<PAGE>   2

                                     PART I

Item 1.  Business

         Elcor Corporation (Registrant), incorporated in 1965 as a Delaware
corporation, is a publicly held corporation headquartered in Dallas, Texas.
Shares of the Registrant's common stock are traded on the New York Stock
Exchange with the ticker symbol - ELK.

Lines of Business

         Roofing Products

         The Registrant, through Elk Corporation of Dallas and its subsidiaries
(Elk), is engaged in the manufacture and sale of premium laminated fiberglass
asphalt residential roofing shingles and accessory products. Elk also
manufactures and sells nonwoven fiberglass roofing mats for use in manufacturing
asphalt roofing products, and nonwoven mats for use in other industrial
applications. Elk's premium laminated fiberglass asphalt shingle manufacturing
plants are located in Tuscaloosa, Alabama, Ennis, Texas, and Shafter,
California. The major products manufactured at Elk's roofing plants are premium
laminated fiberglass asphalt shingles sold under its brand names: Prestique(R)
Plus, Prestique(R) I, Prestique(R) II and Capstone(R). In fiscal 1995, Elk 
introduced Prestique premium laminated fiberglass asphalt shingle product lines
with the patented Enhanced High Definition(R) and Raised Profile(TM) look. In
addition, Elk also manufactures premium fiberglass asphalt hip and ridge
products: Seal-a-Ridge(R) and Z(R) ridge brands. Premium laminated asphalt
shingles account for approximately 30% of the residential sloped asphalt
shingle roofing market. About 80% of asphalt shingles are used in reroofing and
remodeling and 20% are used in new construction.
        
         Elk's roofing products are sold by employee sales personnel primarily
to roofing wholesale distributors, delivery being made by common carrier or by
customer vehicles from the manufacturing plants or warehouses. Elk's products
are distributed nationwide with Texas, California and Florida representing the
largest market areas. The Roofing Products segment accounted for approximately
86% of consolidated sales of the Registrant in fiscal 1998. For the past several
years, the building materials distribution industry has consolidated at a rapid
pace with many smaller independent distributors being acquired by emerging
larger national building products distributors. One customer, ABC Supply Co.
Inc., the largest roofing wholesale distributor in the United States, accounted
for 16% of consolidated sales in fiscal 1998, 14% of consolidated sales in
fiscal 1997, and 13% of consolidated sales in fiscal 1996.

         The company's new nonwoven fiberglass roofing mat facility at its
Ennis, Texas plant achieved its performance test level of operations effective
April 1, 1997. The new facility operates in parallel to the original fiberglass
mat manufacturing facility at the Ennis, Texas plant and produces nonwoven
fiberglass roofing mats and other mats for a variety of industrial uses. The new
plant was designed to more than triple Elk's previous manufacturing capacity for
nonwoven fiberglass mats.


                                       1

<PAGE>   3



         Elk's nonwoven fiberglass roofing mat facilities supply all of its
internal fiberglass roofing mat needs. In addition, roofing mats are sold by
employee sales personnel to other asphalt roofing products manufacturers.
Nonwoven mats are also sold to manufacturers of construction and industrial
products which use such mats in their products, and to distributors of
industrial filtration products. Elk's nonwoven mats are shipped by common
carrier to its other roofing plants and to its customers' locations.

         Industrial Products

         The Registrant, through Chromium Corporation (Chromium), is engaged in
two business lines. Chromium's Reciprocating Engine Components Division is
engaged in the remanufacture of diesel engine cylinder liners, including hard
chrome plating of cylinder bores and tin plating of pistons, primarily for the
railroad, marine, and stationary power industries; and hard chrome plating of
original equipment cylinder liners and tin plating of pistons for major domestic
locomotive manufacturers and stationary power equipment manufacturers.
Chromium's Conductive Coatings Division (CCD) is engaged in electroless
shielding of plastic enclosures for digital cellular phones, telecommunications
and other electronic equipment. Electroless shielding is designed to control the
level of electromagnetic and radio frequency interference (EMI/RFI) emissions
generated by electronic components. During fiscal 1998, CCD broadened its
product offerings to include dispense conductive gaskets which are formed in
place. Sales are generated by employee sales personnel, with delivery made
primarily by common carrier. To keep pace with rapidly growing demand, CCD
completed two expansions at its Lufkin, Texas facility in fiscal 1998, and a
third expansion is currently in progress. In fiscal 1999, CCD will be developing
plans for a second manufacturing location. In fiscal 1998, net sales for
Chromium Corporation were 11% of consolidated net sales.

         Another unit of the Registrant, OEL, LTD, d/b/a Ortloff Engineers, LTD
(Ortloff) is engaged in providing technology licensing and engineering support
services and in providing engineering consulting services to the oil and gas
production, gas processing and sulfur recovery industries. Ortloff licenses
technology covered by and related to ten patents owned by the Registrant for use
in new or redesigned natural gas and refinery gas processing facilities, and
utilizes technology licensed from others and its own expertise in the
performance of consulting and engineering assignments. Although one important
patent will expire in fiscal 1999, Ortloff continues to develop and patent
improved processes for natural gas processing. Moreover, Ortloff offers
significant expertise and other nonpatented technology associated with its
processes that is difficult for customers to obtain on a cost effective basis
from others. Three patents are currently pending and two new patent applications
are being written. These efforts reflect Ortloff's commitment to continually
update and advance its technological position. Ortloff was also successful in
expanding its markets into several parts of Latin America during fiscal 1998.

         Patent license fees are calculated by standard formulas that take into
account both specific project criteria and market conditions, adjusted for
special conditions that exist in a project. Engineering consulting assignments
are performed under consulting services agreements at negotiated rates.


                                       2


<PAGE>   4




Information as to Industry Segments

         For Financial Information by Company Segments, see the table on page 39
of this Annual Report on Form 10-K.

Accounting Change

         In fiscal 1998, the Registrant changed its method of accounting for
inventories from the LIFO method to the FIFO method. All prior period financial
information, including industry segment information, has been restated to
reflect this accounting change. See the Inventories footnote on page 28 of this
Annual Report of Form 10-K for additional information regarding this accounting
change.

Competitive Conditions

         Roofing Products

         Even though the asphalt roofing products manufacturing business is
highly competitive, the Registrant believes that Elk is a leading manufacturer
of premium laminated fiberglass asphalt shingles. Elk has been able to compete
successfully with its competitors, some of which are larger in size and have
greater financial resources.

         There are a number of major national and regional manufacturers
marketing their products in a portion or all of the market areas served by the
Registrant's plants. The Registrant competes primarily on the basis of product
quality, design and service. Typically, the Registrant is able to sell its
roofing products at higher prices than its competitors receive for similar type
products.

         Industrial Products

         The Registrant believes that Chromium is the leading remanufacturer of
diesel engine cylinder liners and pistons for the railroad and marine
transportation industries and is the primary supplier of hard chrome plated
finishes for original equipment diesel engine cylinder liners to all of the
major domestic locomotive manufacturers. The Registrant believes it has smaller
competitors in the locomotive diesel engine cylinder liner remanufacturing
market. The Registrant also believes that Chromium is one of the leading hard
chrome platers of recycled and original equipment large bore cylinder liners for
stationary power applications. Chromium has achieved a leading position in these
markets through competition on the basis of product performance, quality,
service and price. The Registrant, through the Conductive Coatings Division of
Chromium, is engaged in electroless shielding of plastic enclosures for digital
cellular phones, telecommunications, and other electronic equipment. The
Registrant believes the success of Chromium's Conductive Coatings Division in
becoming a qualified supplier for and obtaining significant orders from major
digital cellular phone manufacturers, together with telecommunications and other
electronic equipment manufacturers, has enabled it to become a market leader.


                                       3


<PAGE>   5



         The Registrant believes that it holds significant state-of-the-art
patents covering some of the most competitive processes for the cryogenic
processing of refinery and natural gas streams to remove the higher value
components, such as ethane and propane, which are primarily used as
petrochemical feedstocks. The Registrant believes that Ortloff has widely
recognized expertise in the design and operation of facilities for natural gas
and refinery gas processing and sulfur recovery.

Backlog

         Backlog was not significant, nor is it material, in the Registrant's
operations.

Raw Materials

         Roofing Products

         In the asphalt roofing products manufacturing business, the significant
raw materials are ceramic coated granules, asphalt, glass fibers, resins and
mineral filler. All of these materials are presently available from several
sources and are in adequate supply. Historically, the Registrant has been able
to pass some of the higher raw material and transportation costs through to the
customer.

         Industrial Products

         In the Registrant's business of hard chrome plating and remanufacturing
diesel engine cylinder liners and large bore cylinder liners, chromic acid is a
significant raw material which is presently available from a number of domestic
suppliers. The Registrant believes these domestic suppliers obtain the ore for
manufacturing chromic acid principally from sources outside the United States,
some of which may be subject to political uncertainty. The Registrant has been
advised by its suppliers that they maintain substantial inventories of chromic
acid in order to minimize the potential effects of foreign interruption in ore
supply. In the electroless shielding business, copper and nickel are the
significant raw materials. These materials are presently available and are in
adequate supply.

         No raw materials are utilized in the Registrant's engineering
consulting and technology licensing business.

Patents, Licenses, Franchises and Concessions

         The Registrant holds certain patents, particularly in its engineering
consulting and licensing business, which are significant to its operations.
However, the Registrant does not believe that the loss of any one of these
patents or of any license, franchise or concession would have a material adverse
effect on the Registrant's overall business operations. The Registrant, through
its subsidiary, Elk Corporation of Dallas, is involved in patent litigation
against GAF Building Materials Corporation and related GAF entities concerning
design and utility patents covering certain aspects of Elk's High Definition
shingles. Refer to Item 3 "Legal Proceedings" for a more detailed discussion of
this matter.



                                       4

<PAGE>   6



Environmental Matters

         The Registrant and its subsidiaries are subject to federal, state and
local requirements regulating the discharge of materials into the environment,
the handling and disposal of solid and hazardous wastes, and protection of the
public health and the environment generally (collectively, Environmental Laws).
Certain facilities of the Registrant's subsidiaries ship waste products to
various waste management facilities for treatment or disposal. Governmental
authorities have the power to require compliance with these Environmental Laws,
and violators may be subject to civil or criminal penalties, injunctions or
both. Third parties may also have the right to sue for damages and/or to enforce
compliance and to require remediation of contamination.

         The Registrant and its subsidiaries are also subject to Environmental
Laws that impose liability for the costs of cleaning up contamination resulting
from past spills, disposal, and other releases of hazardous substances. In
particular, an entity may be subject to liability under the Federal
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or
Superfund) and similar state laws that impose liability -- without a showing of
fault, negligence, or regulatory violations -- for the generation,
transportation or disposal of hazardous substances that have caused or may
cause, environmental contamination. In addition, an entity could be liable for
cleanup of property it owns or operates even if it did not contribute to the
contamination of such property. From time to time, the Registrant or its
subsidiaries may incur such remediation and related costs at the company owned
plants and certain offsite locations.

         The Registrant anticipates that its subsidiaries will incur costs to
comply with Environmental Laws, including correcting existing non-compliance
with such laws and achieving compliance with anticipated future standards for
air emissions and reduction of waste streams. Such subsidiaries expend funds to
minimize the discharge of materials into the environment and to comply with
governmental regulations relating to the protection of the environment. Neither
these expenditures nor other activities initiated to comply with Environmental
Laws is expected to have a material impact on the consolidated financial
position, net earnings or liquidity of the Registrant.

Persons Employed

         At June 30, 1998, the Registrant and its subsidiaries had 867
employees.

Extended Payment Terms

         In some years, the Registrant's roofing products business grants
extended payment terms to certain customers for some product shipments during
the winter and early spring months, with payment generally due during the summer
months. As of June 30, 1998, $6,299,000 in receivables relating to such
shipments were outstanding, the majority of which are due in the first four
months of fiscal 1999. As of August 31, 1998, $3,647,000 of these receivables
have been collected.

Seasonal Business

         The Registrant's industrial products businesses are substantially
nonseasonal. The Registrant's roofing products manufacturing business is
seasonal to the extent that cold, wet or icy weather conditions during the late
fall and winter months in its marketing areas typically limit the 



                                       5

<PAGE>   7



installation of residential roofing products which causes sales to be slower
during such periods. Damage to roofs from extreme weather such as severe wind,
hurricanes and hail storms can result in higher demand for periods up to
eighteen months depending upon the extent of roof damage. Working capital
requirements and related borrowings fluctuate during the year because of
seasonality. Generally, working capital requirements and borrowings are higher
in the spring and summer months, and lower in the fall and winter months.

