SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
___
/XX/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1994

OR
___
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 0-14787
_________________

WATTS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware 04-2916536
(State of incorporation) (I.R.S. Employer
Identification No.)
815 Chestnut Street
North Andover, Massachusetts 01845
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (508) 688-1811
________________

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.10 per share
(Title of class)

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

Indicate by check mark 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 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. [ ]

The aggregate market value of the voting stock of the registrant
held by non-affiliates of the registrant on September 2, 1994 was
$431,500,109.

The number of shares of the registrant's Class A Common Stock,
par value $.10 per share, outstanding on September 2, 1994 was
18,013,522 and the number of shares of the registrant's Class B Common
Stock, par value $.10 per share, outstanding on September 2, 1994 was
11,472,470.

Documents Incorporated by Reference

Portions of the following documents are incorporated by reference into
the Parts of this Report on Form 10-K indicated below:

(1) The Annual Report to Stockholders for fiscal year ended June
30, 1994 (Part II).

(2) The Company's definitive proxy statement dated September 14,
1994 for the Annual Meeting of Stockholders to be held on October 18,
1994 (Part III).

PART I

Item 1. BUSINESS.

General

Watts Industries, Inc., (as further defined below),("the
Company") designs, manufactures and sells an extensive line of valves
for the plumbing and heating and water quality, municipal water,
steam, and industrial and oil and gas markets. Watts has focused on
the valve industry since its inception in 1874, when it was founded to
design and produce steam regulators for New England textile mills.
The Company is a leading manufacturer and supplier of water service
and water quality valve products, which account for over one-half of
its sales. The Company's growth strategy emphasizes internal
development of new valve products and entry into new markets for
specialized valves and related products through diversification of its
existing business and strategic acquisitions in related business
areas, both domestically and abroad.

The Company's product lines include (1) safety relief valves,
regulators, ball valves and flow control valves for water service
primarily in residential and commercial environments, and metal and
plastic water supply/drainage products including valves, tubular brass
products, faucets, drains, and sink strainers for residential
construction, home repair and remodeling, and specialty bronze valves
and fittings used in underground water service connections; (2)
backflow preventers for preventing contamination of potable water
caused by reverse flow within water supply lines; (3) American Water
Works Association (AWWA) butterfly valves for use in water
distribution, water treatment and waste water management; (4) steam
regulators and control devices for industrial HVAC and naval/marine
applications; (5) ball valves, pneumatic and electric actuators,
relief valves, check valves and butterfly valves for industrial
applications; and (6) valves for the oil and gas industry. Within a
majority of the specific markets in which it participates, the Company
believes it has the broadest product line in terms of the distinct
designs, sizes and configurations of its valves. Products
representing a majority of the Company's sales have been approved
under regulatory standards incorporated into state and municipal
plumbing and heating, building and fire protection codes.

The Company operates its own automated foundries for casting
bronze and iron component parts and has extensive facilities for
machining bronze, brass, iron and steel components and assembling them
into finished valves. The Company has its principal manufacturing
plants, warehouses, product development facilities or sales offices in
20 locations in the United States, 4 locations in Canada, 12 locations
in Europe, and 1 location in Asia through a 60% controlling interest
in a joint venture located in the People's Republic of China. These
domestic and foreign operations employ approximately 4,850 people,
including 864 employees in the Company's joint venture located in the
People's Republic of China.

The Company was incorporated in Delaware in 1985. The Company
maintains its principal executive offices at 815 Chestnut Street,
North Andover, Massachusetts 01845 and its telephone number is (508)
688-1811. Unless the context otherwise requires or indicates,
references to the "Company" and "Watts" include the Company's
predecessors and subsidiaries.

The Company's principal subsidiaries include:

- Watts Regulator Co. of North Andover, Massachusetts, a
manufacturer of pressure regulators, temperature and pressure relief
valves, backflow preventers, flow control valves, pneumatic and
electric actuators, ball valves, and butterfly valves;

- KF Industries, Inc. of Oklahoma City, Oklahoma, a
manufacturer of high pressure floating and trunnion ball valves, check
valves, and needle valves for the oil and gas industry;

- Jameco Industries, Inc. of Wyandanch, New York, a
manufacturer of metal and plastic water supply products, including
valves, tubular products, and sink strainers;

- Henry Pratt Company of Aurora, Illinois, a manufacturer of
AWWA butterfly valves and other valve products for use in water
distribution, water treatment, waste water management, fire protection
and power generation;

- Leslie Controls, Inc. of Tampa, Florida, a manufacturer of
control valves, instrumentation, regulators, water heaters and
whistles for the naval, marine and industrial steam markets;

- Circle Seal Controls, Inc. of Corona, California, a
manufacturer of relief valves, pressure regulators, check valves,
pressure gauges and other valve products for industrial, commercial
aviation and aerospace/military applications;

- Spence Engineering Company, Inc. of Walden, New York, a
manufacturer of steam regulators and control devices;

- James Jones Company of El Monte, California, a manufacturer
of specialty bronze valves and fittings used in underground water
service connections, and bronze fire hydrants;

- Watts Automatic Control Valve, Inc. of Houston, Texas, a
manufacturer of automatic control valves;

- Nicholson Steam Trap, Inc. of Walden, New York, a
manufacturer of low pressure steam condensate traps;

- R.G. Laurence Company, Inc. of Tampa, Florida, a
manufacturer of products for the gas turbine industry;

- Watts Industries (Canada) Inc. of Woodbridge, Ontario,
Canada, a manufacturer of various water service and water quality

valves, traps, drains and other specialty products for the commercial
and industrial construction markets;

- Intermes, S.p.A. of Caldaro and Trento, Italy, a
manufacturer of plumbing and heating valves and controls with
distribution facilities in Italy, Germany, France, Austria,
Switzerland, Belgium, and Spain;

- MTR GmbH of Gemmrigheim, Germany, a distributor of plumbing
and heating valves and controls;

- Edward Barber Ltd. of Tottenham, England, a manufacturer of
valves, meter boxes and accessories for the municipal water market;

- Watts Ocean B.V. of Eerbeek, Holland, which assembles and
distributes water quality valves and manufactures check valves, double
cage pinch valves, automatic control valves and other valve systems;

- Watts SFR S.A. of Fressenneville, France, a manufacturer of
speciality relief valves, water pressure reducing valves and other
speciality valves for the water safety and flow control markets in
France and other European countries; and

- Tianjin Tanggu Watts Valve Company Limited of Tianjin,
People's Republic of China, a manufacturer of butterfly, globe and
check valves for the water distribution and industrial markets in
China and Southeast Asia.

All information appearing in this Item 1 is as of September 2,
1994, except as otherwise specified.

Recent Acquisitions

On June 27, 1994, a wholly owned subsidiary of the Company formed
Tianjin Tanggu Watts Valve Company Limited ("Tanggu Watts"), a
Chinese joint venture located in Tianjin, People's Republic of China,
with Tianjin Tanggu Valve Plant, a manufacturer of butterfly valves
and other valve products that are sold primarily to the water
distribution and industrial markets in China and exported to other
parts of the world. Tanggu Watts commenced business operations in
August 1994. Tianjin Tanggu Valve Plant's 1993 calendar year sales
were approximately $8,000,000. The Company owns a 60% controlling
interest in Tanggu Watts.

On July 28, 1994, a wholly owned subsidiary of the Company
acquired Jameco Industries, Inc. located in Wyandanch, New York.
Jameco manufactures metal and plastic water supply products including
valves, tubular products and sink strainers that are sold primarily to
the residential construction and do-it-yourself, home repair and
remodeling markets in the United States and overseas. The sales of
Jameco for the 12-month period ended June 30, 1994 were approximately
$56,000,000 with the majority of its sales concentrated in the United
States.

Products

The Company classifies its valve products into four categories:
(1) Plumbing and Heating and Water Quality, (2) Municipal Water, (3)
Steam, and (4) Industrial and Oil and Gas. The Company serves a wide
range of end users through the manufacture of valve products of many
designs, sizes and configurations.

Plumbing and Heating and Water Quality. Water plumbing and
heating valves and water supply/drainage products include a broad
line of safety relief valves, regulators, ball valves, control valves,
tubular brass products, sink strainers, faucets and drains used for
water service in residential, industrial, commercial, and
institutional applications. Watts has developed automatic temperature
and pressure relief valves and pressure-only relief valves used for
protection against overtemperature and excessive pressure build-up in
water heaters, boilers and other pressure vessels. These products
must meet stringent requirements under municipal and state regulatory
codes ("code requirements"). See "Code Compliance." Watts has also
developed self-contained water-pressure regulators, which reduce and
control supply pressure in commercial and residential water systems.
These regulators, which conserve water and protect appliances and
other equipment from excessive water pressure, are also subject to
stringent code requirements. The Company's plumbing and heating
valves also include bronze ball valves used in a wide range of
applications for controlling the flow of water within pipe lines.

The Company manufactures and sells a large number of specialty
water service products including hydronic heating control products,
vacuum relief valves, hot and cold water mixing valves, strainers,
traps, drains, dielectric unions, water hammer shock arrestors,
washing machine Duo-Cloz shut-off valves, flow switches, pilot
operated regulators, and thermostatic controls.

Jameco Industries, acquired by the Company in July 1994,
manufactures valves, sink strainers, drains, and tubular brass
products and imports for resale, vitreous china and faucets for the
residential construction and do-it-yourself, home repair and
remodeling markets. Many of these products are distributed in the
United States through retail warehouse chain stores that sell to the
do-it-yourself market.

