<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

      [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
           EXCHANGE ACT OF 1934  [FEE REQUIRED]

                  For the fiscal year ended February 25, 1995
                                            -----------------

      [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934  [NO FEE REQUIRED]

Commission File Number 0-6365

                            APOGEE ENTERPRISES, INC.
        --------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Minnesota                               41-0919654
       ---------------------------              -----------------------------
      (State or other jurisdiction of         IRS Employer Identification Number
      incorporation or organization)
 
   7900 Xerxes Avenue South - Suite 1800
         Minneapolis, Minnesota                              55431
    -----------------------------------                 ------------------
   (Address of principal executive offices)                (Zip Code)
 
Registrant's telephone number, including area code:  (612) 835-1874
                                                   ------------------

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

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

                        Common Stock $.33-1/3 Par Value
                 ---------------------------------------------
                                 Title of Class

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

  The aggregate market value of voting stock held by non-affiliates of the
registrant on March 31, 1995 was $203,516,820  The number of shares outstanding
of the Registrant's Common Stock at March 31, 1995 was 13,443,163.

                      DOCUMENTS INCORPORATED BY REFERENCE


  Part III incorporates information by reference from the Proxy Statement for
the Annual Meeting of Shareholders to be held June 20, 1995.

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[_]

<PAGE>
 
                           APOGEE ENTERPRISES, INC.
                                   FORM 10-K

                               TABLE OF CONTENTS

                     For the year ended February 25, 1995


<TABLE>
<CAPTION>
                                Description                                  Page
                                -----------                                  ----
<S>                             <C>                                          <C>   
PART I                                                                                                       
- ------                                                                                                       
  Item 1.                       Business                                        3                            
                                                                                                             
  Item 2.                       Properties                                      7                            
                                                                                                             
  Item 3.                       Legal Proceedings                               8                            
                                                                                                             
  Item 4.                       Submission of Matters to a Vote                                              
                                of Security Holders                             8                            
                                                                                                             
                                Executive Officers of the Registrant            8                            
PART II                                                                                                      
- -------                                                                                                      
  Item 5.                       Market for the Registrant's                                                  
                                Common Equity and Related                                                    
                                Stockholder Matters                             9                            
                                                                                                             
  Item 6.                       Selected Financial Data                        10                            
                                                                                                             
  Item 7.                       Management's Discussion and                                                  
                                Analysis of Financial Condition                                              
                                and Results of Operations                      12                            
                                                                                                             
  Item 8.                       Financial Statements and                                                     
                                Supplementary Data                             17                            
                                                                                                             
  Item 9.                       Changes in and Disagreements with                                            
                                Accountants on Accounting and                                                
                                Financial Disclosure                           17                            
                                                                                                             
PART III                                                                                                     
- --------                                                                                                     
  Item 10.                      Directors and Executive Officers                                             
                                of the Registrant                              17                            
                                                                                                             
  Item 11.                      Executive Compensation                         17                            
                                                                                                             
  Item 12.                      Security Ownership of Certain                                                
                                Beneficial Owners and Management               17                            
                                                                                                             
  Item 13.                      Certain Relationships and                                                    
                                Related Transactions                           17                            
PART IV                                                                                                      
- -------                                                                                                      
  Item 14.                      Exhibits, Financial Statement                                                
                                Schedules and Reports on Form 8-K              17                            
                                                                                                             
                                Index of Financial Statements and Schedules   F-1
 </TABLE>



                                       2

<PAGE>
 

                                     PART I
                                     ------


ITEM 1.   BUSINESS
          --------

The Company
- -----------

  Apogee Enterprises, Inc. is a holding company incorporated under the laws of
the State of Minnesota in 1949.  The Company, through its operating
subsidiaries, is primarily engaged in the fabrication, distribution and
installation of curtainwall (exterior wall panels), aluminum windows systems,
glass panels, and related glass products and services for the nonresidential
construction, replacement automotive glass and selected consumer products
markets.  Two business segments comprise Apogee's operations:  Building Products
& Services (BPS) serves certain sectors of the commercial and institutional,
detention and security building and consumer products markets.   Automotive
Glass (AG) serves the automotive glass replacement market.  Financial
information about the Company's segments can be found at Note 17 - Business
Segments of the notes to consolidated financial statements of Apogee
Enterprises, Inc.  contained in a separate section of this report.  See "Index
of Financial Statements and Schedules"

  Unless the context otherwise requires, the terms "Company" and "Apogee" as
used herein refer to Apogee Enterprises, Inc. and its subsidiaries.

Building Products & Services
- ----------------------------

  The Company's Building Products & Services segment operates principally in the
design, engineering, manufacturing and installation of custom and standard
curtainwall and window systems for commercial, institutional and detention and
security buildings, as well as some specialized consumer products.  BPS
operating units are organized under four groups: Nonresidential Construction,
Architectural Metals, Architectural Glass and Consumer.

Nonresidential Construction

  BPS's Harmon Contract unit is one of the world's largest designers and
installers of curtainwall and window systems  for nonresidential construction.
It has six offices throughout the United States as well as five in Europe and
Asia.  BPS acquired an 80% interest in CFEM Facades (CFEM), in fiscal 1994,  a
French company engaged in both the manufacture and installation of curtainwall.
This office, in addition to the other European and Asian offices, has given the
division a stronger presence in overseas markets.  All of the offices typically
design, assemble and install a building's exterior skin.  The enclosure usually
consists of a metal framing system which is glazed (filled) with glass in the
vision areas and opaque glass or panels in the non-vision (spandrel) areas.
Panels are usually made from aluminum, precast concrete or natural stone.  The
segment procures its materials from a number of independent fabricators,
including the BPS's architectural metals and architectural glass units.  Harmon
Contract also serves as a stone subcontractor, setting stone on both the
exterior and interior of buildings, including floors, benches and lavatories.

  BPS also has seven Harmon full service operations located around the country.
These centers offer complete replacement or remodeling glass services for
residential and commercial buildings.  In addition, the full service units offer
24-hour replacement service for storm or vandalism damage. Superior engineering
capabilities allow the units to duplicate the original design or create a
completely new appearance for renovated buildings.

  The Harmon detention and security units manufacture and install windows,
doors, guard booths and monitoring systems, primarily for prisons and jails.
The units' products are also sold to convenience stores, hospitals, schools and
other governmental facilities.  BPS competes in the detention and security
market through its Norment operating unit which is a leader in the design,
manufacture and installation of institutional and governmental security and
detention systems.  BPS also includes Airteq, which assembles pneumatic locks
used in Norment's and other detention and security systems, and EMSS, a
detention equipment contractor.

  BPS is subject to normal subcontractor's risks, including material and wage
increases, construction and transportation work stoppages and contractor credit
worthiness.  In addition, office vacancy rates, tax laws concerning real estate
and interest rates are important factors which affect nonresidential
construction markets.  Reduced competition on larger projects, custom designing
capability and a trend toward the use of more sophisticated materials for energy
conservation and design flexibility have helped BPS increase its market share
over the past several years.

                                       3

<PAGE>
 
Architectural Metals

  The Architectural Metals unit of BPS designs and manufactures high-quality,
thermally-efficient aluminum window and curtainwall systems under the "Wausau
Metals and Milco" trade names.  These products meet high standards of wind load
capacity and resistance to air and moisture seepage.    Architectural Metals'
aluminum window frame designs are engineered to be thermally efficient,
utilizing high-strength polyurethane to limit the transfer of heat or cold
through the window frame.  Products are marketed through a nationwide network of
distributors and a direct sales staff.  Sales are made to building contractors,
including Harmon Contract, for new construction and to building owners for
retrofitting older buildings.  Wausau Metals maintains design and product
engineering staffs to prepare aluminum window and curtainwall system designs to
fit customers' needs and to originate new product designs.  Wausau Metals
occasionally joins Harmon Contract in pursuing certain projects, as many
architects and general contractors prefer to work with an experienced
curtainwall subcontractor and manufacturer team.

  Operating under the "Linetec" name, the architectural metals unit also has two
metal coating facilities which provide anodized and fluoropolymer coatings to
metal.   Anodizing is the electrolytic process of putting a protective, often
colored, oxide film on light metal, typically aluminum.   Fluoropolymer coatings
are high quality paints which are sometimes preferred over anodizing because of
the wide color selection. Coatings are applied to window and curtainwall
components for the Company, as well as other companies' architectural and
industrial aluminum products.

Architectural Glass

  BPS's Architectural Glass unit fabricates finished glass products and provides
glass coating services, primarily under the "Viracon"  and  "Marcon Coatings"
names.  These operating units purchase flat, unprocessed glass in bulk
quantities from which a variety of glass products are fabricated, including
insulating, tempered and laminated architectural glass; security glass;
laminated and tempered industrial glass; anti-reflection and UV-light blocking
picture framing glass; and provide reflective and low-emissivity coatings on
glass.

  Tempered glass is a heat-processed safety glass which is four to five times
stronger than ordinary glass, breaks into "pebbles" rather than sharp pieces and
has architectural, automotive and industrial applications.  Laminated glass
consists of two or more pieces of glass fused with a plastic interlayer and is
used primarily for strength and safety in skylights and in security
applications.  Sales of laminated and tempered safety glass products have
increased with the adoption of federal and state safety glazing standards.
Insulating glass, comprised of two or more pieces of glass separated by a sealed
air space, is used in architectural and residential applications for thermal
control.

  The Viracon unit is able to fabricate all types of architectural glass
(insulating, laminated, tempered and combinations of all three) at its Owatonna
complex.  Combined with the adjacent Marcon Coatings'  glass coating
capabilities, the segment is able to provide a full range of products from a
central location.  It markets its products nationally and overseas to glass
distributors, glazing contractors (including Harmon Contract) and industrial
glass fabricators.  A substantial portion of its glass products is delivered to
customers by Viracon's fleet of company-owned trucks, providing "backhaul"
capability for its raw materials, thereby reducing shipping time, transportation
costs and breakage expense.

  Viracon is a 50% owner of Marcon Coatings, Inc., (Marcon) a joint venture
glass coating facility with Marvin Windows ("Marvin").  Marcon provides glass
coating services from its Owatonna, Minnesota facility to Marvin and Viracon, as
well as outside customers.  Marcon's reflective and low-emissivity coatings
reduce energy costs and provide innovative design features for window and
curtainwall systems.  Low-emissivity coatings are an invisible, metallic film
deposited on glass which selectively limits the transfer of heat through the
glass.  Low-emissivity coated glass represents a fast-growing segment of both
residential and nonresidential glass markets.

Consumer

  Tru Vue, located in Chicago, Illinois, is one of the largest domestic
manufacturers of picture framing glass.  Tru Vue provides its customers with a
full array of picture framing glass products, including clear, reflection
control, which diminishes reflection, and conservation glass, which blocks
ultraviolet rays.  The products are distributed primarily through independent
distributors who, in turn, supply local picture framing markets.  During 1993,
Tru Vue acquired the assets of Miller Artboard  (Miller).  Miller is a
manufacturer of conservation picture framing matboard, which complements Tru
Vue's glass product offerings.

  The segment also offers several types of window coverings for residential,
commercial and institutional markets, under the "Nanik" and "The Shuttery"
names.  Nanik manufactures various types of custom aluminum, wood and
polycarbonate venetian blinds, and markets them primarily to interior designers
through independent distributors.  The Shuttery is a 

                                       4

<PAGE>
 
manufacturer of custom wooden and vinyl interior shutters. Nanik Wood Products
was formed in 1991 to provide a reliable source of wood mouldings for both Nanik
and The Shuttery, while allowing both units to improve inventory control and
production efficiency. All three units operate manufacturing facilities in
Wausau, Wisconsin.

Automotive Glass
- ----------------

  The Automotive Glass (AG) segment is engaged in the automotive replacement
glass business through its Harmon Glass service centers (retail), Glass Depot
distribution centers (wholesale) and Curvlite fabrication center.

  Harmon Glass operates automotive glass service centers in 36 states.  The
centers replace auto glass on the premises and also provide mobile installation
service.  Primary customers include insurance companies (on behalf of their
insured clients), fleet owners and car owners.  The service centers also carry
limited inventories of flat glass, which are sold at retail for such purposes as
home window repair and table tops.  Some automotive accessories are also sold
and installed at certain service centers.  Quality service is emphasized in all
service centers.  The Company believes Harmon Glass is the second-largest auto
glass retailer in the United States.  The unit also operates a centralized
service for handling auto glass claims under the name "National Call Center"
(Center).  The Center, on behalf of its insurance company and fleet customers,
handles replacement glass claims made by policyholders or fleet owners. Calls
are placed through a toll-free number to the Center located in Orlando, Florida.
Customer service agents arrange for the prompt replacement or repair of auto
glass by either a Harmon Glass service center or an affiliated shop member of
the Center's network and begins the process of filing the claim electronically
with the applicable insurance company. The Center subcontracts for replacement
and repair services with over 3,300 auto glass stores nationwide. The unit seeks
to maximize the electronic exchange of information, which reduces claim costs
and eliminates errors. This type of service is a fast-growing segment for the
segment.

  The auto glass distribution centers, known as "Glass Depot", supply the Harmon
Glass service centers with auto and flat glass and related products, as well as
selling wholesale to other glass installers.  Due to the variety of makes and
models of automobiles, automotive glass service centers typically stock only
windshields for the most popular models.  As a result, there is a demand for
distributors to maintain inventories of automotive glass and to provide prompt
delivery.  The Glass Depot distribution centers maintain a broad selection of
automotive glass.  Purchases of fabricated automotive glass are made from
several primary glass manufacturers and fabricators, including the segment's
Curvlite unit.

  Curvlite fabricates replacement windshields for foreign and domestic
automobiles and tempered and laminated glass parts for the transportation
industry.  It fabricates approximately 800 types of replacement windshields
which are marketed nationally to distributors and glass shops, including the
Glass Depot distribution centers.  Curvlite seeks to offer a broad selection of
windshields by promptly adding new windshields as new models are introduced.

  In fiscal 1995, the AG segment acquired or opened 9 new distribution centers
and 33 service centers, while closing 1 distribution and 7 service centers,
bringing its year-end total to 53 and 256 respectively.  This includes a chain
of 13 retail stores and one warehouse in the Washington, D.C. area, acquired in
January, 1995.  The segment continues to evaluate opportunities to expand both
its retail and wholesale auto glass segments, while closely monitoring existing
units' profitability.

  Under a franchise agreement with Midas International Corporation in 1980, the
segment operates seven Midas Muffler locations in Minnesota, South Dakota, North
Dakota and Wisconsin.

Viratec Thin Films
- ------------------

  In addition to its two primary segments, Apogee owns 50% of Viratec Thin
Films, Inc. (Viratec), an optical-quality glass coating joint venture with
Marvin Windows, which was organized in fiscal 1989 in Faribault, Minnesota and
began production in early 1990.  Viratec develops advanced, optical-display and
imaging coatings for glass and other surfaces.  These products are used in
aftermarket anti-glare computer screens, high-quality optical components and
high performance mirror products for the imaging industry.  Viratec markets
optical display and imaging products to both domestic and overseas customers.
These customers provide further assembly, marketing and  distribution to end
users.  The Company accounts for its investment in Viratec using the equity
method.

Competition
- -----------

  All segments of the Company's business, other than Viratec, are fairly mature
and are highly competitive.  The curtainwall subcontractor business is primarily
price competitive, although the Harmon Contract's reputation for quality
engineering 

                                       5

<PAGE>
 
and service is an important factor in receiving invitations to bid on large
complex projects. In addition to the above factors, Harmon Contract has the
advantage of having the financial strength and long-term viability of Apogee,
which allows Harmon Contract to be bonded on even the largest, most complex
jobs. This is an important competitive advantage in the bidding of larger
contracts. The Architectural Metals group competes against several major
aluminum window manufacturers. Wausau Metals primarily serves the custom portion
of this market in which the primary competitive factors are product quality,
reliable service and the ability to provide technical engineering and design
services. The Architectural Glass unit competes with several large integrated
glass manufacturers and numerous smaller specialty fabricators. Product pricing
and service are the primary competitive factors in this market. AG competes with
other auto glass shops, glass distributor warehouses, car dealers, body shops
and fabrication facilities on the basis of pricing and customer service. Its
competition consists of national and regional chains as well as significant
local competition. Viratec Thin Films has both domestic and foreign competitors,
several of whom are older and more established.

