SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934





For the quarter ended June 30, 2006           Commission file number 1-13905
                      -------------                                  -------




                            COMPX INTERNATIONAL INC.
-------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)




           Delaware                                       57-0981653
-------------------------------                     --------------------------
(State or other jurisdiction of                          (IRS Employer
         organization) Identification No.)


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



Registrant's telephone number, including area code:            (972) 448-1400
                                                               --------------


Indicate by check mark:

Whether the Registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months and (2) has been  subject  to such  filing  requirements  for the past 90
days. Yes X No
         ---   ---

Whether the Registrant is a large accelerated  filer, an accelerated filer, or a
non-accelerated  filer (as  defined in Rule 12b-2 of the  Exchange  Act).  Large
accelerated filer Accelerated filer Non-Accelerated filer X
                                                         ---

Whether  the  Registrant  is a shell  company  (as  defined in rule 12b-2 of the
Exchange Act). Yes   No X
                 ---   ---

Number of shares of common stock outstanding on July 21, 2006:
        Class A:   5,248,280
        Class B:  10,000,000

<PAGE>
                            COMPX INTERNATIONAL INC.

                                      INDEX




                                                                         Page
                                                                        number

Part I.          FINANCIAL INFORMATION

  Item 1.        Financial Statements.

                 Condensed Consolidated Balance Sheets -
                  December 31, 2005;June 30, 2006 (unaudited)             3

                 Condensed Consolidated Statements of Income -
                  Three months and six months ended
                  June 30, 2005 and 2006 (unaudited)                      5

                 Condensed Consolidated Statements of Comprehensive
                  Income - Three and six months ended
                  June 30, 2005 and 2006 (unaudited)                      6

                 Condensed Consolidated Statements of Cash Flows -
                  Six months ended June 30, 2005 and 2006 (unaudited)     7

                 Condensed Consolidated Statement of Stockholders' Equity -
                  Six months ended June 30, 2006 (unaudited)              8

                 Notes to Condensed Consolidated Financial Statements
                  (unaudited) 9

  Item 2.        Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.                    16

  Item 3.        Quantitative and Qualitative Disclosures
                    About Market Risk.                                    21

  Item 4.        Controls and Procedures.                                 22

Part II.         OTHER INFORMATION

  Item 1A.       Risk Factors.                                            23

  Item 4.        Submission of Matters to a Vote of Security Holders      23

  Item 6.        Exhibits.                                                23

Items 1, 2, 3, and 5 of Part II are omitted because there is no information to
report.


                                     - 2 -

<PAGE>


                            COMPX INTERNATIONAL INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                 (In thousands)


<TABLE>
<CAPTION>
               ASSETS                                                             December 31,           June 30,
                                                                                     2005                  2006
                                                                                   ---------             --------
                                                                                 (unaudited)

 Current assets:
<S>                                                                                 <C>                  <C>
   Cash and cash equivalents                                                        $ 30,592             $ 22,840
   Accounts receivable, net                                                           20,609               22,744
   Receivables from affiliates                                                           620                 -
   Refundable income taxes                                                               401                1,649
   Inventories, net                                                                   22,538               23,483
   Prepaid expenses and other                                                          1,496                1,221
   Deferred income taxes                                                               1,903                1,877
   Current portion of note receivable                                                  2,612                1,306
                                                                                    --------             --------

       Total current assets                                                           80,771               75,120
                                                                                    --------             --------

 Other assets:
   Goodwill                                                                           35,678               40,202
   Note receivable                                                                     1,567                1,567
   Other intangible assets                                                             2,317                3,494
   Other                                                                                 230                  501
                                                                                    --------             --------

       Total other assets                                                             39,792               45,764
                                                                                    --------             --------

 Property and equipment:
   Land                                                                                7,868                8,895
   Buildings                                                                          31,165               33,652
   Equipment                                                                         107,333              111,912
   Construction in progress                                                            2,015                5,853
                                                                                    --------             --------
                                                                                     148,381              160,312

   Less accumulated depreciation                                                      80,392               89,271
                                                                                    --------             --------

       Net property and equipment                                                     67,989               71,041
                                                                                    --------             --------

         Total assets                                                               $188,552             $191,925
                                                                                    ========             ========
</TABLE>




                                     - 3 -

<PAGE>

                            COMPX INTERNATIONAL INC.

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)


<TABLE>
<CAPTION>
 LIABILITIES AND STOCKHOLDERS' EQUITY                                            December 31,           June 30,
                                                                                     2005                 2006
                                                                                   --------             --------
                                                                                                      (unaudited)

 Current liabilities:
<S>                                                                                <C>                  <C>
   Accounts payable and accrued liabilities                                        $ 19,238             $ 19,541
   Income taxes payable to affiliates                                                   771                  557
   Income taxes                                                                         327                    -
                                                                                   --------             --------

       Total current liabilities                                                     20,336               20,098
                                                                                   --------             --------

 Noncurrent liabilities:
   Deferred income taxes                                                             16,692               18,716
   Long term debt and other                                                           1,425                   29
                                                                                   --------             --------

       Total noncurrent liabilities                                                  18,117               18,745
                                                                                   --------             --------

 Stockholders' equity:
   Preferred stock                                                                     -                    -
   Class A common stock                                                                  52                   52
   Class B common stock                                                                 100                  100
   Additional paid-in capital                                                       109,556              109,648
   Retained earnings                                                                 31,320               33,274
   Accumulated other comprehensive income                                             9,071               10,008
                                                                                   --------             --------

       Total stockholders' equity                                                   150,099              153,082
                                                                                   --------             --------

       Total liabilities and stockholders' equity                                  $188,552             $191,925
                                                                                   ========             ========
</TABLE>


Commitments and contingencies (Note 1)



     See accompanying Notes to Condensed Consolidated Financial Statements.
                                     - 4 -

<PAGE>


                            COMPX INTERNATIONAL INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                      (In thousands, except per share data)



<TABLE>
<CAPTION>
                                                                     Three months ended               Six months ended
                                                                           June 30,                       June 30,
                                                                   ----------------------            -------------------
                                                                      2005           2006            2005           2006
                                                                      ----           ----            ----           ----
                                                                                         (unaudited)

<S>                                                                <C>             <C>           <C>            <C>
 Net sales                                                         $45,730         $50,143       $92,573        $97,172
 Cost of goods sold                                                 35,203          37,794        71,763         73,195
                                                                   -------         -------       -------        -------

     Gross margin                                                   10,527          12,349        20,810         23,977

 Selling, general and administrative expense                         5,802           6,441        11,924         13,159
                                                                   -------         -------       -------        -------

 Other operating income (expense):
   Currency transaction gains (losses),net                              38             (69)          (15)          (111)
   Disposition of property and equipment                               (18)            (18)          (13)           (91)
                                                                   -------         -------       -------        -------

     Operating income                                                4,745           5,821         8,858         10,616

 Other non-operating income, net                                        60             303           270            686
 Interest expense                                                      (69)            (50)         (138)          (112)
                                                                   -------         -------       -------        -------

     Income from continuing operations
      before income taxes                                            4,736           6,074         8,990         11,190

 Provision for income taxes                                          2,361           2,284         4,403          4,927
                                                                   -------         -------       -------        -------

   Income from continuing operations                                 2,375           3,790         4,587          6,263

 Discontinued operations, net of tax                                  -               (500)         (477)          (500)
                                                                   -------         -------       -------        -------

     Net income                                                    $ 2,375         $ 3,290       $ 4,110        $ 5,763
                                                                   =======         =======       =======        =======

 Basic and diluted earnings per common share:
   Continuing operations                                           $   .16         $   .25       $   .30        $   .41
   Discontinued operations                                            -               (.03)         (.03)          (.03)
                                                                   -------         --------      -------        -------

                                                                   $   .16         $   .22       $   .27        $   .38
                                                                   =======         =======       =======        =======

 Cash dividends per share                                          $  .125         $  .125       $   .25        $   .25
                                                                   =======         =======       =======        =======


 Shares used in the calculation of basic
  and diluted earnings per share                                    15,214          15,250        15,215         15,249
                                                                   =======         =======       =======        =======
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.
                                     - 5 -

<PAGE>


                            COMPX INTERNATIONAL INC.

