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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

or

Commission File Number 0-6365

APOGEE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (952) 835-1874

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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock $0.33 1/3 Par Value

(Title of each 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. x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act.) Yes x No ¨

As of August 30, 2003, the last business day of the registrant’s most recently completed second fiscal quarter, the approximate aggregate market value of voting and non-voting stock held by non-affiliates of the registrant was $311,978,521 (based on the closing price of $11.36 per share as reported by Nasdaq as of that date.)

As of April 28, 2004, there were approximately 27,454,000 shares of the registrant’s Common Stock, $0.33 1/3 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required in Part III hereof is incorporated by reference to the Proxy Statement for the Registrant’s 2004 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K.

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APOGEE ENTERPRISES, INC.

Annual Report on Form 10-K

For the fiscal year ended February 28, 2004

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PART I

The Company

Apogee Enterprises, Inc. was incorporated under the laws of the State of Minnesota in 1949. Through its subsidiaries, the Company believes it is a leader in technologies involving the design and development of value-added glass products, services and systems. Unless the context otherwise requires, the terms “Company,” “Apogee,” “we,” “us” and “our” as used herein refer to Apogee Enterprises, Inc. and its subsidiaries.

The Company is comprised of three reporting segments to match the markets they serve:

Financial information about the Company’s segments can be found in Note 16 to the Consolidated Financial Statements of the Company contained elsewhere in this report.

Products

The following tables describe our products, the business unit to which the product pertains, and the key features and applications of our various products.

Architectural Products and Services (Architectural) Segment

Businesses in the Architectural segment include: Viracon, Inc. (Viracon), the leading fabricator of coated, high-performance architectural glass for global commercial markets; Harmon, Inc., one of the largest U.S. full-service building glass installation, maintenance and renovation companies; Wausau Window and Wall Systems (Wausau), a manufacturer of custom aluminum window systems and curtainwall; and Linetec (Linetec), a paint and anodizing finisher of window frames and PVC shutters.

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Large-Scale Optical Technologies (LSO) Segment

The LSO segment consists of Tru Vue, Inc. (Tru Vue), a value-added glass and acrylic manufacturer for the custom picture framing and pre-framed art markets, and a producer of optical thin film coatings for consumer electronics displays. In March 2004, we merged Tru Vue and Viratec Thin Film, Inc., our two LSO business units, with Tru Vue being the surviving entity.

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Automotive Replacement Glass and Services (Auto Glass) Segment

The Auto Glass segment consists of Viracon/Curvlite, Inc. (Curvlite), a U.S. fabricator of aftermarket foreign and domestic car windshields and original equipment and replacement windshields for recreational vehicles and buses.

Markets and Distribution Channels

Architectural Segment. Our businesses within the Architectural segment market our products primarily within North America, with less than 10 percent of our revenues shipping to locations outside North America. Our customers are glass distributors, contractors, curtainwall subcontractors and commercial glass fabricators, including our own window manufacturing and installation businesses.

Apogee serves primarily the architectural glass market, and we are well positioned as the leader in North America in the supply of a wide range of high performance architectural glass products to the commercial building industry and other institutions. Viracon, the largest business in this segment, holds an estimated 15 percent share of the overall U.S. non-residential glass market and is focused on the two largest sectors of this market: the $340 million core market, which requires custom coated, fabricated products for large, complex projects with lead times of four weeks or longer, and the $640 million broader market, which demands both coated and uncoated glass that can be installed in basic insulating units or laminated and delivered in four weeks or less and is more regional.

With our focus on reducing our customer lead times over the past three years, we have started servicing smaller projects in their broader market with fabricated coated and uncoated products. During fiscal 2004, our revenues from these projects were almost $30 million. Because products for the broader market must be delivered in four weeks or less, we are focused on increasing our sales to customers within 500 miles of our southern Minnesota and Georgia plants.

Harmon, Inc.’s estimated share within the regional markets served with its offices located in 13 U.S. cities ranges from 10 to 15 percent; Wausau’s share of the non-residential aluminum window and curtainwall market is 2 percent; and Linetec’s share of U.S. architectural finishing market is 5 percent.

We offer complete design, engineering, installation and replacement or glazing services for commercial, institutional and other buildings in 13 metropolitan areas in the United States through Harmon, Inc. We bid and negotiate these curtainwall and window projects with owners, architects, general contractors and property managers. While the installation of building glass in new construction projects is the primary focus of our installation business, we are broadening our offerings for glass services and retrofitting the outside skin of older commercial and institutional buildings. In some markets we offer 24-hour replacement service for storm or vandalism damage. Our in-house engineering capabilities allow us to duplicate the original design or create a completely new appearance for renovated buildings.

Wausau designs and manufactures high-quality window and curtainwall systems, engineered to be thermally efficient, utilizing high-strength polyurethane to limit the transfer of heat or cold through the window frame, primarily for commercial and institutional buildings in the United States. These products meet high standards of wind load capacity and resistance to air and moisture infiltration. Products are marketed primarily in the United States through a nationwide network of trained distributors and a direct sales staff. Wausau typically provides window or wall quotations to glazing subcontractors, including our own installation business, which in-turn bids more inclusive glass and glazing packages to general contractors

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for projects in the United States. At all levels, the low-bid is an advantageous competitive position, if specified performance, warranty, aesthetic and operational characteristics are met. On complex work, engineering capability and ease of installation also become qualifying factors for window and wall manufacturers.

Harmon, Inc. and Wausau continue to develop a variety of hurricane systems incorporating laminated glass from Viracon and other manufacturers in response to new building code requirements in Florida and along the East and Gulf Coasts. Although implementation of new hurricane and energy codes is inconsistent, demand for these products is expected to increase significantly in coming years. Our businesses are also capturing major government projects requiring blast-resistant glass.

Our finishing business serves the architectural, industrial and commercial metal fabricator markets (including Wausau), as well as building product manufacturers and interior window covering businesses in the Unites States and Canada.

