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 September 30, 2003, 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                                                 38-2308668
-------------------------------------------------------------------------------
 (State or Other Jurisdiction                              (IRS Employer
      of Incorporation)                                  Identification No.)

   1000 APOLLO ROAD, EAGAN, MINNESOTA                       55121-2240
-------------------------------------------------------------------------------
 (Address of Principal Executive Offices)                   (Zip Code)

 (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.

1,786,624 shares of Common Stock as of October 31, 2003

         Transitional Small Business Disclosure Format (check one):

Yes _____;  No__x__


                                       1

<PAGE>


WTC INDUSTRIES, INC. AND SUBSIDIARIES

INDEX



                                                                            PAGE
                                                                            ----
PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Condensed Consolidated Unaudited Balance Sheet
                September 30, 2003 and Audited Balance Sheet
                December 31, 2002                                             3

         Condensed Consolidated Unaudited Statements of Income
                Three Months Ended September 30, 2003 and 2002                4

         Condensed Consolidated Unaudited Statements of Income
                Nine Months Ended September 30, 2003 and 2002                 5

         Condensed Consolidated Unaudited Statements of Cash Flows
                Nine Months Ended September 30, 2003 and 2002                 6

         Notes to Condensed Consolidated Unaudited Financial Statements       7

Item 2.  Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                    12

Item 3.  Controls and Procedures                                             16


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                    16








                                       2

<PAGE>

                          PART I. FINANCIAL INFORMATION
                          -----------------------------

                          ITEM 1. FINANCIAL STATEMENTS
                          ----------------------------

                       WTC INDUSTRIES, INC. AND SUBSIDIARY
                      CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                September 30,   December 31,
ASSETS                                                                              2003            2002
------                                                                          -------------   ------------
<S>                                                                             <C>             <C>
Current Assets
      Cash                                                                      $     80,920    $    139,969
      Accounts receivable, net of allowance for doubtful accounts
          of approximately $8,000                                                  6,866,904       4,198,018
      Inventory (Note 3)                                                           1,597,164       1,279,718
      Prepaid expenses                                                               159,872          72,206
      Deferred tax asset                                                           1,928,082       2,000,000
                                                                                ------------    ------------
            Total current Assets                                                  10,632,942       7,689,911

Property & Equipment, at cost, net                                                 4,539,615       2,710,671
Intellectual Property, net (Note 4)                                                2,179,545       2,215,110
Deferred Tax Asset (Note 6)                                                                0       1,023,000
Other Assets                                                                          41,559          19,559
                                                                                ------------    ------------

                                                                                $ 17,393,661    $ 13,658,251
                                                                                ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

CURRENT LIABILITIES
      Note payable to bank                                                      $  2,255,628    $          0
      Current maturities of long-term debt                                         2,477,718       2,950,593
      Accounts payable                                                             2,782,488       1,029,495
      Accrued expenses:
         Interest                                                                     28,225          29,299
         Warranty (Note 5)                                                           291,864         300,000
         Compensation                                                                419,354         483,904
         Other                                                                       134,787          70,346
                                                                                ------------    ------------
            TOTAL CURRENT LIABILITIES                                              8,390,064       4,863,637

LONG-TERM DEBT, net of current maturities                                          3,712,409       5,550,811
                                                                                ------------    ------------

STOCKHOLDERS' EQUITY (Note 7)
      Common stock                                                                   178,462         164,010
      Additional paid-in capital                                                  13,085,469      12,955,146
      Accumulated deficit                                                         (7,972,743)     (9,875,353)
                                                                                ------------    ------------
                                                                                   5,291,188       3,243,803
                                                                                ------------    ------------

                                                                                $ 17,393,661    $ 13,658,251
                                                                                ============    ============
</TABLE>



See notes to consolidated condensed unaudited financial statements.