Markets
- -------

  BPS serves the domestic nonresidential construction market, which tends to be
cyclical and has been on a slow comeback, both in terms of dollars and square
feet of new contract awards.  This market has been hard hit due to the
overbuilding in past years, tax law changes, recession, tightening credit
standards, business restructurings and other factors.  The resulting contraction
in demand for building materials and construction services has intensified
competition, squeezed profit margins and contributed to some business failures
in the market sectors served by the Company.  In response to weak markets, the
BPS segment has consolidated manufacturing facilities, closed offices and
reduced personnel and discretionary expenses.  It has also redirected its
marketing focus to sectors with relative strength, including remodeling,
institutional (including detention and security) and certain international
markets such as Asia and Europe.  These international markets have recently been
an important source of growth for BPS.  See "Foreign Operational Export Sales,"
below.

AG services the automotive glass aftermarket which is influenced by a variety of
factors, including new car sales, gasoline prices, speed limits, road
conditions, the economy, weather and average number of miles driven.  A
transformation of the industry's pricing structure has intensified competition.
In recent years, major purchasers of auto glass, such as insurance companies,
have increasingly requested volume pricing and awarded regions to glass
providers at significant discounts from historical levels.  As a result, margins
have narrowed at the retail level and, to a lesser extent, at wholesale and
manufacturing levels.

Sources and Availability of Raw Materials
- -----------------------------------------

  None of the Company's operating units are significantly dependent upon any one
supplier.  The Company believes a majority of its raw materials (bulk flat
glass, aluminum extrusions, automotive glass and related materials) are
available from a variety of domestic sources.

Trademarks and Patents
- ----------------------

  The Company has several nationally recognized trademarks and trade names which
it believes have significant value in the marketing of its products.  Harmon
Glass(R),  Harmon Contract(R), Norment(R), Airteq(R), EMSS(R), Viratec(R), Tru
Vue(R), The Glass Depot(R), Nanik(R), The Shuttery(R), and Linetec(R) are
registered trademarks of the Company.  Viratec Thin Films has obtained several
patents pertaining to its glass coating methods.  However, no single patent is
considered to be materially important to the Company.

Foreign Operations and Export Sales
- -----------------------------------

  BPS has sales offices in Europe and Asia.  Sales for those offices were
approximately $66,580,000,  $65,021,000 and  $6,490,000 for the years ended
February 25, 1995, February 26, 1994 and February 27, 1993, respectively.
Operating losses for 1995, 1994 and 1993, were $6,575,000, $887,000 and
$1,328,000, respectively.  At February 25, 1995 and  February 26, 1994, the
identifiable assets of foreign operations totaled $41,880,000 and $31,786,000,
respectively.  At February 25, 1995, the backlog of work for European and Asian
projects was $100 million, $60,000,000 of which is not expected to be reflected
as revenue in fiscal 1996.  In addition, during the years ended February 25,
1995, February 26, 1994 and February 27, 1993, the Company's export sales,
principally from BPS operations, amounted to approximately $30,241,000,
$27,643,000 and  $22,808,000, respectively.

                                       6

<PAGE>
 
Employees
- ---------

  The Company employed 6,184 persons at February 25, 1995, of whom 1,079 were
represented by labor unions.  The Company is a party to 108 collective
bargaining agreements with several different unions.  Seventy (70) of the
collective bargaining agreements will expire during fiscal 1996.  The number of
collective bargaining agreements to which the Company is a party will vary with
the number of cities with active nonresidential construction contracts.  The
Company considers its employee relations to be very good and has not recently
experienced any significant loss of work days due to strike.

Backlog
- -------

  The backlog of orders is significant in the Company's construction-related BPS
segment.  At February 25, 1995, the Company's total backlog of orders considered
to be firm was $364,000,000, compared with $405,000,000 at February 26, 1994.
Approximately $84,000,000 is not expected to be reflected as revenue in fiscal
1996.


I
TEM 2.  PROPERTIES
         ----------

  The following table lists, by division, the Company's major facilities, the
general use of the facility and whether it is owned or leased by the Company.


<TABLE>
<CAPTION>
Facility                           Location             Owned/Leased       Function
- --------                           --------             ------------       --------
<S>                                <C>                  <C>                <C>  
Building Products & Services
- ------------------------------
Harmon Contract headquarters       Minneapolis, MN      Leased             Administrative              
United Kingdom facility            Milton Keynes,                                             
                                   United Kingdom       Owned              Fabrication/Admin.          
Norment                            Montgomery, AL       Owned              Mfg./Admin.                
Harmon CFEM -- Sitraco             Pinon, France        Owned              Mfg.                       
Harmon CFEM -- Facalu              Epernon, France      Owned              Mfg.                       
Wausau Metals                      Wausau, WI           Owned              Mfg./Admin.                
Wausau Metals - Plant II           Wausau, WI           Owned              Mfg.                       
Linetec (Painting)                 Wausau, WI           Owned              Mfg./Admin.                
Linetec (Anodizing)                Wausau, WI           Owned              Mfg.                       
Viracon                            Owatonna, MN         Owned              Mfg./Admin.                
Tru Vue                            Chicago, IL          Owned              Mfg./Admin.                
Marcon Coatings, Inc.  (1)         Owatonna, MN         Owned              Mfg./Admin.                
Nanik                              Wausau, WI           Owned              Mfg./Admin.                
Nanik Wood Products                Wausau, WI           Owned              Mfg./Admin.                
Shuttery                           Wausau, WI           Owned              Mfg./Admin.                
                                                                                                     
Automotive Glass                                                                                     
- ----------------
                                                                                                     
Curvlite                           Owatonna, MN         Owned              Mfg./Admin.                
Harmon Glass and Glass                                                                               
  Depot headquarters               Minneapolis, MN      Leased             Administrative             
National Call Center               Orlando, FL          Owned              Administrative             
                                                                                                     
Other                                                                                                
- -----
                                                                                                     
Apogee Corporate Office            Minneapolis, MN      Leased             Administrative            
Viratec Thin Films  (1)            Faribault, MN        Owned              Mfg./Admin.                
</TABLE>


(1) 50% owned  joint ventures.

  The Harmon Contract operating unit has 12 sales offices, 7 glazing service
centers and 11 fabrication facilities generally located in major metropolitan
areas in the United States, Europe and Asia, virtually all of which are leased.

                                       7

<PAGE>
 
  The Automotive Glass segment has 309 retail  service and distribution centers
located nationally and seven Midas Muffler franchises located in the Midwest,
the majority of which are leased.

  The Curvlite plant, a Wausau Metals facility, the Linetec paint facility, an
addition to one of the Wausau Metals plants and the National Call Center
administrative center were constructed with the use of proceeds from industrial
revenue bonds issued by those cities.  These properties are considered owned,
since at the end of the bond term, title reverts to the Company.


ITEM 3.  LEGAL PROCEEDINGS
         -----------------

  There are no material pending legal proceedings.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

  None.

                      EXECUTIVE OFFICERS OF THE REGISTRANT
                      ------------------------------------


<TABLE>
<CAPTION>
           NAME                        AGE               POSITION                                   
           ----                        ---               --------                                   
           <S>                         <C>               <C>                                        
                                                                                                    
           Donald W. Goldfus            61               Chairman of the Board of Directors         
                                                         and Chief Executive Officer                
                                                                                                    
           Gerald K. Anderson           63               President                                  
                                                                                                    
           James L. Martineau           54               Vice President                             
                                                                                                    
           Richard Gould                55               Senior Vice President                      
                                                                                                    
           Terry L. Hall                41               Vice President Finance and                 
                                                         Chief Financial Officer
                                                                                                    
           William G. Gardner           49               Treasurer and Secretary                             
</TABLE>


  Executive officers are elected annually by the Board of Directors and serve
for a one-year period.  With the exception of Gerald K. Anderson,  has a post-
employment consulting agreement with the Company.  Richard Gould has an
employment contract with the Company that covers the period through 2000.  No
other officers have employment contracts with the Company.  None of the
executive officers or directors of the Company are related.

  All of the above named executive officers have been employees of the Company
for more than the last five years with the exception of Mr. Gould  joined the
company in May 1994 and Mr. Hall who joined the Company in April, 1995.  Prior
to joining the Company, Mr. Gould was president of Gould Associates, a strategic
management consulting firm to a wide range of companies.  Prior to joining the
Company, Mr. Hall was Chief Financial Officer of Tyco International from 1993 to
1995 and Vice President and Treasurer of United Airlines from 1990 to 1993.

                                       8

<PAGE>
 

                                    PART II
                                    -------


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

  Apogee common stock is traded in the National Market System of the NASDAQ
over-the-counter market, under the ticker symbol APOG.  Stock price quotations
are printed daily in major newspapers.  During the fiscal year ended February
25, 1995, the average trading volume of Apogee common stock was 806,506 shares
per month, according to NASDAQ.

  As of March 31, 1995, there were 13,443,163 shares of common stock
outstanding, of which about 6.9 percent were owned by officers and directors of
Apogee.  At that date, there were approximately 2,187 shareholders of record and
2,942 shareholders for whom securities firms acted as nominees.

  The following chart shows the quarterly range and year-end close of the
company's common stock over the past five fiscal years.


<TABLE>
<CAPTION>
                                 QUARTER            QUARTER            QUARTER           QUARTER          YEAR    
                                    I                 II                 III               IV             END     
                           -----------------------------------------------------------------------------------------
                      <S>     <C>                <C>                <C>                <C>                <C> 
                      1991    14 1/4-18 1/8      15 3/4-20 1/8       14 1/4-18 1/4     13 1/4-19 1/4       18
                      1992    12 3/4-18          12 3/4-14 1/2       10 3/4-14 3/8      9 1/2-14           12 1/4
                      1993    10 1/4-12 3/4       8 1/4-10 3/4        9 3/4-12 1/4      9 3/4-12 1/4       11 5/8
                      1994    10 1/4-12 1/2      11 1/2-14 1/4       11 1/4-14 1/2     13 1/2-17 3/4       14 1/2
                      1995    11 1/2-15 1/4      11 3/4-15 3/4       14 3/4-18 1/4     14 3/4-18 1/2       17 1/4 
</TABLE>


  It is Apogee's policy to pay quarterly cash dividends in May, August, November
and February.  Cash dividends have been paid each quarter since 1974 and have
been increased each year since then.  The chart below shows quarterly cash
dividends per share for the past five years.


<TABLE>
<CAPTION>
                                       QUARTER     QUARTER      QUARTER       QUARTER     
                                          I          II           III           IV         YEAR
                                    --------------------------------------------------------------
                               <S>     <C>         <C>          <C>           <C>          <C>   
                               1991        $0.060       $0.060        $0.060       $0.060  $0.240
                               1992         0.065        0.065         0.065        0.065   0.260
                               1993         0.065        0.065         0.070        0.070   0.270
                               1994         0.070        0.070         0.075        0.075   0.290
                               1995         0.075        0.075         0.080        0.080   0.310 
</TABLE>


                                       9

<PAGE>
 

ITEM 6.  SELECTED FINANCIAL DATA
         -----------------------

  The following information should be read in conjunction with Item 7 -

Management's Discussion and Analysis of Financial Condition and Results of
Operations and Item 8 - Financial Statements and Supplementary Data.


<TABLE>
<CAPTION>
                                                     1995       1994*         1993        1992        1991
                                                     ----       -----         ----        ----        ----  
<S>                                       <C>             <C>          <C>         <C>         <C>
OPERATING RESULTS
Net sales                                 $      756,549     688,233      572,450     596,281     599,525              
Gross profit                              $      105,889      83,895       78,201     101,580     100,097              
Operating income                          $       24,262       7,058        6,369      19,249      33,267              
Net earnings                              $       13,050       3,833        4,514       8,505      17,017              
Earnings per share                        $         0.97        0.29         0.34        0.63        1.25              
Effective tax rate - %                              40.2        60.9         42.3        39.6        37.1              
                                                                                                                       
OPERATING RATIOS                                                                                                       
Gross margin                                        14.0        12.2         13.7        17.0        16.7              
Operating margin                                     3.2         1.0          1.1         3.2         5.5              
Net margin                                           1.7         0.6          0.8         1.4         2.8              
Return on                                                                                                              
  Average shareholders' equity - %                  10.9         3.4          4.0         7.6        16.6              
  Average invested capital - %                       6.7         2.4          3.0         5.7        11.5              
  Average total assets - %                           3.9         1.4          1.8         3.4         6.9              
                                                                                                                       
                                                                                                                       
FUNDS FLOW DATA                       
Cash flow before changes in                                                      
operating assets and liabilities          $       29,122      20,275       17,994      38,414      33,184                          
Depreciation and amortization             $       15,131      15,724       15,110      16,305      13,309              
Capital expenditures                      $       24,957      14,046        9,166      12,974      12,798              
Dividends                                 $        4,155       3,841        3,584       3,505       3,248              
                                                                                                                       
YEAR-END DATA                                                                                                          
Total assets                              $      361,928     306,188      251,456     249,509     250,343              
Current assets                            $      256,820     221,286      169,029     166,376     162,676              
Current liabilities                       $      135,719     140,846       99,787     101,011     102,492              
Working capital                           $      121,101      80,440       69,242      65,365      60,184              
  Current ratio                                      1.9         1.6          1.7         1.6         1.6              
Long-term debt                            $       80,566      35,688       28,419      25,267      29,398              
  % of invested capital                             35.6        21.6         18.7        17.0        19.9              
Shareholders' equity                      $      124,629     114,063      112,335     113,781     109,050              
  % of invested capital                             55.1        69.0         74.1        76.6        73.8              
Backlog                                   $      363,751     405,223      322,323     231,949     245,000              
                                                                                                                       
INVESTMENT INFORMATION                                                                                                 
Dividends per share                       $        0.310       0.290        0.270       0.260       0.240              
Book value per share                      $         9.27        8.57         8.53        8.45        8.09              
Price range during year:                                                                                               
  High                                    $       18 1/2      17 3/4       12 3/4          18     20/1//8              
  Low                                     $       11 1/2      10 1/4        8 1/4       9 1/2      13 1/4              
  Close                                   $       17 1/4      14 1/2      11/5//8      12 1/4          18              
Price/earnings ratio at year-end                      18          50           34          19          14              
Dividend yield at year-end - %                       1.9         2.0          2.3         2.1         1.3              
Shares outstanding                            13,443,000  13,312,000   13,177,000  13,461,000  13,477,000              
Average monthly trading volume                   806,506     259,450      322,147     693,029     606,341               
</TABLE>


* Fiscal 1994 figures reflect the cumulative effect of a change in accounting
for income taxes, which increased net earnings by $525,000, or  4 cents per
share.