Item 2.  Properties

         All significant facilities are owned and unencumbered by liens in favor
of nonaffiliates except as discussed herein.

         Roofing Products

         Asphalt roofing products are manufactured at plants located at
Tuscaloosa, Alabama, Ennis, Texas and Shafter, California. Fiberglass roofing
mat, nonwoven industrial, reinforcement and filtration products are manufactured
on two production lines located at Ennis, Texas.

         Corporate headquarters and administrative offices for the asphalt
roofing products operations are located in the same leased facility as the
Registrant's corporate offices in Dallas, Texas.

         Industrial Products

         Plants for the hard chrome plating of original equipment and
remanufactured diesel engine cylinder liners and related equipment are located
in Cleveland, Ohio and Lufkin, Texas. The Conductive Coatings Division's (CCD)
EMI/RFI shielding facility is located at the Lufkin, Texas plant. During fiscal
1998, CCD completed two expansions and a third expansion is currently in
progress.

         Corporate headquarters and administrative offices are located in the
same leased facility as the Registrant's corporate offices in Dallas, Texas.

         The Ortloff engineering and process licensing group is located in
leased offices in Midland, Texas.

         Corporate Offices

         The Registrant's corporate headquarters is located in leased offices in
Dallas, Texas.

         In addition, one of the Registrant's subsidiaries owns land and
buildings in Waco, Texas, formerly used in the discontinued solid waste handling
equipment manufacturing business. This facility is currently subject to a
lease/purchase agreement.



                                       6
<PAGE>   8



Item 3.  Legal Proceedings

         GAF Patent Litigation

         On February 8, 1994, a wholly owned subsidiary, Elk Corporation of
Dallas (Elk) was granted a design patent covering the ornamental aspects of
certain Elk shingles. On December 6, 1994, Elk was granted a utility patent on
the functional aspects of certain Elk shingles. Elk has sued GAF Building
Materials Corporation and related GAF entities (collectively GAF) in federal
court for infringement of these patents and trade dress. In the design patent
case, Elk seeks to recover as damages the total profit that GAF has made from
the infringing shingles. In the utility patent case, Elk seeks to recover as
damages a reasonable royalty on GAF's sales of infringing shingles and certain
lost profits.

         GAF seeks a declaratory judgment that the Elk patents are not infringed
and are either invalid or unenforceable. GAF has also asserted claims for unfair
competition, Lanham Act violations based on alleged false advertising, and
common law fraud, generally praying for damages of not less than $25 million
including actual and punitive damages, plus interest, costs, and reasonable
attorney fees. Elk disputes GAF's claims, and management intends vigorously to
defend them and to enforce its intellectual property rights. In April, 1998, the
District Court for the Northern District of Texas entered a partial final
judgment against Elk in the design patent case based on an inequitable conduct
ruling and certified the case for appeal. Elk has contested that judgment in an
appeal which it has filed with the United States Court of Appeals for the
Federal Circuit. Elk expects its appeal to be decided by the Court of Appeals in
1999. In the interim, trial on the trade dress claim and certain other matters
in the design patent case and trial in the utility patent cases are unscheduled
but pending.

         While management can give no assurances regarding the ultimate outcome
of the litigation, outside counsel believe that Elk will prevail on its patent
and trade dress claims and that Elk will defeat GAF's counterclaims. Even if the
outcome were to be adverse to Elk, it is not expected to have a material effect
on the Registrant's financial position or liquidity.

         Gibraltar Tort Litigation

         In December 1995 through August 1996, Chromium Corporation was sued in
four separate tort lawsuits brought by the same attorneys on behalf of
plaintiffs who allege unspecified personal injuries and property damages
associated with the former operation of a licensed hazardous waste treatment,
storage and disposal facility in Smith County, Texas known as the Gibraltar
facility. The four suits were brought against or expanded to include the current
and former owners and operators of the facility, and more than fifty other
defendants, including Chromium and several Fortune 500 companies, as generators
of waste sent to the facility (as named in a particular lawsuit,"Generator
Defendants").

         The plaintiffs have non-suited or dismissed the Generator Defendants
from two of the cases. In another case, Williams, et al. v. Akzo Nobel
Chemicals, Inc., et al., the Smith County (Texas) District Court has dismissed
Chromium and certain other Generator Defendants. Plaintiffs' appeal of this
decision is pending.



                                       7
<PAGE>   9


         Chromium remains a defendant in the fourth case, Adams v. American
Ecology Environmental Services Corporation, pending in Tarrant County (Texas)
District Court since August 1996, when approximately 650 plaintiffs filed it. On
July 30, 1998, the court issued a ruling denying the Generator Defendants'
motions for a discovery management order and lifted the stay on discovery in the
case. Discovery has recommenced and is ongoing. No trial date has been set for
Adams as yet.

         In connection with these cases, Chromium has entered into joint defense
agreements with more than twenty other Generator Defendants. Chromium also has
demanded a defense and indemnity from the facility owners pursuant to the waste
disposal contract and from Chromium's insurers. To date, the facility owners
have not responded and the insurers have declined or failed to accept the
defense and indemnity obligation. Chromium intends to pursue its defenses
vigorously.

         Management believes that the claims brought against Chromium in these
cases are without merit. While management can give no assurances regarding the
ultimate outcome of this litigation, it believes that it will not have a
material adverse effect on the consolidated results of operations, financial
position or liquidity of the Registrant.

         Chromium/TWC Settlement

         In May 1993, Chromium entered into an Agreed Order with the Texas Water
Commission (TWC) in settlement of an enforcement proceeding. Pursuant to the
Agreed Order, the TWC assessed $60,000 in penalties and agreed to defer and
forgive $74,800 in penalties contingent on Chromium's completion of certain
technical and remedial activities at the Lufkin facility ("Technical
Recommendations"). Chromium has paid the assessed penalties, and completed the
Technical Recommendations. On August 31, 1998, the Texas Natural Resource
Conservation Commission, TWC's successor, issued a letter stating that it
considered all of the actions required under the Agreed Order to have been
fulfilled and completed.

         Frontier Chemical Site

         In May 1993, Chromium received a Notification Letter from the United
States Environmental Protection Agency (USEPA) informing Chromium that USEPA had
reason to believe that Chromium was a Potentially Responsible Party (PRP) under
the Comprehensive Environmental Response, Compensation and Liability Act at the
Frontier Chemical Royal Avenue Site (Site), a former state-permitted waste
processing and management facility in Niagara Falls, New York. In September
1993, Chromium entered into an Administrative Order on Consent with USEPA under
which Chromium and other PRPs agreed to perform Phase I response activities at
the Site and to reimburse USEPA for response costs incurred by USEPA at the
Site.



                                       8
<PAGE>   10


         All of the Phase I work was concluded in May 1994. Chromium was
assessed a total of $109,250 of the $4 million cost estimate assessed to all
Phase I PRPs. Chromium has not been and does not expect to be named as a PRP in
Phase II or any subsequent phases of cleanup.

         Certain Phase I and Phase II PRPs intervened in a suit brought by the
New York Attorney General seeking recovery of approximately $1.2 million in
proceeds from a closure bond relating to the Site. If such intervention is
successful, participating Phase I and Phase II PRPs will share in any recovery
with the State of New York. In February 1998, a court denied the motion for
summary judgment of the PRPs, including Chromium, in the suit, and granted the
New York Attorney General's opposing motion. Appeal from the ruling is pending.

         In March 1997, the USEPA issued its demand for future costs pursuant to
the Administrative Order on Consent. The PRPs have objected to this cost demand
and have demanded an accounting. Resolution of this dispute still is pending,
but even if the USEPA demand remains at the current amount, no further
assessments from Chromium will be necessary to meet it; moreover, Chromium
received a refund of a small portion of its original assessment on the basis of
the existing demand.

         Chromium's final assessment in this matter net of all recoveries cannot
be calculated until its PRP group determines which assessments are
uncollectible, and the closure bond action and USEPA cost reimbursement are
resolved. Management of the Registrant believes that the final disposition of
this matter will not have a material adverse effect on the consolidated results
of operations, financial position, or liquidity of the Registrant.

         Other

         There are various other lawsuits and claims pending against the
Registrant and its subsidiaries arising in the ordinary course of their
businesses. In the opinion of the Registrant's management based in part on
advice of counsel, none of these actions should have a material adverse effect
on the Registrant's consolidated results of operations, financial position, or
liquidity.

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

         Inapplicable.



                                       9


<PAGE>   11


Executive Officers of the Registrant

         Certain information concerning the Registrant's executive officers is
set forth below:

<TABLE>
<CAPTION>
                                                                               Period            Age as of
                                                                               Served             Sept. 1,
          Name                          Title                                As Officer             1998
------------------------     --------------------------                      ----------          ----------
<S>                          <C>                                             <C>                 <C>
Harold K. Work               Chairman of the Board,                          16 years                  65
                             Chief Executive Officer and
                             President of Elcor Corporation;
                             Chief Executive Officer, President
                             and Director of Elk Corporation
                             of Dallas, a subsidiary, and Chief
                             Executive Officer, President and
                             Director of its subsidiaries

Richard J. Rosebery          Vice Chairman,                                  23 years                  63
                             Chief Financial and
                             Administrative Officer, and
                             Treasurer of Elcor Corporation;
                             Officer and Director of all subsidiaries
                             and Chairman and/or President of
                             certain subsidiaries

Leonard R. Harral            Vice President and Chief                         5 years                  46
                             Accounting Officer of
                             Elcor Corporation; Director of
                             one subsidiary

Raul G. Holguin              Vice President Information Systems               1 year                   41
                             of Elcor Corporation; Vice President
                             of Chromium Corporation, and
                             General Manager of Chromium's
                             Conductive Coatings Division

David G. Sisler              Vice President, General Counsel and              3 years                  40
                             Secretary of Elcor Corporation; Officer
                             of all subsidiaries; Director of
                             one subsidiary

James J. Waibel              Vice President Administration                    5 years                  54
                             of Elcor Corporation
</TABLE>

                                       10

<PAGE>   12



         All of the executive officers except Mr. Sisler have been employed by
the Registrant or its subsidiaries in responsible management positions for more
than the past five years. In October 1993, Mr. Rosebery and Mr. Work were
elected as Executive Vice Presidents of the Registrant. Previously Mr. Rosebery
was Vice President, Treasurer and Chief Administrative and Financial Officer.
Mr. Work was Vice President. In July 1996, Mr. Rosebery and Mr. Work were
appointed as Directors of the Registrant. On August 18, 1997, Mr. Work and Mr.
Rosebery were each elected as Vice Chairman. On August 26, 1997, Mr. Work was
elected as Chairman of the Board, President and Chief Executive Officer of the
Registrant following the death on August 22, 1997 of Mr. Roy E. Campbell, who
previously held those positions. In October 1993, Mr. Harral and Mr. Waibel were
elected as Vice Presidents. Previously Mr. Harral was Chief Accounting Officer
and Mr. Waibel was Assistant Vice President, Administration. In June 1997, Mr.
Holguin was elected as Vice President, Information Systems. Previously Mr.
Holguin was Assistant Vice President, Information Systems.

         On August 14, 1995, Mr. Sisler was appointed by the Board of Directors
as Vice President, General Counsel and Secretary of the Registrant. Mr. Sisler
was employed by Central and South West Corporation from 1991 to 1995, most
recently as a Senior Attorney. From 1989 to 1991, Mr. Sisler was employed by
Johnson & Gibbs, a private law firm. Mr. Sisler has practiced law for more than
fourteen years and his responsibilities have included corporate, securities and
other business legal matters in several industries.

         Officers are elected annually by the Board of Directors.



                                       11

<PAGE>   13


                                     PART II

Item 5.  Market for the Registrant's Common Stock and Related Stockholder
         Matters

         The principal market on which the Registrant's Common Stock is traded
is the New York Stock Exchange. The Boston, Midwest, Philadelphia and Toronto
Stock Exchanges have granted unlisted trading privileges for the Registrant's
Common Stock. There were 992 holders of record of the Registrant's Common
Stock at September 1, 1998.

