<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q


              [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

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

        For Quarter Ended November 28, 1998 Commission File Number 0-6365


                            APOGEE ENTERPRISES, INC.
               --------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)


                  Minnesota                        41-0919654
          ------------------------           ---------------------
          (State of Incorporation)           (IRS Employer ID No.)

       7900 Xerxes Avenue South, Suite 1800, Minneapolis, Minnesota 55431
       ------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                  Registrant's Telephone Number (612) 835-1874

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
                                      -----    -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.

           Class                           Outstanding at December 31, 1998 
--------------------------------           -------------------------------- 
Common Stock, $.33-1/3 Par Value                      27,642,043

                                       1
<PAGE>
 
                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

                     FOR THE QUARTER ENDED NOVEMBER 28, 1998

         Description                                                 Page
         -----------                                                 ----

PART I
------

Item 1. Financial Statements

        Consolidated Balance Sheets as of November 28, 1998
          and February 28, 1998                                        3

        Consolidated Results of Operations for the
          Three Months and Nine Months Ended

          November 28, 1998 and November 29, 1997                      4

        Consolidated Statements of Cash Flows for
          the Nine Months Ended November 28, 1998 and

          November 29, 1997                                            5

        Notes to Consolidated Financial Statements                     6

Item 2. Management's Discussion and Analysis of

          Financial Condition and Results of Operations             7-11

Item 3. Quantitative and Qualitative Disclosures About Market Risk    11

PART II Other Information
-------

Item 6. Exhibits and Reports on Form 8-K                              12
        Exhibit Index                                                 14

                                       2
<PAGE>
 
Item 1.  Financial Statements
-------  --------------------

                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             (Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                     November 28,    February 28,
                                                                         1998            1998
                                                                     ------------    ------------
<S>                                                                  <C>             <C>       
ASSETS

Current assets
  Cash and cash equivalents                                           $  1,294         $  7,853
  Receivables, net of allowance for doubtful accounts                  160,534          145,121
  Inventories                                                           69,456           64,183
  Costs and earnings in excess of billings on uncompleted
    contracts                                                            5,419            6,796
  Refundable income taxes                                                  200           16,533
  Deferred tax assets                                                   10,628           14,218
  Other current assets                                                   5,221            7,540
                                                                      --------         --------
    Total current assets                                               252,752          262,244
                                                                      --------         --------

Property, plant and equipment, net                                     164,107          129,937
Marketable securities - available for sale                              19,698           18,706
Investments                                                                671              709
Intangible assets, at cost less accumulated amortization                54,373           50,500
Other assets                                                             2,195            2,025
                                                                      --------         --------
    Total assets                                                      $493,796         $464,121
                                                                      ========         ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                    $ 44,310         $ 44,055
  Accrued expenses                                                      86,668          108,893
  Billings in excess of costs and earnings on uncompleted
    contracts                                                           39,147           23,141
  Current installments of long-term debt                                 1,279            1,679
                                                                      --------         --------
    Total current liabilities                                          171,404          177,768
                                                                      --------         --------

Long-term debt                                                         167,719          151,967
Other long-term liabilities                                             26,423           24,785
Minority interest                                                          158                -

Shareholders' equity
  Common stock, $.33 1/3 par value; authorized 50,000,000
    shares; issued and outstanding 27,642,000 and 27,453,000
    shares, respectively                                                 9,214            9,151
  Additional paid-in capital                                            42,510           38,983
  Retained earnings                                                     76,961           61,899
  Unearned compensation                                                   (862)            (686)
  Net unrealized gain on marketable securities                             269              254
                                                                      --------         --------
    Total shareholders' equity                                         128,092          109,601
                                                                      --------         --------
    Total liabilities and shareholders' equity                        $493,796         $464,121
                                                                      ========         ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
 
                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                       CONSOLIDATED RESULTS OF OPERATIONS

                   FOR THE THREE MONTHS AND NINE MONTHS ENDED

                     NOVEMBER 28, 1998 AND NOVEMBER 29, 1997

            (Thousands of Dollars Except Share and Per Share Amounts)

<TABLE>
<CAPTION>
                                                       Three Months Ended                        Nine Months Ended
                                               ------------------------------------     -------------------------------------
                                                November 28,        November 29,         November 28,         November 29,
                                                    1998                1997                 1998                 1997
                                               ----------------    ----------------     ----------------    -----------------

<S>                                              <C>                <C>                   <C>                 <C>       
Net sales                                         $236,004            $235,021             $720,034             $704,887

Cost of sales                                      186,018             183,383              570,270              545,925
                                                  --------            --------             --------            ---------

    Gross profit                                    49,986              51,638              149,764              158,962

Selling, general and

  administrative expenses                           36,080              32,560              108,939               97,134
Unusual items                                            -              35,647                    -               48,438
                                                  --------            --------             --------            ---------

    Operating income (loss)                         13,906             (16,659)              40,825               13,390

Interest expense, net                                2,376               1,510                7,521                5,569
                                                  --------            --------             --------            ---------
    Earnings (loss) before income                               

    taxes and other items below                     11,530              (18,079)             33,304                7,821

Income taxes                                         4,017               (7,894)             12,073                1,171
Equity in net loss of affiliated
  companies                                            316                 250                1,064                  654
Minority interest                                      (53)                  -                 (116)                   -
                                                  --------            --------             --------            ---------

    Net earnings (loss)                           $  7,250            $ (10,435)           $ 20,283            $   5,996
                                                  ========            =========            ========            =========

Earnings (loss) per share-Basic                   $   0.26            $   (0.37)           $   0.74            $    0.22
                                                  ========            =========            ========            =========
Earnings (loss) per share-Diluted                 $   0.26            $   (0.37)           $   0.73            $    0.21
                                                  ========            =========            ========            =========

Cash dividends per common share                   $ 0.0525            $  0.0500            $ 0.1525            $  0.1400
                                                  ========            =========            ========            =========

</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
 
                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

        FOR THE NINE MONTHS ENDED NOVEMBER 28, 1998 AND NOVEMBER 29, 1997

                             (Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                           1998                 1997
                                                                         --------             --------
<S>                                                                      <C>                  <C>     
OPERATING ACTIVITIES
Net earnings                                                             $ 20,283             $  5,996
Adjustments to reconcile net earnings to net cash provided by
  operating activities:
    Depreciation and amortization                                          20,222               18,394
    Provision for losses on accounts receivable                             1,404                 (282)
    Deferred income tax (benefit) expense                                   4,580               (8,463)
    Provision for restructuring and
      other unusual items                                                       -               26,030
    Foreign currency translation loss                                           -                4,097
    Equity in net loss of affiliated companies                              1,064                  654
    Minority interest                                                        (116)                   -
    Other, net                                                                222                1,036
                                                                         --------             --------
         Cash flow before changes in operating assets and
            liabilities                                                    47,659               47,462
    Changes in operating assets and liabilities, net of effect
       of acquisitions
        Receivables                                                       (16,093)               4,761
        Inventories                                                        (5,231)              (7,544)
        Costs and earnings in excess of billings on uncompleted
           contracts                                                        1,377                6,017
        Other current assets                                                2,385                2,314
        Accounts payable and accrued expenses                             (23,546)             (10,994)
        Billings in excess of costs and earnings on uncompleted
          contracts                                                        16,006               (5,579)
        Refundable income taxes and accrued income taxes                   17,101                    -
        Accrued income taxes                                                    -                1,754
        Other long-term liabilities                                           472               (2,345)
                                                                         --------             --------
          Net cash provided by operating activities                        40,130               35,846
                                                                         --------             --------