                                      10

<PAGE>
 

<TABLE>
<CAPTION>
                                                1990        1989        1988      1987**      1986**      1985**
                                                ----        ----        ----      ------      ------      ------
<S>                                     <C>             <C>         <C>         <C>         <C>         <C>   
OPERATING RESULTS
Net sales                               $   589,657     433,740     312,051     279,097     249,570     219,605               
Gross profit                            $    93,718      72,214      57,350      48,300      42,189      32,999                   
Operating income                        $    32,033      24,134      20,211      17,867      17,383      11,936                   
Net earnings                            $    14,095      13,421      11,615       8,523       8,233       5,820                   
Earnings per share                      $      1.04        1.00        0.87        0.64        0.62        0.44                   
Effective tax rate - %                         37.1        38.2        41.8        46.6        47.5        47.3                   
                                                                                                                                  
OPERATING RATIOS                                                                                                                  
Gross margin                                   15.9        16.6        18.4        17.3        16.9        15.0                   
Operating margin                                5.4         5.6         6.5         6.4         7.0         5.4                   
Net margin                                      2.4         3.1         3.7         3.1         3.3         2.7                   
Return on                                                                                                                         
  Average shareholders' equity - %             15.7        17.2        17.3        14.5        15.9        12.7                   
  Average invested capital - %                  9.8        11.4        13.2        11.2        11.9         9.6                   
  Average total assets - %                      6.2         7.6         9.0         7.8         8.5         6.9                   
                                                                                                                                  
FUNDS FLOW DATA                                                                                                                   
Cash flow before changes in                                                                        
operating assets and liabilities        $    33,711      25,545      19,925      15,831      13,496      10,539            
Depreciation and amortization           $    12,141       8,987       6,586       4,339       3,601       2,833                   
Capital expenditures                    $    16,985      23,680      11,311      15,773       7,905       7,450                   
Dividends                               $     2,693       2,140       1,807       1,516       1,342       1,188                   
                                                                                                                                  
YEAR-END DATA                           $   244,103     207,686     143,487     115,738     102,580      90,977                   
Total assets                            $   154,845     126,881      86,026      68,250      71,823      63,059                   
Current assets                          $    94,948      68,921      47,652      36,199      30,253      25,194                   
Current liabilities                     $    59,897      57,960      38,374      32,051      41,570      37,865                   
Working capital                                 1.6         1.8         1.8         1.9         2.3         2.5                   
  Current ratio                         $    41,366      46,277      17,899      12,136      14,196      15,413                   
Long-term debt                                 27.7        33.3        18.7        15.3        19.6        23.4                   
  % of invested capital                 $    95,754      83,871      72,062      62,561      55,381      48,371                   
Shareholders' equity                           64.2        60.4        75.2        78.7        76.6        73.5                   
  % of invested capital                 $   299,810     333,240     228,532     124,161     108,195     112,776                   
Backlog                                                                                                                           
                                                                                                                                  
INVESTMENT INFORMATION                  $      0.20        0.16        0.14        0.11        0.10        0.09                   
Dividends per share                     $      7.11        6.25        5.40        4.68        4.17        3.65                   
Book value per share                                                                                                              
Price range during year:                $    18 3/4      14 1/4      12 1/4     15/1//8      10 3/4       8 1/2                   
  High                                  $        13          10       7 1/2      7/5//8      6/1//8      5/1//8                   
  Low                                   $    14 3/4     13/5//8          11     10/3//8  10 /13//32       7 1/2                   
  Close                                          14          14          13          16          17          17                   
Price/earnings ratio at year-end                1.4         1.2         1.2         1.1         1.0         1.2                   
Dividend yield at year-end - %           13,467,000  13,414,000  13,349,000  13,362,000  13,268,000  13,241,000                   
Shares outstanding                          861,486     720,041     633,493     880,458     473,599     324,800                    
Average monthly trading volume                             
</TABLE>


** The per share data for fiscal 1987, 1986 and 1985 has been adjusted for the
   fiscal 1987 stock dividend.

                                      11

<PAGE>
 

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

FINANCIAL GOALS
- ---------------

The strategies undertaken by Apogee in fiscal 1995 to improve quality, reduce
costs, resize our profit centers to better fit available business and become
more responsive to customer needs has brought us closer to our goal of resuming
historical growth rates in sales and earnings. Further improvements were made by
our auto glass and architectural glass businesses during the past year. Our
nonresidential construction businesses significantly cut their operating losses,
while implementing strengthened bidding and project management practices.
However, the ongoing review of our varied operations continues to warrant a
delay in the setting of new financial targets.  In fiscal 1995, we are again
reporting record sales.  Nonetheless, earnings still lag our fiscal 1991 record
by more than 20%. Our primary goal is to overcome that lag.  We have a
reasonable basis to believe we can do so in fiscal 1996. Our optimism is based
in part on the positive developments detailed in this financial review.

PERFORMANCE
- -----------
FISCAL 1995 COMPARED TO FISCAL 1994
The following table illustrates the relationship between various components of
operations, stated as a percent of net sales, for the three years ended February
25, 1995.


<TABLE>
<CAPTION>
                                                                         PERCENT OF NET SALES
                                                                     ============================
                                                                       1995      1994      1993       
                                                                       ----      ----      ----       
       <S>                                                             <C>       <C>      <C>         
       Net sales...................................................... 100.0     100.0    100.0       
       Cost of sales..................................................  86.0      87.8     86.3       
           Gross profit...............................................  14.0      12.2     13.7       
       Selling, general and administrative expenses...................  10.8      10.4     12.5       
       Provision for business restructuring and asset valuation.......  -          0.8        -       
           Operating income...........................................   3.2       1.0      1.1       
       Interest expense, net..........................................   0.5       0.4      0.3       
           Earnings before income taxes and other items...............   2.7       0.6      0.8       
       Income taxes...................................................   1.1       0.4      0.3       
       Equity in net earnings of affiliated companies.................  (0.1)     (0.3)    (0.3)      
       Minority interest..............................................   -         0.1       -        
           Net earnings before cumulative effect of change in                                         
             accounting for income taxes..............................   1.7       0.5      0.8       
                                                                                                      
       Cumulative effect of change in accounting for income taxes.....   -         0.1       -        
           Net earnings...............................................   1.7       0.6      0.8        
</TABLE>


Consolidated net sales rose 10% to $757 million in fiscal 1995, primarily due to
strong replacement auto glass markets, robust demand for architectural glass
products, and higher detention and security contracting  revenues. Our gross
margin increased nearly two percentage points as pricing improved slightly for
replacement auto glass and architectural glass products.   Productivity improved
as sales outpaced moderate increases in wages and benefits, including lower
medical plan costs. In addition, the margin gains reflected operating
improvements by our nonresidential construction and architectural metals
operations, despite the continuation of depressed margins for those units'
markets.

As a percentage of net sales, selling, general and administrative expenses
(SG&A) crept slightly higher, but grew substantially in absolute dollars. The
majority of  the increase resulted from  expenditures by our auto glass retail
and wholesale businesses for the development of improved information systems to
better meet customer needs, as well as for expanded marketing programs related
to windshield repair and claims administration.

                                      12

<PAGE>
 
Net interest expense rose 51% , due to the combination of higher interest rates
and increased borrowing levels required to meet working capital and capital
investment needs.

Our effective income tax rate fell substantially, from 60.9% in fiscal 1994, to
40.2% in 1995, as increased domestic earnings were taxed at essentially the
statutory rate.  The fiscal 1994 rate was unusually high due to an increase in
our deferred tax asset valuation.

Equity in net earnings of affiliated companies dropped 67%, to $800,000 in
fiscal 1995.  New product and process development costs at Viratec Thin Films
substantially offset strong earnings of the unit's anti-glare screen business.
Minority interest differed from a year ago as Harmon/CFEM Facades, our French
curtainwall unit, reported a loss in fiscal 1995 compared to net earnings in the
prior year.

Fiscal 1995 consolidated net earnings grew 240%, to $13.1 million, or $.97 per
share, up from $3.8 million or 29 cents per share a year ago, which includes the
$525,000 or 4 cents per share cumulative effect of the change in accounting for
income taxes reported last year.  Return on average shareholders' equity grew to
10.9%, up from 3.4% a year earlier.

At year end, our consolidated backlog was $364 million, down 10% from $405
million a year ago. Decreases in our domestic and Asian construction backlogs
exceeded the combined increases in other areas. While our backlog declined, we
believe that recently recorded orders will provide margin improvement over that
realized in the past couple of years. Approximately $84 million of the February
1995 backlog will not be reflected as revenue in fiscal 1996.

In order to better inform shareholders and readers, Apogee has redefined its
business segments information and discussion.  We believe the changes will
provide more effective communication concerning our business units and the
markets we serve.  Apogee consists of two segments, Building Products & Services
(BPS) and Automotive Glass (AG).  These segments, plus the Viratec Thin Films
joint venture, are discussed below.

Building Products & Services

BPS made significant strides in fiscal 1995, increasing revenues 9% to $508
million, and reporting a modest $4.4 million operating profit.  Within the
segment, 19% revenue growth was achieved at the detention and security unit,
largely due to fast-track projects entered into at the beginning of the year.
Also, high demand and firmer pricing for Viracon's architectural glass products
boosted its sales 22%.  These factors led to margin gains and strong profit
growth for both units.

Marcon Coatings, our building glass coating joint venture, reported healthy
sales and earnings growth, as the company benefitted from rapidly growing
Viracon sales.

Harmon Contract, our curtainwall subcontractor, reported a 2% decline in
domestic revenues, but slashed its operating loss by 85%.  With a lower cost
structure and improved project management, Harmon worked through much of its
narrow-margin backlog, obtained in the intensely competitive pricing environment
of 1991-1993.

Harmon Contract's overseas operations recorded flat revenues compared to a year
ago, with higher Asian revenues offset by less activity in Europe. Operating
results suffered from low-margin projects and overhead growth related to brisk
bidding activity in both Europe and Asia.

The segment's architectural metals group also rebounded sharply.  Sales grew 9%,
with firmer pricing, beefed-up engineering and better factory utilization nearly
eliminating last year's significant operating loss.

BPS's picture framing products and window coverings units recorded steady sales
gains and solid earnings although behind historical levels.

Overall, BPS made progress in controlling its costs, with a $500,000 reduction
in SG&A expenses, the result of restructuring measures taken late last year, as
well as ongoing cost control this year.  The segment believes the aggressive
steps taken to strengthen margins and reduce overhead, along with the elevated
demand for architectural glass products and the slow recovery of U.S.
nonresidential construction, should help it make improvements in profitability
next year.

                                      13

<PAGE>
 
Automotive Glass

The Automotive Glass (AG) segment achieved net sales of $249 million, up 12%
over a year ago, while reporting operating income of $19.1 million, modestly
ahead of the prior year's strong performance.  High demand for replacement auto
glass, along with share gains in selected markets, helped to boost revenues.
Price  increases early in the year were somewhat eroded by volume discounts to
major customers.  Despite the sales increase, operating income for the segment
was flat with a year ago,  as costs to expand marketing programs and develop
state-of-the-art information systems offset gross profit gains.

Both Harmon Glass (retail) and Glass Depot (wholesale) advanced same-location
sales by 7% reflecting overall market growth.  The higher volume contributed to
gross margin growth, but higher SG&A costs limited the units' operating income
gain to 4%.

The National Call Center, (formerly the Harmon Glass Network), which arranges
auto glass repair and replacement orders received from insurance and fleet
customers, reported  9% unit growth over fiscal 1994. About two-thirds of the
Call Center's volume is handled by company-owned stores.

Viracon/Curvlite, our windshield fabricator, maintained high factory utilization
throughout the year, producing record sales and strong earnings.  Windshield
unit shipments grew 8%.  Also, Curvlite invested in equipment to expand capacity
and lower production costs.

During the year, the AG segment acquired or started up 33 retail stores and nine
wholesale depots, including a chain of 13 retail stores and one warehouse in the
Washington, D.C. area, acquired in January, 1995.  This acquisition gives AG a
significant position in this attractive East Coast market. The group closed
seven retail and one distribution locations during the year, to end the year
with 256 retail stores, 53 wholesale depots and 7 Midas Muffler locations.

Increased demand for new and better auto glass products and services, combined
with sophisticated information systems, should enable AG to expand internally
and through acquisitions, and to improve results.

Viratec Thin Films

Viratec Thin Films (Viratec) is Apogee's second joint venture with Marvin
Windows.  The unit develops and applies optical-grade coatings to glass and
other substrates.  Revenues rose 8%, while pre-tax earnings were down 74%  from
last year. Demand for Viratec's coated glass for anti-glare computer screens
remained strong, especially in overseas markets, as the European Community has
adopted stricter safety regulations for limiting computer emissions. Viratec
invested heavily in research and development costs during fiscal 1995 to begin
limited direct-coating of cathode ray tubes (CRTs), thus reducing bottom-line
results.  At February 25, 1995, Viratec's backlog stood at $14.5 million, up 11%
from a year ago. Accordingly, the unit is anticipating improved revenues in the
upcoming year.  However, operating results will be highly dependent upon
Viratec's ability to ramp up production of CRT coatings within a reasonable cost
structure.

FISCAL 1994 COMPARED TO FISCAL 1993

Consolidated net sales rose 20%, to $688 million, in fiscal 1994, primarily due
to strong replacement auto glass sales, higher overseas nonresidential
construction activity and improved demand for architectural glass products.

Apogee's gross profit, as a percent of sales, fell for the second straight year.
Stronger auto and architectural glass markets allowed for firmer pricing, but
were more than offset by very low gross margins in curtainwall contracting,
ineffective project management and poor factory utilization at some units within
the Building Products & Services segment.

Selling, general and administrative expenses decreased slightly from a year
earlier, due to cost containment efforts throughout the company. Greater
expenditure levels for improved information systems  and expanded  marketing
programs, primarily  in the Automotive Glass segment, were offset by reductions
elsewhere in the  company.

During the fourth quarter of fiscal 1994, Apogee recorded a $5.6 million ($4.5
million after tax, or 34 cents per share) provision for business restructuring
and asset valuation. The charge reflected the costs of consolidating or closing
certain Harmon Contract offices and facilities, writing down particular assets
and reorganizing the architectural metals group.  The provision consisted of
$2.5 million of asset write-downs plus projected cash outlays of $3.1 million.
Most of the $3.1 million was planned for equipment relocation, employee
severance and facility closing costs.  The asset valuation component included a
$1.6 million write-off of intangible assets, principally patents and non-compete
agreements, which were 

                                      14

<PAGE>
 
determined to hold no future value. A facility scheduled for closure was written
down by $850,000 to its estimated net realizable value.

Despite lower interest rates, net interest expense jumped 52% to $2.7 million in
fiscal 1994, as borrowing levels increased to meet significant working capital
needs.

In the first quarter of fiscal 1994, a $525,000 gain, or 4 cents a share, was
recorded to reflect the adoption of Statement of Financial Accounting Standards
No. 109 - Accounting for Income Taxes (FAS 109). Under FAS 109, deferred tax
liabilities declined, primarily reflecting the fact that deferred taxes on
depreciation were originally booked at higher tax rates than those currently
prevailing. Other deferred tax assets and liabilities were essentially
unchanged.

The effective tax rate for fiscal 1994 was 60.9%, up from 42.3% in fiscal 1993.
The rise was primarily due to low earnings relative to permanent tax-to-book
differences and the increase in our deferred tax asset valuation allowance
related to a capital loss carryforward.

Equity in net earnings of affiliated companies rose 22% in fiscal 1994.
Significant earnings improvement at Viratec Thin Films was somewhat offset by
lower earnings at Marcon Coatings  and the taxability of a portion of Marcon's
and Viratec's earnings as their net operating loss carryforwards were fully
utilized.

The provision for business restructuring and asset valuation and the poor
performance of the Building Products & Services segment combined to offset the
strong results of the Automotive Glass segment.  Consolidated net earnings,
including the FAS 109 accounting change, fell 15% to $3.8 million, or 29 cents
per share, from $4.5 million, or 34 cents per share, in 1993.  Return on average
shareholders' equity was 3.4% compared with 4.0% in 1993.

Building Products & Services   Growth in overseas and domestic institutional
construction coupled with high demand for architectural glass caused revenues to
rise 21% for BPS. A slight improvement in architectural glass pricing was not
enough to offset the highly competitive pricing of curtainwall projects. In
addition, the complexity of  many projects stretched the architectural metals
group's ability to effectively manage its book of work and these difficult
conditions contributed to erratic order flow, poor pricing and inconsistent
factory utilization.  Along with the high costs of international marketing and
setting up overseas offices, the aforementioned factors caused  the segment to
record a $14.5 million operating loss, compared to a $2.4 million operating loss
in fiscal 1993.

During the year, BPS's Harmon Contract unit acquired majority ownership of one
of Europe's leading curtainwall contracting firms, CFEM Facades (CFEM).  The
acquisition provided BPS with substantial backlog,  manufacturing facilities and
expertise in European construction techniques.  CFEM generated significant sales
and operating income during fiscal 1994.

BPS achieved sharp backlog growth in 1994, finishing the year with $403 million
in backlog, up 26% from 1993.  The growth came from the European and Asian
markets, primarily the addition of the $80 million Kuala Lumpur City Centre
project in Kuala Lumpur, Malaysia. At February 26,1994, it was estimated that
approximately $115 million of backlog would not be reflected as revenue in
fiscal 1995.