         The quarterly dividend declared per share and the high and low prices
in dollars per share on Registrant's Common Stock for each quarter during fiscal
year 1998 and fiscal year 1997, adjusted for a three-for-two stock split in
November 1997, are set forth in the following tables:

<TABLE>
<CAPTION>
     Period                             Dividend               High              Low
     ------                             --------             --------          -------
     <S>                                <C>                  <C>               <C>
     Fiscal 1998

         First Quarter                  $   .06              21 11/16          18 1/2
         Second Quarter                 $   .06              24 1/2            21 1/16
         Third Quarter                  $   .06              27 7/16           20 1/2
         Fourth Quarter                 $   .06              28 1/4            24 3/4


     Fiscal 1997

         First Quarter                  $ .0467              13 1/16           11
         Second Quarter                 $ .0467              15 1/16           12 5/16
         Third Quarter                  $ .0467              17 5/16           13 13/16
         Fourth Quarter                 $ .0467              18 15/16          16 1/4
</TABLE>


         The Registrant's Board of Directors has authorized the purchase of up
to $10,000,000 of the Registrant's common shares from time to time on the open
market to be used for general corporate purposes. As of June 30, 1998, 327,850
shares with cumulative cost of $5,466,000 had been repurchased under this
program. In September 1995, the Board of Directors reinstated the Registrant's
regular quarterly cash dividend. In September 1997, the regular quarterly cash
dividend was increased to six cents per common share (after giving effect to a
stock split) and a three-for-two stock split payable in the form of a stock
dividend was declared, to be distributed on November 12, 1997 to shareholders
of record on October 16, 1997.

         The limitations affecting the future payment of dividends by Registrant
imposed as a part of the Registrant's revolving credit agreement are discussed
under the caption "Notes to Consolidated Financial Statements" under the heading
"Long-Term Debt" on page 30 of this Annual Report on Form 10-K.


                                       12
<PAGE>   14


Item 6.  Selected Financial Data

        The following selected consolidated financial data for each of the five
years in the period ended June 30, 1998 have been derived from the audited
consolidated financial statements of the Registrant included herein. The
selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and notes
thereto included elsewhere in this report.


FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
($ In thousands, except per share data)                     Year Ended June 30,
------------------------------------------------------------------------------------------------------
                                          1998        1997(1)      1996(1)(2)    1995(1)     1994(1)(3)
------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>          <C>          <C>      
Sales                                  $ 268,178     $ 230,756     $ 196,462    $ 159,061    $ 157,031
                                       =========     =========     =========    =========    =========
                                   
Income:
  From continuing operations           $  18,324     $  12,276     $  10,676    $  10,076    $  15,184
  From discontinued operations                --            --            --           --       (1,494)
                                       ---------     ---------     ---------    ---------    ---------
  Before cumulative effect of
    accounting change for taxes           18,324        12,276        10,676       10,076       13,690
  Cumulative effect of accounting
    change for taxes                          --            --            --           --          668
                                       ---------     ---------     ---------    ---------    ---------

Net Income                             $  18,324     $  12,276     $  10,676    $  10,076    $  14,358
                                       =========     =========     =========    =========    =========

Net Income Per Share - Basic           $    1.38     $     .93     $     .81    $     .77    $    1.08
                                       =========     =========     =========    =========    =========

Net Income Per Share - Diluted         $    1.36     $     .92     $     .80    $     .76    $    1.07
                                       =========     =========     =========    =========    =========

Total Assets                           $ 217,044     $ 206,449     $ 192,060    $ 136,673    $ 107,255
                                       =========     =========     =========    =========    =========

Long-Term Debt                         $  48,000     $  52,600     $  53,000    $  18,400    $      --
                                       =========     =========     =========    =========    =========

Shareholders' Equity                   $ 125,956     $ 111,986     $ 102,130    $  93,156    $  84,251
                                       =========     =========     =========    =========    =========

Cash Dividends Per Share               $     .24     $     .19     $     .16    $      --    $      --
                                       =========     =========     =========    =========    =========
</TABLE>

(1)      Restated for a change in accounting for inventories and adjusted for a
         three-for-two stock split in November 1997.

(2)      1996 results include $1,595 in pretax charges in connection with a
         provision for the adoption of SFAS No. 121 and a previous reduction in
         value of certain other assets.

(3)      1994 results include $1,706 in pretax charges in connection with the
         closed Chromium Chicago plant, and $82 in losses, net of tax, on the
         disposal of a discontinued operation.


                                       13
<PAGE>   15


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

RESULTS OF OPERATIONS

FISCAL 1998 COMPARED TO FISCAL 1997

         During the fiscal year ended June 30, 1998, sales increased 16% to
$268,178,000 from the $230,756,000 reported in fiscal 1997. Net income in fiscal
1998 increased 49% to $18,324,000 from $12,276,000 in the prior fiscal year.
Both the Roofing Products and Industrial Products Groups generated significant
increases in sales. The Roofing Products Group reported better operating results
in fiscal 1998 as compared to the prior fiscal year. However, the substantial
increase in net income was primarily attributable to increased demand and
dramatically improved operating results in each of the Industrial Products
Group's principal operations of: (1) conductive coatings used in digital
cellular phones and in other electronic equipment; (2) remanufactured diesel
engine components used in the transportation industry; and (3) technology
licensing and consulting services for the natural gas processing industry. In
fiscal 1998, the company changed its method of accounting for inventories from
the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method.
Accordingly, fiscal 1997 amounts have been restated to reflect the accounting
change. Had the company not made this change, net income would have been lower
by $130,000 in fiscal 1998.

         Sales for the Roofing Products Group increased 11% in fiscal 1998 to
$229,475,000 from $207,017,000 in fiscal 1997. The Western United States
produced very strong demand for Elk Prestique premium laminated shingles.
However, shipments on the West Coast were limited during much of the second half
of fiscal 1998 by El Nino's impact, as many roofing contractors could not
replace leaking roofs during extended periods of heavy rainfall. Demand was also
higher in the Southeast, Midwest and North regions. Only in the Southwestern
region was demand lower than in the previous fiscal year. Average selling prices
were about the same in fiscal 1998 compared to fiscal 1997.

         Elk's roofing mat operations achieved significantly higher sales and
operating profit, primarily as a result of growing demand for its high quality
roofing mats and specialty industrial products.

         Operating income for the Roofing Products Group increased 18% in fiscal
1998 to $24,885,000 from $21,052,000 in fiscal 1997. Each of Elk's three roofing
plants and its roofing mat operation were very profitable in fiscal 1998,
although the Ennis, Texas roofing plant's operating results were lower in fiscal
1998 as a result of lower demand in the Southwestern region. The impact of high
winds and heavy rainfall in much of the nation this past winter has increased
the level of demand during the latter months of fiscal 1998 and early fiscal
1999. The company currently anticipates sharply higher demand for its premium
laminated fiberglass asphalt shingles and mat products in fiscal 1999.

         Sales for the Industrial Products Group increased 64% in fiscal 1998 to
$38,586,000 from $23,542,000 in fiscal 1997. Operating income for this Group
increased to $10,780,000 in fiscal 1998 from $3,498,000 in fiscal 1997. Each of
the three principal operations in this business segment reported significantly
higher sales and operating income in fiscal 1998. Chromium Corporation continued
to benefit from strong demand for its Compushield(R) conductive coatings and
dispense



                                       14
<PAGE>   16


conductive gasketing used in digital cellular phones and in other electronic
equipment. Chromium also experienced higher sales and significantly improved
margins in plating certain proprietary finishes for large diesel engine
components during fiscal 1998. Further, Ortloff Engineers' revenues from its
technology licensing and consulting services for the natural gas processing
industry about doubled in fiscal 1998 as compared to fiscal 1997. This resulted
in a tripling of operating income for this business activity in fiscal 1998.
However, management expects that Ortloff Engineers' sales and operating profit
will decline in fiscal 1999 as a result of lower oil prices, which may cause
some potential customers to defer planned projects until economic conditions are
more favorable.

         Selling, general and administrative (SG&A) costs in fiscal 1998
increased 12.9% from fiscal 1997 primarily as a result of increased business
activity. As a percentage of sales, SG&A costs declined to 13.0% of sales in
fiscal 1998 from 13.4% of sales in fiscal 1997.

         Interest expense in fiscal 1998 was $2,577,000 compared to $1,136,000
in fiscal 1997. In fiscal 1997, $1,784,000 of interest was capitalized in
connection with the company's major facilities expansion program. In fiscal
1998, the company capitalized $160,000 in interest costs in connection with its
existing plant expansion program.

FISCAL 1997 COMPARED TO FISCAL 1996

         During the fiscal year ended June 30, 1997, sales grew to $230,756,000,
a 17% increase over fiscal 1996 sales of $196,462,000. Both the Roofing Products
and Industrial Products Groups contributed to the increase in sales. Net income
in fiscal 1997 increased 15% to $12,276,000 from the $10,676,000 achieved in
fiscal 1996. Higher net income was primarily attributable to the Industrial
Products Group, which achieved substantially improved operating results in
fiscal 1997. In addition, in fiscal 1996 the Company incurred $1,595,000 in
pretax charges in connection with a provision for the adoption of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and the reduction in value of certain other assets during that
fiscal year. Fiscal 1997 and 1996 amounts have been restated to reflect the
accounting change for inventories adopted in fiscal 1998.

         Sales for the Roofing Products Group increased 16% in fiscal 1997 to
$207,017,000 from $178,378,000 in fiscal 1996. The Roofing Products Group
accounted for 90% of consolidated sales in fiscal 1997 and 91% in fiscal 1996.
Higher sales were primarily due to an increase in shipments of premium laminated
fiberglass asphalt shingles. Sales from the new plant in Shafter, California
accounted for a significant part of the increased shipments. Average selling
prices were about the same in fiscal 1997 compared to fiscal 1996.

         Operating profit for the Roofing Products Group decreased to
$21,052,000 in fiscal 1997 from $22,675,000 in fiscal 1996. The Shafter,
California plant achieved profitable operations in fiscal 1997 after incurring a
significant operating loss in the prior fiscal year. Although both of the other
roofing plants were very profitable, operating income at these facilities was
lower in fiscal 1997, primarily as a result of higher freight rates, higher raw
materials costs and costs of implementing a fourth shift operation at the
Tuscaloosa, Alabama roofing plant to increase that facility's production
capacity.




                                       15
<PAGE>   17
         The company's new nonwoven fiberglass roofing mat plant at its Ennis,
Texas facility achieved its performance test level of operations effective
April 1, 1997. Although overall mat plant operations were profitable in fiscal
1997, operating income from mat plant operations was significantly lower in
fiscal 1997 compared to fiscal 1996 due primarily to higher costs associated
with the new plant in its start-up year of operations.

         Sales for the Industrial Products Group increased 31% in fiscal 1997 to
$23,542,000 from $17,930,000 in fiscal 1996. Operating income for this business
segment increased to $3,498,000 in fiscal 1997 compared to an operating loss of
$224,000 in fiscal 1996. Chromium Corporation achieved significantly higher
revenues and operating results relating to conductive coatings of plastic
enclosures for electronic equipment. Improved operating conditions in this area
more than offset decreased demand for Chromium's hard chrome plated diesel
engine cylinder liners for the railroad, marine and stationary power industries.
In addition, in fiscal 1996, Chromium recorded $1,037,000 in charges relating to
a reduction in value of assets at its Cleveland, Ohio plant upon the adoption of
SFAS No. 121. Ortloff Engineers achieved much higher revenues in fiscal 1997
from licensing the company's process technology for construction of both new
natural gas processing plants and retrofits to upgrade existing gas processing
plants.

         Selling, general and administrative costs as a percentage of sales were
13.4% for fiscal 1997 compared to 14.8% in fiscal 1996. In fiscal 1995, the
company established a larger sales organization to better serve growing market
areas. During fiscal 1997, this larger organization was able to service the
increase in sales orders without a proportionate increase in overall selling
costs.

         Interest expense was higher in fiscal 1997 as a result of the company's
completion of its three-year major facilities expansion program which was
completed in March 1997. Subsequent to that date, all interest was expensed as
incurred.

LIQUIDITY AND CAPITAL RESOURCES

         The company generated cash flows from operating activities of
$23,207,000 in fiscal 1998, despite a $10,115,000 increase in working capital.
The increase in working capital was primarily the result of higher trade
receivables, which increased $13,272,000 during fiscal 1998. Receivables
increased primarily as a result of higher sales in fiscal 1998, together with a
higher level of deferred payment term receivables. At June 30, 1998, deferred
payment term receivables from promotional programs to certain customers were
$6,299,000 compared to $2,139,000 at June 30, 1997. Deferred receivables
outstanding at June 30, 1998, are primarily due during the first four months of
fiscal 1999. The increase in receivables was partially offset by lower
inventories and prepaid expenses. The current ratio at June 30, 1998 was 3.5 to
1 compared to 3.0 to 1 at June 30, 1997. Historically, working capital
requirements and associated borrowings fluctuate during the year because of
seasonality in some market areas. Generally, working capital requirements and
borrowings are higher in the spring and summer, and lower in the fall and
winter.