INVESTING ACTIVITIES
Capital expenditures                                                      (52,946)             (27,998)
Acquisition of businesses, net of cash acquired                            (3,361)                (537)
Increase in marketable securities                                            (946)              (7,462)
Investments in and advance to affiliated companies                         (1,025)                   -
Proceeds from sale of property and equipment                                  232                  768
Other, net                                                                    628               (1,186)
                                                                         --------             --------
          Net cash used in investing activities                           (57,418)             (36,415)
                                                                         --------             --------

FINANCING ACTIVITIES
Payments on long-term debt                                                 (1,145)              (1,114)
Proceeds from issuance of long-term debt                                   16,497                9,589
Repurchase and retirement of common stock                                  (1,182)              (7,149)
Proceeds from issuance of common stock                                      2,961                4,112
Dividends paid                                                             (4,214)              (3,876)
Increase in deferred debt expenses                                         (2,188)                   -
                                                                         --------             --------
          Net cash provided by financing activities                        10,729                1,562
                                                                         --------             --------
(Decrease) increase in cash and cash equivalents before
  effect of exchange rate changes on cash                                  (6,559)                 993
Effect of exchange rate changes on cash                                         -               (2,049)
                                                                         --------             --------
Decrease in cash                                                           (6,559)              (1,056)
Cash at beginning of period                                                 7,853                4,065
                                                                         --------             --------
Cash at end of period                                                    $  1,294              $ 3,009
                                                                         ========              =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
 
                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      Summary of Significant Accounting Policies

        In the opinion of the Company, the accompanying unaudited consolidated
        financial statements contain all adjustments (consisting of only normal
        recurring accruals) necessary to present fairly the financial position
        as of November 28, 1998 and November 29, 1997, the results of operations
        for the three months and nine months ended November 28, 1998 and
        November 29, 1997 and cash flows for the nine months ended November 28,
        1998 and November 29, 1997. Certain prior year amounts have been
        reclassified to conform to the current period presentation.

        The financial statements and notes are presented as permitted by Form
        10-Q and do not contain certain information included in the Company's
        annual consolidated financial statements and notes. The information
        included in this Form 10-Q should be read in conjunction with
        Management's Discussion and Analysis and financial statements and notes
        thereto included in the Company's Form 10-K for the year ended February
        28, 1998. The results of operations for the three months and nine months
        ended November 28, 1998 and November 29, 1997 are not necessarily
        indicative of the results to be expected for the full year.

        The Company's fiscal year ends on the Saturday closest to February 28.
        Each interim quarter ends on the Saturday closest to the end of the
        months of May, August and November.

2.      Earnings per share

        The following table presents a reconciliation of the denominators used
        in the computation of basic and diluted earnings per share.

                              Three Months Ended          Nine Months Ended
                          --------------------------  --------------------------
                          November 28,  November 29,  November 28,  November 29,
                              1998          1997          1998          1997
                           ----------    ----------    ----------    ----------

Basic earnings per
   share-weighted common
   shares outstanding      27,635,881    27,865,701    27,588,981    27,844,743
Weighted common shares
   assumed upon exercise
   of stock options           127,828          --         197,152       653,792
                           ----------    ----------    ----------    ----------
Diluted earnings per
   share-weighted common
   shares and common
   shares equivalent
   outstanding             27,763,709    27,865,701    27,786,133    28,498,535
                           ==========    ==========    ==========    ==========

3.      Inventories

        Inventories consist of the following:

                                        November 28, 1998   February 28, 1998

                                        -----------------   -----------------
        Raw materials and supplies             $19,933            $20,017
        In process                               4,234              4,749
        Finished goods                          45,289             39,417
                                        -----------------   -----------------
                                               $69,456            $64,183
                                        =================   =================

                                       6
<PAGE>
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations
         -------------

Sales and Earnings
------------------
Third quarter net earnings of $7.3 million, or $0.26 cents per share diluted,
were $17.7 million higher than last year's loss of $10.4 million, or $0.37 cents
per share diluted. Revenues of $236.0 million for the quarter were relatively
flat as compared to revenues of $235.0 a year ago. Operating income of $13.9
million compared to an operating loss of $16.6 million in last year's third
quarter, which included $31.2 million in operating losses related to Building
Products & Services' exited European curtainwall operations. The increase in
Apogee's operating income was primarily due to a significant improvement in
Building Products & Services' results; last year's results included a $26.0
million pre-tax provision for restructuring and other unusual items mainly
related to the segment's international curtainwall operations. A 49% decline in
operating income at Glass Technologies partly offset this improvement.

Year-to-date net earnings increased to $20.3 million, or $0.73 cents per share
diluted, from $6.0 million, or $0.21 cents per share diluted, in the prior year.
Revenues for the first nine months increased 2%, to $720.0 million, compared to
$704.9 million a year ago.

The following table presents the percentage change in net sales and operating
income for the Company's three segments and on a consolidated basis, for three
and nine months when compared to the corresponding periods a year ago.

<TABLE>
<CAPTION>
                                       Three Months Ended                     Nine Months Ended
                                ----------------------------------    ---------------------------------
                                November 28,  November 29,    %       November 28,  November 29,    %
(Dollars in thousands)             1998           1997       Chg         1998          1997        Chg
                                ----------------------------------    ---------------------------------
<S>                             <C>           <C>             <C>     <C>           <C>             <C>
Net Sales
Glass Technologies              $  54,680     $  61,431       (11)    $ 159,545     $ 171,481       (7)
Auto  Glass                        91,117        83,971         9       296,920       271,524        9
Building Products & Services       93,056        93,087        --       271,832       270,285        1
Intersegment Eliminations          (2,849)       (3,468)      (18)       (8,263)       (8,403)      (2)
                                ----------------------------------    ---------------------------------
Total                           $ 236,004     $ 235,021        --     $ 720,034     $ 704,887        2
                                ==================================    =================================

Operating Income (Loss)
Glass Technologies              $   4,186     $   8,228       (49)    $  10,046     $  21,412      (53)
Auto Glass                          4,019         2,953        36        18,757        20,715       (9)
Building Products & Services        5,959       (27,473)      N/M        12,680       (28,113)     N/M
Corporate and Other                  (258)         (277)       (7)         (658)         (624)       5
                                ----------------------------------    ---------------------------------
Total                           $  13,906     $ (16,569)      N/M     $  40,825     $  13,390      205
                                ==================================    =================================
</TABLE>

Glass Technologies (GT)
-----------------------
Third quarter sales and earnings results at Glass Technologies were below the
record sales and operating income reported a year ago, but showed improvement
over second quarter. GT sales decreased 11% to $54.7 million in the third
quarter, while operating income fell 49% to $4.2 million in the quarter. The
economic slowdown in Asia was a primary factor affecting the segment's results
as sales of Viratec's anti-glare filter and front-surface mirror products to
Asia, both directly and indirectly, continued to trail sales from a year ago.
The effects of the segments' many capital projects also contributed to the
segment's lower earnings. In addition, Viracon reported lower sales despite
solid plant productivity, as production of the unit's architectural glass
products outpaced shipments by a considerable margin. We expect shipments to
exceed production levels in the fourth quarter as releases are made to
customers.

Viracon, the segment's largest unit, reported 11% lower net sales, while
earnings were down 39% compared to last year's very strong third quarter. These
results were due primarily to the factors noted above. Viracon continued to run
at a high level of productivity despite its continuing capacity limitations,
which were partially relieved by modest production from temporary operations
used in the training of employees for the new Statesboro, Georgia facility.
Construction of Viracon's new facility remained on schedule. Customer demand for
Viracon's high-performance architectural glass products remained strong.

