Forward-Looking Statements

This discussion contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should" and similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this document are "forward-looking statements," and are based on management's current expectations or beliefs of the Company's near-term results, based on current information available pertaining to the Company, including the risk factors noted under Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2009. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.

Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to, the risks and uncertainties set forth under Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2009.

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

Overview

We are a leader in certain technologies involving the design and development of value-added glass products, services and systems. The Company is comprised of two segments: Architectural Products and Services (Architectural) and Large-Scale Optical (LSO). Our Architectural segment companies design, engineer, fabricate, install, maintain and renovate the walls of glass, windows, storefront and entrances comprising the outside skin of commercial and institutional buildings. Businesses in this segment are: Viracon, Inc., a fabricator of coated, high-performance architectural glass for global markets; Harmon, Inc., one of the largest U.S. full-service building glass installation, maintenance and renovation companies; Wausau Window and Wall Systems, a manufacturer of custom aluminum window systems and curtainwall; Linetec, a paint and anodizing finisher of architectural aluminum and PVC shutters;

and Tubelite, Inc, a fabricator of aluminum storefront, entrance and curtainwall products for the U.S. commercial construction industry. Our LSO segment consists of Tru Vue, Inc., a manufacturer of value-added glass and acrylic for the custom picture framing and commercial optics markets.

The following selected financial data should be read in conjunction with the Company's Form 10-K for the year ended February 28, 2009 and the consolidated financial statements, including the notes to consolidated financial statements, included therein.

Sales and Earnings

The relationship between various components of operations, stated as a percent
of net sales, is illustrated below for the three-month periods of the current
and past fiscal year.



                                                             Three months ended
                                                            May 30,       May 31,
  (Percent of net sales)                                      2009         2008
  Net sales                                                    100.0 %      100.0 %
  Cost of sales                                                 77.1         79.5

  Gross profit                                                  22.9         20.5
  Selling, general and administrative expenses                  16.4         13.5

  Operating income                                               6.5          7.0
  Interest income                                                0.1          0.1
  Interest expense                                               0.1          0.2
  Other expense, net                                              -            -
  Equity in loss of affiliated companies                          -          (0.2 )

  Earnings from continuing operations before income taxes        6.5          6.7
  Income tax expense                                             2.3          2.4

  Earnings from continuing operations                            4.2          4.3
  Loss from discontinued operations, net of income taxes          -            -

  Net earnings                                                   4.2 %        4.3 %


  Effective tax rate for continuing operations                  36.1 %       36.0 %

Highlights of First Quarter Fiscal 2010 Compared to First Quarter of Fiscal 2009

• Consolidated net sales decreased $57.6 million, or 24.2 percent, for the first quarter ended May 30, 2009 compared to the prior-year period. The architectural glass and installation businesses were the primary drivers of the decrease as the overall commercial construction market declines have resulted in lower demand and project delays. These businesses were also impacted by the timing of project flow and cancellations experienced during the second half of last year.

• Gross profit as a percent of sales for the quarter ended May 30, 2009 increased to 22.9 percent from 20.5 percent in the prior-year period, an increase of 2.4 percentage points. The increase in gross margins was primarily due to improvements in the installation and window business margins as a result of project mix and execution in this business. Overall during the quarter, we managed costs and productivity to realize strong gross margins in this difficult environment.

• Selling, general and administrative expenses for the first quarter increased as a percent of net sales to 16.4 percent from 13.5 percent in the prior-year period but were down $2.6 million. The decrease in spending relates to reduced long-term executive compensation expenses, primarily related to lower projected payouts of stock-based incentives on lower expected future-year results; lower sales and marketing expenses; and reduced salaries and employee-related expenses due to headcount reductions. The increase as a percent of sales was largely due to our inability to leverage expenses over a lower level of sales dollars.

• Interest expense decreased $0.3 million in the first quarter of fiscal 2010 from the prior-year period due to reduced debt levels.