                                       16
<PAGE>   18


         The company used $12,614,000 for investing activities in fiscal 1998.
The majority of investing expenditures were for additions to property, plant and
equipment. Most capital expenditures in fiscal 1998 were for productivity,
capacity, and cost improvement projects at the current roofing plants and for
the development of new computer systems. In addition, the company expanded its
capacity in the Chromium Corporation Conductive Coatings operation to meet
rapidly growing demand for its Compushield process. Capital expenditures are
expected to be about $24,000,000 in fiscal 1999. The majority of currently
planned fiscal 1999 capital expenditures are a continuation of productivity,
capacity and cost improvement projects at its existing roofing plants, continued
capacity expansion of the Conductive Coatings operation, and capital costs
associated with developing new computer systems. The company expects to invest
about $100 million over the next three years to expand capacity and improve
productivity at existing plants and to build new plants in both the Roofing
Products and Industrial Products segments.

         Cash flows used for financing activities were $8,954,000 in fiscal
1998, primarily resulting from dividend payments, a $4,600,000 decrease in
long-term debt, and purchases of treasury shares. Long-term debt represented 28%
of the $173,956,000 of invested capital (long-term debt plus shareholders'
equity) at June 30, 1998. In December 1997, the company increased its unsecured
revolving line of credit to $100,000,000 and extended the term to December 15,
2002. As of June 30, 1998, $50,210,000 was available under this facility.

         The company's Board of Directors has authorized the purchase of up to
$10,000,000 of the company's common shares on the open market to be used for
general corporate purposes. As of June 30, 1998, 327,850 shares with cumulative
cost of $5,466,000 had been repurchased. In September 1997, the Board of
Directors increased the regular quarterly cash dividend to six cents per common
share (after giving effect to a stock split) and declared a three-for-two stock
split payable in the form of a stock dividend distributed on November 12, 1997
to shareholders of record on October 16, 1997.

         Management believes that current cash and cash equivalents, cash flows
from operations and its unsecured revolving credit facility should be sufficient
during fiscal 1999 and beyond to fund its planned capital expenditures, working
capital needs, dividends, stock repurchases and other cash requirements.
However, management believes it could secure additional capital at favorable
rates, if needed, to support its capital expansion program.

NEW ACCOUNTING STANDARDS

         In June 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 130, "Reporting Comprehensive Income," which establishes standards of
reporting of comprehensive income and its components in the consolidated
financial statements. The company will adopt SFAS No. 130 in fiscal 1999, but
does not expect the adoption of SFAS No. 130 to impact the company's financial
position or results of operations.

         In June 1997, the FASB also issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 requires public
companies to disclose, among other things, certain interim and annual financial
information about the enterprise using a new management approach. This approach
requires segment information to be reported based on how management evaluates
the operating performance of its business units or segments. The company 



                                       17

<PAGE>   19

will adopt SFAS No. 131 in fiscal 1999 and does not currently anticipate
significant changes in its reportable segments.

         In April 1998, the Accounting Standards Executive Committee (AcSec) of
the American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities," requiring, among
other things, companies to expense on a current basis previously capitalized
start-up costs. At June 30, 1998, the company had $6,682,000 of unamortized
capitalized start-up costs. This Statement of Position is effective for
financial statements for fiscal years beginning after December 15, 1998, unless
adopted earlier. The company plans to adopt this new accounting standard in
fiscal 1999 at which time all remaining unamortized capitalized start-up costs
will be expensed and reflected in the Consolidated Statement of Operations as a
cumulative change in accounting principle.

YEAR 2000 ISSUE

         The company is currently developing a new information system for its
critical financial, distribution and manufacturing applications. The system is
scheduled for completion and full implementation in the summer of 1999 at an
estimated total cost of about $10 million. While the primary purpose of this new
information system is to modernize and improve the company's operations, it is
also expected to resolve the Year 2000 issues in these critical computer
systems. Costs to develop this new information system are being capitalized in
accordance with SOP 98-1. Costs to implement the new information system and
other costs relating to Year 2000 readiness are being expensed as incurred. As
of June 30, 1998, the company's expenditures for its new information system have
been $3.7 million and its expenditures for Year 2000 readiness projects have
been less than $200,000. At this time, other than the cost of developing and
implementing its new information system, the company does not believe that the
costs of addressing the Year 2000 issue will be material. The company does not
believe that other critical information systems work has been deferred due to
its Year 2000 efforts.

         The company also has teams of employees and consultants who are
reviewing other computer applications and systems not included in the scope of
the new information system, including systems other than information systems
that have embedded technology, and its interaction with its suppliers, customers
and other business partners for Year 2000 readiness. The company is close to
completing the process of taking relevant inventory, assessing risk, assigning
priorities to various tasks and performing limited internal tests. The company
has completed its initial remedial programming for its mainframe computer system
and is ready to begin testing this system. The company has developed contingency
plans for its critical information system which primarily consist of making its
existing information system Year 2000 compliant in the event the new system is
not completed by its scheduled date. Contingency plans for other aspects of Year
2000 readiness are currently being developed. The company expects to have fully
developed action and contingency plans by the end of calendar 1998, and to have
completed integrated testing and any remediation before January 1, 2000.

         The company believes the Year 2000 readiness project is on schedule for
timely completion. Based on a current assessment of risks relating to its Year
2000 readiness, the company does not believe that this issue will result in
uncertainty that is reasonably likely to materially affect future financial
results or operating performance.



                                       18

<PAGE>   20

FORWARD - LOOKING STATEMENTS

         In an effort to give investors a well-rounded view of the company's
current condition and future opportunities, management's discussion and analysis
of the results of operations and financial condition and other sections of this
Form 10-K contain "forward-looking statements" about its prospects for the
future. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected. Such risks
and uncertainties include, but are not limited to the following:

         1.       The company's roofing products business is cyclical and is
                  affected by weather and some of the same economic factors that
                  affect the housing and home improvement industries generally,
                  including interest rates, the availability of financing and
                  general economic conditions. In addition, the asphalt roofing
                  products manufacturing business is highly competitive. Actions
                  of competitors, including changes in pricing, or slowing
                  demand for asphalt roofing products due to general or industry
                  economic conditions or the amount of inclement weather could
                  result in decreased demand for the company's products, lower
                  prices received or reduced utilization of plant facilities.
                  Further, changes in building codes and other standards from
                  time to time can cause changes in demand, or increases in
                  costs that may not be passed through to customers.

         2.       In the asphalt roofing products business, the significant raw
                  materials are ceramic coated granules, asphalt, glass fibers,
                  resins and mineral filler. Increased costs of raw materials
                  can result in reduced margins, as can higher trucking and rail
                  costs. Historically, the company has been able to pass some of
                  the higher raw material and transportation costs through to
                  the customer. Should the company be unable to recover higher
                  raw material and transportation costs from price increases of
                  its products, operating results could be lower than projected.

         3.       During fiscal 1997, the company completed the construction of
                  a plant at the company's Ennis, Texas facility to manufacture
                  nonwoven fiberglass roofing mats and other mats for a variety
                  of industrial uses. The company also expects to make up to
                  $100 million in new investments to expand capacity and improve
                  productivity at existing plants and to build new plants over
                  the next three years. Progress in achieving anticipated
                  operating efficiencies and financial results is difficult to
                  predict for new plant facilities. If such progress is slower
                  than anticipated, if substantial cost overruns occur in
                  building new plants, or if demand for products produced at new
                  plants does not meet current expectations, operating results
                  could be adversely affected.

         4.       Certain facilities of the company's industrial products
                  subsidiaries must utilize hazardous materials in their
                  production process. As a result, the company could incur costs
                  for remediation activities at its facilities or off-site, and
                  other related exposures from time to time in excess of
                  established reserves for such activities.


                                       19
<PAGE>   21


         5.       The company's litigation, including its patent infringement
                  suits against GAF Building Materials Corporation and certain
                  affiliates, is subject to inherent and case-specific
                  uncertainty. The outcome of such litigation depends on
                  numerous interrelated factors, many of which cannot be
                  predicted.

         6.       Even with fully developed action and contingency plans for
                  Year 2000 readiness, it is possible that the company will not
                  achieve full internal readiness. Further, the company's
                  business may be adversely affected by external Year 2000
                  disruption that the company is not in position to control,
                  including but not limited to potential disruptions in power
                  and other energy supplies, telecommunications or other
                  infrastructure, potential disruptions in transportation and
                  the supply of raw materials, and potential disruptions in
                  financial and banking systems. Year 2000 problems therefore
                  could result in unanticipated expenses or liabilities,
                  production or disruption delays or other adverse effects on
                  the company.

         7.       Although the company currently anticipates that most of its
                  needs for new capital in the near future will be met with
                  internally generated funds, significant increases in interest
                  rates could substantially affect its borrowing costs under its
                  existing loan facility, or its cost of alternative sources of
                  capital.

         8.       Each of the company's businesses, especially its Conductive
                  Coatings Division's business, is subject to the risks of
                  technological changes that could affect the demand for or the
                  relative cost of the company's products and services, or the
                  method and profitability of the method of distribution or
                  delivery of such products and services. In addition, the
                  company's businesses each could suffer significant setbacks in
                  revenues and operating income if it lost one or more of its
                  largest customers.

         9.       Although the company insures itself against physical loss to
                  its manufacturing facilities, including business interruption
                  losses, natural or other disasters and accidents, including
                  but not limited to fire, earthquake, damaging winds and
                  explosions, operating results could be adversely affected if
                  any of its manufacturing facilities became inoperable for an
                  extended period of time due to such events.

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

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

         Inapplicable.


                                       20

<PAGE>   22

   Item 8.  Financial Statements and Supplemental Data

         Index to Financial Statements and Financial Statement Schedule


<TABLE>
<CAPTION>
   Financial Statements:                                                                         Page
   ---------------------                                                                         ----
   <S>                                                                                           <C>
   Independent Auditors' Report                                                                   22
   Consolidated Balance Sheet at June 30, 1998 and 1997                                           23
   Consolidated Statement of Operations for the years ended
     June 30, 1998, 1997, and 1996                                                                24
   Consolidated Statement of Cash Flows for the years ended
     June 30, 1998, 1997, and 1996                                                                25
   Consolidated Statement of Shareholders' Equity for the years
     ended June 30, 1998, 1997, and 1996                                                          26
   Notes to Consolidated Financial Statements                                                     27

   Financial Statement Schedule:

   Independent Auditors' Report                                                                   40
   Schedule II - Consolidated Valuation and Qualifying Accounts and Reserves                      41
</TABLE>

   All other schedules are omitted because they are not required, are not
   applicable, or the information is included in the financial statements or
   notes thereto.


                                       21

<PAGE>   23

INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors,
Elcor Corporation

         We have audited the accompanying consolidated balance sheets of Elcor
Corporation (a Delaware corporation) and subsidiaries as of June 30, 1998 and
1997, and the related consolidated statements of operations, cash flows and
shareholders' equity for each of the three years in the period ended June 30,
1998. 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 referred to above
present fairly, in all material respects, the financial position of Elcor
Corporation and subsidiaries as of June 30, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended June 30, 1998, in conformity with generally accepted accounting
principles.

         As discussed in the Summary of Significant Accounting Policies, the
company has given retroactive effect to the change in the method of accounting
for inventories from the last-in, first-out method to the first-in, first-out
method in fiscal 1998.

         As discussed in the Summary of Significant Accounting Policies, the
company adopted Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," in fiscal 1996.