                                       7
<PAGE>
 
Start-up of the Optium CRT coating line and lower demand for Viratec's
anti-glare filter and front-surface mirror products caused Viratec to report an
operating loss for the quarter compared to solid operating earnings a year
earlier. The Viratec unit's Optium CRT coating line went online in September and
is ramping up production to meet the sales orders received from customers.
Viratec continued to proceed with the addition of a new flat glass coating line,
which is expected to go on-line next spring.

As compared to last year, third quarter operating income at Tru Vue held steady
on a marginal sales increase. Also, during the third quarter, Tru Vue broke
ground on a new facility in the Chicago area. The new facility, expected to be
completed in the spring of 1999, should increase productivity at this business
unit.

Based on its backlog, strong demand for most of its products and the return to
full production of Viratec's Optium CRT coating line, fourth quarter earnings
for GT are expected to increase over third quarter results. However, GT will
fall short of last year's fourth quarter and full year operating earnings.

Auto Glass (AG)
---------------
As compared to last year, AG sales for the quarter increased 9% to $91.1
million. Operating income increased 36% to $4.0 million, compared to a year ago,
due partly to a continuing effort to increase sales to national insurance
companies. AG also continued to proceed with efforts to improve productivity for
its auto glass repair and replacement retail operations. For the first nine
months of fiscal 1999, same-location retail unit sales fell slightly. At the
close of the third quarter, AG had 340 retail locations, 75 wholesale depots and
8 Midas Muffler franchises.

While the segment expects to report a loss in its seasonally slow fourth
quarter, the segment expects to report year-over-year improvement for the
quarter.

Building Products & Services (BPS)
----------------------------------
Third quarter operating income at Building Products & Services climbed to $6.0
million compared with an operating loss of $27.5 million in last year's third
quarter, which included the $26.0 million pre-tax charge noted above. Sales were
at the prior year level of $93.1 million, which were restated to reflect the
deconsolidation of the segment's European curtainwall operations. The quarter's
results benefited from the impact of strategies employed last year by Building
Products & Services - downsizing of operations, exiting from the segment's
international curtainwall operations, and adherence to defined margin and
investment parameters.

Although profitable, domestic curtainwall operations reported operating earnings
below last year despite a marginal increase in sales. Last year's results
benefited from the completion of a large project. The Detention/Security group
also reported decreased earnings despite increased sales levels. Full Service
and Architectural Products both reported solid results with earnings well above
a year ago.

As of the end of the third fiscal quarter, the activities associated with the
exit from European curtainwall operations remained on schedule, and the Asian
curtainwall unit had substantially completed the remaining projects in its
backlog.

On December 3, 1998, the segment executed the sale of its Detention/Security
business, effective November 28, 1998. The sale was made in an effort to better
focus on Apogee's core businesses. The Detention/Security business unit
represented 8% of Apogee's consolidated sales and less than 3% of Apogee's
consolidated operating income for the three quarters ended November 28, 1998.

Backlog
-------
On November 28, 1998, Apogee's consolidated backlog stood at $240 million, down
26% from the $327 million reported a year ago. The backlogs of BPS's operations
represented 75% of Apogee's consolidated

                                       8
<PAGE>
 
backlog. The most notable variances were the anticipated declines in BPS's New
Construction unit's international backlogs and the elimination of
Detention/Security's backlog as a result of the sale of that unit as mentioned
above. These decreases were offset by significant backlog increases at Viracon,
Viratec and BPS's domestic New Construction unit.

Consolidated
------------
The following table compares quarterly results with year-ago results, as a
percentage of sales, for each caption.

<TABLE>
<CAPTION>
                                                 Three Months Ended  Nine Months Ended
                                                 ------------------  -----------------
                                                 Nov. 28,  Nov. 29,  Nov. 28,  Nov. 29,
                                                   1998     1997       1998      1997
                                                  -----------------  -----------------
<S>                                               <C>       <C>        <C>       <C>  
Net sales                                         100.0     100.0      100.0     100.0
Cost of sales                                      78.8      78.0       79.2      77.4
                                                  -----------------  -----------------
     Gross profit                                  21.2      22.0       20.8      22.6
Selling, general and administrative expenses       15.3      13.9       15.1      13.8
Unusual items                                        --      15.2         --       6.9
                                                  -----------------  -----------------
     Operating income (loss)                        5.9      (7.1)       5.7       1.9
Interest expense, net                               1.0       0.6        1.0       0.8
                                                  -----------------  -----------------
     Earnings (loss) before income taxes
       and other items below                        4.9      (7.7)       4.6       1.1
Income taxes                                        1.7      (3.4)       1.7       0.2
Equity in net earnings of affiliated companies      0.1       0.1        0.1       0.1
Minority interest                                    --        --         --        --
                                                  -----------------  -----------------
     Net earnings (loss)                            3.1      (4.4)       2.8       0.9
                                                  =================  =================

Income tax rate                                    35.0%    (43.7)%     36.3%     15.0%

</TABLE>

On a consolidated basis for the three-month and nine-month periods, gross profit
fell as a percentage of net sales. The primary factors underlying this decline
were the effect of the suspension of the Optium CRT coating line through the
second quarter, temporary productivity issues at Viracon early in the second
quarter and the absence of the significant margin recognized upon the completion
of one large curtainwall project included in last year's results. These items
were partly offset by solid productivity gains at BPS's Architectural and Full
Service business units and the continuation of a change in sales mix reflecting
lower curtainwall revenues.

Selling, general and administrative (SG&A) expenses rose by $3.5 million, or
11%, for the quarter, and by $11.8 million, or 12%, for nine months. The
increases included higher spending for information systems technology at several
businesses, and higher employee and advertising costs. Interest expense rose
over last year for both the three-month and nine-month periods, due to higher
borrowing levels and interest rates. The nine-month effective income tax rate
was 36.3% versus a 15.0% tax rate last year with the fiscal 1998 tax rate
reflecting the marginal tax benefit associated with the $26.0 million charge
related to international curtainwall operations described above.

Liquidity and Capital Resources
-------------------------------
Financial Condition
-------------------
Net cash provided by operating activities

Cash provided by operating activities for the nine months ended November 28,
1998 totaled $40.1 million. That figure primarily reflected the combination of
net earnings and noncash charges, such as depreciation and amortization. At
quarter end, the Company's working capital stood at $81.3 million. Working
capital, excluding cash, remained essentially unchanged from the beginning of
the year. Major variances within the working capital accounts included growth in
receivables and inventories along with a reduction in payables/accruals.
Offsetting these increases in working capital were the receipt of approximately
$10

                                       9
<PAGE>
 
million in refundable income taxes, which was used to reduce outstanding debt,
and an increase in billings in excess of costs and earnings on uncompleted
contracts.

Net cash provided by financing activities

Bank borrowings stood at $167.0 million at November 28, 1998; 11% higher than
the $150.5 million outstanding at February 28, 1998. The additional borrowings
were primarily attributable to the excess of capital spending and cash dividends
over cash generated from operating activities. At November 28, 1998, long-term
debt stood at 52% of total capitalization.

Debt was decreased by $22.5 million the week following quarter-end. This
decrease was attributable to the use of proceeds from the sale of the
Detention/Security business unit of BPS.

In May 1998, the Company obtained a five-year, committed secured credit facility
in the amount of $275 million. This new credit facility requires Apogee to
maintain minimum levels of net worth and certain financial ratios, and is
collateralized by the Company's receivables, inventory, equipment and
intangibles. This facility replaced a $150 million five-year, multi-currency
committed credit facility which had been obtained in May 1996. The total
commitment of the credit facility was reduced by the sales price, net of taxes,
of the sale of the Detention/Security business.