• During the third quarter of fiscal 2009 and in connection with PPG's sale of its automotive replacement glass businesses, we executed our right to sell our minority interest in the PPG Auto Glass joint venture, and therefore we had no impact from the joint venture in the current-year quarter. During fiscal 2009, the joint venture was negatively impacted by soft conditions in the auto glass replacement market, resulting in a $0.4 million loss in the first quarter.

Segment Analysis

The following table presents sales and operating income data for our two
segments and on a consolidated basis for the three-month period ended May 30,
2009, when compared to the corresponding period a year ago.



                                                                Three months ended
                                                       May 30,         May 31,          %
(In thousands)                                          2009            2008          Change
Net Sales from Continuing Operations
Architectural                                         $ 166,701       $ 220,720        (24.5 )%
Large-Scale Optical                                      14,155          17,749        (20.2 )
Intersegment Eliminations                                    (5 )            (1 )         NM

Net Sales                                             $ 180,851       $ 238,468        (24.2 )%


Operating Income (Loss) from Continuing Operations
Architectural                                         $  10,756       $  14,843        (27.5 )%
Large-Scale Optical                                       1,983           3,271        (39.4 )
Corporate and Other                                      (1,049 )        (1,480 )       29.1

Operating Income                                      $  11,690       $  16,634        (29.7 )%

NM = not meaningful

Due to the varying combinations of individual window systems and curtainwall, the Company has determined that it is impractical to report product and service revenues generated by the Architectural segment by class of product, beyond the segment revenues currently reported.

Architectural Products and Services (Architectural)

• First-quarter net sales of $166.7 million decreased 24.5 percent from the prior-year period due to difficult market conditions with continued tight commercial real estate credit. The architectural glass and installation businesses both saw decreases in revenue year-over-year due to project delays, timing of project flow and cancellations experienced in the second half of last year.

• Operating income of $10.8 million in the current quarter was down 27.5 percent from the prior-year period, while operating margins decreased 0.2 percentage points to 6.5 percent from 6.7 percent in the prior-year period. While operating income was down due to the lower sales levels, operating margins remained relatively consistent due to solid execution in the installation and window businesses on projects bid during stronger market conditions, along with productivity improvements and ongoing cost cutting measures at all businesses within the segment. These items were partially offset by the impact of lower volume, primarily in our architectural glass business, where we have a higher fixed-cost base.

• Architectural backlog at May 30, 2009 decreased to $310.0 million from $491.0 million in the prior-year period, and was relatively flat compared to the $316.2 million reported at the end of fiscal 2009. Slow bid-to-award timing is impacting backlog, despite steady bidding activity. We expect approximately $253.6 million of this backlog to flow during the remainder of fiscal 2010.

Large-Scale Optical Technologies (LSO)

• First quarter revenues were $14.2 million, down 20.2 percent from the prior-year period. The decrease was due primarily to weak custom picture framing market conditions. However, we have continued to convert customers to our value-added picture framing products.

• Operating income of $2.0 million in the quarter was down 39.4 percent from the prior-year period, and operating margins decreased to 14.0 percent from 18.4 percent in the prior-year period. The decrease in operating income and margins was due the impact of lower volume, which was partially offset by a strong mix of better value-added picture framing products as our efforts to convert this market continued.

Consolidated Backlog

• At May 30, 2009, our consolidated backlog was $311.2 million, down 36.9 percent from the prior-year period and relatively flat compared to the $317.4 million reported at the end of fiscal 2009.

• The backlog of the Architectural segment represented more than 99 percent of consolidated backlog.

• We view backlog as an important statistic in evaluating the level of sales activity and short-term sales trends in our business. However, as backlog is only one indicator, and is not an effective indicator, of the ultimate profitability of our sales, we do not believe that backlog should be used as the sole indicator of future earnings of the Company.

Discontinued Operations

In several transactions in fiscal years 1998 through 2000, we completed the sale of our large-scale domestic curtainwall business, the sale of our detention/security business and the exit from international curtainwall operations. The remaining estimated cash expenditures related to these discontinued operations are recorded as liabilities of discontinued operations and a majority of the remaining cash expenditures related to discontinued operations is expected to be paid within the next three years. The majority of these liabilities relate to the international curtainwall operations, including bonds outstanding, of which the precise degree of liability related to these matters will not be known until they are settled within the U.K. courts. The reserve for discontinued operations also covers other liability issues, consisting of warranty issues relating to these and other international construction projects.