                                        3

<PAGE>

                       WTC INDUSTRIES, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Three months ended September 30,
                                                    --------------------------------
                                                          2003           2002
                                                       -----------    -----------
<S>                                                    <C>            <C>
NET SALES                                              $ 7,738,921    $ 6,152,180

COST OF GOODS SOLD                                       5,221,101      4,205,570
                                                       -----------    -----------

GROSS PROFIT                                             2,517,820      1,946,610

EXPENSES
    Selling, general and administrative                    663,741        714,025
    Research and development                               381,909        313,059
                                                       -----------    -----------
                                                         1,045,650      1,027,084
                                                       -----------    -----------

INCOME FROM OPERATIONS                                   1,472,170        919,526

NONOPERATING EXPENSE
    Interest expense                                        63,665         92,724
    Other income                                            (4,504)             0
                                                       -----------    -----------
                                                            59,161         92,724
                                                       -----------    -----------

INCOME BEFORE INCOME TAXES                               1,413,009        826,802

INCOME TAX EXPENSE (Note 6)                               (536,943)            --
                                                       -----------    -----------

NET INCOME                                             $   876,066    $   826,802
                                                       ===========    ===========

PER COMMON SHARE DATA - BASIC & DILUTED

EARNINGS PER SHARE - BASIC                             $      0.49    $      0.52
                                                       ===========    ===========
EARNINGS PER SHARE - DILUTED                           $      0.39    $      0.37
                                                       ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
    BASIC                                                1,785,000      1,600,000
                                                       ===========    ===========
    DILUTED                                              2,238,000      2,254,000
                                                       ===========    ===========
</TABLE>

See notes to consolidated condensed unaudited financial statements.

                                        4

<PAGE>

                       WTC INDUSTRIES, INC. AND SUBSIDIARY
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Nine months ended September 30,
                                                    -------------------------------
                                                           2003           2002
                                                       -----------    -------------
<S>                                                    <C>            <C>
NET SALES                                              $ 19,997,518    $ 19,236,206

COST OF GOODS SOLD                                       13,299,154      13,041,742
                                                       ------------    ------------

GROSS PROFIT                                              6,698,364       6,194,464

EXPENSES
    Selling, general and administrative                   2,064,973       2,099,180
    Research and development                              1,359,380       1,113,008
                                                       ------------    ------------
                                                          3,424,353       3,212,188
                                                       ------------    ------------

INCOME FROM OPERATIONS                                    3,274,011       2,982,276

NONOPERATING EXPENSE
    Interest expense                                        208,286         270,142
    Other income                                             (3,103)              0
                                                       ------------    ------------
                                                            205,183         270,142
                                                       ------------    ------------

INCOME BEFORE INCOME TAXES                                3,068,828       2,712,134

INCOME TAX (EXPENSE) BENEFIT (Note 6)                    (1,166,218)      1,400,000
                                                       ------------    ------------

NET INCOME                                             $  1,902,610    $  4,112,134
                                                       ============    ============

PER COMMON SHARE DATA - BASIC & DILUTED

EARNINGS PER SHARE - BASIC                             $       1.12    $       2.67
                                                       ============    ============
EARNINGS PER SHARE - DILUTED                           $       0.85    $       1.87
                                                       ============    ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
    BASIC                                                 1,703,000       1,539,000
                                                       ============    ============
    DILUTED                                               2,231,000       2,202,000
                                                       ============    ============
</TABLE>

See notes to consolidated condensed unaudited financial statements.

                                        5

<PAGE>

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

<TABLE>
<CAPTION>
                                                                             Nine months ended September 30,
                                                                             -------------------------------
                                                                                  2003           2002
                                                                               -----------    -----------
<S>                                                                            <C>            <C>
OPERATING ACTIVITIES
    Net income                                                                 $ 1,902,610    $ 4,112,134
    Adjustments to reconcile net income to net cash
       provided by operating activities:
       Depreciation                                                                858,638        479,719
       Amortization                                                                142,641         30,636
       Deferred income taxes                                                     1,094,918     (1,400,000)
       Gain on disposal of fixed assets                                             (2,899)            --
       Noncash consulting services                                                      --          8,253
       Accretion of long-term debt discount                                             --         13,240
       Changes in operating assets and liabilities:
            Accounts receivable                                                 (2,668,886)    (1,905,133)
            Inventories                                                           (317,446)      (222,584)
            Current and other assets                                              (140,302)        18,315
            Accounts payable                                                     1,752,993        623,781
            Accrued expenses                                                        (9,319)      (308,237)
                                                                               -----------    -----------
                 Net cash provided by operating activities                       2,612,948      1,450,124
                                                                               -----------    -----------

INVESTING ACTIVITIES
    Purchases of property and equipment                                         (2,666,109)    (1,322,026)
    Investment in supplier                                                              --       (100,000)
    Proceeds from sale of equipment                                                  4,300
    Intellectual property                                                          (76,440)            --
                                                                               -----------    -----------
                 Net cash used in investing activities                          (2,738,249)    (1,422,026)
                                                                               -----------    -----------

FINANCING ACTIVITIES
    Net proceeds from note payable to bank                                       2,255,628      1,000,000
    Proceeds from long-term debt                                                        --      7,500,000
    Proceeds from issuance of common stock                                         144,775        207,178
    Payments on long-term debt                                                  (2,334,151)    (8,752,449)
                                                                               -----------    -----------
                 Net cash provided by (used in) financing activities                66,252        (45,271)
                                                                               -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                          (59,049)       (17,173)

CASH AND CASH EQUIVALENTS:
    Beginning of period                                                            139,969         81,853
                                                                               -----------    -----------

    End of period                                                              $    80,920    $    64,680
                                                                               ===========    ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
    Cash paid during the period for interest                                   $   209,360    $   588,601
                                                                               ===========    ===========
    Cash paid during the period for income taxes                               $    71,500    $        --
                                                                               ===========    ===========
    Lease for equipment                                                        $    22,874    $        --
                                                                               ===========    ===========
</TABLE>

See notes to consolidated condensed unaudited financial statements.

                                        6

<PAGE>


WTC INDUSTRIES, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED UNAUDITED
FINANCIAL STATEMENTS

1.       DESCRIPTION OF BUSINESS

BUSINESS - WTC Industries, Inc. ("WTC") manufactures and markets water
filtration and purification products for the point-of-use potable water market.
The Company's primary customers are original equipment manufacturers of home
appliances that are based in the United States who use the Company's filtration
system for drinking water that is dispensed by the appliance to the consumer.

The Company's products fall into two categories: systems and cartridges for use
by original equipment manufacturers of home appliances; and point-of-use systems
and cartridges for the home or office.

HOME APPLIANCE SYSTEMS

The Company has developed several filtration systems for the home appliance
market. Appliance manufacturers have increasingly sought to add water filtration
systems to refrigerator models in response to high consumer demand driven by:
emphasis on health, fitness and wholesome diets; increased concerns among
consumers regarding the safety and quality of public water supplies; and
consumer's preferences regarding the taste and odor of water.

The Company's filtration systems provide a means to filter the drinking water
using a filtration cartridge mounted inside the refrigerator 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 that attaches to the filter
cartridge. The Company believes that as the installed base of refrigerators that
are specifically designed to accept the Company's filter cartridge increases,
this need for compatibility and the Company's patent protection gives the
Company a competitive advantage in selling both original and replacement filter
cartridges to the appliance manufacturers. The need for compatibility is also an
advantage from the appliance manufacturers' 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.

                                       7

<PAGE>

POINT OF USE SYSTEMS
--------------------

Point-of-use systems treat water at a single source, typically a water faucet,
without treating the water in the rest of the home or office. The increased
demand for point-of-use systems has been driven by a number of factors,
including ease of installation and the availability of systems at a variety of
price points for a number of different potable water problems. The Company's
point-of-use systems are similar to the "dry-change" system referred to above.

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, 2002, which are included in the Company's Annual
Report on Form 10-KSB.

3.       INVENTORY

INVENTORY CONSISTS OF THE FOLLOWING:    September 30, 2003     Dec 31, 2002
------------------------------------    ------------------     ------------

Raw Materials                             $  972,712           $  779,223
Finished Goods                               624,452              500,495
                                          ----------           ----------
                                          $1,597,164           $1,279,718
                                          ==========           ==========

The increase in inventory is necessary to support increased sales levels and the
increased number of products the Company sells to its customer base. The total
inventory reserve as of September 30, 2003 and December 31, 2002 is
approximately $68,000 and $12,000, respectively.

4.       INTELLECTUAL PROPERTY

The Company's intellectual property consists primarily of technology rights and
patents. These assets are amortized over the shorter of their estimated useful
lives or their contractual life using the straight-line method. Amortization of
patents will begin upon granting of the patents. The Company reviews these
assets for any indications of impairment.


                                       8

<PAGE>

Intellectual Property, continued


<TABLE>
<CAPTION>
                              September 30, 2003                     December 31, 2002
                    ------------------------------------   ------------------------------------
                                Accumulated    Net Book                Accumulated    Net Book
                       Cost     Amortization     Value        Cost     Amortization      Value
                    ----------  ------------  ----------   ----------  ------------  ----------
<S>                 <C>          <C>          <C>          <C>          <C>          <C>
Technology Rights   $2,240,000   $  136,895   $2,103,105   $2,240,000   $   24,890   $2,215,110
Patents                 76,440          -0-       76,440          -0-          -0-          -0-
                    ----------   ----------   ----------   ----------   ----------   ----------
                    $2,316,440   $  136,895   $2,179,545   $2,240,000   $   24,890   $2,215,110
                    ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

Amortization expense is as follows:

                  For the three months ended September 30, 2003      $ 37,335
                                                                     ========
                  For the three months ended September 30, 2002      $      0
                                                                     ========
                  For the nine months ended September 30, 2003       $112,005
                                                                     ========
                  For the nine months ended September 30, 2002       $      0
                                                                     ========
                  Year ended December 31, 2002                       $ 24,890
                                                                     ========

Amortization expense for the remainder of 2003 is anticipated to be
approximately $40,000. Amortization expense is anticipated to be approximately
$175,000 annually in each of the next four 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.

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

                                 Three Months Ended   Nine Months Ended
                                    September 30         September 30
-------------------------------------------------------------------------
                                  2003      2002        2003       2002
-------------------------------------------------------------------------
Balances, Beginning             $294,316   $313,172   $300,000   $244,464
   Accruals for products sold        -0-        -0-        -0-     90,245
   Payments made                   2,452      1,693      8,136     23,230
                                --------   --------   --------   --------
Balances, Ending                $291,864   $311,479   $291,864   $311,479
                                ========   ========   ========   ========


                                       9
<PAGE>

As a result of production yields that exceed customer's quality requirements and
minimal product returns, management believes that the warranty reserve at
September 30, 2003 is adequate and does not require any additional accrual for
the first nine months of 2003.


6.       INCOME TAXES

In 2003, the Company recorded income tax expense using an estimated combined
federal and state tax rate of 38%. The Company has deferred income tax assets,
originating primarily from net operating loss carryforwards, available to offset
the cash requirements of virtually all of this income tax expense. During the
first nine months of 2002, under generally accepted accounting principles, no
income tax accrual was recorded because the deferred income tax assets arising
primarily from the Company's net operating loss carryforwards were fully
reserved at that time. The reserve against those deferred tax assets was
reversed in the second and fourth quarters of 2002 because of the Company's
continued profitability. In 2003, generally accepted accounting principles
require that the Company record federal and state income tax expense. However,
the Company's utilization of the deferred tax assets are expected to largely
offset any cash requirement for such income tax expense.

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 three and nine-month periods ended September 30, 2003
and 2002.

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.