LSO Segment. The Company’s Tru Vue brand is one of the largest domestically manufactured brands for the value-added picture-framing glass market. Under this brand, we provide our customers with a full array of picture-framing glass products, including clear, reflection control, anti-reflective and conservation glass. The products are distributed primarily in North America through independent distributors, which, in turn, supply local picture-framing markets. The Company also has limited distribution in Europe, Australia and New Zealand. We continue to convert the custom picture framing industry from clear glass to our proprietary value-added glass, TruGuard^™, which preserves pictures and art. Through Tru Vue’s leadership, the custom picture framing industry continues to convert to value-added picture framing glass and acrylic, a trend that is expected to continue and has helped Tru Vue boost its sales of these products approximately 20 percent annually for several years. Tru Vue holds an estimated 27 percent of the domestic custom framing glass market and approximately 60 percent of the niche that has been converted to value-added glass.

This segment also develops advanced, optical coatings for glass and acrylic for display and imaging applications for the consumer electronics market. These products are used in projection televisions and picture-framing glazing, as well as imaging devices such as scanners and copiers. These optical coatings are marketed to both domestic and foreign manufacturers of consumer electronics products and accessories. These customers provide further assembly, marketing and distribution to end-users. Based on growth projections for value-added glass, we will eventually need more of the capacity at the Minnesota plant for picture framing, thus we are transitioning away from some consumer electronics coatings.

Auto Glass Segment. The Company’s manufacturing business, Curvlite, serves primarily two windshield markets, domestic and foreign automotive replacement glass (ARG) and original equipment manufacturers’ (OEM) windshields for recreational vehicles and buses. Curvlite has approximately 5% to 6% of the aftermarket automotive windshield manufacturing market. Under a multi-year agreement with PPG Industries, Inc. (PPG) expiring in July 2005, Curvlite’s automotive replacement glass production is primarily dedicated to supplying windshields to PPG. In March 2004, we received the required advance notice from PPG indicating that the windshield supply agreement Curvlite operates under will be terminated on the expiration date in July 2005, which is during fiscal 2006. We are in discussions with PPG regarding a new supply agreement.

In an effort to enhance efficiency, geographic coverage and customer service in the distribution of auto replacement glass, the Company and PPG combined their U.S. automotive replacement glass distribution businesses in July 2000 to create a new entity, PPG Auto Glass, LLC (PPG Auto Glass), of which the Company has a 34 percent interest. The results of PPG Auto Glass are recorded in earnings from equity in affiliated companies.

During fiscal 2004, the Company sold its subsidiary, Harmon AutoGlass. Further information regarding the transaction is provided under “Discontinued Operations” in Item 7 and Footnote 12 to the Consolidated Financial Statements below.

Warranties

We offer warranties on our products which we believe are competitive for the markets in which those products are sold. The nature and extent of these warranties depend upon the product, the market and in some cases the customer being served. Viracon and Wausau generally offer warranties up to 10 years, while our other businesses offer warranties of 2 years or less. In the event of a product claim against a product in which we have received a warranty from the supplier, we will pass the claim back to our supplier. We carry liability insurance and reserve for warranty exposures, as our insurance does not cover warranty claims. There can be no assurance that our insurance will be sufficient to cover all liability claims in the future or that the costs of this insurance and the related deductibles will not increase materially or that liability insurance will be available on terms acceptable to the Company in the future.

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Sources and Availability of Raw Materials

Materials used within the Architectural segment include raw glass, vinyl, insulated glass spacer frames, silicone desiccant, metal targets, aluminum extrusions, chemicals, paints, lumber, urethane and plastic extrusions. All of these materials are readily available from a number of sources, and no supplier delays or shortages are anticipated. While certain glass products may only be available at certain times of the year, all standard glass colors are available throughout the year in abundant quantities. Chemicals purchased range from commodity to specifically formulated types of chemistries.

Materials used within the LSO segment include glass, hard-coated acrylic, acrylic substrates, coating materials and chemicals. Currently, the chemicals used for the UV resistant coating at Tru Vue are readily available from only one supplier, which meets the Company’s specifications for this proprietary technology. Tru Vue is currently seeking to qualify other suppliers and alternate technologies.

Within the AutoGlass segment, raw materials consist primarily of flat glass and polyvinyl butyral, which are available from a number of sources.

The Company believes a majority of its raw materials are available from a variety of domestic sources.

Trademarks and Patents

The Company has several trademarks and trade names which it believes have significant value in the marketing of its products. Despite being a point of differentiation from its competitors, no single patent is considered to be material to the Company. Within the Architectural segment, Linetec^® and Finisher of Choice^® are registered trademarks of the Company. Harmon^™ and AdVantage^™ are listed trademarks of the Company.

Within the LSO segment, Viratec^®, Tru Vue^®, TruGuard^®, Conservation Clear^®, Conservation Reflection Control^®, Museum Glass^®, Optium^®, Pricing for Profit^®, AR Glass^®, Reflection Control^®, UltraClear^®, PerfectView^®, UltiMat^® and UltiBlack^® are registered trademarks. Reflection Free Acrylic^™ and Museum Security Glass^™ are trademarks of the Company. Tru Vue has several patents pertaining to its glass coating methods. Tru Vue also holds several patents on its proprietary products, including its UV coating and etch processes for non-reflective glass.

PPG Auto Glass^™ is a trademark of PPG.

The Company had developed and maintained various patents related to TerraSun, the Company’s research and development joint venture which the Company discontinued funding in fiscal 2002. During fiscal 2003, the Company donated all of the technology and patents to the Illinois Institute of Technology.

Seasonality

Within the Architectural segment, there is a slight seasonal effect following the commercial construction industry, with demand in late spring to late autumn that is slightly higher than during the balance of the year. The construction industry is highly cyclical in nature and can be influenced differently by the effects of the localized economy in various geographic markets.

The businesses in the LSO segment depend, in part, on sales by manufacturers of products such as rear projection televisions, computer displays and scanners, and retail picture-framing products. In particular, the rear projection television market is highly cyclical and can be seasonal, with a significant increase in sales occurring between Thanksgiving and late January. The impact of this will be reduced as we transition from consumer electronics to picture framing glass. Picture framing sales also tends to have an increase in the pre-holiday late fall, early winter timeframe.

The markets that are served by the businesses in the Auto Glass segment tend to be seasonal in nature. However, our agreement with PPG allows us to manufacture and sell our after-market automotive replacement windshield products evenly throughout the year.