Liquidity and Capital Resources



                                                            Three months ended
                                                          May 30,        May 31,
   (Cash effect, in thousands)                              2009          2008
   Net cash provided by continuing operating activities   $  4,757      $   4,963
   Capital expenditures                                     (2,254 )      (23,290 )
   Net change in borrowings                                     -          15,200

Operating activities. Cash provided by operating activities of continuing operations was $4.8 million for the first three months of fiscal 2010, compared to $5.0 million in the prior-year period, on lower earnings. We experience seasonally high cash outflow from operations in the first quarter as a result of payments made to fund annual incentive compensation and retirement plan contributions, which impacted both fiscal 2010 and 2009 operating cash flows.

Non-cash working capital (current assets, excluding cash and short-term investments, less current liabilities) was $53.1 million at May 30, 2009 or 6.1 percent of last 12-month sales, our key metric. This compares to 4.8 percent at February 28, 2009 and 9.2 percent at May 31, 2008. The deterioration from year-end was due to the seasonally high cash outflow mentioned above and the current market conditions, which we believe will continue to negatively impact this metric. The improvement over the prior-year period is largely the result of initiatives to expedite billings and collections.

Investing Activities. Through the first quarter of fiscal 2010, investing activities used $0.8 million of cash, compared to $23.3 million in the same period last year. New capital investments through the first three months of fiscal 2010 totaled $2.3 million, compared to $23.3 million in the prior-year period. Prior-year spending was primarily for productivity improvements and capacity expansions in both operating segments.

We expect fiscal 2010 capital expenditures to be less than $20 million for productivity and new green products, maintenance and safety expenditures. We believe our factories are modern and have excess capacity given current market conditions; accordingly we are also focusing on productivity improvements and product enhancements, including "green" product offerings, with minimal use of capital.

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

Financing Activities. Total outstanding borrowings remained consistent at $8.4 million as of May 30, 2009, compared to the February 28, 2009 levels, and consisted solely of industrial development bonds. Total outstanding borrowings at May 31, 2008 were $73.4 million. Through cash generated from operations and the sale of our interest in PPG Auto Glass, we have reduced the amount of debt outstanding. Our debt-to-total-capital ratio was 2.5 percent at May 30, 2009, compared to 2.6 percent at February 28, 2009.

We did not pay any dividends during the first quarter of either fiscal 2010 or 2009. This was due to the timing of quarterly dividend payments whereby, although declared, no payments were made in either quarter. We expect to continue to make quarterly dividend payments and spend approximately $9.1 million on dividends for the year.

During fiscal 2004, the Board of Directors authorized a share repurchase program of 1,500,000 shares of common stock. The Board of Directors increased this authorization by 750,000 shares in January 2008 and by 1,000,000 in October 2008. We repurchased 535,324 shares in the open market under this program, for a total of $7.2 million, through February 25, 2006. No share repurchases were made under this plan during fiscal 2007. We repurchased 338,569 shares in the open market during fiscal 2008 for $5.4 million. During fiscal 2009, we repurchased 1,130,230

shares in the open market for $14.6 million under the program. There have been no share repurchases during the first three months of fiscal 2010. Therefore, we have purchased a total of 2,004,123 shares, at a total cost of $27.3 million, since the inception of this program. We have remaining authority to repurchase 1,245,877 shares under this program, which has no expiration date, although we do not expect to repurchase any shares during the remainder of fiscal 2010.