Automotive Glass   AG grew sales by 19% and operating income 114% in fiscal
1994.  Strong demand for replacement auto glass required Curvlite, the segment's
auto glass fabricating unit, to operate at near-capacity levels throughout the
year.  The increased volume led to sharp unit cost reduction, offsetting price
weakness.

In fiscal 1993, the segment  changed the structure of its installation and
distribution businesses from a regional alignment to a national retail and
wholesale business unit arrangement.   This realignment helped the division
capitalize on increased unit movement and firmer pricing in the auto glass
market. Same-store retail sales rose 15%, reflecting industry growth and
increased market penetration. The National Call Center reported a 53% jump in
sales.

The division also increased its market penetration by adding 5 wholesale depots
during the year, for a year-end total of 45 locations. At February 26, 1994, the
segment also had 231 retail glass stores and 7 Midas Muffler franchises in 37
states.

Viratec Thin Films   Viratec achieved both sales and earnings growth for the
third consecutive year, reporting a 71% sales jump and a seven-fold increase in
pre-tax earnings.  Strong demand for computer anti-glare screens, particularly
in overseas markets, combined with healthy margins to produce the outstanding
results.  Viratec's backlog increased 22% from a year earlier, to $13 million at
year end.

                                      15

<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

Financial Condition  Major balance sheet items as a percentage of total assets
at February 25, 1995 and February 26, 1994 are presented below:


<TABLE>
<CAPTION>
                                                          1995      1994  
                                                          ----      ---- 
                    <S>                                   <C>       <C>  
                    Current assets.......................  71        72  
                                                                        
                    Current liabilities..................  37        46  
                                                                        
                    Long-term debt.......................  22        12  
                                                                        
                    Other liabilities ...................   5         5  
                                                                        
                    Shareholders' equity ................  34        37  
</TABLE>


Net receivables rose 14% in fiscal 1995, due to BPS's fourth quarter, 17%
revenue gain. Inventories rose 27% due mainly to higher AG inventories, fueled
by more wholesale depots and the proliferation in the number of auto glass
parts.  Costs in excess of billings more than doubled, reflecting volume growth,
contract complexity and variation in stages of completion on contracts.

Total long-term debt, at February 25, 1995, stood at $80.6 million, up from
$35.7 million a year earlier.   The increase reflected working capital growth
and record capital spending.  During the year, Apogee expanded its revolving
credit facilities to $70 million.  Ten million dollars outstanding under these
facilities, as well as $60 million of our short-term bank borrowings, are
classified as long-term debt based on the terms of the revolving credit
agreements.  In fiscal 1996, we believe cash flow from operations, along with
existing and reasonably available sources of financing, will enable us to
maintain liquidity and continue our growth strategy.

Capital Investment

New capital investment in fiscal 1995 totaled $39.6 million, versus $19.4
million and $13.6 million in fiscal 1994 and 1993, respectively.  Expenditures
for new property, plant and equipment totaled $25.0 million, and consisted of
information systems, facility additions and manufacturing equipment additions
and upgrades. We also invested $8.8 million to fund AG's acquisition of retail
stores and wholesale depots.

Capital investment for fiscal 1996 is estimated at $36 million.  Further
upgrading of information and communication systems and construction of a major
distribution center are the primary components of AG's plan, while BPS's plans
primarily consist of expenditures for capacity expansion and productivity
improvements.

Shareholders' Equity

Apogee's book value rose 9% in fiscal 1995 to $124.6 million, or $9.27 per
share.  Net  earnings less dividends, along with common stock issued in
connection with long-term compensation plans, accounted for the increase. During
fiscal 1995, we increased our quarterly dividend by 7%, to 8 cents per share,
our 20th consecutive year of increase.

Impact of Inflation

Apogee's financial statements are prepared on a historical cost basis, which
does not completely account for the effects of inflation.  However, since the
cost of most of our inventories is determined using the last-in, first-out
(LIFO) method of accounting, cost of sales, except for depreciation expense
included therein, generally reflects current costs.

The cost of glass, one of  Apogee's primary raw materials, increased slightly in
fiscal 1995 due to strong demand from both U.S. residential construction and new
car sales. We expect the cost of glass to rise moderately in fiscal 1996.
Aluminum prices were volatile and rose sharply in 1995. While our construction
and supply contracts are at fixed prices, the material components are usually
based on firm quotes obtained from suppliers. Labor cost increases, including
taxes and fringe benefits, can be reasonably anticipated. Through new
efficiencies and cost containment programs set up at most operating units, many
selling, general and administrative expenses were reduced or held relatively
constant.

OUTLOOK
- -------

We believe that improving market conditions for nonresidential construction and
steady demand for automotive replacement glass will allow Apogee to improve
earnings in fiscal 1996. Better project selection and management, continued cost
containment programs and efficiencies and competitive advantages from
information management technology should also contribute to earnings growth.

                                      16

<PAGE>
 

I
TEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

  The information called for by this Item is contained in a separate section of
this report.  See "Index of Financial Statements and Schedules".


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

  None.


                                    PART III
                                    --------


ITEMS 10, 11, 12 and 13.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
                          ---------------------------------------------------
       EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
       ----------------------------------------------------------------
       OWNERS AND MANAGEMENT; AND CERTAIN RELATIONSHIPS AND RELATED 
       ------------------------------------------------------------
       TRANSACTIONS.
       ------------

  The information required by these Items, other than the information set forth
above in "Executive Officers of the Registrant," is included on pages 1 to 10 of
the Proxy Statement for the Annual Meeting of Shareholders to be held June 20,
1995, which is incorporated herein by reference.


                                    PART IV
                                    -------


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

(a) and (d)  Financial Statements and Financial Statement Schedules -

     The consolidated financial statements and schedules of the Registrant
listed on the accompanying "Index to Financial Statements and Schedules"
together with the report of KPMG Peat Marwick LLP, independent auditors, are
filed as part of this report.

(b)  Reports on Form 8-K

        No reports on Form 8-K were filed during the quarter ended February 25,
     1995.

(c)  Exhibits -

        The information called for by this Item is contained in a separate
     section of this report. See "Exhibit Index".


                                      17

<PAGE>
 
                                 - SIGNATURES -


     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

     Date:  May 24, 1995
                           APOGEE ENTERPRISES, INC.


                           By: /s/  Donald W. Goldfus
                               ------------------------------
                               Donald W. Goldfus
                               Chairman of the Board of Directors
                                 and Chief Executive Officer


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


SIGNATURE                     TITLE                        DATE
- -------------------------------------------------------------

                              Chairman of the Board
                              of Directors and
/s/  Donald W. Goldfus        Chief Executive Officer            May 24, 1995
- ----------------------------  -----------------------------    ----------------
Donald W. Goldfus


/s/  Gerald K. Anderson       President and Director             May 24, 1995
- ----------------------------  -----------------------------    ----------------
Gerald K. Anderson


/s/  Laurence J. Niederhofer  Director                           May 24, 1995
- ----------------------------  ------------------------------   -----------------
Laurence J. Niederhofer


/s/  James L. Martineau       Vice President and Director        May 24, 1995
- ----------------------------  ------------------------------    ----------------
James L. Martineau


/s/  D. Eugene Nugent         Director                           May 24, 1995
- ----------------------------  ------------------------------    ----------------
D. Eugene Nugent


/s/  Richard Gould            Senior Vice President              May 24, 1995   
- ---------------------------   ------------------------------    ----------------


/s/  William G. Gardner       Treasurer and Secretary            May 24, 1995
- ----------------------------  -------------------------------   ----------------
William G. Gardner


 /s/ Terry L. Hall            Chief Financial Officer            May 24, 1995
- ----------------------------  --------------------------------  ----------------
Terry L. Hall

                                      18

<PAGE>
 
                           APOGEE ENTERPRISES, INC.
                                   FORM 10-K

                           ITEMS 8, 14(A) AND 14(D)


                  INDEX OF FINANCIAL STATEMENTS AND SCHEDULES


<TABLE>
<CAPTION>
<S>                                                                                     <C>
Financial Statements
        Independent Auditors' Report....................................................F-2
        Consolidated Balance Sheets.....................................................F-3
        Consolidated Results of Operations and Quarterly Data (Unaudited)...............F-4
        Consolidated Statements of Cash Flows...........................................F-5
        Notes to Consolidated Financial Statement.......................................F-6

Financial Statements Schedules
        Schedule II -- Valuation and Qualifying Accounts................................F-15
</TABLE>


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

                                      F-1

<PAGE>
 

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Apogee Enterprises, Inc.:

     We have audited the consolidated financial statements of Apogee
Enterprises, Inc. and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial statement schedule
are the responsibility or the company's management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Apogee
Enterprises, Inc. and subsidiaries as of February 25, 1995 and February 26, 1994
and the results of their operations and their cash flows for each of the years
in the three-year period ended February 25, 1995 in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.

     As discussed in notes 1 and 9, the company changed its method of accounting
for income taxes in fiscal 1994 to adopt the provisions of Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes.


                                            KPMG Peat Marwick LLP



                                            Minneapolis, Minnesota
                                            April  21, 1995


                                      F-2

<PAGE>
 
CONSOLIDATED BALANCE SHEETS
APOGEE ENTERPRISES, INC.


<TABLE>
<CAPTION>
                                                                      February 25,              February 26,
               (Dollar amounts in thousands)                             1995                      1994
               ----------------------------                         --------------            --------------
               <S>                                                    <C>                       <C>
               ASSETS
               Current assets
                Cash and cash equivalents (including restricted
                  funds of $885 and $825, respectively)                   $  2,894                  $ 10,824           
                Receivables, net of allowance for doubtful                 165,099                   144,597           
                Inventories                                                 54,559                    42,972           
                Costs and earnings in excess of billings on                                                            
                  uncompleted contracts                                     19,606                     9,760           
                Deferred tax assets                                         10,384                     8,454           
                Other current assets                                         4,278                     4,679           
                                                                    --------------            --------------           
                 Total current assets                                      256,820                   221,286           
                                                                    --------------            --------------           
               Property, plant and equipment, net                           75,028                    64,917           
               Other assets                                                                                            
                Investments in and advances to affiliated companies         15,016                    11,826           
                Intangible assets, at cost less accumulated                                                            
                 amortization of $8,681and $10,999, respectively             8,383                     1,972           
                Deferred tax assets                                          5,082                     3,526           
                Other                                                        1,599                     2,661           
                                                                    --------------            --------------           
                                                                            30,080                    19,985           
                                                                    --------------            --------------           
                 Total assets                                             $361,928                  $306,188           
                                                                    ==============            ==============           
                                                                                                                       
                                                                                                                       
                                                                                                                       
               LIABILITIES AND SHAREHOLDERS' EQUITY                                                                    
               Current liabilities                                                                                     
                Accounts payable                                          $ 53,793                  $ 51,488           
                Accrued expenses                                            41,168                    40,916           
                Billings in excess of costs and earnings on                                                            
                 uncompleted contracts                                      17,717                    15,911           
                Accrued income taxes                                        10,454                     4,524           
                Notes payable                                                7,065                    23,850           

                Current installments of long-term debt                       5,522                     4,157           
                                                                    --------------            --------------           
                 Total current liabilities                                 135,719                   140,846           
                                                                    --------------            --------------           
                                                                                                                       
                                                                                                                       
               Long-term debt                                               80,566                    35,688           
               Other long-term liabilities                                  19,587                    14,260           
               Minority interest                                             1,427                     1,331           
               Commitments and contingent liabilities (Notes 14 and 15)                                                
                                                                                                                       
               Shareholders' equity                                                                                    
                Common stock of $.33-1/3 par value;                                                                    
                  authorized 50,000,000 shares; issued and                                                             
                  outstanding, 13,443.00 and 13,312,000, respectively        4,481                     4,437           
                Additional paid-in capital                                  19,345                    17,718           
                Retained earnings                                          100,803                    91,908           
                                                                    --------------            --------------           
                 Total shareholders' equity                                124,629                   114,063           
                                                                    --------------            --------------           
                 Total liabilities and shareholders' equity               $361,928                  $306,188           
                                                                    ==============            ==============           
</TABLE>


     See accompanying notes to consolidated financial statements.

                                      F-3

<PAGE>
 
CONSOLIDATED RESULTS OF OPERATIONS
APOGEE ENTERPRISES, INC.


<TABLE>
<CAPTION>
                                                              Year Ended     Year Ended     Year Ended
                                                              February 25,   February 26,   February 27,
(Dollar amounts in thousands, except per share data)             1995           1994           1993
                                                              ------------   -----------    ------------
<S>                                                           <C>            <C>            <C> 
Net sales                                                         $756,549       $688,233       $572,450
Cost of sales                                                      650,660        604,338        494,249  
                                                              ------------   ------------   ------------  
  Gross profit                                                     105,889         83,895         78,201  
Selling, general and administrative expenses                        81,627         71,659         71,832  
Provision for business restructuring and asset valuation                 -          5,178              -  
                                                              ------------   ------------   ------------  
  Operating income                                                  24,262          7,058          6,369  
Interest expense, net                                                4,135          2,735          1,794  
                                                              ------------   ------------   ------------  
  Earnings before income taxes and                                                                        
   other items below                                                20,127          4,323          4,575  
Income taxes                                                         8,101          2,634          1,936  
Equity in net earnings of  affiliated companies                       (762)        (2,294)        (1,875) 
Minority interest                                                     (262)           675              -  
                                                              ------------   ------------   ------------  
  Net earnings before cumulative effect of change                                                         
   in accounting for income taxes                                   13,050          3,308          4,514  
Cumulative effect of change in accounting for income taxes               -            525              -  
                                                              ------------   ------------   ------------  
  Net earnings                                                      13,050       $  3,833       $  4,514  
                                                              ============   ============   ============  
                                                                                                          
Earnings per share:                                                                                       
Earnings per share before cumulative effect                                                               
 of change in accounting  for income taxes                           $0.97       $   0.25          $0.34  
Cumulative effect of change in accounting for income taxes               -           0.04              -  
                                                              ------------   ------------   ------------  
  Earnings per share                                                 $0.97       $   0.29          $0.34  
                                                              ============   ============   ============   
</TABLE>


See accompanying notes to consolidated financial statements.

QUARTERLY  DATA (UNAUDITED)
(Dollar amounts in thousands, except per share data)

NET SALES                                           GROSS PROFIT


<TABLE>
<CAPTION>
Quarter        1995         1994          1993         Quarter        1995         1994          1993
- -------     ---------    ----------    ----------      -------     ---------     --------     ---------
<S>          <C>        <C>              <C>           <C>          <C>           <C>           <C>
First        $178,927      $148,752      $130,878      First        $ 25,388      $19,947       $19,236
Second        185,971       175,568       145,802      Second         29,240       22,093        20,855
Third         186,253       184,529       146,723      Third          26,204       23,917        19,859
Fourth        205,398       179,384       149,047      Fourth         25,057       17,938        18,251
             ------------------------------------                  ---------     --------     ---------
 Total       $756,549      $688,233      $572,450       Total        105,889      $83,895       $78,201
            =========    ==========    ==========                  =========     ========     =========
</TABLE>

 
NET EARNINGS (LOSS)                                    EARNINGS (LOSS) PER SHARE
 

<TABLE>
<CAPTION>
Quarter        1995          1994*         1993         Quarter       1995          1994*         1993  
- -------      --------      --------      --------       -------    ----------     --------      --------
<S>          <C>           <C>           <C>            <C>          <C>           <C>           <C>
First          $2,600      $  1,443      $    319       First           $0.19      $  0.11       $  0.02
Second          4,294         2,441         1,949       Second           0.32         0.18          0.15
Third           3,763         2,902         2,020       Third            0.28         0.22          0.15
Fourth          2,393        (2,953)          226       Fourth           0.18        (0.22)         0.02
             --------      --------      --------                  ----------     --------      --------
 Total        $13,050      $  3,833      $  4,514        Total          $0.97      $  0.29       $  0.34
             ========      ========      ========                  ==========     ========      ========
</TABLE>


*During the first quarter of 1994, Apogee adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes.  The cumulative
effect of the change in accounting for income taxes increased net earnings by
$525,000, or 4 cents per share, and is included in fiscal 1994 figures.