Working Capital Requirements

Within the Architectural segment, receivables can be extended based on the retention amounts and project durations. Payment terms offered our customers are similar to those offered by others in the industry. However, inventory requirements are not significant to the businesses within this segment since we make-to-order rather than build-to-stock for the majority of our products. As a result, inventory levels follow the customer demand for the products produced.

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Due to the PPG supply agreement, the Company’s manufacturing unit maintains level volumes throughout the year for PPG, which purchases and stores the product at a PPG warehouse. In turn, this provides a just-in-time inventory relationship between PPG and PPG Auto Glass. Therefore, limited finished goods inventory is maintained within the segment, which causes a limited demand on working capital.

Dependence on a Single Customer

We do not have any one customer that exceeds 10 percent of the Company’s consolidated revenues; however, there are important customers within each of our segments whose loss could have an adverse effect on the Company.

Because of the supply agreement with PPG in connection with the formation of PPG Auto Glass, the Company’s auto glass distribution joint venture with PPG, PPG has become the primary customer of Curvlite. Between ARG and flat glass, PPG accounts for approximately 80 percent of the total volume at Curvlite. The Company believes the amounts received from such transactions represent the amounts that would normally be received from unrelated third parties for similar transactions.

Backlog

At February 28, 2004, the Company’s total backlog of orders considered to be firm was $230.6 million compared with $153.3 million at March 1, 2003. Of this amount, approximately $224.5 million and $147.3 million of the orders were in the Architectural segment at February 28, 2004 and March 1, 2003, respectively. $214.8 million, or 93 percent, of the Company’s backlog is expected to be produced and shipped in fiscal 2005. The Company’s backlog of orders is not indicative of future results of the Company.

Competitive Conditions

Architectural Segment. The markets served by the businesses within the Architectural segment are very competitive, price and lead-time sensitive, and affected by changes in the North American commercial construction industry as well as changes in general economic conditions. The companies within the Architectural segment primarily serve the custom portion of the construction market in which the primary competitive factors are product quality, reliable service, warranty and the ability to provide technical engineering and design services.

In recent times, there has been a shift in competition for the Architectural segment’s largest business unit, Viracon. The market has expanded from three glass fabricators in the high-end performance market each with less capacity than Viracon, to include additional competition from regional glass fabricators with shorter lead times incorporating high performance, post-temperable glass products, procured from primary glass suppliers, into their insulated glass products. The availability of these products has enabled the regional fabricators in some cases to bid on more complex projects than in the past.

Harmon, Inc. largely competes against local and regional construction companies and glazing contractors where the primary competitive factors are quality engineering, service and price. Wausau competes against several major aluminum window manufacturers in various market niches. With products at the high-end of the performance scale, and one of the industry’s best standard warranties for repair or replacement of defective product, Wausau effectively leverages a well-earned reputation for engineering quality and delivery dependability into a position as a preferred provider. Linetec competes against regional paint and anodizing companies and national window covering companies.

LSO Segment. Product pricing, service and quality are the primary competitive factors in the markets within the LSO segment. The Company’s competitive strength includes our excellent relationships with our customers. We compete in the value-added and conservation glass markets in North America based on the product performance afforded by our proprietary, patented processes. Until recently, we have been the only company in the picture-framing industry that has been able to produce UV products in any meaningful supply and at a consistent, high level of quality. While there is significant price sensitivity in regard to sales of clear glass to picture framers, there is significantly less pricing pressure on our value-added glass products.

Tru Vue also competes with a few significant coating manufacturers and fabricators and numerous smaller specialty coaters and fabricators in North America and abroad in the consumer electronics part of its business. Competitors in the consumer electronic market include companies developing new coatings, such as wet coatings for flat panel displays, as well as competitors who supply sputter coated films similar to those produced by us. Customers’ selection of anti-reflective products is driven by quality, price, service and capacity.

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Auto Glass Segment. The Auto Glass segment competes with original equipment and after-market automotive replacement glass fabrication facilities worldwide on the basis of pricing and customer service. Pricing through the entire supply chain has been affected by overcapacity in the market and the influx of imported products.

Research and Development

The amount spent on research and development activities over the past three fiscal years was $4.0 million, $3.9 million and $2.8 million in fiscal 2004, 2003 and 2002, respectively. Our research and development has been focused primarily upon development of new proprietary products and system enhancements in our Architectural and LSO segments.

In fiscal 2002, the Company decided to discontinue funding TerraSun, LLC (TerraSun), our research and development joint venture of which the Company had a 50 percent interest. As a result, TerraSun ceased its operations. TerraSun had been developing holographic optical technologies for lighting and energy systems applications. In connection with the closure of TerraSun, we acquired TerraSun’s proprietary technology. We donated the patented technology developed by TerraSun to the Illinois Institute of Technology (IIT) in the fourth quarter of fiscal 2003. Until the TerraSun patents expire, the Company will have a first right of refusal for the purchase of any architectural product applications developed by IIT based on these patents.

Environment

We use hazardous materials in our manufacturing operations and have air and water emissions that require controls. As a result, we are subject to stringent federal, state and local regulations governing the storage, use and disposal of wastes. We contract with outside vendors to collect and dispose of waste at our production facilities in compliance with applicable environmental laws. In addition, we have procedures in place that we believe enable us to deal properly with the regulated materials used in our manufacturing processes and wastes created by the production processes, and we have implemented a program to monitor our compliance with environmental laws and regulations. Although we believe we are currently in material compliance with such laws and regulations, current or future laws and regulations could require us to make substantial expenditures for compliance with chemical exposure, waste treatment or disposal regulations. During fiscal 2003, we spent approximately $1.4 million at facilities to reduce wastewater solids and further reduce hazardous air emissions. We expect to incur costs to continue to comply with laws and regulations in the future, but do not expect these to be material to our financial statements.

Employees

The Company employed 4,128 persons at February 28, 2004, of whom approximately 775 were represented by labor unions. The Company is a party to 53 collective bargaining agreements with several different unions. Approximately 2 percent of the collective bargaining agreements representing 196 employees were set to expire during fiscal 2005. These agreements have been negotiated and settled in the first quarter of fiscal 2005. The number of collective bargaining agreements to which the Company is a party will vary with the number of cities in which our Harmon, Inc. subsidiary has active nonresidential construction contracts. The Company considers its employee relations to be very good and has not recently experienced any significant loss of workdays due to strike. We are highly dependent upon the continuing services of certain technical and management personnel.