Other Financing Activities. The following summarizes our significant contractual obligations that impact our liquidity as of May 30, 2009:

                                                        Future Cash Payments Due by Fiscal Period
                                      2010
(In thousands)                      Remaining      2011       2012       2013       2014       Thereafter      Total
Continuing Operations
Industrial revenue bonds           $        -     $    -     $    -     $    -     $    -     $      8,400    $  8,400
Operating leases (undiscounted)          5,162      5,565      4,076      2,832      2,014           3,366      23,015
Purchase obligations                     3,890        343         -          -          -               -        4,233
Other obligations                          626         36         -          -          -               -          662

Total cash obligations             $     9,678    $ 5,944    $ 4,076    $ 2,832    $ 2,014    $     11,766    $ 36,310

We maintain a $100.0 million revolving credit facility, which expires in November 2011. No borrowings were outstanding as of May 30, 2009. The credit facility requires that we maintain a minimum level of net worth as defined in the credit facility based on certain quarterly financial calculations. The minimum required net worth computed in accordance with the credit agreement at May 30, 2009 was $251.6 million, whereas our net worth as defined in the credit facility was $321.1 million. The credit facility also requires that we maintain a debt-to-cash flow ratio of no more than 2.75. This ratio is computed daily, with cash flow computed on a rolling 12-month basis. Our ratio was 0.08 at May 30, 2009. If we are not in compliance with either of these covenants, the lender may terminate the commitment and/or declare any loan then outstanding to be immediately due and payable. At May 30, 2009, we were in compliance with all of the financial covenants of the credit facility. Long-term debt also includes $8.4 million of industrial development bonds that mature in fiscal years 2021 through 2023.

From time to time, we acquire the use of certain assets, such as warehouses, automobiles, forklifts, vehicles, office equipment, hardware, software and some manufacturing equipment through operating leases. Many of these operating leases have termination penalties. However, because the assets are used in the conduct of our business operations, it is unlikely that any significant portion of these operating leases would be terminated prior to the normal expiration of their lease terms. Therefore, we consider the risk related to termination penalties to be minimal.

We have purchase obligations for raw material commitments and capital expenditures. As of May 30, 2009, these obligations totaled $4.2 million.

The other obligations relate to non-compete and consulting agreements with current and former employees.

We expect to make contributions of $0.5 million to our defined benefit pension plans in fiscal 2010. The fiscal 2010 expected contributions will equal or exceed our minimum funding requirements.

As of May 30, 2009, we had $16.1 million and $2.2 million of unrecognized tax benefits and environmental liabilities, respectively. We are unable to reasonably estimate in which future periods these amounts will ultimately be settled.

At May 30, 2009, we had ongoing letters of credit related to construction contracts and certain industrial development bonds. The letters of credit by expiration period were as follows at May 30, 2009:

                                                  Amount of Commitment Expiration Per Fiscal Period
                                        2010
(In thousands)                        Remaining     2011     2012     2013     2014      Thereafter      Total
Standby letters of credit            $     1,476    $   -    $   -    $   -    $   -    $      8,653    $ 10,129

In addition to the above standby letters of credit, which were predominantly issued for our industrial development bonds, we are required, in the ordinary course of business, to provide a surety or performance bond that commits payments to our customers for any non-performance by us. At May 30, 2009, $167.0 million of our backlog was bonded by performance bonds with a face value of $434.6 million. Performance bonds do not have stated expiration dates, as we are released from the bonds upon completion of the contract. We have never been required to pay on these performance-based bonds with respect to any of our current portfolio of businesses.

We self-insure our third-party product liability coverages. As a result, a material construction project rework event would have a material adverse effect on our operating results.

For fiscal 2010, we believe that current cash on hand, cash generated from operating activities and available capacity under our committed revolving credit facility should be adequate to fund our working capital requirements, planned capital expenditures and dividend payments.

Outlook

We are facing an unprecedented level of uncertainty in fiscal 2010. The following statements are based on our current expectations for full-year fiscal 2010 results. These statements are forward-looking, and actual results may differ materially.

• Overall revenues for the year will be down at least 15 percent compared to fiscal 2009.

• Operating margins are expected to be in the mid-single digits.

• Full-year capital expenditures are projected to be less than $20 million.

Related Party Transactions

No material changes have occurred in the disclosure with respect to our related party transactions set forth in our Annual Report on Form 10-K for the fiscal year ended February 28, 2009.

Critical Accounting Policies

No material changes have occurred in the disclosure with respect to our critical accounting policies set forth in our Annual Report on Form 10-K for the fiscal year ended February 28, 2009.