In December 1998, Apogee entered into an interest rate swap agreement, which
expires in fiscal 2004, which effectively converted $25 million of its variable
rate borrowings into a fixed rate obligation.

The Company anticipates bank borrowings to increase over the remainder of the
fiscal year as capital spending, working capital and dividend requirements are
expected to exceed the Company's cash provided by operating activities.

Net cash used in investing activities

Additions to property, plant and equipment during the nine months ended November
28, 1998 totaled approximately $52.9 million. Major items included expenditures
for the GT expansion activities noted above as well as expenditures on
information systems projects throughout the Company. Capital expenditures for
the remainder of the year are expected to be significant primarily due to the
completion of the Company's new Statesboro, Georgia architectural glass
fabrication facility and other planned capacity expansions in GT.

Cash decreased $6.6 million for the nine months ended November 28, 1998.

Shareholders' Equity
--------------------
At November 28, 1998, Apogee's shareholders' equity stood at $128.1 million.
Book value per share was $4.63, up from $3.99 per share at February 28, 1998,
with outstanding common shares increasing nominally during the period. Net
earnings and proceeds from common stock issued in connection with the Company's
stock-based compensation plans accounted for the increase, slightly offset by
dividends paid.

Impact of Year 2000
-------------------
The Company has been evaluating, with the assistance of independent software
consultants, its Information Technology (IT) systems, non-IT systems, and
third-party readiness for compliance with Year 2000 requirements. For these
purposes, the Company defines its "IT systems" as those hardware and software
systems which comprise its central management information systems and its
telephone systems. All other systems, including those involved in local, on-site
product design or manufacturing, are considered "non-IT systems." "Third
parties" include all the Company's key suppliers and customers.

The assessment phase for the Company's IT systems is approximately 80% complete.
Remediation and implementation of the core operating and application programs
within the IT systems is approximately 25% complete, and the intention is to be
completed by May 1999. The costs related to Year 2000 to complete this activity
should not exceed $15 million of both capital and expense, of which
approximately

                                       10
<PAGE>
 
$2 million has been incurred to date. Of this projected cost, approximately $6
million is related to accelerated replacement due to Year 2000 concerns.

The Company's businesses are approximately 15% complete in the assessment phase
regarding embedded operating and applications software and hardware within its
non-IT systems. The Company expects to complete that assessment by February
1999. Although the Company is still in the assessment phase, based on currently
known data about its non-IT systems, the Company believes that the requirements
for Year 2000 remediation of its non-IT systems will be limited in nature.

The Company's businesses have contacted key customers and suppliers to assess
Year 2000 compliance within their organizations to assure no material
interruption in these important third party relationships. This dialog and
process will be ongoing into early 1999. Non-compliant customers and suppliers
will be evaluated in terms of the degree of risk posed to the Company's
business, and, where necessary, appropriate responses such as selection of Year
2000 compliant additional or replacement suppliers will be taken. If there were
significant non-compliance by key customers and suppliers, the Company might
experience a material adverse effect on the businesses with those specific
third-party relationships.

Most of the Company's businesses will remediate or replace portions of their
software and hardware within the Company's IT systems and non-IT systems that
are identified as requiring Year 2000 remediation. The Company intends to
address contingency planning with respect to its IT systems, its non-IT systems
and its third-party relationships with key customers and suppliers in early
1999.

Based on the Company's assessments completed to date, the Company's total cost
of addressing Year 2000 issues is currently estimated to be in the range of $10
to $18 million, of which approximately $3 million has already been incurred.
These costs have been and will continue to be funded through operating cash
flows.

Cautionary Statements
---------------------
A number of factors should be considered in conjunction with any discussion of
operations or results by the Company or its representatives and any
forward-looking discussion, as well as comments contained in press releases,
presentations to securities analysts or investors, or other communications by
the Company.

These factors are set forth in the cautionary statements filed as Exhibit 99 to
the Company's Form 10-K and include, without limitation, cautionary statements
regarding changes in economic and market conditions, factors related to
competitive pricing, commercial building market conditions, management of growth
of business units, costs or difficulties related to the operation of the
businesses or execution of exit activities are greater than expected, the impact
of foreign currency markets, the integration of acquisitions, and the
realization of expected economies gained through expansion and information
systems technology. The Company wishes to caution investors and others to review
the statements set forth in Exhibit 99 and that other factors may prove to be
important in affecting the Company's business or results of operations. These
cautionary statements should be considered in connection with this Form 10-Q,
including the forward looking statements contained in the Management's
discussion and analysis of the Company's three business segments. These
cautionary statements are intended to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.

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

This item is not applicable to the Company as of November 28, 1998.

                                       11
<PAGE>
 
                                     PART II


                                OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K
         --------------------------------

(a)    Exhibits:

       Exhibit 10.1  Resignation Agreement between Apogee Enterprises, Inc.
                     and James L. Martineau
       Exhibit 10.2  Apogee Enterprises, Inc. Officers' Supplemental Executive
                     Retirement Plan
       Exhibit 10.3  Apogee Enterprises, Inc. Executive Supplemental Plan
       Exhibit 10.4  Amendment to Apogee Enterprises, Inc. Employment Agreement
                     with Richard Gould
       Exhibit 27.1  Financial Data Schedule (EDGAR filing only).
       Exhibit 27.2  Restated Financial Data Schedule (EDGAR filing only).
       Exhibit 27.3  Restated Financial Data Schedule (EDGAR filing only).
       Exhibit 27.4  Restated Financial Data Schedule (EDGAR filing only).

(b)    The Company filed a Current Report on Form 8-K, dated November 10, 1998,
       announcing the signed purchase agreement between the Company and
       CompuDyne Corporation for the sale of the Company's Detention/Security
       business unit.

       The Company filed a Current Report on Form 8-K, dated December 3, 1998,
       updating the information on the purchase agreement announced November 10,
       1998 and announcing the closing of the sale of the Detention/Security
       business unit.

                                       12
<PAGE>
 
CONFORMED COPY

                                   SIGNATURES

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

                                           APOGEE ENTERPRISES, INC.

Date:   January 12, 1999                   /s/ Russell Huffer
                                           ------------------
                                           Russell Huffer
                                           President and Chief Executive Officer

Date:  January 12, 1999                    /s/ Robert G. Barbieri
                                           ----------------------
                                           Robert G. Barbieri
                                           Vice President Finance and
                                             Chief Financial Officer

                                       13
<PAGE>
 
                                  EXHIBIT INDEX

Exhibit
-------
Exhibit 10.1   Resignation Agreement between Apogee Enterprises, Inc. and James
               L. Martineau
Exhibit 10.2   Apogee Enterprises, Inc. Officers' Supplemental Executive
               Retirement Plan
Exhibit 10.3   Apogee Enterprises, Inc. Executive Supplemental Plan
Exhibit 10.4   Amendment to Apogee Enterprises, Inc. Employment Agreement with
               Richard Gould
Exhibit 27.1   Financial Data Schedule (EDGAR filing only).
Exhibit 27.2   Restated Financial Data Schedule (EDGAR filing only).
Exhibit 27.3   Restated Financial Data Schedule (EDGAR filing only).
Exhibit 27.4   Restated Financial Data Schedule (EDGAR filing only).