Sale of Harmon AutoGlass

During fiscal 2004, the Company sold its subsidiary, Harmon AutoGlass. Further information regarding the transaction is provided under “Discontinued Operations” in Item 7 and Footnote 12 to the Consolidated Financial Statements below.

Foreign Operations and Export Sales

During the years ended February 28, 2004, March 1, 2003 and March 2, 2002, the Company’s export sales, principally from Architectural operations, amounted to approximately $30.3 million, $37.2 million and $35.0 million, respectively.

Available Information

The Company maintains a website at www.apog.com. Through a link to a third-party content provider, this corporate website provides free access to the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after electronic filing such material with, or furnishing it to, the Securities and Exchange Commission. Also available on our website are various corporate governance documents,

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including our Code of Business Ethics and Conduct, Corporate Governance Guidelines, Audit Committee charter, Compensation Committee charter, and Nominating and Corporate Governance Committee charter.

The following table lists, by segment, the Company’s major facilities as of February 28, 2004, the general use of the facility and whether it is owned or leased by the Company.

In addition to the locations indicated above, Architectural’s Harmon, Inc. unit operates from 15 leased locations, serving 13 metropolitan areas. We continue to own 17 locations that did not transfer with the sale of Harmon AutoGlass. These properties are recorded as assets held for discontinued operations.

The Curvlite plant, a portion of the Wausau Window and Wall Systems facility, the Linetec paint facility, and the owned Tru Vue facility were constructed with the use of proceeds from industrial revenue bonds issued by their applicable cities. These properties are considered owned since, at the end of the bond term, title reverts to the Company.

The Company has been a party to various legal proceedings incidental to its normal operating activities. In particular, like others in the construction supply industry, the Company’s construction supply businesses are routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. The Company has also been subject to litigation arising out of employment practices, workers compensation, general liability and automobile claims. Although it is very difficult to accurately predict the outcome of such proceedings, facts currently available indicate that no such claims will result in losses that would have a material adverse effect on the financial condition of the Company.

No matters were submitted to a vote of security holders during the fourth quarter ended February 28, 2004.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Executive officers are elected annually by the Board of Directors and serve for a one-year period. There are no family relationships between the executive officers or directors of the Company.

PART II

Market Information

Apogee common stock is traded on the Nasdaq National Market (Nasdaq), under the ticker symbol APOG. During the fiscal year ended February 28, 2004, the average trading volume of Apogee common stock was 2,405,000 shares per month, according to Nasdaq.

As of April 28, 2004, there were 27,454,000 shares of common stock outstanding, of which about 6.0 percent were owned by directors and executive officers of Apogee. At that date, there were approximately 1,911 shareholders of record and 5,200 shareholders for whom securities firms acted as nominees.

The following chart shows the quarterly range and year-end closing bids for one share of the Company’s common stock over the past five fiscal years.

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Dividends

It is Apogee’s policy, subject to Board review and approval, to pay quarterly cash dividends in May, August, November and February. Cash dividends have been paid each quarter since 1974. The chart below shows quarterly and annual cumulative, cash dividends per share for the past five fiscal years. Subject to future operating results, available funds and the Company’s future financial condition, the Company intends to continue paying cash dividends, when and if declared by its Board of Directors.

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The following information should be read in conjunction with Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8 - Financial Statements and Supplementary Data.

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NM=Not meaningful

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Forward-Looking Statements

This discussion contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this document are “forward-looking statements,” and are based on management’s current expectations or beliefs of the Company’s near-term results, based on current information available pertaining to the Company, including the risk factors noted below. From time to time, we also may provide oral and written forward-looking statements in other materials we release to the public such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.

Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to, the following: Operational risks within (A) the Architectural segment: i) competitive, price-sensitive and changing market conditions, including unforeseen delays in project timing and work flow; ii) economic conditions and the cyclical nature of the North American commercial construction industry; iii) product performance, reliability or quality problems that could delay payments, increase costs, impact orders or lead to litigation; and iv) the segment’s ability to fully utilize production capacity; (B) the Large-Scale Optical segment: i) integration of the two manufacturing facilities in this segment; ii) timing of the transition of manufacturing capacity from consumer electronics to picture framing products; iii) markets that are impacted by consumer confidence; iv) dependence on a relatively small number of customers; and v) ability to utilize manufacturing facilities; and (C) the Auto Glass segment: i) negotiation of a new long-term supply agreement between Curvlite and PPG Industries; ii) changes in market dynamics; iii) market seasonality; iv) highly competitive, fairly mature industry; and v) performance of the PPG Auto Glass, LLC joint venture. Additional factors include: i) quarterly revenue and operating results that are volatile; ii) the possibility of a material product liability event; iii) the costs of compliance with governmental regulations relating to hazardous substances; iv) management of discontinued operations exiting activities; and v) foreign currency risk related to discontinued operations. The Company cautions readers that actual future results could differ materially from those described in the forward-looking statements. For a more detailed explanation of the foregoing and other risks and uncertainties, see Exhibit 99 to this Form 10-K.

The Company wishes to caution investors that other factors might in the future prove to be important in affecting the Company’s results of operations. New factors emerge from time to time; and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a leader in technologies involving the design and development of value-added glass products, services and systems. The Company is organized in three segments: Architectural products and services (Architectural), Large-scale optical (LSO) and Automotive replacement glass and services (Autoglass). Our Architectural segment companies design, engineer, fabricate, install, maintain and renovate the walls of glass and windows comprising the outside skin of commercial and institutional buildings. Businesses in this segment are: Viracon, a leading fabricator of coated, high-performance architectural glass for global markets; Harmon, Inc., one of the largest U.S. full-service building glass installation, maintenance and renovation companies; Wausau Window and Wall Systems, a manufacturer of custom aluminum window systems and curtainwall; and Linetec, a paint and anodizing finisher of architectural aluminum and PVC shutters. Our LSO segment consists of Tru Vue, a value-added glass and acrylic manufacturer for the custom framing and pre-framed art markets, and a producer of optical thin film coatings for consumer electronics displays. Our Autoglass segment consists of Viracon/Curvlite, a U.S. fabricator of aftermarket foreign and domestic car windshields.