                                        /s/ ARTHUR ANDERSEN LLP
                                        -----------------------
                                            Arthur Andersen LLP




Dallas, Texas
   August 17, 1998



                                       22

<PAGE>   24

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
-----------------------------------------------------------------------------------
 ($ In thousands)                                                  June 30,
-----------------------------------------------------------------------------------
ASSETS                                                       1998           1997
-----------------------------------------------------------------------------------
<S>                                                        <C>            <C>      
CURRENT ASSETS
    Cash and cash equivalents                              $   5,240      $   3,601
    Trade receivables, less allowance of $580 and $545        56,450         43,178
    Inventories                                               28,822         32,206
    Prepaid expenses and other                                 1,789          3,572
    Deferred income taxes                                      2,228          2,935
                                                           ---------      ---------
    Total current assets                                      94,529         85,492
                                                           ---------      ---------

PROPERTY, PLANT AND EQUIPMENT, AT COST
    Land                                                       2,194          2,065
    Buildings                                                 35,835         30,873
    Machinery and equipment                                  149,369        145,881
    Construction in progress                                   6,735          1,296
                                                           ---------      ---------
                                                             194,133        180,115
    Less - Accumulated depreciation                          (73,401)       (62,648)
                                                           ---------      ---------
    Property, plant and equipment, net                       120,732        117,467
                                                           ---------      ---------

OTHER ASSETS                                                   1,783          3,490
                                                           ---------      ---------
                                                           $ 217,044      $ 206,449
                                                           =========      =========

-----------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
-----------------------------------------------------------------------------------

CURRENT LIABILITIES
    Accounts payable                                       $  14,579      $  15,899
    Accrued liabilities                                       12,628         12,386
                                                           ---------      ---------
    Total current liabilities                                 27,207         28,285
                                                           ---------      ---------

LONG-TERM DEBT                                                48,000         52,600
                                                           ---------      ---------

DEFERRED INCOME TAXES                                         15,881         13,578
                                                           ---------      ---------

COMMITMENTS AND CONTINGENCIES  (See Note)

SHAREHOLDERS' EQUITY
    Common stock ($1 par, 13,325,569  and 13,221,119          
      shares issued)                                          13,326         13,221
    Paid-in capital                                           67,862         66,943
    Retained earnings                                         47,394         32,245
                                                           ---------      ---------
                                                             128,582        112,409
    Less - Treasury stock (100,423 and 26,250 shares          
      at cost)                                                (2,626)          (423)
                                                           ---------      ---------
    Total shareholders' equity                               125,956        111,986
                                                           ---------      ---------
                                                           $ 217,044      $ 206,449
                                                           =========      =========

-----------------------------------------------------------------------------------
</TABLE>

     The Summary of Significant Accounting Policies and Notes to Consolidated
     Financial Statements are an integral part of this statement.


                                       23

<PAGE>   25


CONSOLIDATED STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
($ In thousands, except per share data)              Year Ended June 30,
-----------------------------------------------------------------------------------

                                              1998            1997           1996
                                            ---------      ---------      ---------
<S>                                         <C>            <C>            <C>      
SALES                                       $ 268,178      $ 230,756      $ 196,462
                                            ---------      ---------      ---------

COSTS AND EXPENSES

    Cost of goods sold                        202,627        179,381        148,451
    Selling, general and administrative        34,962         30,969         29,121
    Reduction in value of assets                   --             --          1,595
                                            ---------      ---------      ---------
INCOME FROM OPERATIONS                         30,589         20,406         17,295
                                            ---------      ---------      ---------

OTHER INCOME (EXPENSE)

    Interest expense                           (2,577)        (1,136)          (394)
    Other income                                  446            215            211
                                            ---------      ---------      ---------

INCOME BEFORE INCOME TAXES                     28,458         19,485         17,112

    Provision for income taxes                 10,134          7,209          6,436
                                            ---------      ---------      ---------

NET INCOME                                  $  18,324      $  12,276      $  10,676
                                            =========      =========      =========

NET INCOME PER SHARE - BASIC                $    1.38      $     .93      $     .81
                                            =========      =========      =========

NET INCOME PER SHARE - DILUTED              $    1.36      $     .92      $     .80
                                            =========      =========      =========


-----------------------------------------------------------------------------------
</TABLE>

 The Summary of Significant Accounting Policies and Notes to Consolidated
Financial Statements are an integral part of this statement.


                                       24

<PAGE>   26

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
 ($ In thousands)                                                              Year June 30,
--------------------------------------------------------------------------------------------------------

                                                                      1998          1997          1996
                                                                    --------      --------      --------
<S>                                                                 <C>           <C>           <C>      
CASH FLOWS FROM OPERATING ACTIVITIES

Net income                                                          $ 18,324      $ 12,276      $ 10,676
Adjustments to reconcile net income to net cash from
operating activities:
    Depreciation and amortization                                     11,056         8,664         4,689
    Reduction in value of assets                                           -             -         1,595
    Deferred income taxes                                              3,010         5,042         4,255
    Changes in assets and liabilities:
        Trade receivables                                            (13,272)         (696)       (9,572)
        Inventories                                                    3,384        (5,527)      (15,676)
        Prepaid expenses and other                                     1,783        (1,616)          975
        Accounts payable                                              (1,320)          396         4,654
        Accrued liabilities                                              242          (705)        2,043
                                                                    --------      --------      --------
    Net cash provided by operating activities                         23,207        17,834         3,639
                                                                    --------      --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property, plant and equipment                           (14,288)      (15,896)      (40,669)
Proceeds from sales of discontinued assets                             1,492           848         4,233
Other, net                                                               182          (109)          (88)
                                                                    --------      --------      --------
    Net cash used for investing activities                           (12,614)      (15,157)      (36,524)
                                                                    --------      --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES

Long-term debt borrowings (repayments)                                (4,600)         (400)       34,600
Dividends paid on common stock                                        (3,175)       (2,462)       (2,101)
Treasury stock transactions and exercises of stock options, 
net                                                                   (1,179)           42           399
                                                                    --------      --------      --------
    Net cash provided by (used for) financing activities              (8,954)       (2,820)       32,898
                                                                    --------      --------      --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   1,639          (143)           13
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                         3,601         3,744         3,731
                                                                    --------      --------      --------
CASH AND CASH EQUIVALENTS AT END OF YEAR                            $  5,240      $  3,601      $  3,744
                                                                    ========      ========      ========


--------------------------------------------------------------------------------------------------------
</TABLE>

     The Summary of Significant Accounting Policies and Notes to Consolidated
     Financial Statements are in integral part of this statement.


                                       25

<PAGE>   27


CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
($ In thousands, except per share data)
------------------------------------------------------------------------------------------------------
                                                                                             Total
                                  Common       Paid-in        Retained      Treasury     Shareholders'
                                  Stock        Capital        Earnings        Stock          Equity
------------------------------------------------------------------------------------------------------
<S>                             <C>           <C>            <C>            <C>          <C>    
BALANCE, June 30, 1995          $  13,203     $  67,279      $  13,856      $  (1,182)   $      93,156

Net income                             --            --         10,676             --           10,676
Treasury stock transactions
  and exercises of stock
  options, net                         --          (125)            --            524              399
Dividends, $.16 per share              --            --         (2,101)            --           (2,101)

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

BALANCE, June 30, 1996             13,203        67,154         22,431           (658)         102,130

Net income                             --            --         12,276             --           12,276
Treasury stock transactions
  and exercises of stock
  options, net                         18          (211)            --            235               42
Dividends, $.19 per share              --            --         (2,462)            --           (2,462)

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

BALANCE, June 30, 1997             13,221        66,943         32,245           (423)         111,986

Net income                             --            --         18,324             --           18,324
Treasury stock transactions
  and exercises of stock
  options, net                        105           919             --         (2,203)          (1,179)
Dividends, $.24 per share              --            --         (3,175)            --           (3,175)

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

BALANCE, June 30, 1998          $  13,326     $  67,862      $  47,394      $  (2,626)     $   125,956
                                =========     =========      =========      =========      ===========

------------------------------------------------------------------------------------------------------
</TABLE>

     The Summary of Significant Accounting Policies and Notes to Consolidated
     Financial Statements are an integral part of this statement.


                                       26
<PAGE>   28


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

         Elcor Corporation (the company), through subsidiaries, is engaged in
two lines of business: Roofing Products and Industrial Products. The Roofing
Products segment, which accounts for 86% of consolidated sales, manufactures and
sells premium laminated fiberglass asphalt residential roofing products,
together with nonwoven mats used in manufacturing asphalt roofing products and
various industrial applications. The Industrial Products group of companies is
engaged in the shielding of plastic enclosures used in digital cellular phones
and in other industries from electromagnetic and radio frequency interference,
the plating of proprietary finishes for large diesel engine cylinder liners and
pistons, and engineering consulting services and licensing of certain patented
technologies.

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
company and all subsidiaries after elimination of significant intercompany
balances and transactions. Service revenues and related expenses are not
disaggregated in the Consolidated Statement of Operations due to immateriality.
Certain prior year information has been restated as a result of a change in
accounting for inventories as discussed in the Inventories section, and the
three-for-two stock split in November 1997.

USE OF ESTIMATES

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

CONCENTRATION OF CREDIT RISK

         The majority of the company's sales are in the Roofing Products segment
and its primary customers are building materials distributors. For the past
several years, the building materials distribution industry has consolidated at
a rapid pace with many smaller independent distributors being acquired by
emerging larger national building products distributors. One customer accounted
for 16%, 14% and 13% of consolidated sales in fiscal years 1998, 1997 and 1996,
respectively. The company performs ongoing credit evaluations and maintains
reserves for potential credit losses.

REVENUE RECOGNITION

         Revenue is recognized at the time products are shipped to the customer
or at the time services are rendered.


                                       27
<PAGE>   29


INVENTORIES

         Inventories are stated at the lower of cost (including direct
materials, labor, and applicable overhead) or market, using the first-in,
first-out (FIFO) method. Inventories were comprised of:

<TABLE>
<CAPTION>
                                                    (In thousands)
                                                       June 30,
                                               ----------------------
                                                 1998          1997
                                               --------      --------
                 <S>                           <C>           <C>
                 Raw Materials                 $  7,827      $  6,334
                 Work-In-Process                    446           419
                 Finished Goods                  20,549        25,453
                                               --------      --------
                                               $ 28,822      $ 32,206
                                               ========      ========
</TABLE>

         In fiscal 1998, the company changed its method of accounting for
inventories from the LIFO method to the FIFO method. Management believes that as
a result of productivity improvements and the declining cost of raw materials
since the adoption of the LIFO method in fiscal 1985, the FIFO method provides a
better measurement of operating results.

         In accordance with Accounting Principles Board Opinion No. 20,
"Accounting Changes," prior period financial statements have been restated to
reflect this accounting change.

         The effect on net income by year of this accounting change is
summarized as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                                                                   Effect on Net
                             Pretax Income Reported By                             Difference                       Income Per
                             -------------------------                             ----------                        Basic and
Fiscal Year               LIFO Method          FIFO Method           Pretax Income            Net Income           Diluted Share
-----------               -----------          -----------           -------------            ----------           -------------
<S>                       <C>                  <C>                   <C>                      <C>                  <C>           
   1994                   $    24,940          $    24,318           $        (622)           $     (387)          $        (.03)
   1995                        15,281               16,110                     829                   518                     .04
   1996                        16,483               17,112                     629                   392                     .03
   1997                        20,637               19,485                  (1,152)                 (726)                   (.06)
   1998                        28,256               28,458                     202                   130                     .01
</TABLE>

           Further, as of July 1, 1993, inventories were reduced $905,000,
    deferred taxes reduced $314,000 and retained earnings reduced $591,000 to
    reflect this accounting change on reported beginning balances.


                                       28

<PAGE>   30



PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment are stated at cost. Major renewals and
improvements are capitalized, while maintenance and repairs are expensed when
incurred. Depreciation is computed over the estimated useful lives of
depreciable assets using the straight-line method. Useful lives for property and
equipment are as follows:

<TABLE>
         <S>                                <C>     
         Buildings and improvements         10 - 40 years
         Machinery and equipment             5 - 20 years
         Computer equipment                  3 -  6 years
         Office furniture and equipment      5 - 12 years
</TABLE>

         The cost and accumulated depreciation for property, plant and equipment
sold, retired, or otherwise disposed of are relieved from the accounts, and
resulting gains or losses are reflected in income. Historically, preoperating
and start-up costs incurred in connection with the construction of major new
manufacturing facilities were capitalized until such facilities became
operational. These costs were then amortized over a five-year period.
Capitalized preoperating and start-up costs included in capital expenditures
were $977,000 and $4,772,000 in fiscal years 1997 and 1996 respectively.
Effective in fiscal 1999, preoperating and start-up costs will be expensed as
incurred in accordance with AcSec Statement of Position 98-5, as described more
fully in the New Accounting Standards section of these financial statements.
Interest is capitalized in connection with the construction of major facilities.
The capitalized interest is recorded as part of the asset to which it relates
and is amortized over the asset's estimated useful life. In 1998, 1997 and 1996,
$160,000, $1,784,000 and $1,459,000 of interest cost was capitalized,
respectively.

INCOME TAXES

         Deferred income taxes are provided to reflect temporary differences
between the financial reporting basis and the tax basis of the company's assets
and liabilities using presently enacted tax rates.

IMPAIRMENT OF LONG-LIVED ASSETS

         During the fourth quarter of fiscal 1996, the company adopted Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The company
recorded a provision of $1,037,000 to reduce the assets of Chromium
Corporation's Cleveland plant and provide for related environmental remediation
in the Industrial Products segment relating to the new accounting standard. The
company had previously reduced the value of certain equipment in the Roofing
Products segment by $558,000.