                                      14
[{"type": "10-Q", "sequence": "1", "description": "QUARTERLY REPORT", "secsgml_size_bytes": 47433}]
{"company-data": {"conformed-name": "APOGEE ENTERPRISES INC", "cik": "0000006845", "assigned-sic": "1700", "irs-number": "410919654", "state-of-incorporation": "MN", "fiscal-year-end": "0228"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-06365", "film-number": "99505046"}, "business-address": {"street1": "7900 XERXES AVE S", "street2": "SUITE 1800", "city": "MINNEAPOLIS", "state": "MN", "zip": "55431", "phone": "6128351874"}, "mail-address": {"street1": "7900 XERXES AVE S", "street2": "SUITE 1800", "city": "MINNEAPOLIS", "state": "MO", "zip": "55431"}, "former-company": {"former-conformed-name": "HARMON GLASS CO INC", "date-changed": "19720623"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

              [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

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

        For Quarter Ended November 28, 1998 Commission File Number 0-6365

                            APOGEE ENTERPRISES, INC.
               --------------------------------------------------
               (Exact Name of Registrant as Specified in Charter)

                  Minnesota                        41-0919654
          ------------------------           ---------------------
          (State of Incorporation)           (IRS Employer ID No.)

       7900 Xerxes Avenue South, Suite 1800, Minneapolis, Minnesota 55431
       ------------------------------------------------------------------
                    (Address of Principal Executive Offices)

                  Registrant's Telephone Number (612) 835-1874

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
                                      -----    -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.

           Class                           Outstanding at December 31, 1998 
--------------------------------           -------------------------------- 
Common Stock, $.33-1/3 Par Value                      27,642,043

                                       1
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

                     FOR THE QUARTER ENDED NOVEMBER 28, 1998

         Description                                                 Page
         -----------                                                 ----

PART I
------

Item 1. Financial Statements

        Consolidated Balance Sheets as of November 28, 1998
          and February 28, 1998                                        3

        Consolidated Results of Operations for the
          Three Months and Nine Months Ended

          November 28, 1998 and November 29, 1997                      4

        Consolidated Statements of Cash Flows for
          the Nine Months Ended November 28, 1998 and

          November 29, 1997                                            5

        Notes to Consolidated Financial Statements                     6

Item 2. Management's Discussion and Analysis of

          Financial Condition and Results of Operations             7-11

Item 3. Quantitative and Qualitative Disclosures About Market Risk    11

PART II Other Information
-------

Item 6. Exhibits and Reports on Form 8-K                              12
        Exhibit Index                                                 14

                                       2
Item 1.  Financial Statements
-------  --------------------

                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                             (Thousands of Dollars)
November 28,    February 28,
                                                                         1998            1998
                                                                     ------------    ------------
ASSETS

Current assets
  Cash and cash equivalents                                           $  1,294         $  7,853
  Receivables, net of allowance for doubtful accounts                  160,534          145,121
  Inventories                                                           69,456           64,183
  Costs and earnings in excess of billings on uncompleted
    contracts                                                            5,419            6,796
  Refundable income taxes                                                  200           16,533
  Deferred tax assets                                                   10,628           14,218
  Other current assets                                                   5,221            7,540
                                                                      --------         --------
    Total current assets                                               252,752          262,244
                                                                      --------         --------

Property, plant and equipment, net                                     164,107          129,937
Marketable securities - available for sale                              19,698           18,706
Investments                                                                671              709
Intangible assets, at cost less accumulated amortization                54,373           50,500
Other assets                                                             2,195            2,025
                                                                      --------         --------
    Total assets                                                      $493,796         $464,121
                                                                      ========         ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
  Accounts payable                                                    $ 44,310         $ 44,055
  Accrued expenses                                                      86,668          108,893
  Billings in excess of costs and earnings on uncompleted
    contracts                                                           39,147           23,141
  Current installments of long-term debt                                 1,279            1,679
                                                                      --------         --------
    Total current liabilities                                          171,404          177,768
                                                                      --------         --------

Long-term debt                                                         167,719          151,967
Other long-term liabilities                                             26,423           24,785
Minority interest                                                          158                -

Shareholders' equity
  Common stock, $.33 1/3 par value; authorized 50,000,000
    shares; issued and outstanding 27,642,000 and 27,453,000
    shares, respectively                                                 9,214            9,151
  Additional paid-in capital                                            42,510           38,983
  Retained earnings                                                     76,961           61,899
  Unearned compensation                                                   (862)            (686)
  Net unrealized gain on marketable securities                             269              254
                                                                      --------         --------
    Total shareholders' equity                                         128,092          109,601
                                                                      --------         --------
    Total liabilities and shareholders' equity                        $493,796         $464,121
                                                                      ========         ========
See accompanying notes to consolidated financial statements.

                                       3
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                       CONSOLIDATED RESULTS OF OPERATIONS

                   FOR THE THREE MONTHS AND NINE MONTHS ENDED

                     NOVEMBER 28, 1998 AND NOVEMBER 29, 1997

            (Thousands of Dollars Except Share and Per Share Amounts)
Three Months Ended                        Nine Months Ended
                                               ------------------------------------     -------------------------------------
                                                November 28,        November 29,         November 28,         November 29,
                                                    1998                1997                 1998                 1997
                                               ----------------    ----------------     ----------------    -----------------
Net sales                                         $236,004            $235,021             $720,034             $704,887

Cost of sales                                      186,018             183,383              570,270              545,925
                                                  --------            --------             --------            ---------

    Gross profit                                    49,986              51,638              149,764              158,962

Selling, general and

  administrative expenses                           36,080              32,560              108,939               97,134
Unusual items                                            -              35,647                    -               48,438
                                                  --------            --------             --------            ---------

    Operating income (loss)                         13,906             (16,659)              40,825               13,390

Interest expense, net                                2,376               1,510                7,521                5,569
                                                  --------            --------             --------            ---------
    Earnings (loss) before income                               

    taxes and other items below                     11,530              (18,079)             33,304                7,821

Income taxes                                         4,017               (7,894)             12,073                1,171
Equity in net loss of affiliated
  companies                                            316                 250                1,064                  654
Minority interest                                      (53)                  -                 (116)                   -
                                                  --------            --------             --------            ---------

    Net earnings (loss)                           $  7,250            $ (10,435)           $ 20,283            $   5,996
                                                  ========            =========            ========            =========

Earnings (loss) per share-Basic                   $   0.26            $   (0.37)           $   0.74            $    0.22
                                                  ========            =========            ========            =========
Earnings (loss) per share-Diluted                 $   0.26            $   (0.37)           $   0.73            $    0.21
                                                  ========            =========            ========            =========

Cash dividends per common share                   $ 0.0525            $  0.0500            $ 0.1525            $  0.1400
                                                  ========            =========            ========            =========
See accompanying notes to consolidated financial statements.