            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                             Six months ended
                                                                                                 June 30,
                                                                                           2005           2006
                                                                                           ----           ----
                                                                                               (unaudited)

<S>                                                                                     <C>              <C>
 Net income                                                                             $4,110           $5,763

 Other comprehensive income (loss), net of tax:
     Currency translation adjustment:
     Arising during the period                                                            (118)           1,040
     Disposal of business unit                                                             739             -
                                                                                        ------           ------
                                                                                           621            1,040

   Impact from cash flow hedges, net                                                      (68)             (103)
                                                                                       ------            ------

     Total other comprehensive income, net                                                 553              937
                                                                                        ------           ------

     Comprehensive income                                                               $4,663           $6,700
                                                                                        ======           ======
</TABLE>











     See accompanying Notes to Condensed Consolidated Financial Statements.
                                     - 6 -

<PAGE>

                            COMPX INTERNATIONAL INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Six months ended June 30, 2005 and 2006

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                            2005             2006
                                                                                            ----             ----
                                                                                                (unaudited)

 Cash flows from operating activities:
<S>                                                                                       <C>                <C>
   Net income                                                                             $  4,110           $ 5,763
   Depreciation and amortization                                                             5,368             5,540
   Goodwill impairment                                                                         864                 -
   Deferred income taxes:
     Continuing operations                                                                     117             1,115
     Discontinued operations                                                                  (187)                -
   Other, net                                                                                   80               413
   Change in assets and liabilities (net of effect of
    acquisition):
     Accounts receivable, net                                                               (2,091)           (1,173)
     Inventories, net                                                                          756             1,050
     Accounts payable and accrued liabilities                                                1,471              (303)
     Accounts with affiliates                                                                1,563               405
     Income taxes                                                                           (2,609)           (1,539)
     Other, net                                                                               (787)                4
                                                                                          --------          --------

       Net cash provided by operating activities                                             8,655            11,275
                                                                                          --------          --------

 Cash flows from investing activities:
   Capital expenditures                                                                     (7,234)           (5,383)
   Proceeds from disposal of assets held for sale                                           18,094                 -
   Cash of disposed business unit                                                           (4,006)                -
   Acquisition, net of cash acquired                                                             -            (9,832)
   Cash collected on note receivable                                                             -             1,306
   Proceeds from sale of fixed assets                                                           12                37
                                                                                          --------          --------

       Net cash provided by (used in) investing activities                                   6,866           (13,872)
                                                                                          --------          --------

 Cash flows from financing activities:
   Principal payments on indebtedness                                                          (19)           (1,490)
   Proceeds from issuance of common stock                                                      217                 -
   Deferred financing costs paid                                                               (28)             (105)
   Dividends                                                                                (3,799)           (3,809)
                                                                                          --------          --------

       Net cash used in financing activities                                                (3,629)           (5,404)
                                                                                          --------          --------

 Cash and cash equivalents - net change from:
   Operating, investing and financing activities                                             11,892            (8,001)
   Currency translation                                                                         171               249
 Cash and cash equivalents at beginning of period                                            21,037            30,592
                                                                                           --------          --------

 Cash and cash equivalents at end of period                                                $ 33,100          $ 22,840
                                                                                           ========          ========

 Supplemental disclosures:
   Cash paid for:
     Interest                                                                              $     82          $    181
     Income taxes                                                                             5,254             4,949
   Noncash investing activity - note receivable received
     upon disposal of business unit                                                        $  4,179          $   -
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.
                                     - 7 -

<PAGE>

                            COMPX INTERNATIONAL INC.

            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                         Six months ended June 30, 2006

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                        Accumulated other
                                                                                      comprehensive income
                                                                                            (loss)
                                      Common stock      Additional                 --------------------------         Total
                                     ---------------      paid-in     Retained      Currency       Hedging         stockholders'
                                  Class A     Class B     capital     earnings     translation    derivatives         equity
                                  -------     -------    ---------    --------     -----------    -----------        --------
                                                                                (unaudited)

<S>                                  <C>       <C>       <C>          <C>            <C>            <C>             <C>
Balance at December 31, 2005         $52       $100      $109,556     $ 31,320       $ 8,961        $ 110           $150,099

Net income                             -          -             -        5,763             -            -              5,763

Other comprehensive income, net        -          -             -            -         1,040         (103)               937

Cash dividends                         -          -             -       (3,809)            -            -             (3,809)

Issuance of common stock              -          -             92         -             -             -                   92
                                     ---       ----      --------      -------       -------        -----           --------

Balance at June 30, 2006             $52       $100      $109,648      $33,274       $10,001        $   7           $153,082
                                     ===       ====      ========      =======       =======        =====           ========
</TABLE>






     See accompanying Notes to Condensed Consolidated Financial Statements.
                                     - 8 -

<PAGE>


                            COMPX INTERNATIONAL INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2006

                                   (unaudited)


Note 1 - Organization and basis of presentation:

     Consolidated   in  this   Quarterly   Report  are  the   results  of  CompX
International  Inc.  and  subsidiaries.  The  unaudited  Condensed  Consolidated
Financial  Statements  contained in this Quarterly  Report have been prepared on
the same basis as the audited  Consolidated  Financial  Statements in our Annual
Report on Form 10-K for the year ended  December 31, 2005 that we filed with the
Securities and Exchange  Commission  ("SEC") on March 16, 2006 (the "2005 Annual
Report").  In our opinion, we have made all necessary adjustments (which include
only normal  recurring  adjustments)  in order to state fairly,  in all material
respects,  our consolidated  financial position,  results of operations and cash
flows as of the dates  and for the  periods  presented.  We have  condensed  the
Consolidated  Balance  Sheet at December 31, 2005  contained  in this  Quarterly
Report as compared  to our audited  Consolidated  Financial  Statements  at that
date,  and  we  have  omitted  certain  information  and  footnote   disclosures
(including those related to the Consolidated Balance Sheet at December 31, 2005)
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted in the United  States of America  ("GAAP").  Our
results of  operations  for the interim  periods  ended June 30, 2006 may not be
indicative  of  our  operating   results  for  the  full  year.   The  Condensed
Consolidated  Financial  Statements contained in this Quarterly Report should be
read in conjunction with our 2005 Consolidated Financial Statements contained in
our 2005 Annual Report.