Water quality valves include backflow preventers for preventing
contamination of potable water caused by reverse flow within water
supply lines. Customers include municipal water works and industrial,
residential, institutional, irrigation and other end users having
water supply lines.

The patented Watts No. 909 reduced pressure zone backflow
preventer line has been recognized within the industry and by certain
regulatory bodies as an important technical advance because of its
improved ability to prevent the reverse flow of contaminated water
during severe conditions of backsiphonage or backpressure in potable
water supply systems. The Company's other water quality valves include
atmospheric and continuous pressure anti-siphon vacuum breakers,

double check valves for residential and commercial service, boiler
feed and vending machine backflow preventers and hose connection and
wall and yard hydrant vacuum breakers. Most of the Company's Water
Quality Valve products are subject to code requirements. See "Code
Compliance."

Municipal Water. Municipal water valves include valves used to
manage and control the delivery of water from the source of supply to
its point of use. Watts Automatic Control Valve manufactures valves
used in municipal water systems to control flow and deliver water at a
constant pressure. James Jones Company manufactures fire hydrants,
underground service valves and fittings used for applications between
water mains and meters. Henry Pratt Company manufactures large size
AWWA butterfly valves as well as ball, plug and check valves used in
water distribution, water treatment, and waste water markets. Tanggu
Watts manufactures large butterfly valves used in municipal water
distribution. Edward Barber Ltd. manufactures valves, meter boxes and
accessories for the European municipal water market.

Steam. The Company's steam valves include pilot operated steam
temperature and pressure regulators manufactured and marketed
principally by Spence Engineering Company, Inc. These specialty
valves are marketed primarily to institutional, industrial and utility
customers. The Company's line of control valves, instrumentation,
regulators, water heaters and whistles for the naval, marine and
industrial steam markets is manufactured and sold by Leslie Controls,
Inc. The Company's line of low pressure steam condensate traps is
manufactured and sold by Nicholson Steam Trap, Inc.

Industrial and Oil and Gas. The Company's industrial products
include an extensive line of ball valves and butterfly valves
primarily for industrial process applications, as well as pneumatic
and electric actuators which open, close and modulate valves. By
offering a broad range of ball, seat, seal, stem and handle choices,
Watts is able to customize ball valves for particularly demanding
service applications. Relief, check and regulator valves for
aerospace, marine, military, cryogenic, and other specialized
applications are manufactured by Circle Seal Controls, Inc.

The Company's oil and gas valves include high pressure floating
and trunnion ball valves, check valves, and needle valves manufactured
by KF Industries, Inc. These specialty valves are marketed primarily
to oil field supply distributors. During fiscal 1994, the Company's
oil and gas business increased its international export sales as a
result of a strong international market in gas transmission pipeline
projects. The Company believes that its oil and gas business,
including the fiscal 1994 sales to gas transmission pipeline projects,
is affected by cyclical variations in industry conditions to a greater
extent than its other business operations.

Acquisitions

An important element of the Company's growth strategy is to make
strategic acquisitions of companies and product lines in related
business areas. The Company's acquisition strategy has been focused

in the valve industry and has involved (i) acquiring additional valve
products which can be sold through the Company's own distribution
network and which can benefit from the Company's manufacturing
expertise and financial support; (ii) entering new markets or
extending existing markets for specialized valves; and (iii) seeking
to acquire foreign companies to penetrate new markets. The Company
began implementing its acquisition strategy in 1984 and through
September 2, 1994 had completed 28 acquisitions of varying sizes.
After it makes an acquisition, the Company participates actively with
the management of the acquired business in implementing operating
strategies with the objective of enhancing the sales, productivity and
operating results.

The Company's present acquisition activities began in September
1984 with the purchase of Spence Engineering Company, Inc. of Walden,
New York, a manufacturer of steam regulators and control valves.
Since then, the Company has also acquired (i) James Jones Company of
El Monte, California, a manufacturer of specialty bronze valves and
fittings used in underground water service connections (acquired in
December 1986); (ii) Ocean B.V., a Netherlands-based producer of check
valves and related products for the European market (acquired in
December 1987); (iii) KF Industries, Inc. of Oklahoma City, Oklahoma,
a manufacturer of high pressure floating and trunnion ball valves and
needle valves for the oil and gas industry (acquired in July 1988);
(iv) Leslie Controls, Inc. of Tampa, Florida, a manufacturer of
control valves, instrumentation, regulators, water heaters and
whistles for the naval, marine and industrial steam markets (acquired
in July 1989); (v) Nicholson Steam Trap, Inc. of Wilkes-Barre,
Pennsylvania, a manufacturer of low pressure condensate traps
(acquired in July 1989); (vi) Circle Seal Controls, Inc. of Corona,
California, a manufacturer of relief valves, pressure regulators,
check valves and other valve products for industrial, commercial
aviation and aerospace/military applications (acquired in September
1990); (vii) Watts SFR S.A. of Fressenneville, France, a manufacturer
of specialty relief valves, water pressure reducing valves and other
specialty valves for the water safety and flow control markets in
France and other European countries (acquired in January 1991); (viii)
Henry Pratt Company of Aurora, Illinois, a manufacturer of AWWA
butterfly valves and other valve products (acquired in September
1991); (ix) Intermes, S.p.A. of Caldaro, Italy, a manufacturer of
plumbing and heating valves and controls (acquired in November 1992);
(x) Edward Barber Ltd. of Tottenham, England, a manufacturer of
valves, meter boxes and accessories for the municipal water market
(acquired in May 1993); (xi) Ancon Products, Inc. of Scarborough,
Ontario, Canada, a manufacturer of drains and other specialty products
(acquired in July 1993); (xii) Tianjin Tanggu Watts Valve Company
Limited, a joint venture company formed with Tianjin Tanggu Valve
Plant in Tianjin, People's Republic of China, a manufacturer of
butterfly, globe and check valves for the water distribution and
industrial markets (formed in June 1994); (xiii) Jameco Industries,
Inc. of Wyandanch, New York, a manufacturer of metal and plastic water
supply products (acquired in July 1994); and (xiv) other smaller
companies and product lines. Businesses and product lines acquired
from September 1984 through June 30, 1994 collectively, excluding

revenues from Jameco Industries, Inc. and Tianjin Tanggu Watts Valve
Company Limited, represented more than 60% of the Company's revenues
during the fiscal year ended June 30, 1994.

Code Compliance

Products representing a majority of the Company's sales are
subject to regulatory standards and code enforcement which typically
require that these products meet stringent performance criteria.
Standards are established by such industry test and certification
organizations as the American Society of Mechanical Engineers
(A.S.M.E.), the American Gas Association (A.G.A.), the American
Society of Sanitary Engineers (A.S.S.E.), the University of Southern
California (U.S.C.) Foundation for Cross-Connection Control, the
International Association of Plumbing and Mechanical Officials
(I.A.P.M.O.), Underwriters Laboratories (UL), Factory Mutual (F.M.),
American Water Works Association (A.W.W.A.), and the American
Petroleum Institute (A.P.I.). These standards are incorporated into
state and municipal plumbing and heating, building and fire protection
codes. The Company also meets the criteria of the Canadian Standards
Association (C.S.A.).

The Company also has agency approvals in each of the major
European markets in which it participates. These approvals include
KIWA in the Netherlands, DVGW in Germany, WRC in the United Kingdom,
AFNOR in France, SVGW in Switzerland, UNI in Italy, and ANSEAU in
Belgium.

The Company has consistently advocated the development and
enforcement of performance and safety standards. The Company
maintains quality control and testing procedures at each of its
manufacturing facilities in order to produce products in compliance
with code requirements. Additionally, a majority of the Company's
manufacturing subsidiaries have either acquired or are working to
acquire ISO 9000, 9001, or 9002 approval.

Marketing and Distribution

The Company relies primarily on commissioned representative
organizations to market its product lines. These organizations, which
accounted for approximately 63% of the Company's net sales in the
fiscal year ended June 30, 1994, sell primarily to plumbing and
heating wholesalers and industrial, steam, and oil and gas
distributors for resale to end users. The Company also sells products
directly to certain large original equipment manufacturers (OEM's) and
private label accounts. OEM's and private label accounts represented
approximately 11% of the Company's total sales in the fiscal year
ended June 30, 1994.

The Company maintains distinct channels of distribution for
marketing water service valves, underground service valves, AWWA
valves, steam valves, industrial valves, and oil and gas valves in the
United States and abroad.

Plumbing and Heating and Water Quality

Water Service Valves and Products. The Company's water service
distribution network for the United States, which distributes water
plumbing and heating, water safety and flow control and water quality
valves, consists of 84 commissioned representative organizations which
sell to over 6,000 plumbing and heating wholesalers. The Company
maintains consigned inventories of water service products at many
representatives' locations, and each representative carries the entire
line of the Company's water service products. Sales of the Company's
products generally account for more than one-half of its commissioned
representative organizations' total commission income.

Jameco Industries, Inc., acquired in July 1994, distributes its
products in the United States through retail warehouse chain stores
that sell to the do-it-yourself, home repair and remodeling markets.
The Company intends to introduce some of its other product lines to
this distribution channel.

The Company distributes water service valves in Canada through
both direct sales personnel and commissioned representative
organizations.

Municipal

Underground Service Valves. The Company markets its underground
service valves under the James JonesTM trademark through three direct
salesmen, 35 commissioned representatives and 500 water works
distributors.