                                      F-4

<PAGE>
 

CONSOLIDATED STATEMENTS OF CASH FLOWS
Apogee Enterprises, Inc.


<TABLE>
<CAPTION> 
                                                                              Year Ended          Year Ended          Year Ended
(Dollar amounts in thousands)                                              February 25, 1995   February 26, 1994   February 27, 1993
- ----------------------------                                               -----------------   -----------------   -----------------
<S>                                                                        <C>                 <C>                 <C>
OPERATING ACTIVITIES
  Net earnings                                                                 $ 13,050            $  3,833            $  4,514
  Adjustments to reconcile net earnings to net
    cash (used by) provided by operating activities:
      Cumulative effect of change in accounting for
        income taxes                                                                                   (525)                  -
      Depreciation and amortization                                              15,131              15,724              15,110 
      Provision for losses on accounts receivable                                 3,817               2,388               2,061 
      Noncurrent deferred income tax expense                                     (1,556)             (3,124)             (1,992)
      Provision for business restructuring and asset valuation                    5,178                   -                     
      Equity in net earnings of affiliated companies                               (762)             (2,294)             (1,875)
      Minority interest                                                            (262)                675                   - 
      Other, net                                                                   (296)             (1,580)                176 
                                                                           -------------       -------------       -------------
           Cash flow before changes in operating assets and liabilities          29,122              20,275              17,994 
       Changes in operating assets and liabilities,                                                                             
          net of effect of acquisitions:                                                                                        
        Receivables                                                             (23,080)            (40,205)            (14,692)
        Inventories                                                             (11,356)             (6,402)              2,229 
        Cost and earnings in excess of billings on                                                                              
            uncompleted contracts                                                (9,846)             (3,853)             (2,360)
        Other current assets                                                        483                 351                 421 
        Accounts payable and accrued expenses                                     2,557              17,003               2,255 
        Billings in excess of costs and earnings                                                                                
          on uncompleted contracts                                                1,806              (1,529)                968 
        Accrued and current deferred income taxes                                 4,000                 164              (3,333)
        Other long-term liabilities                                               5,327               3,299               3,457 
                                                                           -------------       -------------       -------------
            Net cash (used by) provided by                                                                                      
             operating activities                                                  (987)            (10,897)              6,939 
                                                                           -------------       -------------       -------------
                                                                                                                                
                                                                                                                                
INVESTING ACTIVITIES                                                                                                            
  Capital expenditures                                                          (24,957)            (14,046)             (9,166)
  Acquisition of businesses, net of cash acquired                                (8,823)             (3,154)             (1,696)
  Investment in and advances to affiliated companies                             (2,070)              1,527              (2,502)
  Proceeds from sale of property, plant and equipment                             1,004                 832                 818 
  Other, net                                                                        929              (1,340)             (1,434)
                                                                           -------------       -------------       -------------
            Net cash used by investing activities                               (33,917)            (16,181)            (13,980)
                                                                           -------------       -------------       -------------
                                                                                                                                
FINANCING ACTIVITIES                                                                                                            
  (Decrease) increase in notes payable                                          (16,785)             23,850                   - 
  Payments on long-term debt                                                     (4,182)             (6,851)             (7,733)
  Proceeds from issuance of long-term debt                                       50,425              14,100              10,900 
  Proceeds from issuance of common stock                                          1,671               1,945               1,508 
  Repurchase and retirement of common stock                                        (209)             (3,884)                    
  Dividends paid                                                                 (4,155)             (3,841)             (3,584)
                                                                           -------------       -------------       -------------
            Net cash provided by (used by) financing activities                  26,974              28,994              (2,793)
                                                                           -------------       -------------       -------------
Increase (decrease) in cash and cash equivalents                                 (7,930)              1,916              (9,834)
Cash and cash equivalents at beginning of year                                   10,824               8,908              18,742 
                                                                           -------------       -------------       -------------
Cash and cash equivalents at end of year                                       $  2,894            $ 10,824            $  8,908 
                                                                           =============       =============       =============
</TABLE>


See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Apogee Enterprises, Inc.

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RELATED DATA

     PRINCIPLES OF CONSOLIDATION  Our consolidated financial statements include
the accounts of Apogee and all majority-owned subsidiaries. We use the equity
method to account for our 50%-owned joint ventures. Intercompany transactions
have been eliminated. Certain amounts from prior-years financial statements have
been reclassified to conform with this year's presentation.

     CASH AND CASH EQUIVALENTS  Investments with an original maturity of three
months or less are included in cash and cash equivalents.  Restricted funds
represent collateral for outstanding bank guarantees required by certain
construction contracts' terms.

     INVENTORIES  Inventories, which consist primarily of purchased glass and
aluminum, are valued at cost, principally by using the last-in, first-out (LIFO)
method, which does not exceed market.  If the first-in, first-out (FIFO) method
had been used, our inventories would have been $2,700,000 and $1,825,000 higher
than reported at February 25, 1995 and February 26, 1994, respectively.

     PROPERTY, PLANT AND EQUIPMENT  Property, plant and equipment are carried
at cost. Significant improvements and renewals are capitalized. Repairs and
maintenance are charged to expense as incurred. Apogee computes depreciation on
a straight-line basis, based on estimated useful lives of 20 to 40 years for
buildings and 2 to 15 years for equipment. When property is retired or otherwise
disposed of, the cost and related depreciation are removed from the accounts and
related gains or losses are included in income.

     INTANGIBLE ASSETS AND AMORTIZATION  Intangible assets consist principally
of goodwill and non-compete agreements. We review the ongoing value of
intangibles on an annual basis. The continuing benefit of such assets is
evaluated based upon an assessment of relevant economic and other criteria,
including projections of future results. Goodwill is the excess of cost over the
fair value of acquired assets of purchased businesses. Goodwill is amortized
over periods ranging from 10 to 40 years, except for $923,000, which is not
being amortized. In our opinion, there has been no diminution of its value.
     Non-compete agreements are contracts with the previous management of
purchased businesses not to enter into competition with us for a certain period
of time. Non-compete agreements are amortized ratably over the term of the
agreements. Amortization expense amounted to $288,000, $2,328,000 and $2,123,000
in 1995, 1994 and 1993, respectively.

     OTHER LONG-TERM LIABILITIES  Other long-term liabilities include deferred
compensation and the long-term portion of accrued insurance costs.

     REVENUE RECOGNITION  We recognize revenue from construction contracts on
a percentage-of-completion basis, measured by the percentage of costs incurred
to date to estimated total costs for each contract. Contract costs include
materials, labor and other direct costs related to contract performance. We
establish provisions for estimated losses, if any, on uncompleted contracts in
the period in which such losses are determined. Revenue from the sale of
products and the related cost of sales are recorded upon shipment.

     INCOME TAXES  Apogee files a consolidated federal income tax return.
Effective February 28, 1993, Apogee adopted the provisions of Statement of
Financial Accounting Standards No. 109 (FAS 109). FAS 109 requires the asset and
liability method be used to account for income taxes. This method recognizes
deferred tax assets and liabilities based upon the future tax consequences of
temporary differences between financial and tax reporting. Previously, Apogee
followed the provisions of Accounting Principles Board Opinion No. 11. The
cumulative effect of the change in accounting for income taxes is included in
the fiscal 1994 Consolidated Results of Operations.

     EARNINGS PER SHARE  Apogee computes earnings per share by dividing net
earnings by the weighted average number of common shares and common share
equivalents outstanding during the year. Our average common shares and common
share equivalents outstanding during 1995, 1994 and 1993 were 13,501,000,
13,289,000 and 13,293,000, respectively.

     TRANSLATION OF FOREIGN CURRENCIES  The financial statements of our foreign
operations have been translated to U.S. dollars, using the rules of Statement of
Financial Accounting Standard No. 52. Balance sheet accounts are stated in U.S.
dollars at either the year- end or historical exchange rate. Results of
operations are translated at average exchange rates for the respective period.

     ACCOUNTING PERIOD  Apogee's fiscal year ends on the Saturday closest to
February 28.  Interim quarters end on the Saturday closest to the end of the
months of May, August and November.

                                      F-6

<PAGE>
 

<TABLE>
<CAPTION>
2.   RECEIVABLES
     (In thousands)                              1995             1994  
     --------------                          ------------     ------------
     <S>                                     <C>              <C>
     Trade accounts                              $68,332         $  58,474
     Construction contracts                       67,546            59,747
     Contract retainage                           32,284            30,507
     Other receivables                             5,595             3,748
                                             ------------     ------------
      Total receivables                          173,757           152,476
                                             ------------     ------------
     Less allowance for doubtful accounts         (8,658)           (7,879)
                                             ------------     ------------
      Net receivables                           $165,099          $144,597
                                             ============     ============
</TABLE>


Apogee provides products and services to the commercial and institutional new
construction and remodeling markets, the automotive replacement glass market and
selected consumer markets.  We do not believe a concentration of credit risk
exists, due to the diversity of our markets and channels of distribution, and
the geographic location of our customers.  We perform ongoing credit evaluations
of our customers' financial condition and limit the amount of credit extended
when deemed necessary.  We also routinely file liens to protect our interest
whenever possible.  We generally require no collateral.  Allowances are
maintained for potential credit losses and such losses have been within
management's expectations.  The provision for bad debt expense was $3,817,000,
$2,388,000 and $2,061,000 in 1995, 1994 and 1993, respectively.


<TABLE>
<CAPTION>
3.   INVENTORIES
     (In thousands)                               1995          1994
     --------------                           ------------   ------------
     <S>                                      <C>            <C>
     Raw materials                                 $14,802        $ 9,994    
     In process                                      3,232          3,413    
     Finished                                       36,525         29,565    
                                              ------------   ------------    
      Total inventories                            $54,559        $42,972    
                                              ============   ============    
</TABLE>
 
 

<TABLE> 
<CAPTION> 
4.   PROPERTY, PLANT AND EQUIPMENT
     (In thousands)                               1995          1994
     --------------                           ------------   ------------
     <S>                                      <C>            <C> 
      Land                                       $  2,430        $  2,308
      Buildings and improvements                   50,332          43,965
      Machinery and equipment                      74,387          66,796
      Office equipment and furniture               30,418          24,322
      Construction in progress                      4,127           4,019
                                              ------------   ------------
       Total property, plant and equipment        161,694         141,410
      Less allowance for depreciation             (86,666)        (76,493)
                                              ------------   ------------
       Net property, plant and equipment         $ 75,028        $ 64,917
                                              ============   ============
</TABLE>


Depreciation expense was $14,903,000, $13,397,000 and $12,987,000 in 1995, 1994
and 1993, respectively.


<TABLE>
<CAPTION>
5.   ACCRUED EXPENSES
     (In thousands)                                1995           1994
     --------------                           -------------   -------------
     <S>                                      <C>             <C>
     Payroll and related benefits                   $11,493         $15,331
     Insurance                                       10,771          10,023   
     Taxes, other than income taxes                   2,182           1,888   
     Pension                                          3,319           2,929   
     Interest                                           804             994   
     Other                                           12,599           9,751   
                                              -------------   -------------   
      Total accrued expenses                        $41,168         $40,916   
                                              =============   =============   
</TABLE>

                                                   
                                      F-7

<PAGE>
 

<TABLE>
<CAPTION> 
6.   LONG-TERM DEBT
     (In thousands)                                        1995            1994
     --------------                                   -------------   --------------
     <S>                                              <C>             <C>
     Promissory note, 9.65% due in annual                      
      installments through 1998                             $8,036          $11,607   
     Promissory notes, 7.5%, due in quarterly                  
      installments through 2000                              5,300                -   
     Borrowings under revolving credit and other                              
      bank agreements                                       70,000           25,000   
     Floating rate industrial development bond,                                
        4.4 % at year end, due in annual                                        
      installments through 1999                              1,600            2,000   
     Industrial development bonds, interest                                    
      ranging from 4.7% to 6.96%, due                                          
      in annual installments through 2003                    1,011            1,177   
     Other                                                     141               61   
                                                      -------------   --------------   
      Total long-term debt                                  86,088           39,845   
                                                      -------------   --------------   
     Less current installments                              (5,522)          (4,157)  
                                                      -------------   --------------   
        Net long-term debt                                 $80,566          $35,688   
                                                      =============   ==============   
</TABLE>


Long-term debt maturities are as follows:


<TABLE>
<CAPTION>
     Fiscal Year                                     (In thousands)
     ------------                                    --------------
     <S>                                             <C>             
     1996                                                   $ 5,522
     1997                                                    26,848
     1998                                                    34,179
     1999                                                    18,297
     2000                                                       938
     Thereafter                                                 304  
                                                     -------------- 
      Total                                                 $86,088
                                                     ==============
</TABLE>


     The terms of the 9.65% promissory note include certain dividend and debt
level restrictions and requirements to maintain minimum levels of tangible net
worth and certain financial ratios. Retained earnings available for dividends
under the terms of the promissory note were approximately $35 million at
February 25, 1995.

     At February 25, 1995, we were party to revolving credit agreements with
four banks. The agreements allow us to borrow up to $70 million at fixed or
floating rates tied to the banks' cost of funds. The revolving credit terms will
expire in March 1996 and March 1997. Through March 1996, we can convert $50
million of the outstanding loans into a three-year term loan. The agreements
require us to maintain minimum levels of tangible net worth and certain
financial ratios. At February 25, 1995, there were $10 million of borrowings
outstanding under the committed credit facilities.

     We also had access to short-term credit on an uncomitted basis with several
major banks. At February 25, 1995, $67.1 million in bank borrowings were
outstanding under these agreements. We may refinance these short-term borrowings
on a long-term basis under the revolving credit agreements discussed above.
Accordingly, $60 million of our short-term bank borrowings, which were not
expected to be paid within one year, is classified as long-term debt, and the
debt maturity schedule above is based on the terms of the revolving credit
agreements. The remaining $7.1 million of short-term bank borrowings was
classified as notes payable at February 25, 1995.

     Interest rates on the year-end bank under committed and uncommitted credit
facilities, borrowings ranged from 6.38 % to 6.75 %.

     Selected information related to bank borrowings under credit agreements is
as follows:


<TABLE>
<CAPTION>
(Dollar amounts in thousands)                         1995          1994
- -----------------------------                     ------------  ------------
<S>                                               <C>           <C>
Average daily borrowings during the year          $58,027            $34,203
Maximum borrowings outstanding during the year    $78,865            $53,800
Weighted average interest rate during the year        5.5%              3.7%
</TABLE>


                                      F-8

<PAGE>
 
     In 1992, we entered into three interest rate swap agreements with a
notional amount of $25 million that effectively converted a portion of our fixed
rate, long-term borrowings into variabvle rate obligations. During 1993, we sold
two of the swap agreements at net gains. The gains are being recognized as
reductions in interest expense through 1997. The third agreement expired in
1995.

     The net book value of property, plant and equipment pledged as collateral
under industrial development bonds was approximately $1 million at February 25,
1995.


<TABLE>
<CAPTION>

7.   SHAREHOLDERS' EQUITY                        Common                        Additional
                                                 Shares           Common         Paid-in        Retained
     (In thousands)                           Outstanding         Stock          Capital        Earnings
     --------------                          -------------     -----------     ------------    -----------
     <S>                                     <C>               <C>             <C>             <C>        
     Balance at February 29, 1992                  13,461          $4,487          $14,908        $94,386
       Net earnings                                     -               -                -          4,514
       Common stock issued                            150              50            1,458              -
       Common stock repurchased or retired           (434)           (145)            (521)        (3,218)
       Cash dividends                                   -               -                -         (3,584)
                                             -------------     -----------     ------------    -----------
  
     Balance at February 27, 1993                  13,177           4,392           15,845         92,098
       Net earnings                                     -               -                -          3,833
       Common stock issued                            152              51            1,894              -
       Common stock repurchased                                
       or retired                                     (17)             (6)             (21)          (182)
       Cash dividends                                   -               -                -         (3,841)
                                             -------------     -----------     ------------    -----------
  
     Balance at February  26, 1994                 13,312           4,437           17,718        $91,908   
       Net earnings                                     -               -                -         13,050
       Common stock issued                            131              44             1627              -
       Cash dividends                                   -               -                -         (4,155)
                                             -------------     -----------     ------------    -----------
     Balance at February 25, 1995                  13,443          $4,481          $19,345       $100,803
                                             =============     ===========     ============    ===========
</TABLE>
 

     A class of 200,000 shares of junior preferred stock with a par value of
$1.00 is authorized, but unissued.