     We  are  majority-owned  by  CompX  Group,  Inc.,  which  owns  83%  of our
outstanding common stock at June 30, 2006. CompX Group, Inc. is a majority-owned
subsidiary of NL Industries,  Inc. (NYSE: NL). NL owns 82% of CompX Group, and a
wholly-owned  subsidiary of Titanium Metals  Corporation  (NYSE:  TIE) ("TIMET")
owns the remaining 18% of CompX Group. At June 30, 2006, (i) NL and TIMET own an
additional 2% and 3%, respectively, of us directly, (ii) Valhi, Inc. (NYSE: VHI)
holds,  directly or through a subsidiary,  approximately 83% of NL's outstanding
common stock and approximately 35% of TIMET's outstanding common stock and (iii)
Contran Corporation holds, directly or through  subsidiaries,  approximately 92%
of Valhi's outstanding common stock.  Substantially all of Contran's outstanding
voting stock is held by trusts  established for the benefit of certain  children
and  grandchildren  of Harold C. Simmons (for which Mr. Simmons is sole trustee)
or is held by Mr. Simmons or persons or other entities  related to Mr.  Simmons.
Consequently, Mr. Simmons may be deemed to control each company and us.

     Refer to our  2005  Annual  Report  for a  discussion  of  commitments  and
contingencies.

     Unless  otherwise  indicated,  references  in this report to "we",  "us" or
"our" refer to CompX International Inc. and its subsidiaries, taken as a whole.

Note 2 - Business segment information:

     We define our operating  segments as components of our operations for which
separate  financial  information is available and is regularly  evaluated by the
chief operating  decision maker in determining how to allocate  resources and in
assessing  performance.  Our chief operating  decision maker is David A. Bowers,
president  and chief  executive  officer.  We  currently  have  three  operating

                                     - 9 -
<PAGE>

segments -  Security  Products,  Furniture  Components,  and Marine  Components.
Previously,  the results of the Marine Components  segment had been presented as
Other. Our Security Products  segment,  with  manufacturing  facilities in South
Carolina  and  Illinois,  manufactures  locking  mechanisms  and other  security
products for sale to the mailbox,  transportation,  furniture,  banking, vending
and other  industries.  Our Furniture  Components  segment,  with  facilities in
Canada,  Michigan and Taiwan,  manufactures  a complete  line of precision  ball
bearing  slides  and  ergonomic  computer  support  systems  for  use in  office
furniture,   computer-related   equipment,   tool  storage  cabinets  and  other
applications.  Our Marine  Components  segment with  facilities in Wisconsin and
Illinois,  manufactures  and  distributes  marine  instruments,   hardware,  and
accessories, for performance boats.

     In April 2006, we completed an acquisition of a marine  component  products
business for aggregate cash consideration of $9.8 million, net of cash acquired.
We completed this acquisition to expand our Marine Components  business segment.
We have  included  the  results of  operations  and cash  flows of the  acquired
business in our Condensed  Consolidated  Financial  Statements starting in April
2006. The purchase  price has been  allocated  among the tangible and intangible
net assets acquired based upon an estimate of the fair value of such net assets.
The pro forma  effect  to us,  assuming  this  immaterial  acquisition  had been
completed as of January 1, 2005, is not material.

     Previously,  we had the following  operating  segments:  Security Products,
Precision  Slides,  and  Ergonomics.  During  the  first  quarter  of  2006,  we
reorganized our internal management structure,  and as a result precision slides
and ergonomics  products businesses are now evaluated as a single operating unit
(referred to as Furniture Components).  Our segment information now reflects our
new internal management structure.  Additionally, in prior periods, the reported
amount of operating income for each operating  segment included an allocation of
corporate  operating expenses based upon the amount of each segment's net sales.
Corporate  expenses are now no longer  allocated  but instead are presented as a
separate item within  operating  income.  The prior period  segment  information
shown below has been restated to conform to the current period  presentation for
these changes.


<TABLE>
<CAPTION>
                                                                       Three months ended             Six months ended
                                                                            June 30,                      June 30,
                                                                      --------------------          -----------------------
                                                                      2005           2006            2005             2006
                                                                      ----           ----            ----             ----
                                                                                       (In thousands)

 Net sales:
<S>                                                                   <C>           <C>              <C>            <C>
   Furniture Components                                               $27,013       $24,285          $55,312        $48,029
   Security Products                                                   18,717        20,448           37,261         40,866
   Marine Components                                                     -            5,410             -             8,277
                                                                      -------       -------         --------       --------
     Total net sales                                                  $45,730       $50,143          $92,573        $97,172
                                                                      =======       =======          =======        =======

 Operating income:
   Furniture Components                                                $2,956        $2,348           $5,171         $4,542
   Security Products                                                    3,138         3,724            6,392          7,582
   Marine Components                                                     -              873             -             1,219
   Corporate operating expense                                         (1,349)       (1,124)          (2,705)        (2,727)
                                                                      -------       -------         --------       --------

     Total operating income                                             4,745         5,821            8,858         10,616

 Other non-operating income, net                                           60           303              270            686
 Interest expense                                                         (69)          (50)            (138)          (112)
                                                                      -------       -------         --------       --------

   Income from continuing operations
    before income taxes                                               $ 4,736       $ 6,074         $  8,990       $ 11,190
                                                                      =======       =======         ========       ========
</TABLE>

                                     - 10 -
<PAGE>
     The  information  below  provides  disclosure of segment  information  with
respect to each year in the three-year  period ended December 31, 2005, based on
our new operating unit structure.

<TABLE>
<CAPTION>
                                                                                 Years ended December 31,
                                                                            -------------------------------------
                                                                              2003          2004           2005
                                                                              ----          ----           ----
                                                                                      (In thousands)

 Net sales:
<S>                                                                         <C>           <C>            <C>
   Furniture Components                                                     $ 97,811      $106,759       $105,524
   Security Products                                                          76,155        75,872         76,667
   Marine Components                                                            -             -             4,158
                                                                            --------      --------       --------

     Total net sales                                                        $173,966      $182,631       $186,349
                                                                            ========      ========       ========

 Operating income (loss):
   Furniture Components                                                     $  1,359      $  8,885       $ 10,985
   Security Products                                                          11,078        11,604         13,141
   Marine Components                                                               -             -            427
   Corporate operating expenses                                               (3,658)       (5,091)        (5,491)
                                                                            --------      --------       --------

     Total operating income                                                    8,779        15,398         19,062

   Interest expense                                                           (1,301)         (494)          (336)
   Other non-operating income, net                                             1,676         2,419            724
                                                                            --------      --------       --------

     Income from continuing operations
      before income taxes                                                   $  9,154      $ 17,323       $ 19,450
                                                                            ========      ========       ========

 Depreciation and amortization:
   Furniture Components                                                     $  7,155      $  7,477       $  6,798
   Security Products                                                           4,744         4,191          3,876
   Marine Components                                                               -             -            207
   Corporate depreciation                                                        269           111             43
   Thomas Regout**                                                             2,612         2,421           -
                                                                            --------      --------       -----

      Total deprecation and amortization                                    $ 14,780      $ 14,200       $ 10,924
                                                                            ========      ========       ========