AWWA Valves. The Company markets its AWWA butterfly valves as
well as ball plug and check valves through the Henry Pratt Company.
Henry Pratt has 31 commissioned representatives which sell to
distributors as well as a field sales force with 7 offices in the U.S.
Additionally, on large construction projects the Company sells
directly to end users.

Steam

Steam Valves. The Company markets its steam valves under the
SpenceR trademark through 45 commissioned representative
organizations, whose personnel are trained in the sale and technical
support of sophisticated steam products. Leslie Controls, Inc.
markets its control valves and instrumentation, regulators and
waterheaters for the naval, marine and industrial steam markets
through 68 commissioned representative organizations.

Industrial and Oil and Gas

Industrial Valves. The Company's industrial sales organization
markets its products through 60 commissioned representative
organizations who sell to over 300 industrial distributors.

Industrial distributors carry their own inventories and provide local
sales and inventory support services to their customers.

Oil and Gas Valves. The Company markets its oil and gas valves
under the KFTM trademark through 57 commissioned representative
organizations and through direct sales personnel. The Company has
sales offices in Singapore and Southampton, England for sales to the
oil and gas markets in Asia and Europe/Middle East, respectively.

The Company's agreements with its commissioned representative
organizations typically provide for territorial exclusivity, the
payment of percentage commissions and termination by either party on
30 days' notice. No commissioned representative organization,
wholesaler or distributor in any of the Company's market areas
accounted for as much as 10% of the Company's total net sales in
fiscal 1994. The Company maintains an internal staff of sales
personnel organized by product line to support the efforts of its
commissioned representative organizations. The Company also conducts
technical and product application seminars for its customers directly
and in cooperation with its commissioned representative organizations.

The Company estimates that a substantial portion of its sales are
attributable to the normal replacement and repair of valves and
systems employing valves.

The Company's foreign sales, including exports, in fiscal 1994,
1993, and 1992 were 29%, 23%, and 18%, respectively. The Company's
foreign sales other than Canadian sales consist predominantly of sales
of plumbing and heating valves, water quality, and municipal water
valves in Western Europe. Such sales increased in 1994 as compared to
1993 principally as a result of the inclusion of net sales of
Intermes, S.p.A., acquired in November 1992, Edward Barber Company,
acquired in May 1993, Ancon Products, Inc., acquired in July 1993, and
Enpoco Canada, Ltd., acquired in November 1993. Increased unit
shipments of certain product lines also contributed to the Company's
increase in foreign sales. Export sales from the United States in the
oil and gas market increased because of a strong international market
in gas transmission pipeline projects. The increase in export sales in
the oil and gas market for fiscal 1994 may not be reflective of future
export sales in the oil and gas market because of the cyclical nature
of capital intensive projects such as gas transmission pipeline
projects. The Company believes that its acquisitions of Intermes,
Edward Barber Company, Ocean B.V. in 1987, and the operating
subsidiaries of Watts Industries France S.A. in 1991 have strengthened
its manufacturing capability and broadened its distribution network in
Western Europe. See Note 12 of Notes to Consolidated Financial
Statements incorporated by reference in Item 8 for certain information
regarding the Company's foreign operations.

Tanggu Watts, the Company's joint venture which commenced
operations in August 1994, manufactures butterfly, globe and check
valves for the water distribution and industrial markets in the
People's Republic of China and for export sales to those markets in
the United States, Europe, Australia and Southeast Asia.

The Company relies predominantly on exclusive distributorship
arrangements to distribute its water segment products in foreign
countries other than Canada and Europe. The Company established a
Singapore sales office in fiscal 1993 and a Southampton, England sales
office in fiscal 1994 to service the oil and gas markets in Southeast
Asia and Europe/Middle East, respectively.

Production

The Company has a fully integrated and highly automated
manufacturing capability. The Company's machining operations feature
over 300 computer-controlled machine tools, high-speed chucking
machines and automatic screw machines. The Company's foundry
equipment includes metal pouring systems and automatic core making,
mold making and pouring capabilities. See "Properties" below.

The Company has invested heavily in recent years to expand its
manufacturing base and to ensure the availability of the most
efficient and productive equipment. Capital expenditures were
$19,928,000, $25,798,000, and $18,054,000 for fiscal 1994, 1993, and
1992, respectively. Depreciation and amortization for such periods
were $22,393,000, $20,560,000, and $17,630,000, respectively.

Two significant raw materials used in the Company's production
processes are bronze ingot and brass rod. While the Company
historically has not experienced significant difficulties in obtaining
these commodities in quantities sufficient for its operations, there
have been significant changes in their prices. The Company's gross
profit margins are adversely affected to the extent that the selling
prices of its products do not increase proportionately with increases
in the costs of bronze ingot and brass rod. Any significant
unanticipated increase or decrease in the prices of these commodities
could materially affect the Company's results of operations. As the
sales volume and the diversity of materials used in the Company's
production processes have grown, the impact from changes in the cost
of these two raw materials has somewhat diminished. In an effort to
reduce the effects of such fluctuations, the Company maintains an
active materials management program, although no assurances can be
given that this will protect the Company from changes in the prices
for bronze ingot and brass rod.

Product Engineering

The Company believes that new product development and product
engineering are important to success in the valve industry and that the
Company's position in the industry is attributable in significant part
to its ability to develop new products and to adapt and enhance
existing products. The Company employs over 275 engineers and
technicians who engage primarily in these activities.

Competition

The domestic and international markets for valves are intensely
competitive and include companies possessing substantially greater
financial, marketing and other resources than the Company. Management
considers product reputation, price, effectiveness of distribution
and breadth of product line to be the primary competitive factors.

Backlog

The Company does not believe that its backlog at any point in
time is indicative of future operating results. Backlog was
$87,938,000 at June 30, 1994 and $77,275,000 at June 30, 1993.

Patents and Trademarks

The Company owns certain patents and trademarks that it considers
to be of importance, including the U.S. patent for its No. 909
backflow preventer, which expires on December 30, 1997. The Company
has also secured patents for a backflow prevention device in several
foreign countries, including Canada, Germany, France, Italy and Japan.

With respect to its trademarks, the Company has adopted and in
some cases registered various trademarks, in the United States and
certain foreign countries. The principal trademarks of the Company
include WATTS(R), WATTS REGULATOR & Design(R), SPENCE(R), HALE(R), LESLIE(R),
PRATT(R), OCEAN(TM), JAMES JONES(TM), KF(TM), TARAS(TM), CONTROMATICS(TM),
NICHOLSON(TM), FLIPPEN(TM), CIRCLE SEAL(R) and Seal Design(R), and JAMECO and
Design(TM). The U.S. registrations of these trademarks have either a
ten or twenty year term, depending upon whether or not the
registration was issued prior to the effective date of the 1988
amendments to the Trademark Act of 1946, and are renewable if still
used in commerce for additional ten year terms.

The Company does not believe that its business as a whole is
dependent on any one or more patents or trademarks or on patent or
trademark protection generally.

Employees

At September 2, 1994, the Company had approximately 4,850
employees, of whom nearly 3,200 were engaged in production and the
balance in management, sales, engineering and administration. The
majority of the Company's employees are not covered by a collective
bargaining agreement. Employees covered by collective bargaining
agreements include 60 employees of Spence Engineering Company, Inc.,
103 employees of James Jones Company, 133 employees of Henry Pratt
Company, and 290 employees of Jameco Industries, Inc. The Company
believes that its employee relations are excellent.

Product Liability and Environmental Matters

The Company, like other worldwide manufacturing companies, is
subject to a variety of potential liabilities connected with its

business operations, including potential liabilities and expenses
associated with possible product defects or failures and compliance
with environmental laws. The Company maintains product liability and
other insurance coverage which it believes to be generally in
accordance with industry practices. Nonetheless, such insurance
coverage may not be adequate to protect the Company fully against
substantial damage claims which may arise from product defects and
failures.

Certain of the Company's operations generate solid and hazardous
wastes, which are disposed of elsewhere by arrangement with the owners
or operators of disposal sites or with transporters of such waste.
The Company's foundry and other operations are subject to various
federal, state and local laws and regulations relating to
environmental quality. Compliance with these laws and regulations
requires the Company to incur expenses and monitor its operations on
an on-going basis. The Company cannot predict the effect of future
requirements on its capital expenditures, earnings or competitive
position due to any changes in either federal, state or local
environmental laws, regulations or ordinances.

The Company is currently a party to or otherwise involved with
various administrative or legal proceedings under federal, state or
local environmental laws or regulations involving a number of sites,
in some cases as a participant in a group of potentially responsible
parties. Four of these sites, the Sharkey and Combe Landfills in New
Jersey, the San Gabriel Valley/El Monte, California water basin site,
and the Jack's Creek/Sitkin Smelting Superfund Site in Pennsylvania
are listed on the National Priorities List. With respect to the
Sharkey Landfill, the Company has been allocated .75% of the
remediation costs, an amount which is not material to the Company.
Based on recent developments, the Company elected not to enter into
the de minimis settlement proposal and has instead decided to
participate in the remediation as a participating party. No
allocations have been made to date with respect to the Combe Landfill
and San Gabriel Valley sites. With respect to the Jack's Creek Site,
the final volumetric ranking allocated a .30446% share of the total
weight to the Company, which the Company believes should entitle it to
participate as a de minimis party. In addition to the foregoing, the
Solvent Recovery Service of New England site and the Old Southington
landfill site, both in Connecticut, are on the National Priorities
List but, with respect thereto, the Company has resort to
indemnification from third parties and based on currently available
information, the Company believes it will be entitled to participate
in a de minimis capacity.