Our Architectural segment is the largest and most cyclical segment in our portfolio. The segment services the commercial construction markets, which have been in the low end of the construction cycle for the past two years and did not begin to turn around during our fiscal 2004 as we had anticipated. Although we outperformed the nonresidential construction market based on reports by F.W. Dodge, a leading independent provider of construction industry analysis, forecasts and trends, industry

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conditions led to lower volume, project delays and pricing pressures. Additionally, isolated project management issues impacted margins in our glass installation business; and we did not anticipate the severity of the downturn and reduce segment costs quickly enough in fiscal 2004 to offset the declining demand. We are expecting market conditions to continue at the current level through fiscal 2005 with moderate market growth to begin in late fiscal 2005. These expectations are based on market forecasts provided by external sources that may not come to fruition. Additionally, we are expecting our installation business to be better able to manage projects in fiscal 2005 and, once the current backlog of jobs runs its course in early fiscal 2005, our outlook reflects this improvement in project management.

Through our identified growth strategies, we intend to capitalize on current high-potential products and markets in the Architectural segment, while adding complementary services demanded by our customers. In architectural glass, we are working to increase market share to offset our markets that are not expected to grow significantly through fiscal 2007. We are focused on increasing sales in education and health care, in addition to our already strong presence in office buildings, and also increasing our sales in certain domestic geographic markets where our presence is not as strong as in other regions.

A second architectural glass opportunity that we have targeted is to provide smaller, less complex projects with coated, fabricated glass. This broader market is regional in nature because of the shorter lead times demanded by customers. We will serve a portion of this growing regional fabrication market from our plants in Minnesota and Georgia, and we are considering investing in additional facilities to expand our coverage in the U.S.

Another architectural strategic initiative involves our architectural products and services businesses which install glass on new buildings, renovate window and curtainwall systems on older buildings, provide glass services, and design and assemble windows and curtainwall. We are improving the performance of these businesses, while also focusing on opportunities to expand our renovation and glass installation work in current markets. In addition, we are considering expansion into storefront and entrance products that will allow us to grow sales of our window and curtainwall products by offering a full product line from a single source.

Within our LSO segment, we are implementing strategies to drive greater penetration of value-added glass in traditional custom framing markets, as well as in newer institutional fine art and international sectors. During fiscal 2004, it was determined that the pricing pressures, competitive nature and our inability to compete in the consumer electronic markets was resulting in unpredictable and unprofitable results. Accordingly, we decided to focus on further expanding the use of value-added glass in the picture framing industry where our leadership position can be enhanced. Two recent decisions will further our focus on picture framing: we integrated the two businesses in the segment, resulting in cost savings and greater coating capacity to meet the growing demand for picture framing products, and, in the first quarter of fiscal 2005, sold our small framing matboard line, a non-strategic product line. Expenses relating to re-focusing this segment are anticipated to continue through fiscal 2005 as we identify more efficient means to manufacture and distribute our picture- framing products and direct our attention away from some consumer electronic markets.

The Autoglass segment experienced the greatest change during this past fiscal year. Through the sale of Harmon Autoglass, an under-performing business serving an extremely competitive market, a key step in our overall strategic repositioning was accomplished. The Harmon Autoglass business is reported as a discontinued operation throughout this discussion and the following financial statements. The remaining business, which manufactures aftermarket windshields primarily for a single customer, PPG Industries, Inc. (PPG), continues to perform at adequate levels, and we will continue to operate this business to maximize its cash flow. However, this market continues to experience pricing pressures due to the influx of offshore products. Additionally, pressure from insurance companies, which usually pay for retail windshield replacements, to lower costs, has put pressure throughout the supply chain. These influences also affect the performance of our joint venture reported in “equity in earnings (loss) of affiliated companies.” In March 2004, we received the required advance notice from PPG indicating that the windshield supply agreement Curvlite operates under will be terminated on the expiration date in July 2005, which is during fiscal 2006. We are in discussions with PPG regarding a new supply agreement. This is not anticipated to have a material effect on fiscal 2005 earnings.

Results of Operations

Net Sales

Fiscal 2004 Compared to Fiscal 2003

Consolidated net sales decreased 8.5 percent in fiscal 2004 to $535.3 million from $584.9 million in fiscal 2003. The net decrease was primarily attributable to volume reductions and lower pricing due to competitive pressures in the Architectural

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segment, and the continued slowdown in the commercial construction industry. Weak conditions in the commercial construction market caused projects to delay throughout the year, resulting in a continual delay in the activity and, accordingly, adversely impacting revenues recognized in fiscal 2004.

Fiscal 2003 Compared to Fiscal 2002

Consolidated net sales decreased 2.2 percent in fiscal 2003 to $584.9 million from $597.8 million in fiscal 2002. The net decrease was attributable to a slowdown in the commercial construction industry affecting the Architectural segment, and volume reductions and lower pricing due to competitive pressures in the Auto Glass segment. These reductions were partially offset by revenue gains in the LSO segment from new product introductions and conversions of our customers to our higher-margin, value-added picture-framing glass.

Performance

The relationship between various components of operations, stated as a percentage of net sales, is illustrated below for the past three fiscal years.

Fiscal 2004 Compared to Fiscal 2003

On a consolidated basis, cost of sales, as a percentage of net sales, increased to 82.4 percent for fiscal 2004, from 75.2 percent in fiscal 2003. The primary factors for the 7.2 percentage point decrease in margins were the effects of the slowed commercial construction market affecting the Architectural segment, resulting in reduced volume, pricing pressures, as well as project management issues encountered at our glass installation business. Additionally, the LSO segment recognized integration costs and a charge associated with the sale of its matboard product line that, collectively, resulted in a 0.2 percentage point impact. These costs were offset by increased sales of higher value-added products in the LSO segment.

Selling, general and administrative (SG&A) expenses, as a percentage of net sales, decreased to 16.2 percent from 17.0 percent as expenses declined year-over-year from $99.7 million to $86.7 million in fiscal 2004. Nearly all of the decreases occurred in the Architectural segment as a result of lower performance-based incentive expenses, and lower salary and wage-related expenses from reduced headcount. These were offset by increases in outside consulting fees and lower gains from sales of non-strategic assets in the current year versus the prior period.