 Capital expenditures:
   Furniture Components                                                     $  6,446      $  2,521       $  5,549
   Security Products                                                           1,901         2,432          4,909
   Marine Components                                                               -             -             32
   Thomas Regout**                                                               561           395           -
                                                                            --------      --------       --------

      Total capital expenditures                                            $  8,908      $  5,348       $ 10,490
                                                                            ========      ========       ========

 Total assets:
   Furniture Components                                                     $ 88,928      $ 77,717       $ 77,226
   Security Products                                                          77,024        72,794         76,875
   Marine Components                                                               -             -         10,614
   Thomas Regout**                                                            38,595        28,921              -
   Corporate and eliminations                                                  6,196         6,847         23,837
                                                                            --------      --------       --------

      Total assets                                                          $210,743      $186,279       $188,552
                                                                            ========      ========       ========

 Goodwill:
   Furniture Components                                                     $  4,986      $  5,270       $  6,594
   Security Products                                                          23,743        23,742         23,742
   Marine Components                                                            -             -             5,342
                                                                            --------      --------       --------

      Total goodwill                                                        $ 28,729      $ 29,012       $ 35,678
                                                                            ========      ========       ========
</TABLE>

 ** Denotes disposed segment.

                                     - 11 -
<PAGE>
Note 3 -       Inventories, net:

<TABLE>
<CAPTION>
                                                                                   December 31,         June 30,
                                                                                      2005                2006
                                                                                    ---------          ----------
                                                                                         (In thousands)

<S>                                                                                  <C>                 <C>
 Raw materials                                                                       $ 7,098             $ 8,439
 Work in progress                                                                      9,899               9,642
 Finished products                                                                     5,541               5,402
                                                                                     -------             -------

      Total                                                                          $22,538             $23,483
                                                                                     =======             =======
</TABLE>
Note 4 -       Accounts payable and accrued liabilities:

<TABLE>
<CAPTION>
                                                                                   December 31,         June 30,
                                                                                      2005               2006
                                                                                    --------          ----------
                                                                                         (In thousands)

<S>                                                                                  <C>                 <C>
 Accounts payable                                                                    $ 7,022             $ 7,336
 Accrued liabilities:
   Employee benefits                                                                   8,179               7,411
   Customer tooling                                                                    1,319                 660
   Professional fees                                                                     720                 826
   Insurance                                                                             516                 959
   Taxes other than on income                                                            299                 695
   Other                                                                               1,183               1,654
                                                                                     -------             -------

      Total                                                                          $19,238             $19,541
                                                                                     =======             =======
</TABLE>
Note 5 - Indebtedness:

<TABLE>
<CAPTION>
                                                                                   December 31,          June 30,
                                                                                      2005                 2006
                                                                                   -----------            -------
                                                                                         (In thousands)

<S>                                                                                   <C>                    <C>
 Other indebtedness                                                                   $1,596                 $83
 Less current maturities                                                                 171                  54
                                                                                       -----                 ---

      Total                                                                          $ 1,425                 $29
                                                                                     =======                 ===
</TABLE>

     Other indebtedness at December 31, 2005 includes certain industrial revenue
bonds which were prepaid at its carrying value in February 2006.

Note 6 - Other non-operating income, net:

<TABLE>
<CAPTION>
                                                                       Three months ended             Six months ended
                                                                            June 30,                      June 30,
                                                                      -------------------            -------------------
                                                                      2005           2006            2005           2006
                                                                      ----           ----            ----           ----
                                                                                       (In thousands)

<S>                                                                    <C>            <C>             <C>            <C>
 Interest income                                                       $ 88           $291            $264           $665
 Other, net                                                             (28)            12               6             21
                                                                       ----           ----            ----           ----

      Total                                                            $ 60           $303            $270           $686
                                                                       ====           ====            ====           ====
</TABLE>

                                     - 12 -
<PAGE>

Note 7 - Provision for income taxes:

<TABLE>
<CAPTION>
                                                                                              Six months ended
                                                                                                  June 30,
                                                                                             2005           2006
                                                                                           --------       ------
                                                                                               (In thousands)

<S>                                                                                           <C>           <C>
 Expected tax expense                                                                         $3,146        $3,917
 Non-U.S. tax rates                                                                             (105)         (151)
 Incremental U.S. tax on earnings of foreign subsidiaries                                      1,247         1,066
 U.S. State income taxes, net                                                                    125           302
 Reduction in Canadian income tax rate                                                             -          (159)
 Other, net                                                                                      (10)          (48)
                                                                                              ------        ------

      Total                                                                                   $4,403        $4,927
                                                                                              ======        ======
</TABLE>

     In June 2006,  Canada enacted a 2% reduction in the Canadian federal income
tax rate and the  elimination  of the federal  surtax.  The 2% reduction will be
phased in from 2008 to 2010,  and the federal surtax will be eliminated in 2008.
As a result,  during the second quarter of 2006 we recognized a $159,000  income
tax benefit  related to the effect of such reduction on our previously  recorded
net deferred income tax liability.


Note 8 - Currency forward exchange contracts:

     Certain of our sales  generated by our non-U.S.  operations are denominated
in U.S.  dollars.  We periodically  use currency  forward  contracts to manage a
portion of currency  exchange rate market risk associated with  receivables,  or
similar  exchange  rate risk  associated  with future  sales,  denominated  in a
currency other than the holder's functional  currency.  We have not entered into
these  contracts  for trading or  speculative  purposes  in the past,  nor do we
anticipate  entering into such contracts for trading or speculative  purposes in
the future.  Most of our currency forward  contracts meet the criteria for hedge
accounting under GAAP and are designated as cash flow hedges. For these currency
forward  contracts,  gains and losses  representing the effective portion of our
hedges are deferred as a component of accumulated  other  comprehensive  income,
and are subsequently  recognized in earnings at the time the hedged item affects
earnings.  Occasionally,  we enter into currency forward  contracts which do not
meet the criteria for hedge accounting.  For these contracts,  we mark-to-market
the estimated fair value of such contracts at each balance sheet date,  with any
resulting  gain or loss  recognized in income  currently as part of net currency
transactions. At June 30, 2006, we held a series of contracts to manage exchange
rate risk to exchange an aggregate of U.S. $2.8 million for Canadian  dollars at
an exchange rate of Cdn.  $1.12 per U.S.  dollar.  These  contracts  qualify for
hedge  accounting  and mature  through  August 2006.  The exchange rate was Cdn.
$1.12  per U.S.  dollar  at June  30,  2006.  The  estimated  fair  value of the
contracts is not material at June 30, 2006.

Note 9 - Discontinued operations:

     Discontinued  operations  relates to our former Thomas Regout operations in
the Netherlands.  Prior to December 2004, the Thomas Regout European  operations
were classified as held for use. A formal plan of disposal  adopted by our board
of  directors  in  December  2004  resulted  in  the  reclassification  of  such
operations to held for sale. Based upon the estimated  realizable value (or fair
value less costs to sell) of the net assets  disposed,  we  determined  that the
goodwill  associated  with the assets held for sale was partially  impaired.  In

                                     - 13 -

<PAGE>

determining the estimated realizable value of the Thomas Regout operations as of
December 31, 2004,  when we  classified  it as held for sale,  we used the sales
price inherent in the definitive agreement reached with the purchaser in January
2005 and our estimate of the related  transaction  costs (or costs to sell).  In
January  2005, we completed the sale of Thomas Regout for net proceeds that were
approximately  $864,000 less than previously  estimated (primarily due to higher
expenses  associated  with  the  sale).  These  additional  expenses  reflect  a
refinement of our previous estimate of the realizable value of the Thomas Regout
operations  and  accordingly  we  recognized a further  impairment  of goodwill.
Therefore,  discontinued  operations for the first six months of 2005 includes a
charge  for the  additional  expenses  ($477,000,  net of income  tax  benefit).
Discontinued  operations in the second quarter of 2006  represents an expense of
$500,000 for our change in estimate of certain  indemnification  obligations  we
had to the purchaser of the Thomas Regout operations.