                                       4
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

        FOR THE NINE MONTHS ENDED NOVEMBER 28, 1998 AND NOVEMBER 29, 1997

                             (Thousands of Dollars)
1998                 1997
                                                                         --------             --------
OPERATING ACTIVITIES
Net earnings                                                             $ 20,283             $  5,996
Adjustments to reconcile net earnings to net cash provided by
  operating activities:
    Depreciation and amortization                                          20,222               18,394
    Provision for losses on accounts receivable                             1,404                 (282)
    Deferred income tax (benefit) expense                                   4,580               (8,463)
    Provision for restructuring and
      other unusual items                                                       -               26,030
    Foreign currency translation loss                                           -                4,097
    Equity in net loss of affiliated companies                              1,064                  654
    Minority interest                                                        (116)                   -
    Other, net                                                                222                1,036
                                                                         --------             --------
         Cash flow before changes in operating assets and
            liabilities                                                    47,659               47,462
    Changes in operating assets and liabilities, net of effect
       of acquisitions
        Receivables                                                       (16,093)               4,761
        Inventories                                                        (5,231)              (7,544)
        Costs and earnings in excess of billings on uncompleted
           contracts                                                        1,377                6,017
        Other current assets                                                2,385                2,314
        Accounts payable and accrued expenses                             (23,546)             (10,994)
        Billings in excess of costs and earnings on uncompleted
          contracts                                                        16,006               (5,579)
        Refundable income taxes and accrued income taxes                   17,101                    -
        Accrued income taxes                                                    -                1,754
        Other long-term liabilities                                           472               (2,345)
                                                                         --------             --------
          Net cash provided by operating activities                        40,130               35,846
                                                                         --------             --------

INVESTING ACTIVITIES
Capital expenditures                                                      (52,946)             (27,998)
Acquisition of businesses, net of cash acquired                            (3,361)                (537)
Increase in marketable securities                                            (946)              (7,462)
Investments in and advance to affiliated companies                         (1,025)                   -
Proceeds from sale of property and equipment                                  232                  768
Other, net                                                                    628               (1,186)
                                                                         --------             --------
          Net cash used in investing activities                           (57,418)             (36,415)
                                                                         --------             --------

FINANCING ACTIVITIES
Payments on long-term debt                                                 (1,145)              (1,114)
Proceeds from issuance of long-term debt                                   16,497                9,589
Repurchase and retirement of common stock                                  (1,182)              (7,149)
Proceeds from issuance of common stock                                      2,961                4,112
Dividends paid                                                             (4,214)              (3,876)
Increase in deferred debt expenses                                         (2,188)                   -
                                                                         --------             --------
          Net cash provided by financing activities                        10,729                1,562
                                                                         --------             --------
(Decrease) increase in cash and cash equivalents before
  effect of exchange rate changes on cash                                  (6,559)                 993
Effect of exchange rate changes on cash                                         -               (2,049)
                                                                         --------             --------
Decrease in cash                                                           (6,559)              (1,056)
Cash at beginning of period                                                 7,853                4,065
                                                                         --------             --------
Cash at end of period                                                    $  1,294              $ 3,009
                                                                         ========              =======
See accompanying notes to consolidated financial statements.

                                       5
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.      Summary of Significant Accounting Policies

        In the opinion of the Company, the accompanying unaudited consolidated
        financial statements contain all adjustments (consisting of only normal
        recurring accruals) necessary to present fairly the financial position
        as of November 28, 1998 and November 29, 1997, the results of operations
        for the three months and nine months ended November 28, 1998 and
        November 29, 1997 and cash flows for the nine months ended November 28,
        1998 and November 29, 1997. Certain prior year amounts have been
        reclassified to conform to the current period presentation.

        The financial statements and notes are presented as permitted by Form
        10-Q and do not contain certain information included in the Company's
        annual consolidated financial statements and notes. The information
        included in this Form 10-Q should be read in conjunction with
        Management's Discussion and Analysis and financial statements and notes
        thereto included in the Company's Form 10-K for the year ended February
        28, 1998. The results of operations for the three months and nine months
        ended November 28, 1998 and November 29, 1997 are not necessarily
        indicative of the results to be expected for the full year.

        The Company's fiscal year ends on the Saturday closest to February 28.
        Each interim quarter ends on the Saturday closest to the end of the
        months of May, August and November.

2.      Earnings per share

        The following table presents a reconciliation of the denominators used
        in the computation of basic and diluted earnings per share.

                              Three Months Ended          Nine Months Ended
                          --------------------------  --------------------------
                          November 28,  November 29,  November 28,  November 29,
                              1998          1997          1998          1997
                           ----------    ----------    ----------    ----------

Basic earnings per
   share-weighted common
   shares outstanding      27,635,881    27,865,701    27,588,981    27,844,743
Weighted common shares
   assumed upon exercise
   of stock options           127,828          --         197,152       653,792
                           ----------    ----------    ----------    ----------
Diluted earnings per
   share-weighted common
   shares and common
   shares equivalent
   outstanding             27,763,709    27,865,701    27,786,133    28,498,535
                           ==========    ==========    ==========    ==========

3.      Inventories

        Inventories consist of the following:

                                        November 28, 1998   February 28, 1998

                                        -----------------   -----------------
        Raw materials and supplies             $19,933            $20,017
        In process                               4,234              4,749
        Finished goods                          45,289             39,417
                                        -----------------   -----------------
                                               $69,456            $64,183
                                        =================   =================

                                       6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operations
         -------------

Sales and Earnings
------------------
Third quarter net earnings of $7.3 million, or $0.26 cents per share diluted,
were $17.7 million higher than last year's loss of $10.4 million, or $0.37 cents
per share diluted. Revenues of $236.0 million for the quarter were relatively
flat as compared to revenues of $235.0 a year ago. Operating income of $13.9
million compared to an operating loss of $16.6 million in last year's third
quarter, which included $31.2 million in operating losses related to Building
Products & Services' exited European curtainwall operations. The increase in
Apogee's operating income was primarily due to a significant improvement in
Building Products & Services' results; last year's results included a $26.0
million pre-tax provision for restructuring and other unusual items mainly
related to the segment's international curtainwall operations. A 49% decline in
operating income at Glass Technologies partly offset this improvement.

Year-to-date net earnings increased to $20.3 million, or $0.73 cents per share
diluted, from $6.0 million, or $0.21 cents per share diluted, in the prior year.
Revenues for the first nine months increased 2%, to $720.0 million, compared to
$704.9 million a year ago.

The following table presents the percentage change in net sales and operating
income for the Company's three segments and on a consolidated basis, for three
and nine months when compared to the corresponding periods a year ago.
Three Months Ended                     Nine Months Ended
                                ----------------------------------    ---------------------------------
                                November 28,  November 29,    %       November 28,  November 29,    %
(Dollars in thousands)             1998           1997       Chg         1998          1997        Chg
                                ----------------------------------    ---------------------------------
Net Sales
Glass Technologies              $  54,680     $  61,431       (11)    $ 159,545     $ 171,481       (7)
Auto  Glass                        91,117        83,971         9       296,920       271,524        9
Building Products & Services       93,056        93,087        --       271,832       270,285        1
Intersegment Eliminations          (2,849)       (3,468)      (18)       (8,263)       (8,403)      (2)
                                ----------------------------------    ---------------------------------
Total                           $ 236,004     $ 235,021        --     $ 720,034     $ 704,887        2
                                ==================================    =================================

Operating Income (Loss)
Glass Technologies              $   4,186     $   8,228       (49)    $  10,046     $  21,412      (53)
Auto Glass                          4,019         2,953        36        18,757        20,715       (9)
Building Products & Services        5,959       (27,473)      N/M        12,680       (28,113)     N/M
Corporate and Other                  (258)         (277)       (7)         (658)         (624)       5
                                ----------------------------------    ---------------------------------
Total                           $  13,906     $ (16,569)      N/M     $  40,825     $  13,390      205
                                ==================================    =================================
Glass Technologies (GT)
-----------------------
Third quarter sales and earnings results at Glass Technologies were below the
record sales and operating income reported a year ago, but showed improvement
over second quarter. GT sales decreased 11% to $54.7 million in the third
quarter, while operating income fell 49% to $4.2 million in the quarter. The
economic slowdown in Asia was a primary factor affecting the segment's results
as sales of Viratec's anti-glare filter and front-surface mirror products to
Asia, both directly and indirectly, continued to trail sales from a year ago.
The effects of the segments' many capital projects also contributed to the
segment's lower earnings. In addition, Viracon reported lower sales despite
solid plant productivity, as production of the unit's architectural glass
products outpaced shipments by a considerable margin. We expect shipments to
exceed production levels in the fourth quarter as releases are made to
customers.