Apogee has a Shareholders' Rights Plan, under which each share of our
outstanding common stock has an associated preferred share purchase right. The
rights are exercisable only under certain circumstances, including the
acquisition by a person or group of 10% of the outstanding shares of the
Company's common stock. Upon exercise, the rights would allow holders of such
rights to purchase common stock of Apogee or an acquiring company at a
discounted price, which generally would be 50% of the respective stock's current
fair market value.


<TABLE>
<CAPTION>
8.   INTEREST EXPENSE, NET
     (In thousands)                  1995            1994           1993
     --------------             --------------  -------------  --------------
     <S>                        <C>             <C>            <C>
     Interest on debt                  $4,381         $3,008         $ 2,459
     Other interest                       595            620             528
                                --------------  -------------  --------------
      Total interest expense            4,976          3,628           2,987
     Less interest income                (841)          (893)         (1,193)
                                --------------  -------------  --------------
      Interest expense, net            $4,135         $2,735         $ 1,794
                                ==============  =============  ==============
</TABLE>


Interest payments were $4,778,000, $3,714,000 and $2,556,000 in 1995, 1994 and
1993, respectively.

                                      F-9

<PAGE>
 
9.   INCOME TAXES

     As discussed in Note 1, Apogee adopted Statement of Financial Accounting
Standards No. 109 (FAS 109) in 1994. The cumulative effect of this change in
accounting for income taxes is reported separately in the accompanying
Consolidated Results of Operations. Financial statements for 1993 were not
restated to apply the provisions of FAS 109.

     The components of income tax expense for each of the last three fiscal
years are as follows:


<TABLE>
<CAPTION>
     (In thousands)                 1995         1994         1993
     --------------              ---------    ---------    --------- 
     <S>                         <C>          <C>          <C>       
     CURRENT:                                                        
     Federal                      $ 9,663      $ 3,342      $ 2,525  
     State and local                1,608          701          639  
     Foreign                          316        1,520         (429) 
                                 ---------    ---------    --------- 
      Total current                11,587        5,563        2,735  
     DEFERRED:                                                       
     Federal                       (3,233)      (2,794)      (1,494) 
     State and local                 (653)        (485)        (310) 
     Foreign                          400          350        1,005  
                                 ---------    ---------    --------- 
      Total deferred               (3,486)      (2,929)        (799) 
                                 ---------    ---------    --------- 
       Total income tax expense     8,101      $ 2,634      $ 1,936  
                                 =========    =========    ========= 
</TABLE>


       Income tax payments, net of refunds, were $5,790,000, $5,934,000 and
$7,371,000 in 1995, 1994 and 1993, respectively.

        The components of deferred income tax expense (benefit) for 1993 are as
follows:


<TABLE>
<CAPTION>
     (In thousands)                                     1993
     --------------                                  ----------    
     <S>                                             <C> 
     Completed contract accounting                   $  (172)
     Accelerated depreciation                            394
     Allowance for doubtful accounts                   1,862
     Accrued insurance                                (1,499)
     Other accrued expenses                             (170)
     Deferred compensation                              (215)
     Inventory                                           384
     Business restructuring reserve                     (863)
     Other, net                                         (520)
                                                    --------       
     Deferred income taxes                             $(799)
                                                    ========
</TABLE>
 
 
The differences between statutory federal tax rates and our consolidated 
effective tax rates are as follows:
 

<TABLE> 
<CAPTION> 
                                            1995          1994           1993
                                          ---------     ---------      ---------
     <S>                                  <C>           <C>            <C>
     Statutory federal tax rate               35.0%         35.0%          34.0%
     State and local income taxes, net
      of federal tax benefit                   3.0           3.2            4.7
     Tax credits                              (1.1)         (3.3)          (2.3)
     Foreign items with no tax benefit         2.1          18.6            2.4
     Valuation allowance                       1.6          13.9              -
     Other, net                               (0.4)         (6.5)           3.5
                                          ---------     ---------      ---------
     Consolidated effective tax rate          40.2%         60.9%          42.3%
                                          =========     =========      =========
</TABLE>




                                     F-10

<PAGE>
 
Deferred tax assets and deferred tax liabilities at February 25, 1995 and
February 26, 1994 are as follows:


<TABLE>
<CAPTION>
          (In thousands)                        1995              1994
          --------------                   ---------------   ---------------
          <S>                              <C>               <C>
          Deferred tax assets:
           Allowance for doubtful accounts        $ 3.478           $ 3,035
           Accrued insurance                       10,645             8,701  
           Deferred compensation                    3,556             3,143  
           Business restructuring reserve           1,286             2,127  
           Inventory                                2,311             1,591  
           Other                                    2,803             2,260  
                                           ---------------   ---------------  
           Gross deferred tax assets               24,079            20,857  
           Less valuation allowance                (1,353)           (1,035) 
                                           ---------------   ---------------  
            Total deferred tax assets              22,726            19,822  
                                           ---------------   ---------------  
                                                                  
          Deferred tax liabilities:                             
           Depreciation                             4,625             5,006  
           Employee benefit plans                   1,218             1,307  
           Other                                    1,417             1,529  
                                           ---------------   ---------------  
            Total deferred tax liabilities          7,260             7,842  
                                           ---------------   ---------------
            Net deferred tax assets               $15,466           $11,980   
                                           ===============   ===============
</TABLE>


Apogee's valuation allowance increased by $318,000 in 1995 and related primarily
to foreign tax credits.  The valuation allowance at February 25, 1995 also
included prior year amounts for foreign tax credits and a capital loss
carryforward.

10.  INVESTMENT IN AFFILIATED COMPANIES

     Apogee, through its Building Products and Services segment, is party to a
joint venture agreement with Marvin Windows of Warroad, Minnesota, forming
Marcon Coatings, Inc. and its subsidiary, Viratec Thin Films, Inc.
(Marcon/Viratec). Marcon/Viratec operates two glass coating facilities. Our 50%
ownership investment in Marcon/Viratec is accounted for using the equity method.
     Apogee and Marvin have leased certain glass coating equipment to Marcon and
made cash advances to Marcon/Viratec. Our net investment in Marcon/Viratec as of
February 25, 1995, February 26, 1994 and February 27, 1993 was $14,278,000,
$10,652,000 and $8,858,000, respectively. Our equity in Marcon/Viratec's net
earnings is included in the accompanying Consolidated Results of Operations.
Marcon/Viratec's net earnings for 1994 and 1993 included tax benefits from net
operating loss carryforwards in the amounts of $437,000 and $1,200,000,
respectively.

     A summary of assets, liabilities and results of operations for
Marcon/Viratec is presented below:


<TABLE>
<CAPTION>
          (In thousands)               1995             1994           1993
          --------------          -------------    ------------  --------------
          <S>                     <C>              <C>           <C>
          Current assets               $ 8,620       $10,248        $ 5,402 
         Noncurrent assets             16,716         5,704          11,997 
         Current liabilities            6,153         7,214           4,577 
         Noncurrent liabilities        12,673        14,066          12,716 
                                                                            
         Net sales                     38,299        34,497          24,150 
         Gross profit                   8,518        10,967           6,929 
         Net earnings                 $ 1,838       $ 4,566         $ 3,188 
</TABLE>


11.  EMPLOYEE BENEFIT AND STOCK OPTION PLANS

     We maintain a qualified defined contribution pension plan that covers
substantially all full-time, non-union employees. Contributions to the plan are
based on a percentage of employees' base earnings. Benefits for each employee
vary based on total contributions and earnings on invested funds. We deposit
pension costs with the trustee annually. All pension costs were fully funded or
accrued as of year end. Contributions to the plan were $3,394,000, $3,014,000
and $2,848,000 in 1995, 1994 and 1993, respectively.

                                     F-11

<PAGE>
 
     We also maintain a 401(k) Savings Plan, which allows employees to
contribute 1% to 13% of their pretax compensation. Apogee matches 30% of the
first 6% of the employee contributions. Amounts contributed by us to the plan
were $1,242,000, $1,206,000 and $1,069,000 in 1995, 1994 and 1993, respectively.

     The 1987 Stock Option Plan provides for the issuance of up to 1,250,000
options to purchase company stock.  Options awarded under this plan, either in
the form of incentive stock options or nonstatutory options, are exercisable at
an option price equal to the fair market value at the date of award.  Changes in
stock options outstanding for each of the last three fiscal years are as
follows:


<TABLE>
<CAPTION>
                                                     1995             1994              1993
                                                --------------   ---------------   --------------
          <S>                                   <C>              <C>               <C>
          Options outstanding at beginning
           of the year                                477,000           481,000          381,000
          Granted                                     168,000           148,000          165,000
          Exercised                                   (25,000)           (4,000)         (31,000)
          Forfeited                                   (42,000)         (148,000)         (34,000)
                                                --------------   ---------------   --------------
          Options outstanding at end
           of the year                                578,000           477,000          481,000
                                                ==============   ===============   ==============
          Options exercisable at end of year          212,000           129,000          150,000
                                                ==============   ===============   ==============
          Price range of outstanding options     $8.95-$18.91     $8.95-$18.91      $8.95-$18.91
                                                ==============   ===============   ============== 
          Price range of exercised options       $8.95-$16.25    $10.75-$12.00      $       9.38
                                                ==============   ===============   ==============
</TABLE>


     The 1987 Partnership Plan, a plan which is designed to increase the
ownership of Apogee stock by key employees, allows participants selected by the
Compensation Committee of the Board of Directors to use earned incentive
compensation to purchase Apogee stock. The purchased stock is then matched by an
equal award of restricted stock, which vests over a predetermined period. There
are 1,100,000 shares of common stock authorized for issuance or repurchase under
the plan. As of February 25, 1995, 575,000 shares have been issued under the
plan. We expensed $708,000, $478,000 and $287,000 in conjunction with the
Partnership Plan in 1995, 1994 and 1993, respectively.


12.  ACQUISITIONS

     In 1995, our Automotive Glass segment purchased the assets of 16 retail
auto glass stores and one distribution center in four separate transactions. The
aggregate purchase price of the acquisitions was $8.8 million, including $4.6
million of cost in excess of the fair value of acquired assets. Promissory notes
of $5.3 million were issued in connection with the transactions.

     In 1994, the Building Products & Service segment's Tru Vue unit purchased
the assets of a company serving another sector of the picture framing market.
Also in 1994, the segment purchased certain assets of CFEM Facades, a
curtainwall company based in France. In 1993, the Automotive Glass segment
purchased the assets of three retail auto glass stores and two distribution
centers in four separate transactions. The value of the assets acquired in 1994
and 1993 was $3.2 million and $1.7 million, respectively.

     No liabilities were assumed in any of the transactions. All of the above
transactions were accounted for by the purchase method. Accordingly, Apogee's
consolidated financial statements include the net assets and results of
operations from the dates of acquisition.

 
13.  PROVISION FOR BUSINESS RESTRUCTURING AND ASSET VALUATION

     During 1994, we recorded a business restructuring and asset valuation
provision of $5.6 million ($4.5 million after tax) in our Building Products and
Services segment. The charge was principally related to the consolidation or
closing of 10 Harmon Contract offices and facilities, the write-down of certain
assets and the reorganization of the architectural metals operations. The
provision consisted of asset writedowns of $2.5 million and projected cash
outlays of $3.1 million. At February 25, 1995, the remaining reserve for
projected expenditures stood at approximately $700,000. 



                                     F-12

<PAGE>
 
14.  LEASES

     As of February 25, 1995, we were obligated under noncancelable operating
leases for buildings and equipment. Certain leases provide for increased rentals
based upon increases in real estate taxes or operating costs. Future minimum
rental payments under noncancelable operating leases are:


<TABLE>
<CAPTION>
           Fiscal Year                               (In thousands)
           -----------                               -------------- 
           <S>                                       <C>
           1996                                              $8,976
           1997                                               6,588
           1998                                               4,836
           1999                                               3,805
           2000                                               2,606
           Thereafter                                         1,559
                                                          ---------
            Total minimum payments                          $28,370
                                                          =========
</TABLE>


     Total rental expense was $18,242,000, $17,129,000 and 15,653,000 in 1995,
1994 and 1993, respectively.


15.  COMMITMENTS AND CONTINGENT LIABILITIES

     Apogee has entered into a number of non-compete agreements. Non-compete
agreements represent contractual agreements with the previous management of
purchased businesses not to enter into competition with us for a certain period
of time. As of February 25, 1995, we were committed to make future payments of
$658,000 under such agreements.

     Apogee has ongoing letters of credit related to risk management programs,
construction contracts and certain industrial development bonds. The total value
of letters of credit under which the company is obligated as of February 25,
1995 was approximately $53,922,000.

     Apogee, like other participants in the construction business, is routinely
involved in disputes and claims arising out of construction projects, sometimes
involving significant monetary damages. Although it is impossible to predict the
outcome of such disputes, we believe, based on facts currently available to us,
that none of such claims will result in losses that would have a material
adverse effect on our financial condition.

16.  FAIR VALUE DISCLOSURES

     The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of Statement of
Financial Accounting Standards No. 107.

     Estimated fair value amounts have been determined using available market
information and appropriate valuation methodologies. However, considerable
judgment is required in developing the estimates of fair value. Accordingly,
these estimates are not necessarily indicative of the amounts that could be
realized in a current market exchange. The use of different market assumptions
and/or estimating methodologies may have a material effect on the estimated fair
value amounts.

          Estimated fair values of our financial instruments at February 25,
1995 are as follows:


<TABLE> 
                                               Carrying      Estimated
            (In thousands)                      Amount       Fair Value
            --------------                   ------------- --------------
            <S>                              <C>           <C>   
            Long-term debt including
                current installments               $86,088        $86,241
</TABLE>
 

     For cash and cash equivalents, receivables, accounts payable and notes
payable, carrying value is a reasonable estimate of fair value.

     The carrying values (face amounts) of our long-term debt that have variable
interest rates are reasonable estimates of fair value. For borrowings that have
fixed interest rates, fair value is estimated by discounting the projected cash
flows using the rate at which similar borrowings could currently be made.



                                     F-13

<PAGE>
 
17.  BUSINESS SEGMENTS

Sales, operating income, identifiable assets and other related data for our
operations in different business segments, are listed below and are an integral
part of these financial statements.  Fiscal 1991 and 1992 segment data are not
covered by the Independent Auditors' Report.


BUSINESS SEGMENTS INFORMATION
Apogee Enterprises, Inc.