Note 10 - Recent accounting pronouncements:

     Inventory costs - Statement of Financial  Accounting Standards ("SFAS") No.
151,  Inventory  Costs, an amendment of ARB No. 43, Chapter 4, became  effective
for us for inventory  costs  incurred on or after January 1, 2006.  SFAS No. 151
requires that  allocation  of fixed  production  overhead  costs to inventory be
based on normal  capacity of the production  facilities,  as defined by SFAS No.
151. SFAS No. 151 also  clarifies the  accounting  for abnormal  amounts of idle
facility  expense,  freight handling costs and wasted material,  requiring those
items be recognized as  current-period  charges.  Our existing  production  cost
policies complied with the requirements of SFAS No. 151,  therefore the adoption
of SFAS No. 151 did not affect our Condensed Consolidated Financial Statements.

     Stock  options - We adopted  the fair value  provisions  of SFAS No.  123R,
Share-Based   Payment,  on  January  1,  2006  using  the  modified  prospective
application  method.  SFAS No. 123R,  among other  things,  requires the cost of
employee  compensation paid with equity  instruments to be measured based on the
grant-date  fair value.  That cost is then  recognized  over the vesting period.
Using the  modified  prospective  method,  we will apply the  provisions  of the
standard to all new equity  compensation  granted  after January 1, 2006 and any
existing  awards vesting after January 1, 2006. The number of non-vested  equity
awards we had issued as of  December  31,  2005 was not  material.  Prior to the
adoption of SFAS No. 123R we accounted  for  stock-based  employee  compensation
related to stock  options using the  intrinsic  value method in accordance  with
Accounting Principles Board Opinion ("APBO") No. 25, Accounting for Stock Issued
to  Employees,  and  its  various   interpretations.   Under  APBO  No.  25,  no
compensation cost was generally  recognized for fixed stock options in which the
exercise  price is greater  than or equal to the market price on the grant date.
Recognized compensation cost related to stock options was not significant during
the first six months of 2005 or the first six months of 2006.  If we had applied
the fair value  recognition  provisions  of Statement  of  Financial  Accounting
Standards  ("SFAS")  No.  123,  Accounting  for  Stock-Based  Compensation,   to
stock-based  employee  compensation  related to stock  options  for all  options
granted on or after January 1, 1995, the effect on our results of operations for
the first six months of 2005 would not have been material.

     Effective  January 1, 2006,  SFAS No.  123R  requires  the cash  income tax
benefit resulting from the exercise of stock options in excess of the cumulative
income tax benefit previously  recognized for GAAP financial  reporting purposes
(which for us did not represent a significant  amount in the first six months of
2006) to be reflected as a component of cash flows from financing  activities in
our Condensed  Consolidated  Financial  Statements.  SFAS No. 123R also requires
certain  expanded  disclosures  regarding equity  compensation,  and we provided
these expanded disclosures in our 2005 Annual Report.

                                     - 14 -
<PAGE>


     Uncertain  tax  positions.  In the  second  quarter  of 2006 the  Financial
Accounting  Standards Board ("FASB") issued FASB  Interpretation No. ("FIN") 48,
Accounting  for Uncertain Tax Positions,  which will become  effective for us on
January  1,  2007.  FIN No. 48  clarifies  when and how much of a benefit we can
recognize in our Consolidated  Financial  Statements for certain positions taken
in our income tax returns under SFAS No. 109,  Accounting for Income Taxes,  and
enhances the disclosure  requirements  for our income tax policies and reserves.
Among other things, FIN No. 48 will prohibit us from recognizing the benefits of
a tax position  unless we believe it is  more-likely-than-not  that our position
would prevail with the applicable tax  authorities  and limits the amount of the
benefit to the largest amount for which we believe the likelihood of realization
is greater than 50%. FIN No. 48 also requires  companies to accrue penalties and
interest on the difference  between tax positions taken on their tax returns and
the amount of benefit recognized for financial  reporting purposes under the new
standard.  Our current income tax accounting policies comply with this aspect of
the new  standard.  We will also be required to classify  any  reserves we might
have for uncertain tax positions in a separate current or noncurrent  liability,
depending on the nature of the tax  position.  We are currently  evaluating  the
impact of FIN No. 48 on our Consolidated Financial Statements.



                                     - 15 -
<PAGE>


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
-------------------------------------------------------------------------------

Overview

     We are a leading  manufacturer of precision ball bearing  slides,  security
products and ergonomic  computer  support systems used in the office  furniture,
transportation, tool storage and a variety of other industries. We have recently
entered the performance  marine  components  industry through the acquisition of
two performance marine  manufacturers.  Operating income was $5.8 million in the
second  quarter of 2006  compared  to $4.7  million in the same  period of 2005.
Operating  income was $10.6 million for the six-month period ended June 30, 2006
compared to $8.9  million for the  comparable  period of 2005.  The  increase in
results during the second quarter and for the comparative  six-month  periods is
primarily  due to a  more  favorable  product  mix,  the  impact  of two  marine
acquisitions  (the first in August 2005,  and the second in April of 2006),  and
our on-going focus on reducing costs partially  offset by the negative impact of
changes in currency exchange rates within Furniture Components.

Results of Operations

<TABLE>
<CAPTION>
                                            Three months ended                     Six months ended
                                                 June 30,                              June 30,
                                            --------------------        %         ------------------          %
                                             2005           2006      Change      2005          2006       Change
                                             ----           ----      ------      ----          ----       ------
                                                       (In thousands, except percentages)

 Net sales:
<S>                                          <C>            <C>        <C>          <C>           <C>        <C>
   Furniture Components                      $27,013        $24,285    (10)%        $55,312       $48,029    (13)%
   Security Products                          18,717         20,448      9 %         37,261        40,866     10 %
   Marine Components                            -             5,410      n.m.          -            8,277      n.m.
                                             -------        -------                 -------       -------

     Total net sales                         $45,730        $50,143     10 %        $92,573       $97,172      5 %
                                             =======        =======                 =======       =======

 Gross margin:
   Furniture Components                      $ 5,306         $4,661    (12)%        $10,102       $ 9,426     (7)%
   Security Products                           5,221          6,058     16 %         10,708        12,182     14 %
   Marine Components                            -             1,630      n.m.          -            2,369      n.m.
                                             -------        -------                 -------       -------

     Total gross margin                      $10,527        $12,349     17 %        $20,810       $23,977     15 %
                                             =======        =======                 =======       =======