                                       29

<PAGE>   31


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS PER SHARE

         In accordance with SFAS No. 128, "Earnings Per Share," basic earnings
per share were computed by dividing net income by the weighted average number of
shares of common stock outstanding during the year, adjusted for the
three-for-two stock split in November 1997. The reconciliation of basic earnings
per share to diluted earnings per share is shown in the following table.

<TABLE>
<CAPTION>
                                                     (In thousands, except per share data)

                                                         1998       1997         1996
                                                       -------     -------     -------
<S>                                                    <C>         <C>         <C>    
Net income                                             $18,324     $12,276     $10,676
                                                       =======     =======     =======

Denominator for basic earnings per share -weighted
average shares outstanding                              13,245      13,175      13,122

Effect of dilutive securities:
  Employee stock options                                   268         131         163
                                                       -------     -------     -------

Denominator for dilutive earnings per share -
adjusted weighted average shares and assumed
issuance of shares purchased under the incentive
stock option plan using the treasury stock method       13,513      13,306      13,285
                                                       =======     =======     =======

Basic earnings per share                               $  1.38     $   .93     $   .81
                                                       =======     =======     =======

Diluted earnings per share                             $  1.36     $   .92     $   .80
                                                       =======     =======     =======
</TABLE>

LONG-TERM DEBT

         Effective December 15, 1997, the company increased its unsecured
revolving credit facility (Facility) to $100,000,000 of primary credit,
including up to a maximum of $5,000,000 in letters of credit, through December
15, 2002. At June 30, 1998, letters of credit totaling $1,790,000 were
outstanding.

         Borrowings under the Facility bear interest at (1) the higher of the
federal funds rate plus .5% or the lender's prime rate, or (2) at the company's
option, LIBOR, in each case plus specified basis points based on the ratio of
the company's total indebtedness to total capital. The Facility also provides
for a commitment fee on the average unused portion of the line and is also based
on the ratio of the company's total indebtedness to total capital. Based on
financial ratios at June 30, 1998, the LIBOR borrowing rate was LIBOR plus .5%
and the commitment fee was .175% of the average unused portion of the line. The
average interest rate paid on indebtedness in fiscal 1998 was 6.4%.




                                       30
<PAGE>   32


         The loan agreement, among other things, limits the sale or pledging of
assets of subsidiaries involved in manufacturing asphalt roofing products, and
requires maintenance of specified current ratios, capitalization ratios and cash
flow levels. Dividend payments and stock repurchases are limited to certain
specified levels providing no default or event of default would occur. At June
30, 1998, total cumulative dividend payments and stock repurchased since July 1,
1993 were subject to a $32,765,000 limitation. Actual expenditures for these
items as of June 30, 1998 have been $13,204,000.

SHAREHOLDERS' EQUITY

         Authorized common stock, par value $1.00, is 50,000,000 shares, of
which 13,325,569 shares were issued at June 30, 1998 and 13,221,119 shares were
issued at June 30, 1997. The Board of Directors is authorized to issue up to
1,000,000 shares of preferred stock, without par value, in one or more series
and to determine the rights, preferences, and restrictions applicable to each
series. No preferred stock has been issued.

         In September 1997, the Board of Directors declared a three-for-two
stock split payable in the form of a stock dividend which was distributed on
November 12, 1997. An amount equal to the par value of the common shares issued
in connection with the split was transferred from paid-in capital to the common
stock account. Appropriate references to number of shares and to per share
information in the Consolidated Financial Statements have been adjusted to
reflect the stock split on a retroactive basis.

SHAREHOLDER RIGHTS PLAN

         On May 26, 1998, the company's Board of Directors adopted a new
Shareholder Rights Plan which took effect when the existing rights plan expired
on July 8, 1998. Under the new plan, rights were constructively distributed as a
dividend at the rate of one right for each share of common stock of the company
held by the shareholders of record as of the close of business on July 8, 1998.
Until the occurrence of certain events, the rights are represented by and traded
in tandem with common stock. Each right will separate and entitle shareholders
to buy stock upon an occurrence of certain takeover or stock accumulation
events. Should any person or group (Related Person) acquire beneficial ownership
of 15% or more of the company's common stock other than certain bona fide
institutional investors to whom a 20% threshold applies, all rights not held by
the Related Person become rights to purchase one one-hundredth of a share of
preferred stock for $165 or $165 of Elcor common stock at a 50% discount. If
after such an event the company merges, consolidates or engages in a similar
transaction in which it does not survive, each holder has a "flip over" right to
buy discounted stock in a surviving entity.

         Under certain circumstances, the rights are redeemable at a price of
$0.01 per right. Further, upon defined stock accumulation events, the Board of
Directors has the option to exchange one share of common stock per right. The
rights will expire by their terms on July 8, 2008.



                                       31
<PAGE>   33



EMPLOYEE BENEFIT PLANS

         The company's Incentive Stock Option Plan provides for the granting of
incentive and non-qualified stock options to directors, officers and key
employees of the company for purchase of the company's common stock.

Information relating to options is as follows:

<TABLE>
<CAPTION>
                                                                                            Weighted
                                           Number                 Option Price           Average Option
                                          of Shares             Range per Share          Price per Share
                                          ---------             ---------------          ---------------
<S>                                       <C>                   <C>                      <C>   
Outstanding at June 30, 1995                476,758             $ 4.67 - $16.09          $          8.91
  Granted                                   110,627             $14.33 - $14.92          $         14.64
  Cancelled                                 (10,365)            $ 4.67 - $16.09          $         12.25
  Exercised                                 (65,850)            $ 4.67 - $16.09          $          6.47
                                          ---------             
Outstanding at June 30, 1996                511,170             $ 4.67 - $16.09          $         10.40
  Granted                                   152,625             $11.33 - $12.67          $         12.45
  Cancelled                                  (3,978)            $ 5.83 - $16.09          $         12.36
  Exercised                                 (73,640)            $ 4.67 - $13.25          $          5.72
                                          ---------             
Outstanding at June 30, 1997                586,177             $ 4.67 - $16.09          $         11.51
  Granted                                   149,845             $20.00 - $27.63          $         22.36
  Cancelled                                  (2,638)            $ 8.08 - $16.09          $          9.76
  Exercised                                (149,856)            $ 4.67 - $20.00          $         10.38
                                          ---------             
Outstanding at June 30, 1998                583,528             $ 4.67 - $27.63          $         14.58
                                          =========       
</TABLE>

The following table summarizes information about options outstanding at June 30,
1998:

<TABLE>
<CAPTION>
                                      Options Outstanding                      Options Exercisable
                   --------------------------------------------------------------------------------------
                                               Weighted-Average
                            Number      ----------------------------      Number              Weighted   
     Range of            Outstanding at    Remaining       Exercise     Exercisable           Average
  Exercise Prices           6/30/98      Contractual Life   Price        at 6/30/98        Exercise Price
  ---------------        -------------- -----------------  --------     -----------        --------------
<S>                      <C>            <C>                <C>          <C>                <C>   
  $ 4.67 - $ 9.94           113,896         1.49 yrs.       $ 6.58         99,789              $ 6.37
  $10.00 - $14.94           267,096         6.99 yrs.       $13.33         61,752              $13.02
  $15.00 - $19.94            53,051         5.17 yrs.       $16.08         30,272              $16.08
  $20.00 - $27.63           149,485         9.28 yrs.       $22.37         18,000              $24.10
</TABLE>
   

         At June 30, 1998, 1997 and 1996, 209,813, 218,231 and 173,694 shares
were exercisable, respectively. A total of 250,064, 397,271 and 547,274 shares
were reserved for future grants at June 30, 1998, 1997 and 1996, respectively.

         Beginning in fiscal 1997, the company adopted the disclosure-only
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."
Accordingly, no compensation cost has been recognized with respect to the
company's stock option plan. Pro forma information regarding net income and
income per share set forth below has been determined as if the company had
accounted for its stock options under the fair value methodology prescribed by
SFAS No. 123. The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model


                                       32
<PAGE>   34


with the following weighted-average assumptions for fiscal 1998, 1997 and 1996;
dividend yields of 1.1%, 1.5% and 1.1%; risk-free interest rates of 6.2%, 6.5%
and 6.2%; expected market price volatility of .413, .429 and .450; and expected
lives of options of 8.5, 6.9 and 7.5 years. Based on this model, the weighted
average fair value of stock options granted in fiscal 1998, 1997 and 1996 was
$11.63, $5.78 and $7.48, respectively.

<TABLE>
<CAPTION>
       (In thousands,
  except per share data)                             1998         1997           1996
  ----------------------                           -------       -------        -------
<S>                                                <C>           <C>            <C>    
Net income, as reported                            $18,324       $12,276        $10,676
Net income, pro forma                              $17,651       $11,945        $10,366
Income per share - basic, as reported              $  1.38       $   .93        $   .81
Income per share - basic, pro forma                $  1.33       $   .91        $   .79
Income per share - diluted, as reported            $  1.36       $   .92        $   .80
Income per share - diluted, pro forma              $  1.31       $   .90        $   .78
</TABLE>

         The pro forma amounts presented above may not be representative of the
effects on reported net income for future years.

         The company's Employee Stock Ownership Plan (ESOP) became effective
January 1, 1981. Under the plan, the company contributes a percentage of each
participant's annual compensation into a trust, either as treasury stock
contributions or cash, which is then used to purchase Elcor common stock.
Employees vest 20% after three years of employment and 20% per year thereafter,
with the stock distributed at retirement, death, disability, or as authorized by
the Plan Administrative Committee. Effective January 1, 1990, the company
established an Employee Savings Plan under Internal Revenue Code section 401(k).
All employees, except those covered by plans established through collective
bargaining, are eligible for participation. Under this Plan, the company
contributes a percentage of each participant's annual compensation into a Plan
to be invested among various defined alternatives at the participants'
direction. Vesting of company contributions is in accordance with the same
schedule as that of the ESOP.

         The Board of Directors authorized total contributions of 5.0% in fiscal
1998, 4.6% in fiscal 1997 and 4.6% in fiscal 1996, of each participant's annual
compensation, as defined, including forfeitures, split equally between the ESOP
and 401(k) Plans. In addition, on January 1, 1998, the company began
contributing an additional $.50 for every $1.00 of employee contributions into
the 401(k) Plan, limited to a maximum matching of 2% of an employee's
compensation. Total contributions charged to expense for these plans were
$1,722,000, $1,245,000 and $1,120,000, in 1998, 1997 and 1996, respectively.

         The company has a Stock/Loan Plan which allows certain key employees to
borrow an amount, based on a percentage of their salaries and the performance of
their operating units, for the purpose of purchasing the company's common stock.
Under the Stock/Loan Plan, the loans, which are unsecured, and any accrued
interest are forgiven and amortized as compensation over five years of
continuing service with the company. If employment is terminated for any reason
except death, disability or retirement, the balance of the loan becomes due and
payable. Loans outstanding at June 30, 1998 and 1997 totaling $1,074,000 and
$1,078,000, respectively, are included in Other Assets.


                                       33
<PAGE>   35



COMMITMENTS AND CONTINGENCIES

         The company and its subsidiaries lease certain office space,
facilities, and equipment under operating leases, expiring on various dates
through 2004. Total rental expense was $1,505,000 in 1998, $1,295,000 in 1997
and $1,167,000 in 1996. At June 30, 1998, future minimum rental commitments
under noncancellable operating leases, payable over the remaining lives of the
leases, are:

<TABLE>
<CAPTION>
                                         (In thousands)
                                         Minimum Rental
            Fiscal Year                   Commitments
            -----------                  --------------
            <S>                          <C>   
               1999                           $1,364
               2000                            1,240
               2001                            1,077
               2002                              932
               2003                              897
            Thereafter                           641
                                              ------
               Total                          $6,151
                                              ======
</TABLE>


         The company's subsidiaries provide certain warranties for their
products which are generally limited to being free from defect in materials or
workmanship affecting performance or meeting specified manufacturing and
material specifications. During 1998, 1997 and 1996, the company recorded to
expense approximately $1,681,000, $1,566,000 and $1,637,000, respectively, in
warranty claim settlements and reserves. The company has established reserves
for estimated probable future claims in accordance with SFAS No. 5, "Accounting
for Contingencies."

         On February 8, 1994, a wholly owned subsidiary, Elk Corporation of
Dallas (Elk) was granted a design patent covering the ornamental aspects of
certain Elk shingles. On December 6, 1994, Elk was granted a utility patent on
the functional aspects of certain Elk shingles. Elk has sued GAF Building
Materials Corporation and related GAF entities (collectively GAF) in federal
court for infringement of these patents and trade dress. In the design patent
case, Elk seeks to recover as damages the total profit that GAF has made from
the infringing shingles. In the utility patent case, Elk seeks to recover as
damages a reasonable royalty on GAF's sales of infringing shingles and certain
lost profits.