With respect to the Combe Landfill, the Company is one of
approximately 30 potentially responsible parties. The Company and all
other PRP's recently received a Supplemental Directive from the New
Jersey Department of Environmental Protection & Energy seeking to
recover approximately $9 million in the aggregate for the operation,
maintenance, and monitoring of the implemented remedial action taken
to date in connection with the Combe Landfill North site.

Given the number of parties involved in most environmental sites,
the multiplicity of possible solutions, the evolving technology and
the years of remedial activity required, it is difficult to estimate
with certainty the total cost of remediation, the timing and extent of
remedial actions which may be required, and the amount of liability,
if any, of the Company alone and in relation to other responsible
parties. Based on facts presently known to it, the Company does not
believe that the outcome of these proceedings will have a material
adverse effect on its financial condition, however, with respect to
the San Gabriel Valley/El Monte, California, site, the Company is
currently unable to estimate the potential exposure because the
process of determining the causes and extent of contamination, the
cost of remediation and the method to allocate the cost among those
ultimately determined to be responsible is in a very early stage.

The Company has established balance sheet accruals which it
currently believes are adequate in light of the probable and estimable
exposure of pending and threatened environmental litigation and
proceedings of which it has knowledge. With respect to certain of
these matters, the Company has resort either to some degree of
insurance coverage or indemnifications from third parties which are
expected to defray to some extent the effect thereof. With respect to
insurance, coverage of some of these claims has been disputed by the
carriers based on standard reservations and, therefore, recovery is
questionable, a factor which has been considered in the Company's
evaluation of these matters. Although difficult to quantify based on
the complexity of the issues and the limitation on available
information, the Company believes that its accruals for the estimated
costs associated with such matters adequately provide for the
Company's estimated foreseeable liability for these sites, however,
given the nature and scope of the Company's manufacturing operations,
there can be no assurance that the Company will not become subject to
other environmental proceedings and liabilities in the future which
may be material to the Company.

Item 2. PROPERTIES.

The Company's manufacturing operations include six casting
foundries. Castings from these foundries and other components are
machined and assembled into finished valves at 24 manufacturing
facilities. The Company maintains finished goods inventory at 29
facilities and ships customers' and commissioned representative
organizations' orders from these locations.

The Company's properties at September 2, 1994 were as follows:

Approximate
Location Square Feet Use
- - ---------------------------------------------------------------------

Domestic:

Franklin, NH 300,000 Machine shop, assembly,
testing, warehousing and
administration

Approximate
Location Square Feet Use
- - ---------------------------------------------------------------------

Franklin, NH 45,000 Bronze sand casting foundry

Wyandanch, NY 196,000 Machine shop, assembly,
testing, warehousing, and
administration

Dixon, IL 167,000 Machine shop, assembly,
testing and warehousing

Tampa, FL 150,000 Machine shop, assembly,
testing, warehousing and
administration

Oklahoma City, OK 150,000 Machine shop, assembly,
testing, warehousing and
administration

Aurora, IL 134,000 Machine shop, assembly,
testing, warehousing and
administration

Spindale, NC 124,000 Machine shop, assembly,
testing and warehousing

Spindale, NC 36,000 Bronze sand casting foundry

Houston, TX 122,000 Machine shop, assembly,
testing, warehousing and
administration

Corona, CA 95,000 Machine shop, assembly,
testing, warehousing, repair
and administration

Walden, NY 78,000 Machine shop, assembly,
testing, warehousing and
administration

Chesnee, SC 70,000 Machine shop, assembly and
testing

El Monte, CA 57,000 Bronze sand casting foundry,
machine shop, assembly,
testing, warehousing and
administration

North Andover, MA 45,000 Corporate headquarters,
administration and
engineering

Approximate
Location Square Feet Use
- - ---------------------------------------------------------------------

Canaan, NH 32,000 Machine shop, assembly and
testing

Milford, NH 30,000 Machine shop, assembly and
testing

Fairfield, NJ 16,000 Service and repair

Cerritos, CA 13,000 Service, repair and
warehousing

West Babylon, NY 8,000 Warehousing

Canada:

Scarborough, Ontario, 56,000 Assembly, warehousing and
administration

Woodbridge, Ontario, 55,000 Machine shop, assembly,
testing, warehousing and
administration

Burlington, Ontario, 30,000 Machine shop, assembly,
testing, warehousing and
administration

Montreal, Quebec 28,000 Machine shop, assembly,
testing, warehousing and
administration
Europe:

Trento, Italy 182,000 Machine shop, assembly,
testing, warehousing and
administration

Caldaro, Italy 106,000 Machine shop, assembly,
testing, warehousing and
administration

Fressenneville, France 93,000 Machine shop, assembly,
testing, warehousing, bronze
foundry and administration

Eerbeek, The 55,000 Machine shop, assembly,
Netherlands testing, warehousing and
administration

Tottenham, England 40,000 Machine shop, assembly,
testing, warehousing and
administration

Approximate
Location Square Feet Use
- - ---------------------------------------------------------------------

Gemmrigheim, Germany 21,000 Warehousing, administration

Willesden, England 20,000 Bronze sand casting foundry

Barcelona, Spain 16,000 Machine shop, assembly,
testing, warehousing and
administration

Milan, Italy 16,000 Warehousing, administration

Lustenau, Austria 12,000 Warehousing, administration

Aartrijke, Belgium 5,000 Warehousing, administration

Paris, France 2,000 Warehousing, administration

Asia:

Tianjin, People's 246,000 Machine shop, assembly,
Republic of China testing, warehousing, iron
foundry and administration

All of these facilities and the related real estate are owned by
the Company, except the service centers in Fairfield, New Jersey and
Cerritos, California, and the properties in West Babylon, New York;
Paris, France; Barcelona, Spain; Aartrijke, Belgium; and Scarborough
and Montreal, Canada. The buildings and facilities located in
Tianjin, People's Republic of China are leased by Tianjin Tanggu Watts
Valve Company Limited under a 30-year lease agreement. All other lease
terms expire before 1997. Certain of these facilities are subject to
mortgages and collateral assignments under loan agreements with long-
term lenders. In general, the Company believes that its properties,
including machinery, tools and equipment, are in good condition, well
maintained, adequate and suitable for their intended uses. The Company
believes that the manufacturing facilities are currently operating at
a level that management considers normal capacity. This utilization is
subject to change as a result of increases or decreases in sales.

All information appearing in this Item 2 is as of September 2,
1994, except as otherwise specified.

Item 3. LEGAL PROCEEDINGS.

Item 3(a). The Company is from time to time involved in various
legal and administrative procedures. See "Business-Product Liability
and Environmental Matters".

Item 3(b). None.

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

There were no matters submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders
through solicitation of proxies or otherwise.

PART II

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

Market Information

The Class A Common Stock of the Company has been traded in the
over-the-counter market and reported on the National Market System of
the National Association of Securities Dealers Automated Quotation
("NASDAQ") System since its initial public offering in August 1986.
The following tabulation sets forth the high and low sales prices of
the Company's Class A Common Stock on the over-the-counter market as
reported by the National Market System of NASDAQ for the periods
indicated:

Market Prices
________________________________________
Fiscal Year Ended Fiscal Year Ended
June 30, 1994 June 30, 1993
Fiscal Quarters High Low High Low

First $22 1/16 $17 1/8 $24 1/2 $22
Second 25 1/4 21 1/4 25 1/8 22
Third 28 5/8 23 1/2 24 1/4 19 1/2
Fourth 27 22 1/4 20 5/8 17 11/16

There is no established public trading market for the Class B
Common Stock of the Company, which is held exclusively by members of
the Horne family and management. The principal holders of such stock
are subject to restrictions on transfer with respect to their shares.
Each share of Class B Common Stock of the Company is convertible into
one share of Class A Common Stock. All share prices shown reflect a
two-for-one stock split of the Company's Common Stock effected by
means of a stock dividend payable on March 15, 1994 (the "Stock
Split").

Holders

The number of record holders of the Company's Class A Common Stock
as of September 2, 1994 was 295. The Company believes that the number
of beneficial shareholders of the Company's Class A Common Stock was
in excess of 4,500 as of September 2, 1994.

The number of record holders of the Company's Class B Common Stock
as of September 2, 1994 was 11.

Each share of Class B Common Stock is entitled to ten votes per
share and each share of Class A Common Stock is entitled to one vote
per share. As of September 2, 1994, shares of Class B Common Stock
representing approximately 77.0% of the Company's outstanding voting
power were held under a voting trust for which Timothy P. Horne,
Chairman of the Board, President and Chief Executive Officer of the
Company, and Frederic B. Horne, Corporate Vice President of the
Company, serve as trustees. The voting trust requires concurrence of
the two trustees with respect to votes involving the election of
Directors of the Company and gives Timothy P. Horne the ultimate
ability to vote shares held in the voting trust in connection with
other matters submitted to shareholders. See Item 12.

Dividends

The following tabulation sets forth the cash dividends paid by the
Company for the periods indicated:

Fiscal Quarter
Fiscal Year _______________________________________
Ended June 30 First Second Third Fourth Total

1993 .035 .035 .045 .045 .16
1994 .045 .045 .055 .055 .20

Aggregate common stock dividend payments for fiscal 1994, 1993,
and 1992 were $5,884,000, $4,785,000, and $3,637,000, respectively.
While the Company presently intends to continue to pay cash dividends,
payment of future dividends necessarily depends upon the Board of
Directors' assessment of the Company's earnings, financial condition,
capital requirements and other factors. All cash dividends shown
reflect the Stock Split.

Item 6. SELECTED FINANCIAL DATA.