Viracon, the segment's largest unit, reported 11% lower net sales, while
earnings were down 39% compared to last year's very strong third quarter. These
results were due primarily to the factors noted above. Viracon continued to run
at a high level of productivity despite its continuing capacity limitations,
which were partially relieved by modest production from temporary operations
used in the training of employees for the new Statesboro, Georgia facility.
Construction of Viracon's new facility remained on schedule. Customer demand for
Viracon's high-performance architectural glass products remained strong.

                                       7
Start-up of the Optium CRT coating line and lower demand for Viratec's
anti-glare filter and front-surface mirror products caused Viratec to report an
operating loss for the quarter compared to solid operating earnings a year
earlier. The Viratec unit's Optium CRT coating line went online in September and
is ramping up production to meet the sales orders received from customers.
Viratec continued to proceed with the addition of a new flat glass coating line,
which is expected to go on-line next spring.

As compared to last year, third quarter operating income at Tru Vue held steady
on a marginal sales increase. Also, during the third quarter, Tru Vue broke
ground on a new facility in the Chicago area. The new facility, expected to be
completed in the spring of 1999, should increase productivity at this business
unit.

Based on its backlog, strong demand for most of its products and the return to
full production of Viratec's Optium CRT coating line, fourth quarter earnings
for GT are expected to increase over third quarter results. However, GT will
fall short of last year's fourth quarter and full year operating earnings.

Auto Glass (AG)
---------------
As compared to last year, AG sales for the quarter increased 9% to $91.1
million. Operating income increased 36% to $4.0 million, compared to a year ago,
due partly to a continuing effort to increase sales to national insurance
companies. AG also continued to proceed with efforts to improve productivity for
its auto glass repair and replacement retail operations. For the first nine
months of fiscal 1999, same-location retail unit sales fell slightly. At the
close of the third quarter, AG had 340 retail locations, 75 wholesale depots and
8 Midas Muffler franchises.

While the segment expects to report a loss in its seasonally slow fourth
quarter, the segment expects to report year-over-year improvement for the
quarter.

Building Products & Services (BPS)
----------------------------------
Third quarter operating income at Building Products & Services climbed to $6.0
million compared with an operating loss of $27.5 million in last year's third
quarter, which included the $26.0 million pre-tax charge noted above. Sales were
at the prior year level of $93.1 million, which were restated to reflect the
deconsolidation of the segment's European curtainwall operations. The quarter's
results benefited from the impact of strategies employed last year by Building
Products & Services - downsizing of operations, exiting from the segment's
international curtainwall operations, and adherence to defined margin and
investment parameters.

Although profitable, domestic curtainwall operations reported operating earnings
below last year despite a marginal increase in sales. Last year's results
benefited from the completion of a large project. The Detention/Security group
also reported decreased earnings despite increased sales levels. Full Service
and Architectural Products both reported solid results with earnings well above
a year ago.

As of the end of the third fiscal quarter, the activities associated with the
exit from European curtainwall operations remained on schedule, and the Asian
curtainwall unit had substantially completed the remaining projects in its
backlog.

On December 3, 1998, the segment executed the sale of its Detention/Security
business, effective November 28, 1998. The sale was made in an effort to better
focus on Apogee's core businesses. The Detention/Security business unit
represented 8% of Apogee's consolidated sales and less than 3% of Apogee's
consolidated operating income for the three quarters ended November 28, 1998.

Backlog
-------
On November 28, 1998, Apogee's consolidated backlog stood at $240 million, down
26% from the $327 million reported a year ago. The backlogs of BPS's operations
represented 75% of Apogee's consolidated

                                       8
backlog. The most notable variances were the anticipated declines in BPS's New
Construction unit's international backlogs and the elimination of
Detention/Security's backlog as a result of the sale of that unit as mentioned
above. These decreases were offset by significant backlog increases at Viracon,
Viratec and BPS's domestic New Construction unit.

Consolidated
------------
The following table compares quarterly results with year-ago results, as a
percentage of sales, for each caption.
Three Months Ended  Nine Months Ended
                                                 ------------------  -----------------
                                                 Nov. 28,  Nov. 29,  Nov. 28,  Nov. 29,
                                                   1998     1997       1998      1997
                                                  -----------------  -----------------
Net sales                                         100.0     100.0      100.0     100.0
Cost of sales                                      78.8      78.0       79.2      77.4
                                                  -----------------  -----------------
     Gross profit                                  21.2      22.0       20.8      22.6
Selling, general and administrative expenses       15.3      13.9       15.1      13.8
Unusual items                                        --      15.2         --       6.9
                                                  -----------------  -----------------
     Operating income (loss)                        5.9      (7.1)       5.7       1.9
Interest expense, net                               1.0       0.6        1.0       0.8
                                                  -----------------  -----------------
     Earnings (loss) before income taxes
       and other items below                        4.9      (7.7)       4.6       1.1
Income taxes                                        1.7      (3.4)       1.7       0.2
Equity in net earnings of affiliated companies      0.1       0.1        0.1       0.1
Minority interest                                    --        --         --        --
                                                  -----------------  -----------------
     Net earnings (loss)                            3.1      (4.4)       2.8       0.9
                                                  =================  =================

Income tax rate                                    35.0%    (43.7)%     36.3%     15.0%
On a consolidated basis for the three-month and nine-month periods, gross profit
fell as a percentage of net sales. The primary factors underlying this decline
were the effect of the suspension of the Optium CRT coating line through the
second quarter, temporary productivity issues at Viracon early in the second
quarter and the absence of the significant margin recognized upon the completion
of one large curtainwall project included in last year's results. These items
were partly offset by solid productivity gains at BPS's Architectural and Full
Service business units and the continuation of a change in sales mix reflecting
lower curtainwall revenues.

Selling, general and administrative (SG&A) expenses rose by $3.5 million, or
11%, for the quarter, and by $11.8 million, or 12%, for nine months. The
increases included higher spending for information systems technology at several
businesses, and higher employee and advertising costs. Interest expense rose
over last year for both the three-month and nine-month periods, due to higher
borrowing levels and interest rates. The nine-month effective income tax rate
was 36.3% versus a 15.0% tax rate last year with the fiscal 1998 tax rate
reflecting the marginal tax benefit associated with the $26.0 million charge
related to international curtainwall operations described above.

Liquidity and Capital Resources
-------------------------------
Financial Condition
-------------------
Net cash provided by operating activities

Cash provided by operating activities for the nine months ended November 28,
1998 totaled $40.1 million. That figure primarily reflected the combination of
net earnings and noncash charges, such as depreciation and amortization. At
quarter end, the Company's working capital stood at $81.3 million. Working
capital, excluding cash, remained essentially unchanged from the beginning of
the year. Major variances within the working capital accounts included growth in
receivables and inventories along with a reduction in payables/accruals.
Offsetting these increases in working capital were the receipt of approximately
$10

                                       9
million in refundable income taxes, which was used to reduce outstanding debt,
and an increase in billings in excess of costs and earnings on uncompleted
contracts.

Net cash provided by financing activities

Bank borrowings stood at $167.0 million at November 28, 1998; 11% higher than
the $150.5 million outstanding at February 28, 1998. The additional borrowings
were primarily attributable to the excess of capital spending and cash dividends
over cash generated from operating activities. At November 28, 1998, long-term
debt stood at 52% of total capitalization.

Debt was decreased by $22.5 million the week following quarter-end. This
decrease was attributable to the use of proceeds from the sale of the
Detention/Security business unit of BPS.