 Operating income:
   Furniture Components                      $ 2,956         $2,348    (21)%        $ 5,171       $ 4,542    (12)%
   Security Products                           3,138          3,724     19 %          6,392         7,582     19 %
   Marine Components                            -               873      n.m.          -            1,219      n.m.
   Corporate operating
    expense                                   (1,349)        (1,124)   (17) %        (2,705)       (2,727)     1%
                                             -------        -------                 -------       -------

     Total operating income                  $ 4,745        $ 5,821     23 %        $ 8,858       $10,616     20 %
                                             =======        =======                 =======       =======
</TABLE>

n.m. = not meaningful

     Net sales.  Net sales  increased $4.4 million,  or 10%, to $50.1 million in
the second quarter of 2006 from $45.7 million in the second quarter of 2005. Net
sales  increased $4.6 million,  or 5%, to $97.2 million for the first six months
of 2006 from $92.6 million in the first six months of 2005. The increase are due
primarily to sales volume from the acquisition of two marine component  products
businesses,  in April  2006 and August  2005,  and a general  increase  in sales
volume to new and existing customers within Security Products,  partially offset
by sales volume decreases for certain Furniture  Components  products  resulting
from increased  Asian  competition  and an unfavorable  Canadian dollar exchange
rate  which  has  caused  operational  difficulties  for  many  of our  Canadian
customers.

                                     - 16 -
<PAGE>

     Cost of goods sold and gross margin.  Our cost of goods sold increased $2.6
million,  or 7%, to $37.8  million  in the  second  quarter  of 2006 from  $35.2
million in the second  quarter of 2005.  Cost of goods sold  increased 2% in the
first six months of 2006 compared to 2005,  while net sales increased 5% for the
same  period.  Our gross  margin  percentage  increased  from 23% in the  second
quarter of 2005 to 25% in the second  quarter of 2006 and increased  from 22% to
25% in the first six months of 2006 as compared to the first six months of 2005.
The  improvements  in gross margin  percentages  for the comparable  periods are
primarily  due to an  improved  product  mix  as the  decline  in  lower  margin
Furniture  Components  sales were offset by  increasing  sales of  higher-margin
Security Products and Marine Components.

     Selling, general, and administrative expense. As a percentage of net sales,
selling,  general, and administrative  expense was relatively flat in the second
quarter of 2006 and 2005, and for the first six months of each year.

     Operating income.  Operating income increased $1.1 million, or 23%, to $5.8
million in the second quarter of 2006 from $4.7 million in the second quarter of
2005.  Operating  income in the first six months of 2006 increased $1.8 million,
or 20%, to $10.6  million  compared to $8.9  million for the first six months of
2005. As a percentage of net sales,  operating  income  increased to 11% for the
first six months of 2006 from 10% for the first six months of 2005 primarily due
to the  increase  in net sales  and more  favorable  product  mix as well as the
favorable  impact of a continuous  focus on reducing  costs across all segments,
partially offset by the negative impact of currency exchange rates (as discussed
below).

     Currency.  Our furniture components segment has substantial  operations and
assets located outside the United States (in Canada and Taiwan). Sales generated
from our non-U.S.  operations  are  denominated  in both the U.S.  dollar and in
currencies other than the U.S.  dollar,  principally the Canadian dollar and the
New Taiwan dollar. Most raw materials, labor and other production costs for such
non-U.S. operations are denominated primarily in local currencies. Consequently,
the translated U.S. dollar values of our foreign sales and operating results are
subject  to  currency  exchange  rate   fluctuations   which  may  favorably  or
unfavorably   impact  reported   earnings  and  may  affect   comparability   of
period-to-period  operating results. Our Furniture Component segment's net sales
were positively impacted while their operating income was negatively impacted by
currency  exchange  rates in the  following  amounts as compared to the currency
exchange rates in effect during the corresponding period in the prior year:


<TABLE>
<CAPTION>
                                                                  Three months ended            Six months ended
                                                                    June 30, 2005                 June 30, 2005
                                                                       vs. 2006                     vs. 2006
                                                                  -----------------             ------------
                                                                                  (In thousands)

<S>                                                                    <C>                           <C>
Currency impact on net sales                                           $ 496                         $ 744

Currency impact on operating income                                    $(709)                        $(952)
</TABLE>


     Other  non-operating  income,  net. The  components of other  non-operating
income,  net are  summarized in Note 6 to the Condensed  Consolidated  Financial
Statements, and primarily include interest income. Interest income has increased
approximately  $400,000  for the six  months  period  ending  June  30,  2006 as
compared  to the same  period in 2005 due to higher  interest  rates on invested
cash balances.

     Interest expense. Interest expense declined in the six-month period of 2006
compared to 2005 due primarily to lower average levels of outstanding debt.

                                     - 17 -
<PAGE>

     Provision for income taxes. A tabular  reconciliation between our effective
income  tax  rates  and the U.S.  federal  statutory  income  tax rate of 35% is
included  in Note 7 to the  Condensed  Consolidated  Financial  Statements.  Our
income tax rates vary by  jurisdiction  (country  and/or  state),  and  relative
changes in the geographic mix of pre-tax  earnings can result in fluctuations in
the  effective  income tax rate.  Generally,  the  effective  tax rate on income
derived  from our U.S.  operations,  including  the effect of U.S.  state income
taxes,  is lower than the effective tax rate on income derived from our non-U.S.
operations,  in part due to our election to not claim  foreign tax credits.  Our
election to not claim  foreign tax credits is the primary  reason our  effective
income tax rates in 2005 and 2006 are higher than the 35% U.S. federal statutory
income tax rate.

     Our effective  income tax rate from  continuing  operations  for the second
quarter of 2006 declined to 38% as compared to the 50% effective income tax rate
for the same period in 2005, and declined to 44% in the first six months of 2006
as  compared  to the 49%  effective  income tax rate for the first six months of
2005. The decrease is primarily due to a higher percentage of our income in 2006
being derived from our U.S.  operations  as compared to 2005.  In addition,  our
provision  for income  taxes in the second  quarter of 2006  includes a $159,000
income tax benefit  related to the effect of such  reduction  on our  previously
recorded  net  deferred  income  tax  liability.  Other  than the  effect of the
$159,000  income tax benefit we  recognized  in the second  quarter of 2006,  we
currently  expect our  effective  income tax rate for the remainder of 2006 will
approximate our effective income tax rate in the first half of the year.

     Discontinued operations. See Note 9 to the Condensed Consolidated Financial
Statements.

     Recent accounting  pronouncements.See Note 10 to the Condensed Consolidated
Financial Statements.

     Critical  Accounting  Policies.  There  have been no  changes in the second
quarter of 2006 with respect to our critical  accounting  policies  presented in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operation in our 2005 Annual Report.

     Outlook. The component product markets we operate in are highly competitive
in terms of product  pricing  and  features.  Our  strategy is to focus on areas
where we can provide  products  that have  value-added,  user-oriented  features
which enable our customers to compete more effectively in their markets.  One of
the focal  points of our  strategy  is to replace  low  margin,  commodity  type
products with higher margin  user-oriented  feature products.  Additionally,  we
believe our focus on collaborating  with customers to identify solutions and our
ability  to  provide a high  level of  customer  service  enable  us to  compete
effectively.  In response to competitive pricing pressure, we continuously focus
on reducing  production  cost  through  product  reengineering,  improvement  in
manufacturing processes or moving production to lower-cost facilities.