The following items included in the Fifteen Year Financial Summary
on pages 26 and 27 of the Annual Report to Stockholders for the fiscal
year ended June 30, 1994 are incorporated herein by reference:

Operating Data - Net sales
- Net earnings
Investment Data - Total assets
- Capital employed: Total debt
Per Share Data - Net earnings - Fully diluted
- Common cash dividends

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

The information set forth in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 22 through
25 of the Annual Report to Stockholders for the fiscal year ended
June 30, 1994 is incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the Company set forth on
pages 10 through 21 of the Annual Report to Stockholders for the
fiscal year ended June 30, 1994 are incorporated herein by reference.

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

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information appearing under the caption "Information as to
Nominees for Director" in the registrant's definitive proxy statement
dated September 14, 1994 relating to the Annual Meeting of
Stockholders to be held on October 18, 1994 is incorporated herein by
reference. The executive officers of the Company are as follows:

Name Position Age

Timothy P. Horne Chairman of the Board, President 56
and Chief Executive Officer
and Director

David A. Bloss, Sr. Executive Vice President and 44
Director

Frederic B. Horne Corporate Vice President and 44
Director

Kenneth J. McAvoy Vice President of Finance, Chief 54
Financial Officer, Treasurer,
Executive Vice President of European
Operations, Secretary and Director

Robert T. McLaurin Corporate Vice President of 63
Asian Operations

Michael O. Fifer Vice President of Corporate 37
Development

William C. McCartney Corporate Controller 40

Suzanne M. Zabitchuck Corporate Counsel and 39
Assistant Secretary

Timothy P. Horne joined the Company in September 1959 and has been
a Director since 1962. Mr. Horne served as the Company's President
from 1976 to 1978 and as President and Chief Executive Officer from
1978 to April 1986. In April 1986, Mr. Horne became the Company's

Chairman of the Board and Chief Executive Officer. Mr. Horne became
the Company's President in January 1994.

David A. Bloss, Sr., joined the Company as Executive Vice
President in July 1993 and has been a Director since January 1994.
Prior to joining the Company, Mr. Bloss was for five years associated
with the Norton Company, a manufacturer of abrasives and cutting
tools, serving most recently as President of the Superabrasives
Division. He also spent seven years with Cooper Industries.

Frederic B. Horne, brother of Timothy P. Horne, has been Corporate
Vice President of the Company since August 1987 and a Director since
1980. Mr. Horne served as the Company's Vice President and General
Manager from 1978 to August 1987. He joined the Company in 1973.

Kenneth J. McAvoy has been Vice President of Finance since 1984
and Chief Financial Officer and Treasurer since June 1986, and has
been been a Director since January 1994. Mr. McAvoy was also appointed
Executive Vice President of European Operations in January 1994. Mr.
McAvoy has also served as Secretary or Clerk since January 1985. He
joined the Company in 1981 as Corporate Controller.

Robert T. McLaurin was appointed Corporate Vice President of Asian
Operations in August 1994. He served as the Senior Vice President of
Manufacturing of Watts Regulator Co. from 1983 to August 1994. He
joined Watts Regulator Company as Vice President of Manufacturing in
1978.

Michael O. Fifer joined the Company in May 1994 and was appointed
the Company's Vice President, Corporate Development. Prior to joining
the Company, Mr. Fifer was Associate Director of Corporate Development
with Dynatech Corp., a diversified high-tech manufacturer, from 1991
to April 1994. Mr. Fifer also served as President of PYSB, Inc., a
manufacturer of resin-composite transportation products from 1990 to
1991.

William C. McCartney has been Corporate Controller of the Company
since April 1988. He joined the Company in 1985 as Controller. Prior
to that time he was for four years subsidiary Controller for Gould
Electronics, Inc., a manufacturer of factory automation equipment.

Suzanne M. Zabitchuck has been Corporate Counsel of the Company
since joining the Company in December 1992. Ms. Zabitchuck was
appointed Assistant Secretary in August 1993. Prior to joining the
Company, she was associated with The Stride Rite Corporation, a shoe
manufacturer, serving most recently as Associate General Counsel and
Clerk.

Item 11. EXECUTIVE COMPENSATION.

The information appearing under the caption "Compensation
Arrangements" in the registrant's definitive proxy statement dated
September 14, 1994 relating to the Annual Meeting of Stockholders to
be held on October 18, 1994 is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

The information appearing under the caption "Principal and
Management Stockholders" in the registrant's definitive proxy
statement dated September 14, 1994 relating to the Annual Meeting of
Stockholders to be held on October 18, 1994 is incorporated herein by
reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information appearing under the caption "Compensation
Arrangements-Certain Transactions" in the registrant's definitive
proxy statement dated September 14, 1994 relating to the Annual
Meeting of Stockholders to be held on October 18, 1994 is incorporated
herein by reference.

PART IV

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

(a)(1) Financial Statements

The response to this portion of Item 14 is submitted as a
separate section of this Annual Report.

(a)(2) Schedules

The response to this portion of Item 14 is submitted as a
separate section of this Annual Report.

(a)(3) Exhibits

Exhibits 10.1 - 10.6, 10.8 and 10.24 constitute all of the
management contracts and compensation plans and arrangements of the
Company required to be filed as exhibits to this Annual Report.

Exhibit No. Description

10.6 Retirement Plan for Salaried Employees, as amended.
(6)
10.7 Registration Rights Agreement dated as of July 25,
1986. (7)
10.8 Executive Incentive Bonus Plan. (13)
10.9 Indenture dated as of December 1, 1991 between the
Registrant and The First National Bank of Boston,
as Trustee, including form of 8-3/8% Note Due
2003. (10)
10.10 Loan Agreement and Mortgage among The Industrial
Development Authority of the State of New
Hampshire, Watts Regulator Co. and Arlington
Trust Company dated as of August 1, 1985. (5)
10.11 Amendment Agreement relating to Watts Regulator Co.
(Canaan and Franklin, New Hampshire, facilities)
financing dated as of December 31, 1985. (5)
10.12 Sale Agreement between Village of Walden Industrial
Development Agency and Spence Engineering
Company, Inc. dated as of June 1, 1994. *
10.13 Letter of Credit, Reimbursement and Guaranty
Agreement dated June 1, 1994 by and among the
Registrant, Spence Engineering Company, Inc. and
First Union National Bank of North Carolina. *
10.14 Trust Indenture from Village of Walden Industrial
Development Agency to the First National Bank of
Boston, as Trustee, dated as of June 1, 1994. *
10.15 Loan Agreement between Hillsborough County
Industrial Development Authority and Leslie
Controls, Inc. dated as of July 1, 1994. *
10.16 Letter of Credit, Reimbursement and Guaranty
Agreement dated July 1, 1994 by and among the
Registrant, Leslie Controls, Inc. and First Union
National Bank of North Carolina. *
10.17 Trust Indenture from Hillsborough County Industrial
Development Authority to the First National Bank
of Boston, as Trustee, dated as of July 1, 1994.*
10.18 Bond Purchase Agreement among The Rutherford County
Industrial Facilities and Pollution Control
Financing Authority, Northwestern Bank and
Regtrol, Inc. dated as of October 1, 1984. (5)
10.19 Loan Agreement between The Rutherford County
Industrial Facilities and Pollution Control
Financing Authority and Regtrol, Inc. dated as of
October 1, 1984. (5)
10.20 Agreement as to Financial Covenants between
Northwestern Bank and Watts Regulator Co. dated
as of October 1, 1984. (5)
10.21 Guaranty Agreement from Watts Regulator Co. to
Northwestern Bank dated as of October 1, 1984.
(5)
10.22 Amendment Agreement relating to Regtrol, Inc.
financing dated as of January 1, 1986. (5)
10.23 Amended and Restated Stock Restriction Agreement
dated as of October 30, 1991. (3)

10.24 Watts Industries, Inc. 1991 Non-Employee Directors'
Nonqualified Stock Option Plan. (9)
10.25 Letters of Credit relating to retrospective paid
loss insurance programs. (13)
10.26 Form of Master Agreement, dated as of April 15,
1986, relating to interest rate swap transaction
and forms of related Rate Swap Agreements. (7)
10.27 Form of Stock Restriction Agreement for management
stockholders. (7)
10.28 Revolving Credit Agreement dated December 23, 1987
between Nederlandse Creditbank NV and Watts
Regulator (Nederland) B.V. and related Guaranty
of Watts Industries, Inc. and Watts Regulator Co.
dated December 14, 1987. (8)
10.29 Loan Agreement dated September 1987 with, and
related Mortgage to, N.V. Sallandsche Bank. (8)
10.30 Agreement and Plan of Merger dated as of August 22,
1991 relating to the acquisition by the Registrant
of Henry Pratt Company. (11)
10.31 Agreement of the sale of shares of Intermes, S.p.A.,
RIAF Holding A.G. and the participations in
Multiscope Due S.R.L. dated as of November 6,
1992. (12)
10.32 Revolving Credit Agreement dated August 30, 1994
between and among Watts Investment Company,
certain financial institutions, the First National
Bank of Boston, as Agent, and the Registrant, as
Guarantor. *
11 Statement Regarding Computation of Earnings per
Common Share. +
13 1994 Annual Report to Stockholders. * (This Report,
except for those portions thereof which are
expressly incorporated by reference into this
Report on Form 10-K, is not to be deemed "filed"
with the Securities and Exchange Commission.)
21 Subsidiaries. *
23.1 Consent of Ernst & Young, Independent Auditors. +
23.2 Consent of Deloitte & Touche, Independent Auditors. +
27 Financial Data Schedule. *

<FN>

(1) Incorporated by reference to the relevant exhibit to the
Registrant's Registration Statement on Form S-3 (No. 33-43983)
filed with the Securities and Exchange Commission on November 15,
1991.