<TABLE>
<CAPTION> 
                                   1995              1994             1993              1992              1991
(Dollar amounts in thousands)  AMOUNT       %    AMOUNT       %   AMOUNT        %   AMOUNT       %    AMOUNT        %
- -----------------------------  --------------    --------------   ------   ------   --------------    ---------------
<S>                            <C>               <C>              <C>               <C>               <C>  
SALES
Building products
 & services                   $507,645   67.1    $465,024  67.6  $384,808    67.2  $419,093   70.3    $424,882   70.9
Automotive glass               248,904   32.9     223,209  32.4   187,642    32.8   177,188   29.7     174,643   29.1
                               -------  -----     ------- -----   -------   -----   -------  -----     -------  -----
 Net sales                    $756,549  100.0    $688,233 100.0  $572,450   100.0  $596,281  100.0    $599,525  100.0
                               =======  =====     ======= =====   =======   =====   =======  =====     =======  ===== 
 
OPERATING INCOME (LOSS)
Building products
 &services                      $4,394   18.1  $(14,512) (205.6)  $(2,351) (36.9)   $16,517   85.8     $19,006   57.1
Automotive glass                19,067   78.6    18,961   268.6     8,869  139.3      3,528   18.3      14,261   42.9
Corporate and other                801    3.3     2,609    37.0      (149)  (2.3)      (796)  (4.1)          -      -
                               -------- -----   -------   -----   -------- -----    -------- ------     ------  -----
 Operating income               24,262  100.0     7,058   100.0     6,369  100.0     19,249  100.0      33,267  100.0
Interest expense, net           (4,135)          (2,735)           (1,794)             (970)            (1,059)
Other expense, net                   -                -                 -                  -              (331)
                               -------- -----   -------   -----   -------- -----    -------  -----     --------  ----
  Earnings before income                                                   
    taxes and other items      $20,127          $ 4,323           $ 4,575           $18,279            $31,877
                               ======== ======  =======   =====   ======== =====    =======  =====     =======  =====
</TABLE>
 
 

<TABLE> 
<CAPTION> 
                             IDENTIFIABLE ASSETS             CAPITAL EXPENDITURES           DEPRECIATION & AMORTIZATION
                          1995       1994       1993       1995       1994       1993       1995       1994       1993
                       ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------        
<S>                    <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C> 
Building products
  &services            $244,645   $202,734   $164,208   $  12,715    $ 8,088     $6,891  $   9,868    $ 9,692    $ 9,108   
Auto glass               92,346     74,041     66,569      12,201      5,906      2,031      5,116      5,891      5,870
Corporate and other      24,937     29,413     20,679          41         52        244        147        141        132
                       --------   --------   --------   ---------  ---------  ---------    -------  ---------  ---------
 Total                 $361,928   $306,188   $251,456     $24,957    $14,046     $9,166    $15,131    $15,724    $15,110
                       ========   ========   ========   =========  =========  =========  =========  =========  =========
</TABLE>
 

Notes:  Apogee's Building Products & Servieces segment has subsidiaries in
Europe and Asia. During 1995 and 1994, such operations had net sales of
$66,580,000 and $65,021,000, respectively. Operating losses for 1995 and 1994
were $6,575,000 and $887,000 respectively. At February 25, 1995, identifiable
assets of the subsidiaries totaled $41,880,000 and $31,786,000, respectively. In
1993, net sales and identifiable assets of these units were less than 10% of
Apogee's consolidated figures. Foreign currency transaction gains or losses
included in net earnings for 1995, 1994 and 1993 were immaterial.

        Apogee's export sales are less than 10% of consolidated net sales. No
single customer, including government agencies, accounts for 10% or more of
consolidated net sales. Segment operating income (loss) is net sales less cost
of sales and operating expenses. Operating income does not include provision for
interest expense or income taxes. Corporate and other includes miscellaneous
corporate activity not allocable to business segments.

                                     F-14

<PAGE>
 
 
                                                                    SCHEDULE II
                                                                     -----------

                   APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
                                        
                       Valuation and Qualifying Accounts
                                (In thousands)


<TABLE>
<CAPTION>
                         Balance at         Charged to           Deductions          Balance at
                         beginning           costs and              from               end of
                         of period           expenses            reserves(1)           period
                         ----------         ----------           -----------         ----------
<S>                      <C>                <C>                  <C>                 <C>
For the year ended
 February 25, 1995:
   Allowance for
   doubtful receivables    $7,879             $3,817               $3,038               $8,658
                            =====              =====                =====                =====
 
For the year ended
 February 26, 1994:
   Allowance for
   doubtful receivables    $6,339             $2,388               $  848               $7,879
                            =====              =====                 ====                =====       
 
For the year ended
 February 27, 1993:
   Allowance for
   doubtful receivables    $9,049             $2,061               $4,771               $6,339
                            =====              =====                =====                =====
</TABLE>
 




(1)  Net of recoveries


                                     F-15

<PAGE>
 
                                 EXHIBIT  INDEX

Exhibit (3A)   Restated Articles of Incorporation 
               Filed in Registrant's Annual Report on Form 10-K for year ended
               February 27, 1988.
            
Exhibit (3B)   Restated By Laws of Apogee Enterprises, Inc., as amended to date.
               Filed in Registrant's Annual Report on Form 10-K for year ended
               February 29, 1992.
            
Exhibit (4A)   Specimen certificate for shares of common stock of Apogee
               Enterprises, Inc. Filed in Registrant's Annual Report on Form 10-
               K for year ended February 29, 1992.

Exhibit (10A)  Deferred Incentive Compensation Plan dated February 27, 1986
               between Registrant and certain executive officers. Filed in
               Registrant's Annual Report on Form 10-K for year ended March 1,
               1986.
            
Exhibit (10B)  Amended and Restated 1987 Apogee Enterprises, Inc. Partnership
               Plan is incorporated by reference to Registrant's S-8
               registration statement (File No. 33-60400)

Exhibit (10C)  1987 Apogee Enterprises, Inc. Stock Option Plan is incorporated
               by reference to Registrant's S-8 registration statement (File No.
               33-35944)

Exhibit (10D)  Note Agreement dated June 1, 1988 between the registrant and
               Teachers Insurance and Annuity Association of America
               ($25,000,000). Filed in Registrant's Quarterly Report on Form 10-
               Q for quarter ended August 27, 1988.

Exhibit (10E)  Incentive Compensation Agreement between Registrant and Gerald K.
               Anderson dated February 23, 1987. Filed with Registrant's Annual
               Report on Form 10-K for year ended March 2, 1991.

Exhibit (10F)  Consulting Agreement between Registrant and Gerald K. Anderson
               dated March 1, 1989. Filed with Registrant's Annual Report on
               Form 10-K for year ended March 2, 1991.

Exhibit (10G)  Rights Agreement between Registrant and American Stock Transfer
               Co. dated October 19, 1990. Filed with Registrant's Form 8-A on
               October 19, 1990.

Exhibit (10H)  $25 million Credit Facilities agreements between Apogee
               Enterprises, Inc., First Bank National Association and NBD Bank,
               N.A. Filed with Registrant's Annual Report on Form 10-K for year
               ended February 27, 1993.

Exhibit (10I)  Consulting Agreement between Registrant and Laurence J.
               Niederhofer dated November 1, 1993. Filed with Registrant's
               Annual Report on Form 10-K for year ended February 26, 1994.

Exhibit (10J)  Credit Agreement between Apogee Enterprises, Inc. and Credit
               Lyonnais Chicago Branch and Credit Lyonnais Cayman Island Branch.
               Filed with Registrant's Quarterly Report on Form 10-Q for the
               quarter ended August 27, 1994.

Exhibit (10K)  Credit Agreement between Apogee Enterprises, Inc. and The
               Mitsubishi Bank, Limited, Chicago Branch. Filed with Registrant's
               Quarterly Report on Form 10-Q for the quarter ended November 26,
               1994.

Exhibit (10I)  Employment Agreement between Registrant and Richard Gould
               dated May 23, 1994.

Exhibit (11)   Statement of Determination of Common Shares and Common
               Share Equivalents

Exhibit (21)   Subsidiaries of the Registrant





<PAGE>
 
                           APOGEE ENTERPRISES, INC.
                             EMPLOYMENT AGREEMENT
                              WITH RICHARD GOULD



         THIS AGREEMENT is entered into effective as of the 23rd day of May,
1994, by and between Apogee Enterprises, Inc., a Minnesota corporation (the
"Company"), and Richard Gould, a Minnesota resident (the "Employee").

         WHEREAS, the Company desires to engage the Employee in the position of
Senior Vice President to render services for the Company on the terms and
conditions set forth in this Agreement;

         WHEREAS, the Employee desires to be retained by the Company as its
Senior Vice President and to be assured of reasonable tenure and terms and
conditions of employment with the Company; and

         WHEREAS, both parties recognize the critical importance to the Company,
its employees and its investors of preserving the confidentiality of the
Company's trade secrets and confidential information and of protecting the
Company against competition from former executives or other key employees of the
Company following their separation from the Company;

         NOW, THEREFORE, in consideration of the foregoing premises and the
parties' mutual covenants and undertakings contained in this Agreement, the
sufficiency of which is hereby acknowledged, the Company and
 the Employee agree
as follows:

     1.  EMPLOYMENT.  The Company hereby employs the Employee, and the Employee
         ----------                                                            
accepts such employment and agrees to perform services for the Company, for the
period and upon the other terms and conditions set forth in this Agreement.

     2.  TERM.  The Company may terminate the employment of the Employee upon
         ----                                                                
thirty (30) days notice, without cause, provided the Company provides the
Employee with the severance arrangements discussed in paragraph 5 below.

         Notwithstanding the foregoing, the Company may terminate the Employee's
employment for cause without notice and without further obligation of any kind
to the Employee. For purposes of this Agreement,  "cause" shall mean dishonesty,
theft, fraud, conviction of any crime, unethical business behavior, failure to
render competent services, or any material breach of this Agreement.

<PAGE>
 
         It is further agreed that the term of the Employee's employment under
this Agreement shall automatically terminate in the event of the Employee's
death. In the event the Employee becomes mentally or physically disabled during
the term of employment hereunder, such that he cannot perform the essential
functions of his position, with or without reasonable accommodation, his
employment under this Agreement shall terminate as of the date such disability
is established. As used in this paragraph, the term "disabled" means suffering
from any mental or physical condition, other than the use of alcohol or illegal
use of narcotics, which renders the Employee unable to perform the essential
functions of his position, with or without reasonable accommodation, ("impaired
condition") for a period of ninety (90) consecutive days. The date that the
Employee's disability is established shall be the ninety-first (91st) day upon
which such impaired condition exists. Upon termination for disability, the
Employee shall be entitled to receive continuation of his base salary (as herein
defined) for a period of one hundred eighty (180) days. If the Company maintains
a disability policy covering the Employee, then the amount of payments to be
made by the Company to the Employee pursuant to this provision shall be reduced
by any amount so paid to the Employee under any such insurance policy.

     3.  DUTIES AND REPRESENTATIONS OF THE EMPLOYEE.  During the Employee's
         ------------------------------------------                        
employment hereunder, he shall serve as the Company's Senior Vice President.  He
will report to the Company's Chairman and Chief Executive Officer, Donald W.
Goldfus, and will perform special projects assigned to him by Donald W. Goldfus.
The Employee shall devote his full time, attention, knowledge and skill
exclusively to the loyal service of the Company and shall perform all duties
reasonably assigned to him by Donald W. Goldfus.  Additionally, the Employee
shall do such traveling as may be reasonably required by the Company in
connection with the performance of his duties and responsibilities.  The
Employee represents and warrants to the Company that:

         a.   his acceptance of employment under this Agreement and his
              performance of the duties contemplated herein are not in conflict
              with any obligation, undertaking or agreement between the Employee
              and any third party; and

         b.   he has not and will not, during the course of his employment with
              the Company, disclose or utilize without permission, any
              confidential or proprietary information, trade secrets, materials,
              documents, or property owned by any third party.

     4.  COMPENSATION.  The Company shall pay to the Employee the following
         ------------                                                      
compensation beginning May 23, 1994:

                                       2

<PAGE>
 
          (A)  BASE SALARY.  The Company shall pay to the Employee an annual 
               -----------                                                    
               base salary of Two Hundred Thousand Dollars ($200,000.00), less
               legally required deductions and withholdings, payable in periodic
               installments in accordance with the standard payroll practices of
               the Company in effect from time-to-time. The base salary shall be
               reviewed on an annual basis and the Employee will be eligible for
               salary increases in accordance with the Company's standard
               practices.

          (B)  INCENTIVE COMPENSATION.  In addition to the base salary described
               ----------------------                                           
               above, the Employee shall be guaranteed a minimum bonus of
               Seventy Thousand Dollars ($70,000.00), less legally required
               deductions and withholdings, for the first year of his
               employment, which bonus shall be prorated for fiscal 1995, and
               which bonus shall be paid in May, 1995. In addition, the Employee
               shall be eligible for election to the Apogee Enterprises, Inc.
               Partnership Plan in fiscal year 1996.

          (C)  STOCK GRANT.  As additional compensation for his services to the
               -----------                                                     
               Company, the Company grants to the Employee a qualified stock
               option of 5,000 shares of the Company's common stock pursuant to
               the Company's Stock Incentive Plan as amended and restated April
               20, 1990, which stock grant shall be evidenced by, and subject
               to, the terms of a stock option agreement between the Employee
               and the Company. The Company further makes an unrestricted stock
               grant to the Employee of 5,000 shares of the Company's common
               stock.

          (D)  CAR ALLOWANCE.  The Employee shall be paid a car allowance by the
               -------------                                                    
               Company in the amount of Six Thousand Five Hundred Dollars
               ($6,500.00) per year, consistent with the Company's payroll and
               accounting practices. In addition, the Company will reimburse the
               Employee for business mileage at Internal Revenue Service
               approved rates.

          (E)  PARTICIPATION IN BENEFIT PLANS.  The Employee shall also be
               ------------------------------                             
               entitled to participate in all employee benefit plans or programs
               (including vacation time) of the Company to the extent that his
               position, title, tenure, salary, age, health and other
               qualifications make him eligible to participate. The Company does
               not guarantee the adoption or continuance of any particular
               employee benefit plan or program during the term of this
               Agreement, and the Employee's participation in any such plan 

                                       3

<PAGE>
 
               or program shall be subject to the provisions, rules and
               regulations applicable thereto.

          (F)  EXPENSES.  The Company shall pay or reimburse the Employee for 
               --------                                                   
               all reasonable and necessary out-of-pocket expenses incurred by
               him in the performance of his duties under this Agreement,
               subject to the presentment of appropriate vouchers in accordance
               with the Company's normal policies for expense verification.

     5.   SEVERANCE ARRANGEMENTS.  Upon termination of the Employee's employment
          ----------------------                                                
by the Company, other than for cause as defined in paragraph 2 above, or if the
Employee voluntarily resigns his employment following a change in his reporting
relationship such that he no longer reports to Donald W. Goldfus, the Employee
shall be entitled to receive severance compensation in an amount equal to one
(1) year of his base compensation plus his average annual bonus, calculated and
paid as though the Employee had remained in the employment of the Company.  The
Employee shall not be entitled to any severance compensation if his employment
is terminated for cause as defined in paragraph 2 above or if the Employee
voluntarily resigns his employment for any reason other than a change in his
reporting relationship.

          If the Employee's employment is terminated by the Company other than
for cause as defined in paragraph 2 above, or if the Employee voluntarily
resigns his employment following a change in his reporting relationship, the
Company will provide the Employee with health care coverage comparable to the
health care coverage being provided to the Company's executives.  This coverage
will be provided, at the Company's option, either through the Company's plan or
an individual plan.  This coverage will be provided until the Employee reaches
the age of 65.

          In addition, if the Employee's employment is terminated by the
Company, other than for cause as defined in paragraph 2 above, or if the
Employee voluntarily resigns his employment following a change in his reporting
relationship within:

          (a)   six (6) years of the effective date of this Agreement, the
                Employee shall become a consultant of the Company under the
                terms set forth in this paragraph for five (5) years from the
                date of his termination or resignation ;

          (b)   seven (7) years of the effective date of this Agreement the
                Employee shall become a consultant of the Company under the
                terms set forth in this paragraph for four (4) years from the
                date of his termination or resignation;

                                       4

<PAGE>
 
          (c)   eight (8) years of the effective date of this Agreement, the
                Employee shall become a consultant of the Company under the
                terms set forth in this paragraph for three (3) years from the
                date of his termination or resignation ;

          (d)   nine (9) years of the effective date of this Agreement, the
                Employee shall become a consultant of the Company under the
                terms set forth in this paragraph for two (2) years from the
                date of his termination or resignation; and

          (e)   ten (10) years of the effective date of this Agreement, the
                Employee shall become a consultant of the Company under the
                terms set forth in this paragraph for one (1) year from the date
                of his termination or resignation.

The Employee shall not be entitled to become a consultant of the Company if his
employment is terminated for cause as defined in paragraph 2 above or if the
Employee voluntarily resigns his employment for any reason other than a change
in his reporting relationship.