In May 1998, the Company obtained a five-year, committed secured credit facility
in the amount of $275 million. This new credit facility requires Apogee to
maintain minimum levels of net worth and certain financial ratios, and is
collateralized by the Company's receivables, inventory, equipment and
intangibles. This facility replaced a $150 million five-year, multi-currency
committed credit facility which had been obtained in May 1996. The total
commitment of the credit facility was reduced by the sales price, net of taxes,
of the sale of the Detention/Security business.

In December 1998, Apogee entered into an interest rate swap agreement, which
expires in fiscal 2004, which effectively converted $25 million of its variable
rate borrowings into a fixed rate obligation.

The Company anticipates bank borrowings to increase over the remainder of the
fiscal year as capital spending, working capital and dividend requirements are
expected to exceed the Company's cash provided by operating activities.

Net cash used in investing activities

Additions to property, plant and equipment during the nine months ended November
28, 1998 totaled approximately $52.9 million. Major items included expenditures
for the GT expansion activities noted above as well as expenditures on
information systems projects throughout the Company. Capital expenditures for
the remainder of the year are expected to be significant primarily due to the
completion of the Company's new Statesboro, Georgia architectural glass
fabrication facility and other planned capacity expansions in GT.

Cash decreased $6.6 million for the nine months ended November 28, 1998.

Shareholders' Equity
--------------------
At November 28, 1998, Apogee's shareholders' equity stood at $128.1 million.
Book value per share was $4.63, up from $3.99 per share at February 28, 1998,
with outstanding common shares increasing nominally during the period. Net
earnings and proceeds from common stock issued in connection with the Company's
stock-based compensation plans accounted for the increase, slightly offset by
dividends paid.

Impact of Year 2000
-------------------
The Company has been evaluating, with the assistance of independent software
consultants, its Information Technology (IT) systems, non-IT systems, and
third-party readiness for compliance with Year 2000 requirements. For these
purposes, the Company defines its "IT systems" as those hardware and software
systems which comprise its central management information systems and its
telephone systems. All other systems, including those involved in local, on-site
product design or manufacturing, are considered "non-IT systems." "Third
parties" include all the Company's key suppliers and customers.

The assessment phase for the Company's IT systems is approximately 80% complete.
Remediation and implementation of the core operating and application programs
within the IT systems is approximately 25% complete, and the intention is to be
completed by May 1999. The costs related to Year 2000 to complete this activity
should not exceed $15 million of both capital and expense, of which
approximately

                                       10
$2 million has been incurred to date. Of this projected cost, approximately $6
million is related to accelerated replacement due to Year 2000 concerns.

The Company's businesses are approximately 15% complete in the assessment phase
regarding embedded operating and applications software and hardware within its
non-IT systems. The Company expects to complete that assessment by February
1999. Although the Company is still in the assessment phase, based on currently
known data about its non-IT systems, the Company believes that the requirements
for Year 2000 remediation of its non-IT systems will be limited in nature.

The Company's businesses have contacted key customers and suppliers to assess
Year 2000 compliance within their organizations to assure no material
interruption in these important third party relationships. This dialog and
process will be ongoing into early 1999. Non-compliant customers and suppliers
will be evaluated in terms of the degree of risk posed to the Company's
business, and, where necessary, appropriate responses such as selection of Year
2000 compliant additional or replacement suppliers will be taken. If there were
significant non-compliance by key customers and suppliers, the Company might
experience a material adverse effect on the businesses with those specific
third-party relationships.

Most of the Company's businesses will remediate or replace portions of their
software and hardware within the Company's IT systems and non-IT systems that
are identified as requiring Year 2000 remediation. The Company intends to
address contingency planning with respect to its IT systems, its non-IT systems
and its third-party relationships with key customers and suppliers in early
1999.

Based on the Company's assessments completed to date, the Company's total cost
of addressing Year 2000 issues is currently estimated to be in the range of $10
to $18 million, of which approximately $3 million has already been incurred.
These costs have been and will continue to be funded through operating cash
flows.

Cautionary Statements
---------------------
A number of factors should be considered in conjunction with any discussion of
operations or results by the Company or its representatives and any
forward-looking discussion, as well as comments contained in press releases,
presentations to securities analysts or investors, or other communications by
the Company.

These factors are set forth in the cautionary statements filed as Exhibit 99 to
the Company's Form 10-K and include, without limitation, cautionary statements
regarding changes in economic and market conditions, factors related to
competitive pricing, commercial building market conditions, management of growth
of business units, costs or difficulties related to the operation of the
businesses or execution of exit activities are greater than expected, the impact
of foreign currency markets, the integration of acquisitions, and the
realization of expected economies gained through expansion and information
systems technology. The Company wishes to caution investors and others to review
the statements set forth in Exhibit 99 and that other factors may prove to be
important in affecting the Company's business or results of operations. These
cautionary statements should be considered in connection with this Form 10-Q,
including the forward looking statements contained in the Management's
discussion and analysis of the Company's three business segments. These
cautionary statements are intended to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995.

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

This item is not applicable to the Company as of November 28, 1998.

                                       11
PART II

                                OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K
         --------------------------------

(a)    Exhibits:

       Exhibit 10.1  Resignation Agreement between Apogee Enterprises, Inc.
                     and James L. Martineau
       Exhibit 10.2  Apogee Enterprises, Inc. Officers' Supplemental Executive
                     Retirement Plan
       Exhibit 10.3  Apogee Enterprises, Inc. Executive Supplemental Plan
       Exhibit 10.4  Amendment to Apogee Enterprises, Inc. Employment Agreement
                     with Richard Gould
       Exhibit 27.1  Financial Data Schedule (EDGAR filing only).
       Exhibit 27.2  Restated Financial Data Schedule (EDGAR filing only).
       Exhibit 27.3  Restated Financial Data Schedule (EDGAR filing only).
       Exhibit 27.4  Restated Financial Data Schedule (EDGAR filing only).

(b)    The Company filed a Current Report on Form 8-K, dated November 10, 1998,
       announcing the signed purchase agreement between the Company and
       CompuDyne Corporation for the sale of the Company's Detention/Security
       business unit.

       The Company filed a Current Report on Form 8-K, dated December 3, 1998,
       updating the information on the purchase agreement announced November 10,
       1998 and announcing the closing of the sale of the Detention/Security
       business unit.

                                       12
CONFORMED COPY

                                   SIGNATURES

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

                                           APOGEE ENTERPRISES, INC.

Date:   January 12, 1999                   /s/ Russell Huffer
                                           ------------------
                                           Russell Huffer
                                           President and Chief Executive Officer

Date:  January 12, 1999                    /s/ Robert G. Barbieri
                                           ----------------------
                                           Robert G. Barbieri
                                           Vice President Finance and
                                             Chief Financial Officer

                                       13
EXHIBIT INDEX

Exhibit
-------
Exhibit 10.1   Resignation Agreement between Apogee Enterprises, Inc. and James
               L. Martineau
Exhibit 10.2   Apogee Enterprises, Inc. Officers' Supplemental Executive
               Retirement Plan
Exhibit 10.3   Apogee Enterprises, Inc. Executive Supplemental Plan
Exhibit 10.4   Amendment to Apogee Enterprises, Inc. Employment Agreement with
               Richard Gould
Exhibit 27.1   Financial Data Schedule (EDGAR filing only).
Exhibit 27.2   Restated Financial Data Schedule (EDGAR filing only).
Exhibit 27.3   Restated Financial Data Schedule (EDGAR filing only).
Exhibit 27.4   Restated Financial Data Schedule (EDGAR filing only).

                                      14