Net interest expense decreased to $3.1 million for fiscal 2004 from $3.4 million in fiscal 2003, reflecting lower borrowing levels and a lower weighted-average interest rate under our revolving credit agreement. Other income in fiscal 2004 was only $0.1 million versus $1.0 million in the prior year, which reflected the pretax benefit of realized gains on the sale of investments held for our self-insurance program in fiscal 2003. As part of normal investment portfolio management, our wholly owned insurance subsidiary sold appreciated marketable debt securities, creating this gain in the prior period.

Our equity in loss from affiliated companies was $3.2 million in fiscal 2004, versus equity in loss of $2.5 million in the prior year. The additional loss is related to a decline in the performance of the PPG Auto Glass joint venture as a result of a very competitive auto glass replacement industry, which has experienced reduced volume and lower pricing.

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Our income tax benefit of $3.1 million in the current year represents a statutory tax rate of 37.7 percent offset by tax credits and other deductions realized for tax that did not require book expense, the most significant of which related to research and development tax credits and a higher valuation of a charitable donation of a patent donated in fiscal 2003.

Our fiscal 2004 earnings from continuing operations decreased to $4.6 million or $0.17 diluted earnings per share. This compared to earnings from continuing operations of $28.9 million, or $1.02 diluted earnings per share, a year earlier. The decrease in earnings is largely attributable to the revenue decline and operational issues in our Architectural segment.

Current year loss from discontinued operations was $10.2 million or $0.37 diluted earnings per share, compared to $1.0 million in earnings or $0.04 diluted earnings per share in fiscal 2003. During the second quarter of fiscal 2004, we announced plans to sell Harmon AutoGlass. During the third quarter, we signed a definitive agreement to sell the business to Synergistic International, Inc., a subsidiary of The Dwyer Group of Waco, Texas, and the sale was finalized during the fourth quarter. All prior period results have been restated to reflect Harmon AutoGlass as a discontinued operation. The current year results include a loss on the sale of Harmon Auto Glass and costs associated with the exit of the business totaling $7.6 million, or $0.27 per diluted share. The remaining loss of $2.6 million, or $0.10 per share, represents Harmon AutoGlass’s operating results for the period in which we owned Harmon AutoGlass. The prior year total includes a loss from operations of Harmon AutoGlass of $2.6 million, or $0.09 per share, offset by income of $3.6 million, or $0.13 per diluted share, related to a reduction in our estimates of the ultimate liabilities for the discontinued European curtainwall operation described under “Discontinued Operations” below.

Our fiscal 2004 net loss was $5.6 million, or $0.20 diluted earnings per share. This compared to $29.9 million of net earnings, or $1.06 diluted earnings per share, a year ago

Fiscal 2003 Compared to Fiscal 2002

On a consolidated basis, cost of sales, as a percentage of net sales, fell to 75.2 percent for fiscal 2003, from 76.2 percent in fiscal 2002. The primary factors for the increased margins were from efficiencies gained as a result of the higher levels of capacity utilization in our LSO segment as well as efficiency gains and sales of higher-margin products in the Architectural segment. The combined impact of these items increased margins by 1.8 percentage points. This was offset by reductions in the Autoglass segment margin caused by reduced pricing.

Selling, general and administrative (SG&A) expenses, as a percentage of net sales, increased to 17.0 percent from 16.8 percent, but remained essentially flat year-over-year at approximately $100 million. Increases in the Architectural segment associated with the renovation initiative were offset in part by reductions in salaries and related costs in the segment as a result of reducing its overall cost structure as well as a reduction related to the elimination of amortization of goodwill. Decreased performance-based incentive expenses, lower training costs, gain on sale of assets and lower bad debt expenses also contributed to offset these higher expenses.

Net interest expense decreased to $3.4 million for fiscal 2003 from $4.9 million in fiscal 2002, reflecting lower borrowing levels and a lower weighted-average interest rate under our revolving credit agreement. The effects of the lower borrowing levels and rate were offset by less interest collected from tax refunds received during the year in comparison to the prior year.

Other income in fiscal 2003 reflects $1.0 million pretax benefit of realized gains on the sale of investments held for our self-insurance program as compared to $0.1 million in the prior year. The increased gains in fiscal 2003 reflect a significant sale of marketable securities. As part of normal investment portfolio management, the Company’s wholly owned insurance subsidiary sold appreciated marketable debt securities, creating this gain.

Our equity in loss from affiliated companies was $2.5 million in fiscal 2003 versus equity in loss of $1.0 million in the prior year. This additional loss is related to a decline in the performance of the PPG Auto Glass joint venture as a result of strong competition and significantly reduced prices. Additionally, amendments made to supply agreements related to the PPG Auto Glass joint venture in the prior year second quarter led to lower earnings during the current year for PPG Auto Glass and increased earnings for the Auto Glass segment in the amount of $2.1 million. These declines were partially offset by the elimination of funding for the TerraSun joint venture, which was shut down during the third quarter of fiscal 2002.

Our effective income tax rate of 28.9 percent of pre-tax earnings from continuing operations decreased from the 30.4 percent of pre-tax earnings from continuing operations reported in fiscal 2002. This reduction was due to the donation of the TerraSun patented technology to the Illinois Institute of Technology in the fourth quarter of fiscal 2003, which resulted in a significant deduction that reduced the fiscal 2003 rate in comparison to the prior year.

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Our fiscal 2003 earnings from continuing operations increased to $28.9 million or $1.02 diluted earnings per share. This compared to earnings from continuing operations of $25.2 million, or $0.88 diluted earnings per share, a year earlier. The increase in earnings is largely attributable to the revenue and productivity gains within our LSO segment, the elimination of goodwill amortization (due to a change in accounting standards) and reduced interest and taxes, offset by declines for our Architectural segment and losses from our affiliated companies.