     Raw material  prices,  especially  steel,  zinc and copper,  continue to be
volatile  putting  pressure on our  margins.  We actively  seek to mitigate  the
margin  impact by  entering  into raw  material  supply  agreements  in order to
stabilize the cost for a period of time,  execute  larger  volume  tactical spot
purchases at prices that are expected to be favorable  compared to future prices
and, if necessary,  pass on the cost increases to customers  through  surcharges
and  price  increases.  To date we have been able to  effectively  mitigate  the
impact of higher  material cost on our margins,  however,  we may not be able to
achieve these same results in future periods.

                                     - 18 -
<PAGE>


Liquidity and Capital Resources

  Consolidated cash flows.

     Operating  activities.  Trends in cash  flows  from  operating  activities,
excluding  changes in assets and liabilities  have generally been similar to the
trends in earnings.  Changes in assets and liabilities result primarily from the
timing  of  production,  sales,  and  purchases.  Such  changes  in  assets  and
liabilities  generally  tend to even out over  time.  However,  period-to-period
relative  changes  in  assets  and  liabilities  can  significantly  affect  the
comparability  of cash flows from  operating  activities.  Changes in assets and
liabilities are comparable  resulting in a net use of cash of approximately $1.6
million  and  $1.7   million  for  the  first  six  months  of  2006  and  2005,
respectively.

     Relative  changes in working capital can have a significant  effect on cash
flows from  operating  activities.  Our average days sales  outstanding  ("DSO")
increased  from 40 days at December  31, 2005 to 41 days at June 30, 2006 due to
timing of collection  on the higher  accounts  receivable  balance at the end of
June.  For  comparative  purposes,  our  average DSO  increased  from 38 days at
December  31, 2004 to 42 days at June 30,  2005.  Our average  number of days in
inventory ("DII") was 59 days at December 31, 2005 and 57 days at June 30, 2006.
The  decrease in days in inventory is  primarily  due to a lower  commodity  raw
material  balance at June 30,  2006 as a result of the  utilization  of a higher
than normal commodity raw material inventory balance acquired in the latter part
of 2005 as part of our  strategy  to  mitigate  the  significant  volatility  in
commodity  prices.  For  comparative  purposes,  our  average DII was 52 days at
December 31, 2004 and June 30, 2005  primarily as a result lower  commodity  raw
materials balances in the first six months of 2005.

     Investing  activities.  Net cash provided by investing  activities  totaled
$6.9  million  in the first  six  months  of 2005  compared  to net cash used in
investing  activities of $13.9 million in the first six months of 2006. Net cash
for 2005 includes the net proceeds from the sale of the Thomas Regout operations
in Europe,  and net cash used in 2006 includes cash paid for a marine  component
products business, both of which are discussed below.

     On January 24, 2005, we completed the  disposition of all of the net assets
of our Thomas Regout precision slide and window furnishing operations, conducted
at our facility in the Netherlands,  to members of Thomas Regout  management for
net proceeds of approximately $22.3 million. The proceeds consisted of cash (net
of costs to sell) of  approximately  $18.1 million and a  subordinated  note for
approximately $4.2 million.  The $4.2 million  subordinated note requires annual
payments over a period of four years,  and we received the first payment on this
subordinated note of $1.3 million in the first six months of 2006. Historically,
the Thomas Regout European  operations did not contribute  significantly  to net
cash flows from operations.  See Note 9 to the Condensed  Consolidated Financial
Statements.

     In April 2006, we completed an immaterial acquisition of a marine component
products  company  for $9.8  million,  net of cash  acquired.  See Note 2 to the
Condensed Consolidated Financial Statements.

     Financing  activities.  Net cash used in financing  activities totaled $3.6
million  and $5.4  million  for the six  months  ended  June 30,  2005 and 2006,
respectively.  In the first six months of 2006, we prepaid certain  indebtedness
we assumed in a prior acquisition,  reducing debt by $1.5 million.  In addition,
we paid aggregate  quarterly  dividends of $3.8 million,  or $.25 per share,  in
each of the first six months of 2005 and 2006.

     Other.  We  believe  that cash  generated  from  operations  and  borrowing
availability under our $50 million revolving credit facility, together with cash


                                     - 19 -
<PAGE>
on hand,  will be sufficient to meet our  liquidity  needs for working  capital,
capital  expenditures,  debt service and dividends (if declared).  To the extent
that  actual   operating   results  or  other   developments   differ  from  our
expectations, our liquidity could be adversely affected.

     Provisions  contained in our revolving  credit facility could result in the
acceleration  of  outstanding  indebtedness  prior to its  stated  maturity  for
reasons  other than  defaults  from  failing to comply  with  typical  financial
covenants. For example, the Credit Agreement allows the lender to accelerate the
maturity  of the  indebtedness  upon a change of  control  (as  defined)  of the
borrower.  The terms of the Credit Agreement could result in the acceleration of
all or a portion of the  indebtedness  following a sale of assets outside of the
ordinary course of business.

     Periodically,  we  evaluate  liquidity  requirements,  alternative  uses of
capital,  capital needs and available  resources in view of, among other things,
our capital  expenditure  requirements,  dividend  policy and  estimated  future
operating cash flows.  As a result of this process,  we have in the past and may
in the  future  seek to  raise  additional  capital,  refinance  or  restructure
indebtedness,  issue additional securities, modify our dividend policy or take a
combination  of such steps to manage  liquidity  and capital  resources.  In the
normal course of business,  we may review opportunities for acquisitions,  joint
ventures or other business  combinations in the component products industry.  In
the event of any such transaction, we may consider using available cash, issuing
additional equity securities or increasing our indebtedness.

     Future cash requirements.

     Our primary  source of liquidity on an ongoing  basis is our cash flow from
operating activities,  which is generally used to (i) fund capital expenditures,
(ii) repay  short-term  indebtedness  incurred  primarily  for  working  capital
purposes and (iii)  provide for the payment of  dividends  (if  declared).  From
time-to-time,  we will incur  indebtedness,  primarily  for  short-term  working
capital needs or to fund capital  expenditures.  From time-to-time,  we may also
sell assets outside the ordinary  course of business,  the proceeds of which are
generally used to repay indebtedness (including indebtedness which may have been
collateralized  by the assets sold) or to fund capital  expenditures or business
acquisitions.

     At June 30,  2006,  we had $50  million  available  under  our $50  million
revolving  credit  facility that matures in January 2009. We do not expect to be
required to use any of our cash flow from operating  activities generated during
2006 to repay indebtedness.

     Firm purchase  commitments for capital projects in process at June 30, 2006
approximated $4.3 million.

     There have been no material changes in our contractual obligations since we
filed our 2005  Annual  Report,  and we refer you to the  report  for a complete
description of these commitments.

     Off balance sheet  financing  arrangements.  We do not have any off-balance
sheet financing agreements other than the operating leases discussed in our 2005
Annual Report.