(2) Incorporated by reference to the relevant exhibit to the
Registrant's Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 15, 1992.

(3) Incorporated by reference to the relevant exhibit to the
Registrant's Current Report on Form 8-K filed with the Securities
and Exchange Commission on November 14, 1991.

(4) Incorporated by reference to the relevant exhibit to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on September 28, 1989.

(5) Incorporated by reference to the relevant exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-6515)
filed with the Securities and Exchange Commission on June 17,
1986.

(6) Incorporated by reference to the relevant exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-6515)
filed with the Securities and Exchange Commission as part of the
First Amendment to such Registration Statement on July 30, 1986.

(7) Incorporated by reference to the relevant exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-6515)
filed with the Securities and Exchange Commission as part of the
Second Amendment to such Registration Statement on August 21,
1986.

(8) Incorporated by reference to the relevant exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-27101)
filed with the Securities and Exchange Commission on February 16,
1989.

(9) Incorporated by reference to the relevant exhibit to the
Registrant's Amendment No. 1 to Form 10-K for fiscal 1992 filed
with the Securities nd Exchange Commission on March 11, 1993.

(10) Incorporated by reference to the relevant exhibit to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on September 16, 1992.

(11) Incorporated by reference to Exhibit 10.33 to the Registrant's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on September 24, 1991.

(12) Incorporated by reference to the relevant exhibit to the
Registrant's Amendment No. 2 to Form 8-K dated November 6, 1992
filed with the Securities and Exchange Commission on February 22,
1993.

(13) Incorporated by reference to the relevant exhibit to the
Registrant's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 24, 1993.

* Filed herewith.

+ Filed herewith as a separate section of this report.

(b) Reports on Form 8-K.

The Registrant did not file any reports on Form 8-K during the
last quarter of the period covered by this Annual Report.

The response to this portion of Item 14 is submitted as a
separate section of this Annual Report.

(d) Financial Statement Schedules.

The response to this portion of Item 14 is submitted as a
separate section of this Annual Report.

</FN>

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.

WATTS INDUSTRIES, INC.

/S/ Timothy P. Horne
By: ---------------------------
Timothy P. Horne
Chairman of the Board, President,
and Chief Executive Officer

DATED: September 23, 1994

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

Signature Title Date

/S/ Timothy P. Horne
- - -------------------- Chairman of the Board, September 23, 1994
Timothy P. Horne President and Chief Executive
Officer (Principal Executive
Officer) and Director

/S/ Kenneth J. McAvoy
- - -------------------- Vice President of Finance September 23, 1994
Kenneth J. McAvoy and Treasurer (Principal
Financial and Accounting Officer),
Secretary, and Director

/S/ David A. Bloss, Sr.
- - --------------------- Executive Vice President and September 23, 1994
David A. Bloss, Sr. Director

/S/ Frederic B. Horne
- - --------------------- Corporate Vice President and September 23, 1994
Frederic B. Horne Director

/S/ Noah T. Herndon
- - --------------------- Director September 23, 1994
Noah T. Herndon

/S/ Wendy E. Lane
- - --------------------- Director September 23, 1994
Wendy E. Lane

/S/ Gordon W. Moran
- - --------------------- Director September 23, 1994
Gordon W. Moran

/S/ Daniel J. Murphy, III
- - --------------------- Director September 23, 1994
Daniel J. Murphy, III

ANNUAL REPORT ON FORM 10-K

ITEM 14(a)(1) and (2), (c) and (d)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

CERTAIN EXHIBITS

FINANCIAL STATEMENT SCHEDULES

YEAR ENDED JUNE 30, 1994

WATTS INDUSTRIES, INC.

NORTH ANDOVER, MASSACHUSETTS

FORM 10-K--ITEM 14(a)(1) AND (2)

WATTS INDUSTRIES, INC. AND SUBSIDIARIES

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of Watts Industries, Inc. and
subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended June 30, 1994, are incorporated by reference in
Item 8:

Consolidated balance sheets--June 30, 1994 and 1993

Statements of consolidated earnings--Years ended June 30, 1994, 1993
and 1992

Statements of consolidated stockholders' equity--Years ended June 30,
1994, 1993 and 1992

Statements of consolidated cash flows--Years ended June 30, 1994,
1993 and 1992

Notes to consolidated financial statements--June 30, 1994

The following consolidated financial statement schedules of Watts Industries,
Inc. and subsidiaries are included in
Item 14(d):

Schedule I--Marketable Securities--Other Investments

Schedule II--Amounts Receivable from Related Parties and Underwriters,
Promoters and Employees Other than Related Parties

Schedule V--Property, Plant and Equipment

Schedule VI--Accumulated Depreciation, Depletion and Amortization of
Property, Plant and Equipment

Schedule VIII--Valuation and Qualifying Accounts

Schedule X--Supplementary Income Statement Information

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and,
therefore, have been omitted.

Supplemental Reports of Independent Auditors

Schedule I-Marketable Securities--Other Investments

Watts Industries, Inc. and Subsidiaries

June 30, 1994
(Dollar amounts in thousands)

Column A Column B Column C Column D Column E
Amount at Which
Number of Each Portfolio of
Shares or Units- Equity Security
Principal Market Value Issues and Each
Amounts of of Each Issue at Other Security
Bonds and Cost of Each Balance Sheet Issue Carried in
Name of Issuer and Title of Each Issue Notes Issue Date the Balance Sheet

Maturity Date/
Municipal Bonds Rate Putable Date

Atlantic Highlands NJ 7.20% 1/01/06 $ 55 $ 58 $ 57 $ 57
Colorado Hsg Fin Put 4.00 8/01/94 565 573 566 566
Duplin Cnty Ctf Partn 2.75 8/01/94 250 250 250 250
Hillsborough Cnty Fl Util 4.70 8/01/94 875 892 877 877
Indiana St Toll 9.40 7/01/05 1,000 1,083 1,076 1,076
Maricopa County Ariz Sch Dist 3.38 7/29/17 1,500 1,511 1,501 1,501
Massachusetts Whsl 13.00 7/01/18 300 335 322 322
Metropolitan Trans Auth 9.88 7/01/15 125 129 128 128
Michigan St Bldg Auth Rev 3.00 4/01/99 1,865 1,874 1,872 1,872
New York City Mun Water Fin A 9.25 6/15/15 500 543 540 540
New York City Ut Series B 10.88 11/15/14 125 138 143 143
New York St Energy Resh 3.00 12/01/14 500 501 501 501
New York St Med Care Facs 9.75 1/15/25 340 372 359 359
New York St Power Auth Rev 10.38 1/01/16 355 392 369 369
Phoenix Ariz Civic Put 7.00 7/01/27 100 104 100 100
Pueblo County Colo 5.00 12/01/94 100 101 101 101
Puerto Rico Hsg Bk & Fin AG 7.13 12/01/04 100 107 105 105
Santa Ana Calif Cnty Redev 2.75 9/01/94 520 520 520 520
Student Loan Funding Put 3.70 12/01/01 1,500 1,505 1,500 1,500
Triborough Bridge & Tunnel NY 6.45 1/01/95 200 208 204 204
Triborough Bridge & Tunnel NY 9.00 1/01/11 200 216 215 215
Total Municipal Bonds 11,412 11,306 11,306

Schedule I-Marketable Securities--Other Investments (continued)

Watts Industries, Inc. and Subsidiaries

June 30, 1994
(Dollar amounts in thousands)

Maturity Date/
U.S. Government Obligations Rate Putable Date

U.S. Treasury Note 3.88% 2/28/95 $ 2,000 $ 2,006 $ 2,006 $ 2,006
U.S. Treasury Note 3.88 3/31/95 1,000 1,004 1,004 1,004
Total U.S. Government Obligations 3,010 3,010 3,010

Corporate Obligations

AMEX Credit Corp 5.95% 1/27/95 1,000 1,027 1,010 1,010
American General Corp 9.50 12/15/94 1,000 1,076 1,017 1,017
Atlantic Richfield Co 8.65 3/31/95 1,000 1,068 1,034 1,034
Beneficial Corp 9.55 5/26/95 1,000 1,076 1,047 1,047
Commercial Credit Group 6.95 10/01/94 1,000 1,040 1,007 1,007
Dillard Dept Stores 9.63 5/15/95 1,000 1,083 1,047 1,047
First Chicago Corp 8.88 9/15/94 1,000 1,065 1,010 1,010
Ford Motor Credit Co 9.75 11/04/94 1,000 1,081 1,019 1,019
General Electric Co 5.88 12/01/94 1,000 1,024 1,007 1,007
JP Morgan and Co Inc 8.88 8/01/94 1,000 533 502 502
Pactel Capital 8.95 6/20/95 1,000 1,068 1,044 1,044
Pennsylvania Electric Co Resources GTD 8.50 11/01/94 1,000 1,064 1,015 1,015
Philip Morris Cos Inc 9.10 11/14/95 1,000 1,039 1,036 1,036
Total Corporate Obligations 13,244 12,795 12,795

Schedule I-Marketable Securities--Other Investments (continued)

Watts Industries, Inc. and Subsidiaries

June 30, 1994
(Dollar amounts in thousands)