Fiscal 2003 income from discontinued operations is primarily the result of a reduction in our estimates of the ultimate liabilities for the discontinued European curtainwall operation. This resulted in net income of $3.6 million, or $0.13 diluted earnings per share. The remainder represents the operating results of Harmon AutoGlass, which incurred a loss of $2.6 million, or $0.09 diluted earnings per share. In fiscal 2002, income from discontinued operations of $0.9 million consisted entirely of earnings from Harmon AutoGlass. The change in results for Harmon AutoGlass was due to lower pricing within the competitive auto glass market year-over-year.

Our fiscal 2003 net earnings were $29.9 million, or $1.06 diluted earnings per share. This compared to $26.1 million of net earnings, or $0.91 diluted earnings per share, a year ago.

Segment Analysis

Architectural Products and Services (Architectural)

Fiscal 2004 Compared to Fiscal 2003. Architectural net sales for fiscal 2004 decreased 10.3 percent to $411.4 million from $458.8 million in fiscal 2003. The decrease is due to the effects of the slowed economy on the North American commercial construction industry as the number of projects to bid and work on, and the pricing on those projects declined. The number and amount of delays in construction project timing also increased during the year. The impact of these items resulted in lower sales for all of our Architectural business units, but primarily affected revenues in our installation and window manufacturing businesses.

The segment experienced an operating loss for the year of $0.5 million compared to operating income in fiscal 2003 of $32.1 million. Operating margin decreased to (0.1) percent for fiscal 2004 from 7.0 percent in fiscal 2003. The reduced revenues had a significant impact on operating income and margin. Hardest hit by project delays in fiscal 2004 were our glass installation, window and architectural glass businesses. The delays, along with pricing pressures and isolated project management issues in the installation group, impacted margins and earnings. Also impacting the segment was the fact that the mix of work included more institutional work, which generally provides lower margins than the office sector projects.

Fiscal 2003 Compared to Fiscal 2002. Architectural net sales for fiscal 2003 decreased 4.3 percent to $458.8 million from $479.4 million in fiscal 2002. The decrease is due to the effects of the slowed economy on the North American commercial construction industry and to delays in construction project timing. The impact of these items resulted in lower sales for most of our Architectural business units. This segment’s revenue decline was partially offset by an increase in institutional projects and revenues earned on renovation projects.

Operating income for the segment in fiscal 2003 decreased 6.6 percent to $32.1 million from $34.4 million in the prior year. Operating margin decreased to 7.0 percent for fiscal 2003 from 7.2 percent in fiscal 2003. The majority of the decline in operating income was due to excess capacity associated with the revenue decline. We took actions in the latter part of the fourth quarter of fiscal 2003 and early part of the first quarter of fiscal 2004 to lower the cost structure to reflect the current market outlook. Additionally, the level of institutional projects, which have lower margins, increased in fiscal 2003. The margin decline was partially offset by manufacturing efficiencies in our glass and window fabricating business units.

Large-Scale Optical Technologies (LSO)

Fiscal 2004 Compared to Fiscal 2003. LSO net sales of $79.4 million were flat compared to fiscal 2003. Picture-framing revenues grew approximately 2% with an increase in value-added picture framing glass offset by reduced sales in our clear

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glass, matboard and consumer electronics business sales. Operating income declined to $2.8 million in fiscal 2004 from $3.7 million in fiscal 2003. The current year results included a $0.6 million charge related to restructuring the segment by merging the two business units in order to focus on picture-framing glass and reduce operating costs and a $1.1 million non-cash charge for the write-down of matboard product line inventory that we disposed of in the first quarter of fiscal 2005.

Fiscal 2003 Compared to Fiscal 2002. LSO net sales of $79.7 million increased 17.5 percent over fiscal 2002 and operating income improved from a loss of $4.4 million to income of $3.7 million in fiscal 2003. These increases were the result of several successful new product introductions, particularly in applying coatings to acrylic, and continued conversions and wider distribution of value-added picture-framing glass. Also contributing were improvements in key consumer electronics and retail framing markets. In addition, operational improvements from the company-wide six-sigma effort improved operating margins for the segment.

Automotive Replacement Glass and Services (Autoglass)

Fiscal 2004 Compared to Fiscal 2003. Auto Glass net sales, which includes only our manufacturing business, decreased 4.0 percent to $44.6 million in fiscal 2004. During the fourth quarter of fiscal 2004, pricing under the Company’s supply agreement with PPG, to which a significant percentage of our manufacturing capacity is sold, was changed to better reflect market pricing. This decreased the segment’s revenues by approximately 3.0 percent, or $1.4 million. Manufacturing unit volume increased over the prior year, offsetting some of the pricing declines. Additionally, average manufacturing pricing declined by 13.0 percent in the current year in comparison to fiscal 2003.

Auto Glass operating income decreased to $7.8 million in fiscal 2004 from operating income of $11.8 million in fiscal 2003 due to a combination of overall pricing declines and changes in the pricing terms of the supply agreement with PPG. These items were partially offset by volume increases and operational improvements within our manufacturing business. The net of the above caused the operating margin to decline to 17.4 percent from 25.4 percent.

This segment’s operating income includes results from manufacturing and the market-based pricing amendments to the supply agreements related to the PPG Auto Glass joint venture that were effective in fiscal 2002. We agreed to amend the existing pricing amendments during the fourth quarter of fiscal 2004 in order to reflect declines in market pricing. Beginning with fiscal 2005, this will negatively impact the segment’s results with an offsetting benefit to equity in earnings of affiliates.

Fiscal 2003 Compared to Fiscal 2002. Auto Glass net sales decreased 8.3 percent to $46.4 million in fiscal 2003. The decrease was primarily due to lower prices as a result of competitive pricing pressures. The average price in our manufacturing business declined by more than 20 percent for the current year in comparison to fiscal 2002. Our unit volume remained relatively consistent with the prior year, with declines in the first half of the year followed by improvements in year-over-year volumes in the second half.

Auto Glass operating income decreased to $11.8 million in fiscal 2003 from operating income of $14.1 million in fiscal 2002 due to pricing declines in manufacturing businesses. These items were partially offset by operational improvements as well as gains from the sale of real estate.