          If the Employee shall become a consultant to the Company as provided
in this paragraph, the terms of his consultancy shall be as follows:  the
Employee shall consult generally with executive personnel of the Company on
operations and policies with which he was familiar prior to the termination or
resignation of his employment.  The Employee's services may be provided in
person, by telephone or by mail, and at such times, places and under such
circumstances as shall be mutually agreeable.  The Company shall pay the
Employee Fifty Thousand Dollars ($50,000.00), less legally required deductions
and withholdings, per year for these consulting services.

     6.   CONFIDENTIAL INFORMATION.  Except as permitted or directed by the
          ------------------------                                         
Company's Chairman and Chief Executive Officer, during the term of this
Agreement or at any time thereafter, the Employee shall not divulge, furnish or
make accessible to anyone or use in any way (other than in an ordinary course of
business of the Company) any confidential or secret knowledge or information of
the Company which the Employee has acquired or become acquainted with or will
acquire or become acquainted with prior to the termination of the period of his
employment by the Company, whether developed by himself or by others, concerning
any trade secrets, confidential or secret designs, processees, formulae, plans,
devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of the Company, any customer or
supplier list of the Company, any confidential or secret development or research
work of the Company, or any other confidential information or secret aspects of
the business of the Company.  The Employee acknowledges that the above-described
knowledge or information constitutes a unique and valuable asset of the Company
and represents a substantial investment of time and expense by the Company and
its

                                       5

<PAGE>
 
predecessors, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Company would be wrong and
would cause irreparable harm to the Company.  Both during and after the term of
this Agreement, the Employee will refrain from any acts or omissions that would
reduce the value of such knowledge or information to the Company.  The foregoing
obligations of confidentiality, however, shall not apply to any knowledge or
information which is now published or which subsequently becomes generally
publicly known in the form in which it was obtained from the Company, other than
as a direct or indirect result of the breach of this Agreement by the Employee.

     7.   RETURN OF PROPRIETARY PROPERTY.  The Employee agrees that all property
          ------------------------------                                        
in the Employee's possession belonging to the Company, including without
limitation, all documents, reports, manuals, memoranda, computer print-outs,
customer lists, credit cards, keys, identification, products, access cards and
all other property relating in any way to the business of the Company are the
exclusive property of the Company, even if the Employee authored, created, or
assisted in authoring or creating such property.  The Employee shall return to
the Company all such documents and property immediately upon termination of
employment or at such earlier time as the Company may reasonably request.

     8.   RESTRICTIVE COVENANT.  The Employee acknowledges that the Company
          --------------------                                             
needs to be protected against the potential for unfair competition and
impairment of the Company's good will by the Employee's use of the Company's
training, assistance, confidential information and trade secrets in direct
competition with the Company.  The Employee therefore agrees that for a period
of one (1) year from the date of the termination of his employment hereunder or
the expiration of this Agreement, the Employee shall not operate, join, control,
be employed by or participate in ownership, management, operation or control of,
or be connected in any manner as an independent contractor, consultant or
otherwise, with any person or organization engaged in any business activity
which is the same as, similar to, or competitive with any business of the
Company or any successor of the Company as of the expiration or termination date
of this Agreement within the states of the United States of America.  The
Employee expressly agrees that the provisions of this paragraph 8 shall survive
the expiration or termination of this Agreement, whether such termination be
voluntary or involuntary or without or without cause.

          The Employee agrees that in addition to, but not to the exclusion of
any other available remedy, the Company shall have the right to enforce the
provisions of this non-competition agreement by applying for and obtaining
temporary and permanent restraining orders or injunctions from a court of
competent jurisdiction without the necessity of filing a bond therefore, and the
Company shall be entitled to recover from the Employee its reasonable attorneys'
fees and costs and enforcing the non-competition agreement.

                                       6

<PAGE>
 
     9.   COVENANT NOT TO RECRUIT.  The Employee recognizes that the Company's
          -----------------------                                             
workforce constitutes an important and vital aspect of its business.  The
Employee agrees that for a period of two (2) years following the expiration or
termination of this Agreement for any reason whatsoever, he shall not recruit,
or assist anyone else in the solicitation of, any of the Company's then current
employees to terminate their employment with the Company and to become employed
by any business enterprise with which the Employee may then be associated or
connected, whether as an owner, employee, partner, agent, investor, consultant,
contractor or otherwise.

     10.  ASSIGNMENTS.  The rights and obligations of the Company under this
          -----------                                                       
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company.  The Employee may not assign this Agreement or any
rights hereunder.  Any purported or attempted assignment or transfer by the
Employee of this Agreement or any of the Employee's duties, responsibilities or
obligations hereunder shall be void.

     11.  NOTICES.  For purposes of this Agreement, notices provided in this
          -------                                                           
Agreement shall be in writing and shall be deemed to have been given when
personally served or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, to the last known residents address
of the Employee or, in the case of the Company, to its principal office to the
attention of its Chairman and Chief Executive Officer, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

     12.  CONSTRUCTION AND SEVERABILITY.  The validity, interpretation,
          -----------------------------                                
performance and enforcement of this Agreement shall be governed by the laws of
the state of Minnesota.  In the event any provision of this Agreement shall be
held illegal or invalid for any reason, said illegality or invalidity will not
in any way effect the legality or validity of any other provision hereof.  It is
the intention of the parties hereto that the Company be given the broadest
possible protection respecting its confidential information and trade secrets
and respecting competition by the Employee following his separation by the
Company.

     13.  ARBITRATION.  Except as provided in subparagraph (b) below, any claims
          -----------                                                           
or disputes of any nature between the parties arising from or related to the
performance, breach, termination, expiration, application or meaning of this
Agreement shall be resolved exclusively by arbitration before the American
Arbitration Association in Minneapolis, Minnesota, in accordance with the
applicable rules then obtaining of the American Arbitration Association.

          (a)   The decision of the arbitrator(s) shall be final and binding
                upon both parties. Judgment of the award rendered by the
                arbitrator(s)

                                       7

<PAGE>
 
                may be entered in any court having jurisdiction thereof. In the
                event of submission of any dispute to arbitration, each party
                shall, not later than thirty (30) days prior to the date set for
                hearing, provide to the either party and to the arbitrator(s) a
                copy of all exhibits upon which the party intends to rely at the
                hearing and a list of all persons whom each party intends to
                call as a witness at the hearing.

          (b)   This section shall have no obligation to claims by the Company
                asserting violation of or seeking to enforce, by injunction or
                otherwise, the terms of paragraphs 6, 7, 8 and 9 above. Such
                claims may be maintained by the Company in a lawsuit subject to
                the terms of paragraph 14 below.

     14.  VENUE.  Any action at law, suit in equity or judicial proceeding
          -----                                                           
arising directly, indirectly or otherwise in connection with, out of, related to
or from this Agreement or any provision hereof, shall be litigated only in the
courts of the state of Minnesota, County of Hennepin.  The Employee waives any
right the Employee may have to transfer or change the venue of any litigation
brought against the Employee by the Company.

     15.  ENTIRE AGREEMENT.  This Agreement sets forth the entire agreement
          ----------------                                                 
between the Company and the Employee with respect to his employment by the
Company and there are not undertakings, covenants or commitments other than as
set forth herein.  This Agreement may not be altered or amended, except by a
writing executed by the party against whom such alteration or amendment is to be
enforced.  This Agreement supersedes any and all prior understandings or
agreements between the parties.

     16.  COUNTERPARTS.  This Agreement may be simultaneously executed in any
          ------------                                                       
number of counterparts, and such counterparts executed and delivered, each as an
original, shall constitute but one in the same instrument.

     17.  CAPTIONS AND HEADINGS.  The captions and paragraph headings used in
          ---------------------                                              
this Agreement are for convenience of reference only, and shall not affect the
construction or interpretation of this agreement or any of the provisions
hereof.

     18.  SURVIVAL.  The parties expressly acknowledge and agree that the
          --------                                                       
provisions of this Agreement which by their expressed or implied terms extend
beyond the expiration of this Agreement or the termination of the Employee's
employment hereunder, shall continue in full force and effect, notwithstanding
the Employee's termination of employment hereunder or the expiration of this
Agreement.

                                       8

<PAGE>
 
     19.  WAIVERS.  No failure on the part of either party to exercise, and no
          -------                                                             
delay in exercising any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof, or the exercise of any
other right or remedy granted hereby or by any related document or by law.  No
single or partial waiver of rights or remedies hereunder, nor any cause of
conduct of the parties, shall be construed as a waiver of rights or remedies by
either party (other than as expressly and specifically waived).

     20.  RELIANCE BY THIRD PARTY.  This Agreement is intended and exclusive
          -----------------------                                           
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns, and
no other person or entity shall have any right to rely on this agreement or to
claim or derive any benefit therefrom, absent the express written consent of the
party to be charged with such reliance or benefit.

          IN WITNESS WHEREOF, the parties have signed this agreement.


Dated: ____________________               ____________________________________
                                          Richard Gould


Dated: ___________________                APOGEE ENTERPRISES, INC.
                                   

                                          By ______________________
                                             Its ____________________
                           

                                       9



<PAGE>
 
                                                                    Exhibit (11)


   Statement of Determination of Common Shares and Common Share Equivalents
   ------------------------------------------------------------------------

     Average number of common shares and common share equivalents assumed
      outstanding during the three fiscal years ended:

<TABLE> 
<CAPTION> 
                                                        February 25,                February 26,               February 27,
                                                            1995                        1994                       1993
                                                         ---------                   ---------                  ---------
<S>                                                     <C>                         <C>                        <C>
PRIMARY:                                                                                          
   Weighted average of common                                                                     
   shares outstanding (a)                                 13,385,803                  13,232,504                 13,287,054
                                                                                                  
   Common share equivalents resulting                                                             
   from the assumed exercise of stock options (b)            114,771                      56,275                      5,542
                                                         -----------                 -----------                -----------
                                                                                                  
   Total primary common shares and                                                                
   common share equivalents                               13,500,574                  13,288,779                 13,292,596
                                                         ===========                 ===========                ===========
                                                                                                  
   Net earnings before cumulative effect of change                                                
   in accounting for income taxes                        $13,050,000                 $ 3,308,000                $ 4,514,000
                                                        
   Cumulative effect of change in accounting for                                                  
   income taxes                                                   --                     525,000                         --
                                                         -----------                 -----------                -----------
                                                                                                  
   Net earnings                                          $13,050,000                 $ 3,833,000                $ 4,514,000
                                                         ===========                 ===========                ===========
                                                                                                  
   Earnings per share before cumulative effect                                                    
   of change in accounting for income taxes              $       .97                 $       .25                $       .34
                                                                                                  
   Cumulative effect of change in accounting for                                                  
   income taxes                                                   --                         .04                         --
                                                         -----------                 -----------                -----------
                                                                                                  
   Per share amount                                      $       .97                 $       .29                $       .34
                                                         ===========                 ===========                ===========
                                                                                                  
ASSUMING FULL DILUTION:                                                                           
   Total common shares and common share                                                           
   equivalents as determined for primary computation      13,500,574                  13,288,779                 13,292,596
                                                                                                  
   Additional dilutive effect resulting                                                           
   from the assumed exercise of stock options (c)             16,007                      61,633                      8,519
                                                         -----------                 -----------                -----------
                                                                                                  
   Total fully
 diluted common shares                                                              
   and common share equivalents                           13,516,581                  13,350,412                 13,301,115
                                                         ===========                 ===========                ===========
                                                                                                  
   Earnings per share before cumulative effect                                                    
   of change in accounting for income taxes              $       .97                 $       .25                $       .34
                                                                                                  
   Cumulative effect of change in accounting for                                                  
   income taxes                                                   --                         .04                         --
                                                         -----------                 -----------                -----------
                                                                                                  
   Per share amount                                      $       .97                 $       .29                $       .34
                                                         ===========                 ===========                ===========
</TABLE>


Notes:

(a)  Beginning balance of common stock adjusted for changes in amount
     outstanding, weighted by the elapsed portion of the period during which the
     shares were outstanding.

(b)  Common share equivalents computed by the "treasury" method.  Share amounts
     represent the dilutive effect of outstanding stock options which have an
     option value below the average market value for the current period.

(c)  Share amounts represent the additional dilutive effect of outstanding stock
     options where the underlying market value of the stock at the end of the
     period is in excess of the average market value for the period.



<PAGE>
 
                                                                    Exhibit (21)

                         SUBSIDIARIES OF THE REGISTRANT
                         ------------------------------

  The Company is the owner of all of the issued and outstanding stock of the
following corporations, except as noted below.


<TABLE> 
<CAPTION> 
                                                     State or Country of
     Name of Subsidiary                                Incorporation
     ------------------                              ------------------
                                                   
     <S>                                             <C>                   
     Apogee Enterprises International, Inc.               Barbados
     W.S.A., Inc.                                         Minnesota
     Viracon/Curvlite, Inc.                               Minnesota
     Tru Vue, Inc.                                        Illinois
     The Glass Depot, Inc.                                Minnesota
     Prism Assurance, Ltd.                                Vermont
     First Call, Inc.                                     Florida
     Harmon Glass Company                                 Minnesota
     Apogee Sales Corporation (1)                         South Dakota
     Marcon Coatings, Inc. (2)                            Minnesota
     Harmon Contract Asia, Ltd. (3)                       Minnesota
     Harmon Contract U.K., Limited (4)                    United Kingdom
     Viratec Thin Films, Inc. (5)                         Minnesota
     Empire State Auto & Plate Glass, Inc. (7)            New York
     Harmon Glass of Canada Ltd. (1) (6)                  Canada
     Harmon CFEM Facades (UK) Ltd. (8)                    United Kingdom
     Harmon Contract, Inc. (9)                            Minnesota
     Norshield Corporation (9)                            Alabama
     The Glass Depot of New York, Inc. (10)               Minnesota
     Harmon Contract Asia Sdn Bhd (11)                    Malaysia
     Harmon Europe S.A. (12)                              France
     Viratec International, Inc.  (13)                    Barbados
     Harmon LTS (14)                                      France
     Harmon/CFEM Facades S.A. (15)                        France
     Harmon Facalu S.A. (15)                              France
     Harmon Sitraco S.A. (15)                             France

(1)  Owned by Harmon Glass Company
(2)  50% owned by W.S.A., Inc.
(3)  Owned by Harmon Contract, Inc.
(4)  99.99%  owned by
 Harmon Contract, Inc. and .01% by Apogee Enterprises, Inc.
(5)  Owned by Marcon Coatings, Inc.
(6)  Inactive
(7)  66.67% owned by Harmon Glass Company
(8)  99.99% owned by Harmon Europe S.A. and .01% by Apogee Enterprises, Inc.
(9)  Owned by W.S.A., Inc.
(10) Owned by The Glass Depot, Inc.
(11) Owned by Harmon Contract Asia, Ltd.
(12) 75% owned by various Apogee entities
(13) Owned by Viratec Thin Films, Inc.
(14) 99.5% owned by Harmon Europe S.A.
(15) Owned by Harmon Europe S.A.
</TABLE>
 



<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          FEB-25-1995
<PERIOD-START>                             FEB-27-1994
<PERIOD-END>                               FEB-25-1995
<CASH>                                           2,894
<SECURITIES>                                         0
<RECEIVABLES>                                  173,757
<ALLOWANCES>                                     8,658
<INVENTORY>                                     54,559
<CURRENT-ASSETS>                               256,820
<PP&E>                                         161,694
<DEPRECIATION>                                  86,666
<TOTAL-ASSETS>                                 361,928
<CURRENT-LIABILITIES>                          135,719
<BONDS>                                              0
<COMMON>                                         4,481
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                     120,148
<TOTAL-LIABILITY-AND-EQUITY>                   361,928
<SALES>                                        756,549
<TOTAL-REVENUES>                               756,549
<CGS>                                          650,660
<TOTAL-COSTS>                                   81,627
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                               4,135
<INCOME-PRETAX>                                 20,127
<INCOME-TAX>                                     8,101
<INCOME-CONTINUING>                             13,050
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    13,050
<EPS-PRIMARY>                                    $0.97
<EPS-DILUTED>                                    $0.97
        

</TABLE>