Column A Column B Column C Column D Column E
Amount at Which
Number of Each Portfolio of
Shares or Units- Equity Security
Principal Market Value Issues and Each
Amounts of of Each Issue Other Security
Bonds and Cost of Each at Balance Issue Carried in
Name of Issuer and Title of Each Issue Notes Issue Sheet Date the Balance Sheet

Maturity Date/
Commercial Paper Rate Putable Date

Associates Corp of NA 4.30% 7/06/94 $ 255 $ 254 $ 254 $ 254
Florida Power and Light 4.24 7/15/94 4,991 4,991 4,991 4,991
Household Fin Corp 4.20 7/06/94 100 100 100 100
Pennsylvania Power and Light 4.24 7/15/94 1,497 1,497 1,497 1,497
Total Commercial Paper 6,842 6,842 6,842

Money Market and Mutual Funds (In thousands)
Units
Alliance Capital Reserves 30 30 30 30
Laurel Funds Inc Govt MMII 12,860 12,860 12,860 12,860
Laurel Funds Inc Prime II 76 76 76 76
First Union Treasury MMF 341 341 341 341
Lehman Prime MMF 7,058 7,058 7,058 7,058
Lehman Govt Obligations MMF 4,348 4,348 4,348 4,348
Merrill Lynch Institutional MMF 103 103 103 103
Total Money Market and Mutual Funds 24,816 24,816 24,816

Total short-term investments $59,324 $58,769 $58,769

Schedule II-Amounts Receivable from Related Parties and Underwriters,
Promoters and Employees Other than Related Parties

Watts Industries, Inc. and Subsidiaries

(Dollar amounts in thousands)

Column A Column B Column C Column D Column E
Deductions Balance at End of Period
Balance at Beginning of
Name of Debtor Period Additions Amounts Collected Amounts Written Off Current Not Current

Year ended June 30, 1994:
Charles W. Grigg,

Noninterest-bearing note
receivable due upon sale of
certain common stock of

Company $222 $185 $407 (1)

Year ended June 30, 1993:
Charles W. Grigg,

Noninterest-bearing note
receivable, due upon sale of
certain common stock of

Company 120 102 $222

Year ended June 30, 1992:
Charles W. Grigg,

Noninterest-bearing note
receivable, due upon sale of
certain common stock of
Company 120 $120
<FN>

(1) Amount collected represents the sale of 7,200 shares of Class A Common
Stock to the Company at $48.50 per share and a cash remittance of $57,800.
</FN>

Schedule V-Property, Plant and Equipment

Watts Industries, Inc. and Subsidiaries

(Dollar amounts in thousands)

Column A Column B Column C Column D Column E Column F
Balance at Beginning Other Changes--Add Balance at End of
Classification of Period Additions at Cost(2) Retirements (Deduct)--Describe(1) Period

Year ended June 30, 1994:

Land $ 11,247 $ 34 $ (18) $ 11,263
Buildings and improvements 59,951 2,250 78 62,279
Machinery and equipment 142,384 10,050(4) $9,070 6,288 149,652
Construction in progress (5) 4,665 8,657 (6,141) 7,181
Totals $218,247 $20,991 $9,070 $ 207 $230,375

Year ended June 30, 1993:

Land $ 8,114 $ 1,842 $ 1,291 $ 11,247
Buildings and improvements 38,494 17,342(4) 4,115 59,951
Machinery and equipment 121,258 13,727(4) $2,374 9,773 142,384
Construction in progress (5) 6,674 14,319(4) (16,328) 4,665
Totals $174,540 $47,230 $2,374 $ (1,149) $218,247

Year ended June 30, 1992:

Land $ 7,899 $ 256 $ 25 $ (16) $ 8,114
Buildings and improvements 34,556 3,676 358 620 38,494
Machinery and equipment 100,969 18,244(4) 656 2,701 121,258
Construction in progress (5) 1,625 7,205(4) (2,156) 6,674
Totals $145,049 $29,381 $1,039 $ 1,149 $174,540

<FN>

(1) Adjustment due to the effect of exchange ate changes on translating
property, plant and equipment of foreign subsidiaries in accordance with FASB
Statement No. 52, "Foreign Currency Translation."

(2) Includes $1,063,000 in 1994, $21,432,000 in 1993 and $11,327,000
in 1992 of assets of acquired businesses.

(3) The annual provisions for depreciation have been computed using the
straight-line method in accordance with the following range of percentages:

Buildings and improvements 2.5% to 10%
Machinery and equipment 6.7% to 33.3%

(4) Includes acquisition cost of machinery and assembly centers in:

Year Location
1994 Ontario, Canada
1993 Caldero and Trento, Italy and Tottonham, England
1992 Dixon and Aurora, Illinois

(5) Certain capital projects are recorded in construction in progress and
allocated to machinery and equipment and buildings and improvements when
placed into service.

</FN>

Schedule VI-Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment

Watts Industries, Inc. and Subsidiaries

(Dollar amounts in thousands)

Column A Column B Column C Column D Column E Column F
Additions Charged
Balance at Beginning to Cost and Other Changes--Add Balance at End of
Description of Period Expenses Retirements (Deduct)--Describe(1) Period

Year ended June 30, 1994:

Buildings and improvements $ 7,555 $ 914 $ 9 $ 8,478
Machinery and equipment 76,431 17,789 $8,660 88 85,648
Totals $83,986 $18,703 $8,660 $ 97 $ 94,126

Year ended June 30, 1993:

Buildings and improvements $ 6,406 $ 1,192 $ (43) $ 7,555
Machinery and equipment 62,761 15,679 $1,571 (438) 76,431
Totals $69,167 $16,871 $1,571 $(481) $83,986

Year ended June 30, 1992:

Buildings and improvements $ 5,689 $ 723 $ 25 $ 19 $ 6,406
Machinery and equipment 49,051 13,977 442 175 62,761
Totals $54,740 $14,700 $ 467 $ 194 $69,167

<FN>

(1) Adjustment due to the effect of exchange rate changes on translating
property, plant and equipment of foreign subsidiaries in accordance with
FASB Statement No. 52, "Foreign Currency Translation."

Schedule VIII-Valuation and Qualifying Accounts

Watts Industries, Inc. and Subsidiaries

(Dollar amounts in thousands)

Column A Column B Column C Column D Column E
Deductions
Balance at Beginning of Charged to Costs Charged to Other Deductions-- Balance at End of
Description Period and Expenses Accounts--Describe Describe(1) Period

Year ended June 30, 1994:
Deducted from asset account:
Allowance for doubtful
accounts $3,565 $1,726 $137 (2) $ 940 $4,488

Year ended June 30, 1993:
Deducted from asset account:
Allowance for doubtful
accounts $2,586 $1,460 $808 (2) $1,289 $3,565

Year ended June 30, 1992:
Deducted from asset account:
Allowance for doubtful
accounts $1,642 $1,393 $264 (2) $ 713 $2,586

<FN>

(1) Uncollectible accounts written off, net of recoveries.

(2) Balance acquired in connection with acquisition of Ancon, Inc. in 1994,
Intermes in 1993 and Henry Pratt Company and Contromatics, Inc. in 1992.

Schedule X-Supplementary Income Statement Information

Watts Industries, Inc. and Subsidiaries

(Amounts in thousands)

Column A Column B

Item Charged to Costs and Expenses

Fiscal year ended June 30

1994 1993 1992
---- ---- ----

Maintenance and repairs $5,400 $5,265 $5,541

Depreciation and amortization of intangible
assets (1)

Taxes, other than payroll and income taxes (1)

Royalties (1)

Advertising costs (1)

<FN>

(1) Amounts for these expenses are not presented as such amounts are less
than 1% of total sales and revenues.

Exhibit 11

Computation of Net Earnings Per Common Share

Watts Industries, Inc.

(Amounts in thousands, except per share information)

Fiscal year ended June 30
1994 1993 1992

Primary
Average shares outstanding:
Class A Common Stock, par value $.10 17,969 18,404 16,516
Class B Common Stock, par value $.10 11,488 11,490 11,512
Net effect of dilutive stock options--based
upon treasury stock method using
average market price
217 196 298
Total 29,674 30,090 28,326

Earnings before cumulative effect of change
in accounting $41,010 $30,406 $36,625
Cumulative effect of change in accounting (3,132)
Net earnings $41,010 $27,274 $36,625

Earnings per Common Share:

Earnings before cumulative effect of change
in accounting $ 1.38 $ 1.01 $ 1.29
Cumulative effect of change in accounting (.10)
Net earnings $ 1.38 $ .91 $ 1.29

Exhibit 11

Computation of Net Earnings Per Common Share (continued)

Watts Industries, Inc.

(Amounts in thousands, except per share information)

Fiscal year ended June 30
1994 1993 1992

Fully Diluted
Average shares outstanding:

Class A Common Stock, par value $.10 17,969 18,404 16,516
Class B Common Stock, par value $.10 11,488 11,490 11,512
Net effect of dilutive stock options--based
upon treasury stock method using ending
market price, if higher than average
market price 260 204 298
Assumed conversion of 7 3/4% convertible
subordinated debentures 1,754
Total 29,717 30,098 30,080

Earnings before cumulative effect of change
in accounting $41,010 $30,406 $36,625
Cumulative effect of change in accounting (3,132)
Add 7 3/4% convertible subordinated debentures
interest, net of income tax effect 1,459
$41,010 $27,274 $38,084

Earnings per Common Share:

Earnings before cumulative effect of change
in accounting $ 1.38 $ 1.01 $ 1.27
Cumulative effect of change in accounting (.10)
Net earnings $ 1.38 $ .91 $ 1.27

<FN>

All share and per share information have been restated for all periods presented
above to reflect the stock split effected in March 1994 as discussed in Note 7
to the Consolidated Financial Statements.