Discontinued Operations

We announced on September 10, 2003, that we intended to sell our retail auto glass business, Harmon AutoGlass. On January 2, 2004, the Company completed the cash sale of Harmon AutoGlass. During fiscal 2004, the Company recorded a $7.6 million, after-tax charge, representing a reduction in the carrying value of this business unit to its estimated fair value, less cost to sell. Estimated liabilities have been recorded for committed future cash flows related to the sale. We expect the process for the sale to be finalized during the first quarter of fiscal 2005, with any necessary working capital adjustment to the selling price to be made at that time.

In several transactions in fiscal years 1998 through 2000, the Company completed the sale of its large-scale domestic curtainwall business, the sale of the Company’s detention/security business and its exit from international curtainwall operations. The majority of the future cash expenditures related to these businesses are expected to be made within the next three years. The majority of the reserve relates to the international curtainwall operations, including bonds outstanding, of which the precise degree of liability related to these matters will not be known until they are settled within the U.K. and French courts. For the outstanding matter within the U.K., the plaintiff is required to file documents with the court by September 2004

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at which time we will be able to begin the discovery process and better evaluate the plaintiff demands. For the outstanding matter within France, we are expecting a ruling to be made by the French court by June 2004, which may be appealed. The reserve also covers other liability issues, consisting of warranty and rework issues, relating to these and other international construction projects.

At February 28, 2004, assets and liabilities totaling $4.6 million and $12.9 million, respectively, represented the remaining estimated future net cash outflows associated with the Company’s exit from discontinued operations. This compared to $32.9 million assets and $26.4 million liabilities at March 1, 2003. The net reduction in assets and liabilities relates to Harmon AutoGlass assets and liabilities that were sold during fiscal 2004.

Related Party Transactions

As a result of our 34 percent interest in PPG Auto Glass, in which PPG holds the remaining interest, various transactions the Company enters into with PPG and PPG Auto Glass are deemed to be “related party” transactions. Under the terms of a multi-year agreement expiring in July 2005, our manufacturing auto glass business is committed to selling a significant portion of its windshield capacity to PPG. Terms of the agreement between our manufacturing business and PPG require notification of termination by July 2004. The terms are negotiated equivalent to an arm’s-length basis. In March 2004, we received the required advance notice from PPG indicating that the windshield supply agreement Curvlite operates under will be terminated on the expiration date in July 2005, which is during fiscal 2006. We are in discussions with PPG regarding a new supply agreement. This is not anticipated to have a material effect on fiscal 2005 earnings. Additionally, at the time of formation of PPG Auto Glass, Harmon AutoGlass entered into a multi-year agreement pursuant to which it committed to purchase 75 percent of its windshield requirements from PPG Auto Glass. As part of the sale of Harmon AutoGlass, these purchase commitments remained with Harmon AutoGlass.

Liquidity and Capital Resources

Operating activities. Cash provided by operating activities of continuing operations was $18.6 million for fiscal 2004 compared to $52.0 million in fiscal 2003. The most significant items that affected the decline from the past year is the reduction of earnings from continuing operations of $24.3 million and increases in non-cash working capital (current assets less cash and current liabilities) of $18.5 million. The increase in non-cash working capital was primarily due to the increase in refundable income taxes, as we are expecting a significant refund during fiscal 2005. Management of working capital resources is a focus for us, and we expect to reduce non-cash working capital in fiscal 2005.

Investing activities. Capital expenditures in fiscal 2004, 2003 and 2002 were $11.5 million, $11.2 million and $7.7 million, respectively. Capital expenditures for the last three years are lower compared to our historical patterns as a direct result of our focus on filling the capacity of significant expansion projects initiated in fiscal 2000 and fiscal 1999. The Architectural segment’s capacity utilization at the end of fiscal 2004 was approximately 60 percent, indicating that capital requirements for expansion will be limited over the foreseeable future as growth initiatives fill the remaining available capacity.

In fiscal 2005, the Company expects to incur capital expenditures as necessary to maintain existing facilities, safety and information systems, as well as some capacity improvements within the LSO segment. Fiscal 2005 expenditures are expected to be less than $15.0 million. This amount does not include any acquisitions or regional expansions that we may consider as part of our overall strategic and performance objectives.

In fiscal 2004, 2003, and 2002, we had proceeds on the sale of certain land, buildings and equipment totaling $4.0 million, $4.6 million and $5.5 million, respectively. We have been focused on reducing our investment in non-core business assets over the past several years, which has resulted in these proceeds. Included in the fiscal 2004 and fiscal 2002 amounts were sale and leaseback agreements on miscellaneous buildings and equipment totaling $4.0 million and $2.1 million, respectively. Under these and other sale and leaseback agreements, we have an option to purchase equipment at projected future fair market value upon expiration of the leases, which occurs after fiscal 2006.

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We continue to review our portfolio of businesses and their assets in comparison to our internal strategic and performance objectives. As part of this review, we may acquire other businesses, further invest in, fully divest and/or sell-off parts of our current businesses.

Financing activities. Net payments on all of our borrowings for fiscal 2004, 2003, and 2002 were $7.8 million, $21.9 million and $36.3 million, respectively. We continued to focus on debt reduction during fiscal 2004, evidenced by the reduction in our debt-to-total capital ratio, which improved to 19.1 percent at the end of fiscal 2004, compared to 21.0 percent at the end of fiscal 2003. The majority of our long-term debt at the end of the year, $31.1 million, consisted of bank borrowings under a syndicated revolving credit facility. We expect to reduce debt further during fiscal 2005.

In April 2003, the Board of Directors authorized the repurchase of 1,500,000 million shares of our Common Stock. We purchased approximately 113,000 shares during fiscal 2004, paying out $1.3 million throughout the year at an average price of $11.44. During fiscal 2003, the Board of Directors authorized the repurchase of 1,500,000 million shares of our Common Stock. We completed this repurchase program by buying back 1,500,000 million shares in fiscal 2003 paying out $18.0 million throughout the year at an average price of $12.00 per share. We also purchased $0.9 million and $1.5 million of Company stock from employees pursuant to terms of board approved compensation plans during fiscal 2004 and 2003, respectively. It is our present intention to use the repurchase shares solely to offset the dilutive impact of management stock option exercises and to fund our equity-based compensation plans. Stock purchases may be made from time to time in the open market at prevailing market prices.

Other financing activities. The following summarizes significant contractual obligations that impact our liquidity: