# SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________

FORM 10-QSB

| | (MARK ONE)
| | ----------

|(X) |  | QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2004, or
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(   ) |  | TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

COMMISSION FILE NUMBER 0-19622

|WTC INDUSTRIES, INC.                                  
|------------------------------------------------------
|                                                      
|(Exact Name of Registrant as Specified in its Charter)
|                                                      
|DELAWARE                                              
|                                                      
|(State or Other Jurisdiction of Incorporation)        
|                                                      
|1000 APOLLO ROAD, EAGAN, MINNESOTA                    
|                                                      
|(Address of Principal Executive Offices)              
|                                                      
|(651) 554-3140                                        
|                                                      
|(Issuers Telephone Number)                           

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

# APPLICABLE ONLY TO CORPORATE ISSUERS

State
the number of shares outstanding of each of the issuer's classes of common equity, as of
the latest practicable date: 1,906,999 shares of Common Stock as of April 20, 2004

Transitional
Small Business Disclosure Format (check one):  Yes  ;  No  X.

1

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# WTC INDUSTRIES, INC. AND SUBSIDIARIES

# INDEX

|                                                                     | PAGE
|-------------------------------------------------------------------- | ----
|PART I. FINANCIAL INFORMATION                                        |     
|                                                                    
|Item 1.  Financial Statements:                                      
|                                                                    
|Condensed Consolidated Unaudited Balance Sheet                      
|April 2, 2004 and Audited Balance Sheet                             
|December 31, 2003                                                    | 3   
|                                                                    
|Condensed Consolidated Unaudited Statements of Income               
|Three Months Ended April 2, 2004 and March 31, 2003                  | 4   
|                                                                    
|Condensed Consolidated Unaudited Statements of Cash Flows           
|Three Months Ended April 2, 2004 and March 31, 2003                  | 5   
|                                                                    
|Notes to Condensed Consolidated Unaudited Financial Statements       | 6   
|                                                                    
|Item 2.  Management's Discussion and Analysis of Financial Condition
|and Results of Operations                                            | 10  
|                                                                    
|Item 3.  Controls and Procedures                                     | 14  
|                                                                    
|PART II.  OTHER INFORMATION                                         
|                                                                    
|Item 1.  Changes in Securities                                       | 14  
|                                                                    
|Item 2.  Exhibits and Reports on Form 8-K                            | 15  

2

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PART I.   FINANCIAL
INFORMATION

Item 1.   FINANCIAL
STATEMENTS

WTC INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

|ASSETS                                                      | (Unaudited)
April 2, 2004 |  | December 31, 2003
|----------------------------------------------------------- | ------------------------- |  | -----------------
|                                                            |                           |  |                  
|CURRENT ASSETS                                              |                           |  |                  
|Cash                                                        |                           |  | $                
|Accounts receivable, net of allowance for doubtful accounts |                           | 
|of approximately $8,000                                     |                           |  |                  
|Inventories                                                 |                           |  |                  
|Prepaid expenses                                            |                           |  |                  
|Deferred tax assets                                         |                           |  |                  
|                                                            |                           |  |                  
|TOTAL CURRENT ASSETS                                        |                           |  |                  
|                                                           
|Property & Equipment, at cost, net                          |                           |  |                  
|Intellectual Property, net                                  |                           |  |                  
|Other Assets                                                |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  | $                
|                                                            |                           |  |                  
|                                                           
|LIABILITIES AND STOCKHOLDERS' EQUITY                        |                           | 
|                                                           
|CURRENT LIABILITIES                                         |                           | 
|Note payable to bank                                        |                           |  | $                
|Current maturities of long-term debt                        |                           |  |                  
|Accounts payable                                            |                           |  |                  
|Accrued expenses:                                           |                           | 
|Interest                                                    |                           |  |                  
|Warranty                                                    |                           |  |                  
|Compensation                                                |                           |  |                  
|Other                                                       |                           |  |                  
|Income taxes payable                                        |                           |  |                  
|                                                            |                           |  |                  
|TOTAL CURRENT LIABILITIES                                   |                           |  |                  
|                                                           
|LONG-TERM LIABILITIES                                       |                           | 
|Long-term debt, net of current maturities                   |                           |  |                  
|Deferred tax liabilities                                    |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  |                  
|STOCKHOLDERS'  EQUITY                                       |                           | 
|Common stock                                                |                           |  |                  
|Additional paid-in capital                                  |                           |  |                  
|Accumulated deficit                                         |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  |                  
|                                                            |                           |  | $                
|                                                            |                           |  |                  

|See notes to condensed consolidated unaudited financial statements.
|-------------------------------------------------------------------

3

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WTC INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                              | Three months ended
|--------------------------------------------- | ------------------
|
|                                              |                   
|NET SALES                                     |                   
|                                             
|COST OF GOODS SOLD                            |                   
|                                              |                   
|                                             
|GROSS PROFIT                                  |                   
|                                             
|EXPENSES                                      |                   
|Selling, general and administrative           |                   
|Research and development                      |                   
|                                              |                   
|                                              |                   
|                                              |                   
|                                             
|INCOME FROM OPERATIONS                        |                   
|                                             
|OTHER EXPENSE                                 |                   
|Interest expense                              |                   
|                                              |                   
|                                              |                   
|                                              |                   
|                                             
|INCOME BEFORE INCOME TAXES                    |                   
|                                             
|INCOME TAX EXPENSE                            |                   
|                                              |                   
|                                             
|NET INCOME                                    |                   
|                                              |                   
|                                             
|PER COMMON SHARE DATA - BASIC & DILUTED       |                   
|                                             
|EARNINGS PER SHARE - BASIC                    |                   
|                                              |                   
|EARNINGS PER SHARE - DILUTED                  |                   
|                                              |                   
|                                             
|WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |                   
|BASIC                                         |                   
|                                              |                   
|DILUTED                                       |                   
|                                              |                   

|See notes to condensed consolidated unaudited financial statements.
|-------------------------------------------------------------------

4

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# WTC INDUSTRIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                     | Three months ended
|---------------------------------------------------- | ------------------
|                                                     |                   
|
|                                                     |                   
|OPERATING ACTIVITIES                                 |                   
|Net income                                           |                   
|Adjustments to reconcile net income to net cash      |                   
|provided by (used in) operating activities:          |                   
|Depreciation                                         |                   
|Amortization                                         |                   
|Deferred taxes                                       |                   
|Accretion of long-term debt discount                 |                   
|Changes in operating assets and liabilities:         |                   
|Accounts receivable                                  |                   
|Inventories                                          |                   
|Current and other assets                             |                   
|Accounts payable                                     |                   
|Accrued expenses                                     |                   
|Income taxes payable                                 |                   
|                                                     |                   
|Net cash provided by (used in) operating activities  |                   
|                                                     |                   
|                                                    
|INVESTING ACTIVITIES                                 |                   
|Purchases of property and equipment                  |                   
|Intellectual Property                                |                   
|                                                     |                   
|Net cash used in investing activities                |                   
|                                                     |                   
|                                                    
|FINANCING ACTIVITIES                                 |                   
|Net proceeds on note payable to bank                 |                   
|Proceeds from long-term debt                         |                   
|Proceeds from issuance of common stock               |                   
|Payments on long-term debt                           |                   
|                                                     |                   
|Net cash provided by (used in) financing activities  |                   
|                                                     |                   
|                                                    
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                   
|                                                    
|CASH AND CASH EQUIVALENTS:                           |                   
|Beginning of period                                  |                   
|                                                     |                   
|End of period                                        |                   
|                                                     |                   
|                                                    
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -   |                   
|Cash paid during the period for interest             |                   
|                                                     |                   

|See notes to condensed consolidated unaudited financial statements.
|-------------------------------------------------------------------

5

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# WTC INDUSTRIES, INC. AND SUBSIDIARY

# NOTES TO CONDENSED
CONSOLIDATED UNAUDITEDFINANCIAL STATEMENTS

# 1.   Description of
Business

Business 
WTC Industries, Inc. (WTC) manufactures and markets water filtration products
for the point-of-use potable water market. The Companys primary customers are
original equipment manufacturers (OEMs) of home appliances that are based in the United
States. The manufacturers use the Companys filtration system to dispense drinking
water from the appliances for consumer consumption.

The Companys
products include water filtration systems and replacement cartridges for use by original
equipment manufacturers of home appliances and point-of-use systems.  The Company has
discontinued its sales of portable systems for travel, outdoor recreation, military and
emergency relief applications.

Home Appliance Systems

The Company developed
its filtration systems and cartridges in response to demand from the home appliance
market. Appliance manufacturers are rapidly adding water filtration systems to their
refrigerator models as a result of increasing consumer demand. This consumer demand is
driven by greater emphasis on health, fitness and wholesome diets; concerns regarding the
safety and quality of public water supplies; and preferences regarding the taste and odor
of water.  Consumers are increasingly using the filtered water from their
refrigerators as the exclusive source of water for drinking and cooking.

The Companys
filtration systems filter the drinking water using a proprietary filtration cartridge that
is periodically changed by the consumer.  The Companys patented
dry-change system allows the consumer to easily and conveniently replace the
filter cartridge.

In the appliance market,
the main competitive factors are technology, product quality, intellectual property rights
and price. The Company holds several U.S. patents on the dry change filter
cartridge design and the manifold that is permanently mounted inside the refrigerator. In
addition, the Company has received several new patents for point-of-use systems. 
These intellectual properties allow the Company to offer high value proprietary products
that result in sales of both original filtration systems and replacement filter cartridges
to appliance manufacturers.  With each new product introduction, the Company
continues to incorporate multiple technology advancements.

The Company believes
that as the installed base of refrigerators that are specifically designed to accept the
Companys filter cartridge increases, the need for compatibility and the
Companys patent protection gives the Company a competitive advantage in selling

6

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both
original and replacement filter cartridges to the appliance manufacturer. The need for
compatibility is also an advantage from the appliance manufacturers standpoint,
because it greatly increases the likelihood that the end-user will purchase replacement
filter cartridges from the appliance manufacturer, who in turn purchases them from the
Company.

Point of Use Systems

The Companys
point-of-use systems treat water at a single source without treating the water in the rest
of the home or office. The increased demand for point-of-use systems is driven by multiple
factors, including ease of installation and the availability of systems at a variety of
price points for different potable water problems. The Company is positioning itself to
enter the do-it-yourself and new home construction markets by supplying its
dry-change systems referred to above to major brand-name consumer products
companies who in turn market and distribute these products.

# 2.   Basis of Presentation

The accompanying
condensed consolidated unaudited financial statements of WTC Industries, Inc. and
Subsidiary have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and reflect all adjustments,
consisting of normal recurring accruals, which are, in the opinion of management,
necessary for a fair presentation of financial position, results of operations, and cash
flows for the periods shown. These statements are condensed and do not include all
information required by accounting principles generally accepted in the United States of
America. It is recommended that these financial statements be read in conjunction with the
Companys audited financial statements and notes thereto for the year ended December
31, 2003, which are included in the Companys Annual Report on Form 10-KSB.

# 3.   Inventories

|Inventories consist of the following: | April 2, 2004 |  | Dec 31, 2003
|------------------------------------- | ------------- |  | ------------
|                                      |               |  |             
|                                     
|Raw Materials                         |               |  | $           
|Finished Goods                        |               |  |             
|                                      |               |  |             
|                                      |               |  | $           
|                                      |               |  |             

The inventory values
above include a reserve for slow-moving products of approximately $79,000 and $83,000 as
of April 2, 2004 and December 31, 2003, respectively.

# 4.   Intellectual
Property

The Companys
intellectual property consists primarily of technology rights and patents. These assets
are amortized over their estimated useful lives using the straight-line

7

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method.
Amortization of patents will begin upon granting of the patents. The Company reviews these
assets for any indications of impairment.

|                  | April 2, 2004 | December 31, 2003
|----------------- | ------------- | -----------------
|                  |               |                  
|
|                  |               |                  
|Technology Rights |               |                  
|Patents           |               |                  
|                  |               |                  
|                  |               |                  
|                  |               |                  

Amortization expense is
as follows:

|Quarter ended April 2, 2004  | $  37,335
|---------------------------- | ---------
|                             |          
|Quarter ended March 31, 2003 | $  37,335
|                             |          
|Year ended December 31, 2003 | $150,391 
|                             |          

Estimated amortization
expense for the remainder of 2004 is approximately $120,000 and is expected to be $160,000
in each of the next five years.

# 5.   Product Warranty

The Company provides a
limited warranty for the replacement of defective products. The Companys standard
warranty policy requires the Company to repair or replace defective products at no cost to
its customers. The Company estimates the costs that may be incurred under its basic
limited warranty and records a liability in the amount of such costs at the time product
revenue is recognized. Factors that affect the Companys warranty liability include
the number of units sold, historical and anticipated rates of warranty claims, and cost
per claim. The Company periodically assesses the adequacy of its recorded warranty
liabilities and adjusts the amounts as necessary. The Company utilizes historical trends
and information received from its customers to assist in determining the appropriate loss
reserve levels. Warranty experience remains low as a result of improved manufacturing and
quality control procedures. Management believes that the warranty reserve at April 2, 2004
is adequately funded and therefore does not require any additional accrual in the first
quarter 2004.

Changes in the
Companys warranty liability are as follows:

|                               | 2004 | 2003
|------------------------------ | ---- | ----
|                               |     
|Balances, January 1            |      |     
|Payments made                  |      |     
|                               |      |     
|Balances, April 2 and March 31 |      |     
|                               |      |     

8

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# 6.   Income Taxes

The Company has recorded
income tax expense using an estimated combined federal and state tax rate of 38%. The
Company continues to utilize its net operating loss carryforwards to largely offset any
cash requirement for income tax liability. The Company has remaining federal net operating
loss (NOL) carryforwards of approximately $3,000,000 that may be used against future
taxable income. The use of NOL carryforwards can be limited if certain changes in
ownership occur.

# 7.   Stock-Based
Compensation

The Company grants
options to its employees under various plans as described below. As permitted under
accounting principles generally accepted in the United States of America, these grants are
accounted for following APB Opinion No. 25 and related interpretations. Accordingly,
compensation cost has been recognized for those grants whose exercise price is less than
the fair market value of the stock on the date of grant. There was no compensation expense
recorded for employee grants for the quarters ended April 2, 2004 March 31, 2003,
respectively.

The Company also grants
options and warrants to nonemployees for goods and services and in conjunction with
certain agreements. These grants are accounted for under FASB Statement No. 123 based on
the grant date fair values.

Had compensation cost
for all of the stock-based compensation grants and warrants issued been determined based
on the fair values at the grant date consistent with the provisions of Statement No. 123,
the Companys net income and net income per basic and diluted common share would have
been as indicated below.

|                                                 | Quarter Ended
|------------------------------------------------ | -------------
|                                                 |              
|
|                                                 |              
|Net income, as reported                          |              
|Deduct total stock-based employee compensation   |              
|expense determined under the fair value-based    |              
|method for all awards                            |              
|                                                 |              
|Net income, pro forma                            |              
|                                                 |              
|Basic net income per common share, as reported   |              
|Basic net income per common share, pro forma     |              
|Diluted net income per common share, as reported |              
|Diluted net income per common share, pro forma   |              

The above pro forma
effects on net income and net income per basic and diluted common share are not likely to
be representative of the effects on reported net income or net income per common share for
future years because options vest over several years and additional awards generally are
made each year.

9

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# ITEM 2.   MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three months ended April
2, 2004 compared to three months ended March 31, 2003

Overview

The Companys business is selling water filtration systems to major U.S.
appliance manufacturers. These customers have recognized the growing demand for
point-of-use water filtration systems and are seeking to increase their stake in
the residential water treatment market. The Companys strategy is to apply
its strengths in the areas of technology, innovation, quality and low cost
manufacturing to support these OEM manufacturers efforts to increase their
market share in the residential water filtration market. The Company announced
on November 14, 2003 that it had retained an investment-banking firm to assist
it in examining and evaluating strategic and financing alternatives for the
Company. Effective January 1, 2004, the Company changed from a calendar year-end
to a 52-53 week year-end, which ends on the Friday nearest to December 31. The
three-month periods ended April 2, 2004 and March 31, 2003, both contain 13
weeks.

Net Sales
The
Company had record net sales of $10,919,000 in first quarter 2004, more than doubling its
first quarter 2003 net sales of $5,414,000. The Company also increased its sales by 31%
over record sales of $8,306,000 in fourth quarter 2003. The increase is primarily due to
higher unit sales of the Companys original equipment filtration systems to its
appliance customers and a significant increase in replacement filter sales to the growing
base of refrigerators that use the Companys proprietary replacement filters. The
Company also recently introduced a new line of point-of-use water products for a major
customer that resulted in significant new product sales in the first quarter of 2004.

The Companys three
largest customers accounted for 58%, 30% and 6% of the Companys net sales through
April 2, 2004, compared to 55%, 31% and 10% for the period ended March 31, 2003. Accounts
receivable from these customers totaled approximately $9,145,000 at April 2, 2004. The
Company believes that sales to its three largest customers will continue to increase in
2004, primarily due to (i) increased consumer demand for appliances with water filtration
systems, (ii) growth in the number of appliance models utilizing the Companys
filtration systems, (iii) the existence of a larger base of home appliance units that are
designed to accept replacement filters supplied by the Company, (iv) the Companys
strategy to expand the range of components it supplies in a refrigerators ice and
water systems, and (v) the Companys plans to introduce new products to these
customers.

Domestic sales were
$10,475,000, or 96% of total net sales in first quarter 2004, compared to $5,374,000 or
99% in 2003. The Company anticipates continued revenue growth in the domestic market for
the reasons indicated in the previous paragraph. In

10

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addition, the Company is exploring new
sales opportunities with new customers in both the appliance and point-of-use markets.

International sales,
which are comprised primarily of iodinated resin products, represented 4% of
total net sales in 2004 compared to 1% in 2003. The increase in 2004 is due to
one final sale of iodinated resin products. In February 2004, the Company
discontinued the sale of these products. The Company is exploring new sales
initiatives in international markets for its original equipment filtration
systems for appliances.

Gross Profit
Gross profit for the
first quarter 2004 was $3,467,000, compared to $1,798,000 in 2003. The increase in gross
profit is due to higher net sales, combined with the Company leveraging its fixed costs
against the increased sales. The Company anticipates it will continue to increase gross
profit margins in 2004 as a result of initiatives taken in 2003, including investing in
state of the art manufacturing equipment to further reduce labor costs, obtaining raw
materials from alternative sources, vertically integrating key material components,
increasing replacement filter sales, and increasing plant utilization and efficiency.

Operating Expenses
Selling, general and
administrative expenses (SG&A) for first quarter 2004 were $1,148,000, or 10% of net
sales, compared with $672,000, or 12% of net sales in 2003. The increase in SG&A
spending was due to a $165,000 increase in staff expenses to support the Companys
growth plans, a $26,000 increase in occupancy and insurance expenses, and $258,000 in
higher fees for professional and outside services related to the Companys previously
announced exploration of strategic alternatives. Management anticipates SG&A spending
for the remainder of 2004 to be consistent with spending in the first quarter.

Research, development
and engineering expenses for first quarter 2004 were $530,000 or 5% of net sales, compared
to $387,000 or 7% in 2003. The increase in 2004 spending is primarily due to new product
development and staff related expenses in its research department. Management continues to
emphasize innovation and technological advancement as key elements of the Companys
overall strategy in the appliance and residential point-of-use markets. The Company plans
to continue to increase its research and new product development capability.

Income from Operations
Income from operations
was $1,789,000 or 16% of net sales in 2004, compared to $739,000 or 14% of net sales in
2003. The increase is primarily due to the increase in sales and gross profit, partially
offset by increased spending for SG&A and research and development.

11

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Interest
Expense
Interest expense
decreased to $66,000 in 2004 from $74,000 in 2003, primarily as a result of lower
short-term borrowing rates during first quarter 2004 compared to the same period in 2003.

Income Taxes
The Company recorded
income tax expense of $655,000 in 2004, compared to $253,000 in 2003, due to higher net
income. The Company is using an estimated combined federal and state tax rate of 38%. The
Company continues to utilize its net operating loss carryforwards to largely offset any
cash requirement for income tax liability.The Company has remaining federal net
operating loss (NOL) carryforwards of approximately $3,000,000 that may be used against
future taxable income. The use of NOL carryforwards can be limited if certain changes in
ownership occur.

Liquidity and Capital
Resources
During the first quarter
of 2004, the Company used cash in operations of $125,000, compared to cash provided by
operations of $959,000 in 2003. The principal reason for the decrease of $1,084,000 is the
significant increase in accounts receivable due to the increased sales of filtration
systems and replacement filters to appliance manufacturers, as well as new product sales
for the point-of use market in the first quarter of 2004. As a result, more cash was
required to finance the increase in accounts receivable in 2004 compared to 2003. This was
partially offset by the increase in net earnings, increased depreciation related to new
automation equipment, and the decrease in the Companys deferred tax assets from the
utilization of NOLs. Accounts payable increased in 2004 to support increased spending in
operating expenses and purchases of new equipment.

Net cash used in
investing activities was $1,826,000 in the first quarter 2004, compared to $900,000 in
2003. The increase in 2004 was due to continued equipment purchases to further reduce
labor costs and to meet the Companys 2004 sales projections.

Net cash provided by
financing activities was $1,855,000 in 2004, compared to net cash used in financing
activities of $39,000 in 2003. During the first quarter 2004, the Company borrowed an
additional $470,000 as term loans and $1,638,000 as revolving loans under its credit line.
In addition, the Company received proceeds of $572,000from the issuance of common
stock resulting from the exercise of stock options and warrants. Management believes its
banking relationship is excellent and the Company has access to additional loans to
support the Companys growth projections.

12

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The Companys
contractual cash obligations at April 2, 2004 (excluding $1,638,000 in revolving loans
outstanding) are as follows:

|                    |  | 
|------------------- |  | 
|
|
|
|                    | 
|Long Term Debt      |  | 
|                    | 
|Operating Leases    |  | 
|                    | 
|Capital Lease       |  | 
|                    | 
|Firm Commitments to |  | 
|Purchase Equipment  |  | 
|                    | 
|Total               |  | 
|                    | 

The Company had net
working capital (total current assets less total current liabilities) of $3,167,000 as of
April 2, 2004, compared to $3,238,000 as of December 31, 2003. Working capital has
remained relatively unchanged as the large increase in accounts receivable of $2,948,000
is offset by increases of $1,638,000 in notes payable and $763,000 in accounts payable and
the utilization of $650,000 in deferred tax assets. The increase in accounts receivable is
a result of increased sales due to new product launches and higher demand for existing
products. The increase in accounts payable is primarily due to increases in operating
expenses and capital equipment purchases. The increase in notes payable was to finance new
equipment purchases.

Management believes that
cash flow from operations and the utilization of the net operating loss carryforwards,
together with the availability under the revolving credit line, will continue to be
adequate to meet the Companys capital requirements and the commitments summarized
above.

Factors Affecting
Results of Operations
The Companys sales
are primarily to two large manufacturers of home appliances and a to a distributor of the
Companys replacement filters. The orders placed by these customers are based on
their respective plans for various appliance models, the features and product life cycle
of each model, and various other factors. The Company has no firm order
backlog with these or other customers. The need for planning and lead times
associated with some of these factors, the Companys intellectual property rights,
and the growing installed base of appliances using the Companys filtration systems,
may provide the Company some degree of protection against unexpected, abrupt major changes
in the flow of orders to the Company from these manufacturers. However, the loss of any of
the major customers or a significant disruption in the order flow from them could have a
serious adverse effect on the Company.

# 

Foreign Currency Effects
Because international
sales represent a small portion of the Companys total net sales in both 2004 and
2003, foreign currency exchange rate fluctuations did not have a material impact on the
Companys financial results.

13

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Effects of Inflation 
During 2004 and 2003
inflation did not have a material impact on the Companys business.

Cautionary Statement
Regarding Forward Looking Information 
Statements made in this
Quarterly Report on Form 10-QSB, in the Companys other SEC filings, in press
releases and in oral statements to stockholders and securities analysts, which are not
statements of historical or current facts are forward looking statements. Such
forward looking statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results or performance of the Company to be materially
different from the results or performance expressed or implied by such forward looking
statements. The words believes, expects, anticipates,
seeks and similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward looking statements, which speak
only as of the date the statement was made. These statements are subject to risks and
uncertainties that could cause actual results to differ materially and adversely from the
forward looking statement, including, but not limited to, loss of a significant customer,
unanticipated manufacturing difficulties or quality control problems, disruption in
sources of supply, the effect of economic conditions, the impact of competitive products,
pricing pressure from customers, and technological difficulties.

# Item 3.   Controls and
Procedures

(a)    
          Evaluation of Disclosure Controls and Procedures.

The
Companys Chief Executive Officer, James Carbonari, and Chief Financial Officer, Greg
Jensen, have evaluated the Companys disclosure controls as of the end of the period
covered by this report. Based upon this review, they have concluded that these controls
and procedures are effective in ensuring that material information related to the Company
that is made known to them by others in the Company.

(b)    
          Changes in Internal Controls.

There
were no significant changes in the Companys internal controls over financial
reporting that occurred during the fiscal quarter covered by this report that have
materially affected, or are reasonably likely to materially affect, the Companys
internal control over financial reporting.

# PART II. OTHER
INFORMATION

# Item 1.   Changes in
Securities

On March 24, 2004 the
Company sold 15,000 shares of its common stock as a result of the exercise on that date of
a warrant to purchase 15,000 shares for $5.00 per share held by an affiliate of the
Companys bank that would otherwise have expired on March 29, 2004.

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On March 26, 2004
the Company sold 80,000 shares of its common stock as a result of the exercise on that
date of a warrant to purchase 80,000 shares for $3.125 per share held by the
Companys Chairman that would otherwise have expired on March 28, 2004. The total of
95,000 shares that were sold pursuant to the exercise of the two warrants resulted in cash
proceeds to the Company of $325,000. The shares were sold to accredited investors for
investment in reliance upon the exemption afforded by Section 4(2) of the Securities Act
of 1933, as amended. There were no underwriters or placement agents, and no underwriting
discounts or commissions were paid.

# Item 2.   Exhibits and
Reports on Form 8-K

The following documents
are filed as part of the report:

# Exhibits.

|31.1 | Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act).
|---- | ----------------------------------------------------------------------------------------------------------------------
|    
|31.2 | Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act).
|    
|32   | Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.ss.1350).                           

# Reports on Form 8-K.

A Form 8-K was filed
February 10, 2004 pursuant to Item 5 of Form 8-K that related to disclosing material
non-public information regarding the Companys results of operations for the fourth
quarter and fiscal year ended December 31, 2003.

# SIGNATURES

In
accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|Date:  April 20, 2004 |     | WTC Industries, Inc.                                     
|--------------------- | --- | ---------------------------------------------------------
|                     
|                      | By: | /s/ James J. Carbonari
President, Chief Executive Officer
|                     
|                      | By: | /s/ Gregory P. Jensen
Chief Financial Officer            

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