Exhibit 23.1--Consent of Independent Auditors

We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Watts Industries, Inc. of our report dated August 5, 1994, included in the
1994 Annual Report to Shareholders of Watts Industries, Inc.

Our audits also included the financial statements schedules of Watts Industries,
Inc. listed in Item 14(a). These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. We did not audit the financial statements of Watts Industries Europe
B.V., a consolidated subsidiary, which statements reflect total assets of
$107,729,000 and $100,219,000 at June 30, 1994 and 1993 and total revenues of
$79,709,000 and $57,645,000 for the years then ended. We have been furnished
with the report of Deloitte & Touche with respect to Schedules V, VI, VIII and X
of Watts Industries Europe B.V. In our opinion, based on our audits and the
report of other auditors, the financial statement schedules referred to above,
when considered in relation to the basic consolidated financial statements taken
as a whole, present fairly in all material respects the information set therein.

We also consent to the incorporation by reference in the Registration Statements
(Post-Effective Amendment No. 1 to Form S-8 No. 33-30377) pertaining to the 1986
Incentive Stock Option Plan and (Form S-8 No. 33-37926) pertaining to the
Nonqualified Stock Option Plan of Watts Industries, Inc. and in the related
Prospectuses of our report dated August 5, 1994, with respect to the
consolidated financial statements incorporated herein by reference, and our
report included in the preceding paragraph with respect to the financial
statement schedules included in this Annual Report (Form 10-K) of Watts
Industries, Inc.

ERNST & YOUNG

Boston, Massachusetts
September 19, 1994

Independent Auditor's Report

Board of Directors
Watts Industries Europe B.V.

We have audited the accompanying financial statements including the
consolidated/combined financial statements of Watts Industries Europe B.V.
at Eerbeek for the fiscal years ended June 30, 1994 and 1993 (not separately
presented herein) expressed in Dutch Guilders. These financial statements are
the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the Netherlands and the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatements.
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/combined financial statements referred to
above present fairly, in all material respects, the consolidated/combined
financial position of Watts Industries Europe B.V. at June 30, 1994 and
1993 and the results of their operations in the fiscal years then ended in
conformity with generally accepted accounting principles in The Netherlands.

Generally accepted accounting principles in The Netherlands vary in certain
significant respects from generally accepted accounting principles in the
United States. The application of the latter would have affected the
determination of consolidated/combined net earnings in the years ended
June 30, 1994 and 1993 and the determination of stockholders' equity at
June 30, 1994 and 1993 to the extent summarized in Note G.

Leiden, The Netherlands, August 5, 1994

Deloitte & Touche
Registeraccountants
(signature)
P.C. Spaargaren RA

Report of Independent Auditors

Board of Directors
Watts Industries, Inc.

We have audited the financial statements including the consolidated/combined
financial statements of Watts Industries Europe B.V., a wholly owned
subsidiary of Watts Industries, Inc., as of June 30, 1994 and 1993 and for
the years then ended and have issued our report thereon dated August 5, 1994.
Our audits also included financial statement schedules V, VI, VIII and X of
Watts Industries Europe B.V. (not presented separately herein) which
are included in the related schedules of Watts Industries, Inc. in Form 10-K.
These financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedules of Watts Industries Europe
B.V. referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

Leiden, The Netherlands, August 5, 1994

Deloitte & Touche
Registeraccountants
(signature)
P.C. Spaargaren RA

Exhibit 23.2--
Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statements
(Post-Effective Amendment No. 1 to Form S-8 No. 33-30377) pertaining to the
1986 Incentive Stock Option Plan and Form S-8 (No. 33-37926) pertaining to
the Nonqualified Stock Option Plan of Watts Industries Inc. and in the
related Prospectuses of our report dated August 5, 1994, with respect to the
consolidated combined financial statements of Watts Industries Europe B.V. (not
included herein) and our report dated August 5, 1994, with repect to the
financial statement schedules of Watts Industries Europe B.V. (not included
herein).

Leiden, The Netherlands, September 19, 1994

Deloitte & Touche
Registeraccountants
(signature)
P.C. Spaargaren RA

EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this
Report. Certain Exhibits are incorporated by reference to documents
previously filed by the Company with the Securities and Exchange
Commission pursuant to Rule 12b-32 under the Securities Exchange Act of
1934, as amended.

Exhibit No. Description

3.1 Restated Certificate of Incorporation, as amended.(1)
3.2 Amended and Restated By-Laws. (2)
9.1 Horne Family Voting Trust Agreement-1991 dated as of
October 31, 1991. (3)
10.1 Employment Agreement dated as of May 1, 1993 between
the Registrant and Timothy P. Horne. (13)
10.2 Supplemental Compensation Agreement dated as of
May 1, 1993 between the Registrant and Timothy P.
Horne. (13)
10.3 Deferred Compensation Agreement between the
Registrant and Timothy P. Horne, as amended. (5)
10.4 1986 Incentive Stock Option Plan, as amended,
including form of Option Agreement. (4)
10.5 1989 Nonqualified Stock Option Plan, including form
of Option Agreement. (4)
10.6 Retirement Plan for Salaried Employees, as amended.
(6)
10.7 Registration Rights Agreement dated as of July 25,
1986. (7)
10.8 Executive Incentive Bonus Plan. (13)
10.9 Indenture dated as of December 1, 1991 between the
Registrant and The First National Bank of Boston,
as Trustee, including form of 8-3/8% Note Due
2003. (10)
10.10 Loan Agreement and Mortgage among The Industrial
Development Authority of the State of New
Hampshire, Watts Regulator Co. and Arlington
Trust Company dated as of August 1, 1985. (5)
10.11 Amendment Agreement relating to Watts Regulator Co.
(Canaan and Franklin, New Hampshire, facilities)
financing dated as of December 31, 1985. (5)
10.12 Sale Agreement between Village of Walden Industrial
Development Agency and Spence Engineering
Company, Inc. dated as of June 1, 1994. *
10.13 Letter of Credit, Reimbursement and Guaranty
Agreement dated June 1, 1994 by and among the
Registrant, Spence Engineering Company, Inc. and
First Union National Bank of North Carolina. *
10.14 Trust Indenture from Village of Walden Industrial
Development Agency to the First National Bank of
Boston, as Trustee, dated as of June 1, 1994. *
10.15 Loan Agreement between Hillsborough County
Industrial Development Authority and Leslie
Controls, Inc. dated as of July 1, 1994. *

10.16 Letter of Credit, Reimbursement and Guaranty
Agreement dated July 1, 1994 by and among the
Registrant, Leslie Controls, Inc. and First Union
National Bank of North Carolina. *
10.17 Trust Indenture from Hillsborough County Industrial
Development Authority to the First National Bank
of Boston, as Trustee, dated as of July 1, 1994.*
10.18 Bond Purchase Agreement among The Rutherford County
Industrial Facilities and Pollution Control
Financing Authority, Northwestern Bank and
Regtrol, Inc. dated as of October 1, 1984. (5)
10.19 Loan Agreement between The Rutherford County
Industrial Facilities and Pollution Control
Financing Authority and Regtrol, Inc. dated as of
October 1, 1984. (5)
10.20 Agreement as to Financial Covenants between
Northwestern Bank and Watts Regulator Co. dated
as of October 1, 1984. (5)
10.21 Guaranty Agreement from Watts Regulator Co. to
Northwestern Bank dated as of October 1, 1984.
(5)
10.22 Amendment Agreement relating to Regtrol, Inc.
financing dated as of January 1, 1986. (5)
10.23 Amended and Restated Stock Restriction Agreement
dated as of October 30, 1991. (3)
10.24 Watts Industries, Inc. 1991 Non-Employee Directors'
Nonqualified Stock Option Plan. (9)
10.25 Letters of Credit relating to retrospective paid
loss insurance programs. (13)
10.26 Form of Master Agreement, dated as of April 15,
1986, relating to interest rate swap transaction
and forms of related Rate Swap Agreements. (7)
10.27 Form of Stock Restriction Agreement for management
stockholders. (7)
10.28 Revolving Credit Agreement dated December 23, 1987
between Nederlandse Creditbank NV and Watts
Regulator (Nederland) B.V. and related Guaranty
of Watts Industries, Inc. and Watts Regulator Co.
dated December 14, 1987. (8)
10.29 Loan Agreement dated September 1987 with, and
related Mortgage to, N.V. Sallandsche Bank. (8)
10.30 Agreement and Plan of Merger dated as of August 22,
1991 relating to the acquisition by the Registrant
of Henry Pratt Company. (11)
10.31 Agreement of the sale of shares of Intermes, S.p.A.,
RIAF Holding A.G. and the participations in
Multiscope Due S.R.L. dated as of November 6,
1992. (12)
10.32 Revolving Credit Agreement dated August 30, 1994
between and among Watts Investment Company,
certain financial institutions, The First National
Bank of Boston, as Agent, and the Registrant, as
Guarantor. *
11 Statement Regarding Computation of Earnings per
Common Share. +

13 1994 Annual Report to Stockholders. * (This Report,
except for those portions thereof which are
expressly incorporated by reference into this
Report on Form 10-K, is not to be deemed "filed"
with the Securities and Exchange Commission.)
21 Subsidiaries. *
23.1 Consent of Ernst & Young, Independent Auditors. +
23.2 Consent of Deloitte & Touche, Independent Auditors. +
27 Financial Data Schedule. *