         GAF seeks a declaratory judgment that the Elk patents are not infringed
and are either invalid or unenforceable. GAF has also asserted claims for unfair
competition, Lanham Act violations based on alleged false advertising, and
common law fraud, generally praying for damages of not less than $25 million
including actual and punitive damages, plus interest, costs, and reasonable
attorney fees. Elk disputes GAF's claims, and management intends vigorously to
defend them and to enforce its intellectual property rights. In April, 1998, the
District Court for the Northern District of Texas entered a partial final
judgement against Elk in the design patent case based on an inequitable conduct
ruling and certified the case for appeal. Elk has contested that judgment in an
appeal which it has filed with the United States Court of Appeals for the
Federal Circuit. Elk expects its appeal to be decided by the Court of Appeals in
1999. In the interim, trial on the trade dress claim and 



                                       34
<PAGE>   36


certain other matters in the design patent case and trial in the utility patent
cases are unscheduled but pending.

         While management can give no assurances regarding the ultimate outcome
of the litigation, outside counsel believe that Elk will prevail on its patent
and trade dress claims and that Elk will defeat GAF's counterclaims. Even if the
outcome were to be adverse to Elk, it is not expected to have a material effect
on the company's financial position or liquidity.

         The company and its subsidiaries are involved in other legal actions
and claims arising in the ordinary course of business. Based on advice from
legal counsel, management believes such litigation and claims will be resolved
without material adverse effect on the consolidated financial statements.

         On December 1, 1985, the company became self-insured for its products
and completed operations liability exposure because the cost of insurance for
such risks was believed to be excessive for the coverage to be provided.
Reserves for estimated potential losses of this type have been established.

         The company's operations are subject to extensive federal, state and
local laws and regulations relating to environmental matters. Although the
company does not believe it will be required to expend amounts which will have a
material adverse effect on the company's consolidated financial position or
results of operations by reason of environmental laws and regulations, such laws
and regulations are frequently changed and could result in significantly
increased cost of compliance. Further, certain of the company's industrial
products operations utilize hazardous materials in their production processes.
As a result, the company incurs costs for remediation activities at its
facilities and off-site from time to time. The company establishes and maintains
reserves for such remediation activities, when appropriate, in accordance with
SFAS No. 5, "Accounting for Contingencies."

ACCRUED LIABILITIES

Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
                                           (In thousands)
                                             June 30,
                                       -------------------
                                         1998        1997
                                       -------     -------
<S>                                    <C>         <C>    
Product warranty reserves              $ 1,699     $ 1,968
Self-insurance reserves                    919       1,531
Compensation and employee benefits       4,303       3,291
All other                                5,707       5,596
                                       -------     -------
                                       $12,628     $12,386
                                       =======     =======
</TABLE>



                                       35
<PAGE>   37


SUPPLEMENTAL CASH FLOWS

         The company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. Supplemental cash flow
amounts were as follows:

<TABLE>
<CAPTION>
                                      (In thousands)
                                         June 30,
                                ----------------------------
                                 1998       1997       1996
                                ------     ------     ------
          <S>                   <C>        <C>        <C>   
          Interest paid         $2,803     $2,951     $1,739
          Income taxes paid     $4,780     $3,115     $1,105
</TABLE>

NEW ACCOUNTING STANDARDS

         In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," which establishes standards of reporting of comprehensive
income and its components in the consolidated financial statements. The company
will adopt SFAS No. 130 in fiscal 1999, but does not expect the adoption to
impact the company's financial position or results of operations.

         Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 requires public
companies to disclose, among other things, certain interim and annual financial
information about the enterprise using a new management approach. The management
approach requires segment information to be reported based on how management
evaluates the operating performance of its business units or segments. The
company will adopt SFAS No. 131 in fiscal 1999 and does not currently anticipate
significant changes in its reportable segments.

         In April 1998, the Accounting Standards Executive Committee (AcSec) of
the American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities," requiring, among
other things, companies to expense on a current basis previously capitalized
start-up costs. At June 30, 1998, the company had $6,682,000 of unamortized
capitalized start-up costs. This Statement of Position is effective for
financial statements for fiscal years beginning after December 15, 1998, unless
adopted earlier. The company plans to adopt this new accounting standard in
fiscal 1999 at which time all remaining unamortized capitalized start-up costs
will be expensed and reflected in the Consolidated Statement of Operations as a
cumulative change in accounting principle.



                                       36
<PAGE>   38


INCOME TAXES

         The company's effective tax rate was 35.6% in 1998, 37.0% in 1997 and
37.6% in 1996. The difference between the federal statutory tax rate and the
effective tax rate is reconciled as follows:

<TABLE>
<CAPTION>
                                                     1998       1997      1996
                                                    ------     ------    ------
<S>                                                 <C>        <C>       <C>  
Federal statutory tax rate                            35.0%      35.0%     35.0%
Change in tax rate resulting from:
  State income taxes, net of federal tax effect         .9%       1.6%      2.1%
  Miscellaneous items                                  (.3%)       .4%       .5%
                                                    ------     ------    ------
                                                      35.6%      37.0%     37.6%
                                                    ======     ======    ======
</TABLE>

        Components of the income tax provisions consist of the following:

<TABLE>
<CAPTION>
                                                           (In thousands)
                                                     1998       1997      1996
                                                    -------    ------    ------
<S>                                                 <C>        <C>       <C>  
Federal: 
  Current                                           $ 6,722    $1,709    $1,826
  Deferred, net                                       3,010     5,001     4,071
State                                                   402       499       539
                                                    -------    ------    ------
                                                    $10,134    $7,209    $6,436
                                                    =======    ======    ======
</TABLE>

         The significant components of the company's deferred tax assets and
liabilities are summarized below:

<TABLE>
<CAPTION>
                                                                 (In thousands)
                                                        1998          1997          1996
                                                      --------      --------      --------
<S>                                                   <C>           <C>           <C>     
Deferred tax assets:
    Accrued liabilities, difference in                
      expense recognition                             $  1,786      $  2,269      $  2,314 
    Receivables, bad debt reserve                          203           191           246
    Inventories, difference in capitalization              239           475           (62)
    Discontinued asset reductions                           --            --           292
                                                      --------      --------      --------
                                                         2,228         2,935         2,790
                                                      --------      --------      --------
Deferred tax liabilities:
    Fixed assets, primarily depreciation method        
      differences and deferred preoperating costs      (15,881)      (13,578)       (8,629)
                                                      --------      --------      --------
                                                       (15,881)      (13,578)       (8,629)
                                                      --------      --------      --------

Net deferred tax liability                            $(13,653)     $(10,643)     $ (5,839)
                                                      ========      ========      ========
</TABLE>


                                       37

<PAGE>   39


QUARTERLY SUMMARY OF OPERATIONS

(Unaudited, $ in thousands, except per share amounts adjusted for a
three-for-two stock split in November, 1997)

<TABLE>
<CAPTION>
                                           Fiscal 1998
                         -------------------------------------------
                          First       Second      Third       Fourth
                         Quarter     Quarter     Quarter     Quarter
                         -------     -------     -------     -------
<S>                      <C>         <C>         <C>         <C>    
SALES                    $73,516     $60,965     $59,225     $74,472

GROSS PROFIT              18,115      13,664      14,000      19,772

NET INCOME                 5,394       2,948       3,369       6,613

NET INCOME PER SHARE
   BASIC                     .41         .22         .25         .50

   DILUTED                   .40         .22         .25         .49
</TABLE>

<TABLE>
<CAPTION>
                                          Fiscal 1997
                         -------------------------------------------
                          First       Second      Third       Fourth
                         Quarter     Quarter     Quarter     Quarter
                         -------     -------     -------     -------
<S>                      <C>         <C>         <C>         <C>    
SALES                    $64,536     $50,636     $57,120     $58,464

GROSS PROFIT              14,012      11,394      11,773      14,196

NET INCOME                 3,768       2,309       2,612       3,587

NET INCOME PER SHARE                                          
   BASIC
                             .29         .18         .20         .27

   DILUTED                   .29         .17         .19         .27
</TABLE>


                                       38
<PAGE>   40


FINANCIAL INFORMATION BY COMPANY SEGMENTS
<TABLE>
<CAPTION>
                                                        (In thousands)
                                               1998           1997           1996
                                             ---------      ---------      ---------
<S>                                          <C>            <C>            <C>     
SALES
Roofing products                             $ 229,475      $ 207,017      $ 178,378
Industrial products                             38,586         23,542         17,930
Corporate and eliminations                         117            197            154
                                             ---------      ---------      ---------
                                             $ 268,178      $ 230,756      $ 196,462
                                             =========      =========      =========

OPERATING PROFIT
Roofing products                             $  24,885      $  21,052      $  22,675
Industrial products(1)                          10,780          3,498           (224)
Corporate and other                             (5,076)        (4,144)        (5,156)
                                             ---------      ---------      ---------
                                                30,589         20,406         17,295

Interest and other income (expense), net        (2,131)          (921)          (183)
                                             ---------      ---------      ---------

Income before income taxes                   $  28,458      $  19,485      $  17,112
                                             =========      =========      =========

IDENTIFIABLE ASSETS(2)
Roofing products                             $ 187,770      $ 184,138      $ 174,027
Industrial products                             14,931          9,248          6,340
Corporate                                       13,739         10,968          8,751
Discontinued operations                            604          2,095          2,942
                                             ---------      ---------      ---------
                                             $ 217,044      $ 206,449      $ 192,060
                                             =========      =========      =========

DEPRECIATION AND AMORTIZATION
Roofing products                             $  10,025      $   7,704      $   3,554
Industrial products                                833            727            927
Corporate                                          198            233            208
                                             ---------      ---------      ---------
                                             $  11,056      $   8,664      $   4,689
                                             =========      =========      =========

CAPITAL EXPENDITURES
Roofing products                             $   6,745      $  14,222      $  40,046
Industrial products                              4,245          1,400            507
Corporate                                        3,298            274            116
                                             ---------      ---------      ---------
                                             $  14,288      $  15,896      $  40,669
                                             =========      =========      =========
</TABLE>

(1)  In fiscal 1998, operating profit from the company's technology
     licensing and consulting services business exceeded 10% of consolidated
     operating profit. This business has not historically met the 10%
     reporting test nor is it typically expected to in the future. No
     separate segment is reflected in fiscal 1998 for this business unit.

(2)  Consists principally of cash and cash equivalents, trade receivables,
     inventories, and net property, plant and equipment.


                                       39
<PAGE>   41


                          INDEPENDENT AUDITORS' REPORT
                            ON SUPPLEMENTAL SCHEDULE



  To the Shareholders and Board of Directors of Elcor Corporation:


              We have audited in accordance with generally accepted auditing
  standards, the accompanying consolidated financial statements of Elcor
  Corporation and have issued our report thereon dated August 17, 1998. Our
  audit was made for the purpose of forming an opinion on those statements taken
  as a whole. The Supplemental Schedule II is the responsibility of the
  Company's management and is presented for purposes of complying with the
  Securities and Exchange Commission's rules and is not part of the basic
  financial statements. This schedule has been subjected to the auditing
  procedures applied in the audit of the basic financial statements and, in our
  opinion, fairly states in all material respects the financial data required to
  be set forth herein in relation to the basic financial statements taken as a
  whole.





                                              /s/ ARTHUR ANDERSEN LLP
                                              -----------------------
                                                  Arthur Andersen LLP



  Dallas, Texas
   August 17, 1998



                                       40
<PAGE>   42



                                                                     SCHEDULE II
                                                                  (In thousands)
                       ELCOR CORPORATION AND SUBSIDIARIES
          SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
                        Column A                      Column B                Column C                   Column D        Column E
                        --------                     ----------      --------------------------      ----------------   ----------
                                                                             Additions                  Deductions
                                                                     --------------------------      ----------------
                                                     Balance at      Charged to                      For Purposes For   Balance at
                                                     Beginning        Costs and                       Which Reserves       End
                     Description                     of Period        Expenses         Other           Were Created     of Period
                     -----------                     ----------      ----------       ---------      ----------------   ----------
         <S>                                         <C>             <C>              <C>            <C>                <C>    
         YEAR ENDED JUNE 30, 1998

         CONSOLIDATED:

         Allowance for doubtful accounts              $   545         $    210        $      --          $  (175)         $   580
                                                      =======         ========        =========          =======          =======

         Allowance for inventory obsolescence         $   201         $     25        $      --          $  (101)         $   125
                                                      =======         ========        =========          =======          =======


         YEAR ENDED JUNE 30, 1997

         CONSOLIDATED:

         Allowance for doubtful accounts              $   477         $     78        $      --          $   (10)         $   545
                                                      =======         ========        =========          =======          =======

         Allowance for inventory obsolescence         $   673         $     47        $      --          $  (519)         $   201
                                                      =======         ========        =========          =======          =======


         YEAR ENDED JUNE 30, 1996

         CONSOLIDATED:

         Allowance for doubtful accounts              $   306         $    201        $      --          $   (30)        $   477
                                                      =======         ========        =========          =======         =======

         Allowance for inventory obsolescence         $   356         $    317        $      --          $    --         $   673
                                                      =======         ========        =========          =======         =======
</TABLE>

                                       41
<PAGE>   43


Item 9. Disagreements on Accounting and Financial Disclosure.