Forward Looking Information

     As  provided  by the  safe  harbor  provisions  of the  Private  Securities
Litigation  Reform Act of 1995, we caution that the statements in this Quarterly
Report  on Form 10-Q  relating  to  matters  that are not  historical  facts are


                                     - 20 -
<PAGE>

forward-looking  statements that represent our beliefs and assumptions  based on
currently available information. Forward-looking statements can be identified by
the use of words such as "believes," "intends," "may," "should,"  "anticipates,"
"expects" or comparable terminology,  or by discussions of strategies or trends.
Although we believe  that the  expectations  reflected  in such  forward-looking
statements are reasonable,  we do not know if our expectations  will prove to be
correct.   Such  statements  by  their  nature  involve  substantial  risks  and
uncertainties  that could  significantly  impact  expected  results,  and actual
future   results  could  differ   materially   from  those   described  in  such
forward-looking  statements.  Among the factors that could cause  actual  future
results to differ materially are the risks and  uncertainties  discussed in this
Quarterly  Report and those described from time to time in the our other filings
with  the  Securities  and  Exchange  Commission.  While it is not  possible  to
identify  all  factors,  we  continue  to  face  many  risks  and  uncertainties
including, but not limited to the following:

     o    Future supply and demand for our products,
     o    Changes in costs of raw materials and other  operating  costs (such as
          energy costs),
     o    General global economic and political conditions,
     o    Demand for office furniture,
     o    Service industry employment levels,
     o    The possibility of labor disruptions,
     o    Competitive products and prices,  including increased competition from
          low-cost manufacturing sources (such as China),
     o    Substitute products,
     o    Customer and competitor strategies,
     o    Costs  and   expenses   associated   with   compliance   with  certain
          requirements  of  the  Sarbanes-Oxley  Act  of  2002  relating  to the
          evaluation of our internal control over financial reporting,
     o    The introduction of trade barriers,
     o    The impact of pricing and production decisions,
     o    Fluctuations  in the  value  of the  U.S.  dollar  relative  to  other
          currencies (such as the Canadian dollar and New Taiwan dollar),
     o    Potential    difficulties   in   integrating   completed   or   future
          acquisitions,
     o    Decisions to sell operating  assets other than in the ordinary  course
          of business,
     o    Uncertainties associated with new product development,
     o    Environmental  matters (such as those requiring emission and discharge
          standards for existing and new facilities),
     o    Our ability to comply with  covenants  contained in our revolving bank
          credit facility,
     o    The ultimate outcome of income tax audits,
     o    The impact of current or future government regulations,
     o    Possible future litigation and
     o    Other risks and uncertainties.

     Should one or more of these risks  materialize (or the consequences of such
a development  worsen) or should the  underlying  assumptions  prove  incorrect,
actual results could differ  materially  from those  forecasted or expected.  We
disclaim  any  intention  or  obligation  to  update  publicly  or  revise  such
statements whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATITVE DISCLOSURE ABOUT MARKET RISK.

     We are exposed to market risk,  including  foreign currency exchange rates,
interest rates and security prices. There have been no material changes in these
market  risks  since we filed our 2005  Annual  Report,  and we refer you to the
report for a complete description of these risks.

                                    - 21 -
<PAGE>
ITEM 4. Controls and Procedures.

     Evaluation of Disclosure  Controls and Procedures.  We maintain a system of
disclosure   controls  and  procedures.   The  term  "disclosure   controls  and
procedures,"  as defined by  regulations  of the SEC,  means  controls and other
procedures that are designed to ensure that information required to be disclosed
in the reports we file or submit to the SEC under the Securities Exchange Act of
1934, as amended (the "Act"), is recorded,  processed,  summarized and reported,
within the time  periods  specified  in the SEC's  rules and  forms.  Disclosure
controls and procedures  include,  without  limitation,  controls and procedures
designed  to ensure  that  information  required  to be  disclosed  by us in the
reports  that we file or  submit to the SEC  under  the Act is  accumulated  and
communicated to our management,  including our principal  executive  officer and
principal  financial  officer,  or  persons  performing  similar  functions,  as
appropriate to allow timely decisions to be made regarding required  disclosure.
Each of David A. Bowers,  our Vice  Chairman of the Board,  President  and Chief
Executive Officer,  and Darryl R. Halbert,  our Vice President,  Chief Financial
Officer and Controller, have evaluated our disclosure controls and procedures as
of June 30, 2006.  Based upon their  evaluation,  these executive  officers have
concluded that our  disclosure  controls and procedures are effective as of June
30, 2006.

     Internal  Control  Over  Financial  Reporting.  We also  maintain  internal
control over  financial  reporting.  The term  "internal  control over financial
reporting," as defined by  regulations of the SEC, means a process  designed by,
or under the  supervision  of, our principal  executive and principal  financial
officers, or persons performing similar functions,  and effected by our board of
directors,  management  and other  personnel,  to provide  reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial statements for external purposes in accordance with GAAP, and includes
those policies and procedures that:

     o    Pertain  to the  maintenance  of  records  that in  reasonable  detail
          accurately and fairly reflect the transactions and dispositions of our
          assets.
     o    Provide  reasonable   assurance  that  transactions  are  recorded  as
          necessary to permit preparation of financial  statements in accordance
          with GAAP, and that our receipts and  expenditures are being made only
          in accordance with authorizations of our management and directors, and
     o    Provide reasonable  assurance regarding prevention or timely detection
          of  unauthorized  acquisition,  use or  disposition of our assets that
          could have a material effect on our Condensed  Consolidated  Financial
          Statements.

     Changes in Internal  Control Over  Financial  Reporting.  There has been no
change to our internal control over financial reporting during the quarter ended
June  30,  2006  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, our internal control over financial reporting.




                                    - 22 -
<PAGE>


Part II. OTHER INFORMATION

ITEM 1A.       Risk Factors.

     There have been no  material  changes  in the  second  quarter of 2006 with
respect to our risk factors  presented in Item 1A. in our 2005 Annual  Report on
Form 10-K.

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

     Our 2006 Annual Meeting of  Stockholders  was held on May 16, 2006. Paul M.
Bass,  Jr.,  David A. Bowers,  Norman S. Edelcup,  Edward J. Hardin,  Ann Manix,
Glenn R. Simmons and Steven L. Watson were elected as directors,  each receiving
votes  "For"  their  election  from at least  99.4% of the  approximately  105.2
million votes eligible to be cast at the Annual Meeting.

ITEM 6. Exhibits.

               31.1           Certification

               31.2           Certification

               32.1           Certification

               32.2           Certification

               We have retained a signed  original of any of the above  exhibits
               that contains signatures, and we will provide such exhibit to the
               Commission  or its staff  upon  request.  We will  also  furnish,
               without  charge,  a copy of our  Code  of  Business  Conduct  and
               Ethics,  Corporate  Governance  Guidelines  and  Audit  Committee
               Charter, each as adopted by our board of directors, upon request.
               Such  requests  should  be  directed  to  the  attention  of  our
               Corporate  Secretary at our corporate offices located at 5430 LBJ
               Freeway, Suite 1700, Dallas, Texas 75240.



                                    - 23 -
<PAGE>


                                   SIGNATURES

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





                                      COMPX INTERNATIONAL INC.
                                           (Registrant)





Date August  3, 2006           By  /s/ Darryl R. Halbert
     -------------------           ---------------------------
                                   Darryl R. Halbert
                                   Vice President, Chief Financial Officer
                                   and Controller
                                   (Principal Financial and Accounting Officer)


                                    - 24 -