         The Registrant has retained its independent public accountants for over
30 years. There have been no disagreements with the independent public
accountants on accounting or financial disclosure matters.


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

         Information concerning the Directors of the Registrant required by this
item is incorporated herein by reference to the material under the caption
"Election of Directors" on pages 5 and 6 of the Registrant's Proxy Statement
dated September 18, 1998. Information concerning the Executive Officers of the
Registrant is contained in Item 1 of this report under the caption "Executive
Officers of the Registrant" on pages 10 and 11 of this Annual Report on Form
10-K.

Item 11.  Executive Compensation.

         The information required by this item is incorporated herein by
reference to the information under the caption "Executive Compensation" on pages
7 through 16 of the Registrant's Proxy Statement dated September 18, 1998.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

         The information required by this item is incorporated herein by
reference to the information under the caption "Stock Ownership" on pages 2 and
3 of the Registrant's Proxy Statement dated September 18, 1998. The referenced
information was provided as of September 1, 1998. Registrant is aware of no
material change since such date in the beneficial ownership of any officer,
director or beneficial owner of five percent of any class of its voting stock
except that Registrant was informed after the company's Proxy Statement had been
printed that Reich & Tang Capital Management Group has increased its beneficial
ownership to 682,900 shares, or approximately 5.2% of shares outstanding.

Item 13.  Certain Relationships and Related Transactions.

         There are no reportable transactions, business relationships or
indebtedness between the Registrant and any covered party.




                                       42
<PAGE>   44


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports of Form 8-K.

(a) 1.   Financial Statements

         The following financial statements of Elcor Corporation are set forth
in Item 8 of this Annual Report on Form 10-K:


Financial Statements:

Independent Auditors' Report
Consolidated Balance Sheet at June 30, 1998, and 1997 
Consolidated Statement Operations for the years ended
 June 30, 1998, 1997 and 1996
Consolidated Statement of Cash Flows for the years ended
 June 30, 1998, 1997, and 1996
Consolidated Statement of Shareholders' Equity for the years
 ended June 30, 1998, 1997, and 1996
Notes to Consolidated Financial Statements


Financial Statement Schedule:

Independent Auditors' Report
Schedule II - Consolidated Valuation and Qualifying Accounts and Reserves

All other schedules are omitted because they are not required, are not
applicable, or the information is included in the financial statements or notes
thereto.

(b)      Reports on Form 8-K

         The Registrant filed a Form 8-K on April 16, 1998 relating to a press
release containing "forward-looking statements" about its prospects for the
future. The Registrant also filed a Form 8-K on May 29, 1998 relating to the
adoption of a new Shareholder Rights Plan to take effect when the current rights
plan expires on July 8, 1998.

(c)      Exhibits

         **3.1    The Articles of Incorporation of the Registrant, filed as
                  Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for
                  the year ended June 30, 1994 (File No. 1-5341).



                                       43
<PAGE>   45


        **3.2    Amended and Restated Bylaws of the Registrant, filed as Exhibit
                 3 to the Registrant's Annual Report on Form 10-K for the year
                 ended June 30, 1981 and as Exhibit 3.2 to the Registrant's
                 Quarterly Report on Form 10-Q for the quarter ended December
                 31, 1988 originally filed with the Securities and Exchange
                 Commission on February 11, 1989 (File No. 1-5341). 

        **4.1    Form of Rights Agreement dated as of July 7, 1998, between the
                 Company and ChaseMellon Shareholder Services, L.L.C., as Rights
                 Agent, which includes as Exhibits B and C thereto the Form of
                 Rights Certificate and the Summary of Rights to Purchase
                 Preferred Stock, respectively (filed as Exhibit 4.1 to the
                 company's Current Report on Form 8-K dated May 26, 1998 (File
                 No.1-5341).

        **4.6    Loan Agreement dated September 19, 1993 among Elcor 
                 Corporation, Certain Lenders, NationsBank of Texas, N.A., as
                 Issuer, and NationsBank of Texas, N.A., as Administrative
                 Lender, filed as Exhibit 4.6 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended September 30, 1993
                 (File No. 1-5341).

        **4.7    First Amendment dated October 31, 1994 to Loan Agreement dated
                 September 29, 1993 among Elcor Corporation, NationsBank of
                 Texas, N.A., as Issuer, and NationsBank of Texas, N.A. as
                 Administrative Lender, filed as Exhibit 4.7 in the
                 Registrant's Quarterly Report on Form 10-Q for this quarter
                 ended September 30, 1994 (File No. 1-5341).

        **4.8    Second Amendment dated December 15, 1995 to Loan Agreement
                 dated September 29, 1993 among Elcor Corporation, NationsBank
                 of Texas, N.A., As Issuer, Administrative Lender, and Lender;
                 and Bank of America - Texas, N.A. and Comerica Bank - Texas as
                 Lenders, filed as Exhibit 4.8 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended December 31, 1995
                 (File No. 1-5341).

        **4.9    Third Amendment dated October 31, 1996 to Loan Agreement dated
                 September 29, 1993 among Elcor Corporation, NationsBank of
                 Texas, N.A., As Issuer, Administrative Lender, and Lender; and
                 Bank of America - Texas, N.A. and Comerica Bank - Texas as
                 Lenders, filed as Exhibit 4.9 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended September 30, 1996
                 (File No. 1-5341).

        **4.10   Fourth Amendment dated December 15, 1997 to Loan Agreement
                 dated September 29, 1993 among Elcor Corporation, NationsBank
                 of Texas, N.A., as Issuer, Administrative Lender, and Lender;
                 and Bank of America - Texas, N.A., Comerica Bank - Texas, and
                 the Bank of Tokyo - Mitsubishi, Ltd. As Lenders, filed as
                 Exhibit 4.10 in the Registrant's Quarterly Report on Form 10-Q
                 for the quarter ended December 31, 1997 (File No. 1-5341).

        *10.1    Form of Executive Agreement

        *10.2    Amended and Restated Elcor Corporation Employee Stock/Loan 
                 Plan.

        *18      Letter Re: Change in Accounting Principle.

        *21      Subsidiaries of the Registrant.

        *23      Consent of Independent Public Accountants.

        *27      Financial Data Schedule (EDGAR submission only).


                                       44
<PAGE>   46


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

                     *        Filed herewith.

                    **        Incorporated by reference.


                                       45
<PAGE>   47


                                   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.







                                       ELCOR CORPORATION


                                       By /s/ RICHARD J. ROSEBERY
                                          -----------------------------------
                                              Richard J. Rosebery
                                              Vice Chairman,
                                              Chief Financial and Administrative
                                              Officer, and Treasurer


                                       By /s/ LEONARD R. HARRAL
                                          -----------------------------------
                                              Leonard R. Harral
                                              Vice President and Chief
                                              Accounting Officer



                                       46
<PAGE>   48



                                   SIGNATURES



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



<TABLE>
<CAPTION>
            Signature                             Title                                Date
   --------------------------             ----------------------                ------------------
   <S>                                    <C>                                   <C> 
   /s/ HAROLD K. WORK                     Chairman of the Board,                September 28, 1998
   --------------------------             President, Chief 
       Harold K. Work                     Executive Officer
                                          

   /s/ RICHARD J. ROSEBERY                Vice Chairman, Chief                  September 28, 1998
   -------------------------              Financial and Administrative 
       Richard J. Rosebery                Officer, and Treasurer       
                                          

   /s/ LEONARD R. HARRAL                  Vice President and                    September 28, 1998
   -------------------------              Chief Accounting 
       Leonard R. Harral                  Officer          
                                          

   /s/ JAMES E. HALL                      Director                              September 28, 1998
   -------------------------
       James E. Hall

   /s/ DALE V. KESLER                     Director                              September 28, 1998
   -------------------------
       Dale V. Kesler

   /s/ ROBERT M. LEIBROCK                 Director                              September 28, 1998
   -------------------------
       Robert M. Leibrock

   /s/ W.F. ORTLOFF                       Director                              September 28, 1998
   -------------------------
       W.F. Ortloff

   /s/ DAVID W. QUINN                     Director                              September 28, 1998
   -------------------------
       David W. Quinn
</TABLE>



                                       47


<PAGE>   49


                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
        EXHIBIT
        NUMBER                           DESCRIPTION
        -------                          -----------
        <S>       <C>
        **3.1    The Articles of Incorporation of the Registrant, filed as
                 Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for
                 the year ended June 30, 1994 (File No. 1-5341).

        **3.2    Amended and Restated Bylaws of the Registrant, filed as Exhibit
                 3 to the Registrant's Annual Report on Form 10-K for the year
                 ended June 30, 1981 and as Exhibit 3.2 to the Registrant's
                 Quarterly Report on Form 10-Q for the quarter ended December
                 31, 1988 originally filed with the Securities and Exchange
                 Commission on February 11, 1989 (File No. 1-5341). 

        **4.1    Form of Rights Agreement dated as of July 7, 1998, between the 
                 Company and ChaseMellon Shareholder Services, L.L.C., as 
                 Rights Agent, which includes as Exhibits B and C thereto the 
                 Form of Rights Certificate and the Summary of Rights to 
                 Purchase Preferred Stock, respectively Exhibit 4.1 to 
                 the company's Current Report on Form 8-K dated May 26, 1998 
                 (File No. 1-5341).

        **4.6    Loan Agreement dated September 19, 1993 among Elcor 
                 Corporation, Certain Lenders, NationsBank of Texas, N.A., as
                 Issuer, and NationsBank of Texas, N.A., as Administrative
                 Lender, filed as Exhibit 4.6 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended September 30, 1993
                 (File No. 1-5341).

        **4.7    First Amendment dated October 31, 1994 to Loan Agreement dated
                 September 29, 1993 among Elcor Corporation, NationsBank of
                 Texas, N.A., as Issuer, and NationsBank of Texas, N.A. as
                 Administrative Lender, filed as Exhibit 4.7 in the
                 Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended September 30, 1994 (File No. 1-5341).

        **4.8    Second Amendment dated December 15, 1995 to Loan Agreement
                 dated September 29, 1993 among Elcor Corporation, NationsBank
                 of Texas, N.A., As Issuer, Administrative Lender, and Lender;
                 and Bank of America - Texas, N.A. and Comerica Bank - Texas as
                 Lenders, filed as Exhibit 4.8 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended December 31, 1995
                 (File No. 1-5341).

        **4.9    Third Amendment dated October 31, 1996 to Loan Agreement dated
                 September 29, 1993 among Elcor Corporation, NationsBank of
                 Texas, N.A., As Issuer, Administrative Lender, and Lender; and
                 Bank of America - Texas, N.A. and Comerica Bank - Texas as
                 Lenders, flied as Exhibit 4.9 in the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended September 30, 1996
                 (File No. 1-5341).

        **4.10   Fourth Amendment dated December 15, 1997 to Loan Agreement
                 dated September 29, 1993 among Elcor Corporation, NationsBank
                 of Texas, N.A., as Issuer, Administrative Lender, and Lender;
                 and Bank of America - Texas, N.A., Comerica Bank - Texas, and
                 the Bank of Tokyo - Mitsubishi, Ltd. As Lenders, filed as
                 Exhibit 4.10 in the Registrant's Quarterly Report on Form 10-Q
                 for the quarter ended December 31, 1997 (File No. 1-5341).

        *10.1    Form of Executive Agreement

        *10.2    Amended and Restated Elcor Corporation Employee Stock/Loan 
                 Plan.

        *18      Letter Re: Change in Accounting Principle.

        *21      Subsidiaries of the Registrant.

        *23      Consent of Independent Public Accountants.

        *27      Financial Data Schedule (EDGAR submission only).
</TABLE>



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

      *        Filed herewith.

     **        Incorporated by reference.