                                       10


<PAGE>

Stock-Based Compensation, continued

<TABLE>
<CAPTION>
                                                       Three Months Ended             Nine Months Ended
                                                          September 30                  September 30
                                                   --------------------------    ------------------------------
                                                       2003          2002           2003             2002
---------------------------------------------------------------------------------------------------------------
<S>                                                <C>            <C>            <C>              <C>
Net income, as reported                            $   876,066    $   826,802    $   1,902,610    $   4,112,134
Deduct total stock-based employee compensation
   expense determined under the fair value-based
   method for all awards                              (127,573)       (47,043)        (374,540)        (132,685)

                                                   -----------    -----------    -------------    -------------
Net income, pro forma                              $   748,493    $   779,759    $   1,528,070    $   3,979,449
                                                   ===========    ===========    =============    =============

Basic net income per common share, as reported     $      0.49    $      0.52    $        1.12    $        2.67
Basic net income per common share, pro forma              0.42           0.49             0.90             2.59
Diluted net income per common share, as reported          0.39           0.37             0.85             1.87
Diluted net income per common share, pro forma            0.33           0.36             0.68             1.81
</TABLE>

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 periods because options vest
over several years and additional awards generally are made each year.

8.       COMMITMENT FOR CAPITAL EXPENDITURES

The Company has entered into firm commitments for capital expenditures of
approximately $750,000.

9.       RECENT ACCOUNTING PRONOUNCEMENT

The Financial Accounting Standards Board (FASB) has issued Statement No. 150,
ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH
LIABILITIES AND EQUITY. Statement No. 150 requires that certain freestanding
financial instruments be reported as liabilities in the balance sheet. Depending
on the type of financial instrument, it will be accounted for at either fair
value or the present value of future cash flows determined at each balance sheet
date with the change in that value reported as interest expense in the income
statement. Prior to the application of Statement No. 150, either those financial
instruments were not required to be recognized or, if recognized, were reported
in the balance sheet as equity. Changes in the value of those instruments were
normally not recognized in net income. Statement No. 150 applies to the Company
beginning with this quarter, and did not have an effect on the financial
statements.


                                       11

<PAGE>


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

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2002

NET SALES
---------
For the three-month period ended September 30, 2003, the Company had record net
sales of $7,739,000, an increase of 26% from 2002 sales of $6,152,000. For the
nine-month period ended September 30, 2003, the Company had record net sales of
$19,998,000, an increase of 4% from 2002 sales of $19,236,000. The increase in
net sales was primarily due to increased sales of original equipment filtration
systems and increased sales of replacement filters due to a larger installed
base of home refrigerator filtration systems. The Company believes, as a result
of a higher consumer demand for appliances with water filtration systems, that
sales of both filtration systems and replacement filters will continue to grow
into 2004.

The Company's products for the home appliance market accounted for 98% of the
Company's total net sales through September 30, 2003, compared to 86% for the
same period in 2002. Net sales to the Company's three largest customers
accounted for 96% of net sales during the first nine months of 2003. As of
September 30, 2003, accounts receivable from these customers totaled
approximately $6,674,000. The Company anticipates that total net sales to the
home appliance market will continue to grow during 2004 due to increased demand
for original equipment filtration systems and replacement filters.

Domestic sales for the first nine months of 2003 accounted for approximately 99%
of total net sales compared to 92% for the same period in 2002. International
sales represented approximately 1% of net sales for the first nine months of
2003 compared to 8% for the same period in 2002. The Company is exploring other
sales initiatives in international markets to expand its customer base and sales
opportunities utilizing its domestic sales strategy.

GROSS PROFIT
------------
For the three and nine month periods ended September 30, 2003, the Company
recognized a gross profit of $2,518,000 and $6,698,000, respectively,
representing 33% of total net sales for both periods. During the same periods in
2002, the Company recognized a gross profit of $1,947,000 and $6,194,000,
respectively, representing 32% of total net sales for both periods.

The increase in gross profit margin in 2003, as a percentage of net sales, is
primarily due to cost reduction programs and the increase in replacement filter
sales as a percentage of total sales. The Company anticipates that gross profit
margins, as a percentage of net sales, will remain approximately the same for
the fourth quarter and the first quarter of 2004. The Company plans to invest in
capital equipment to further reduce

                                       12

<PAGE>

labor costs, begin sourcing raw materials from foreign sources, and to
vertically integrate key material components into its operations. In addition,
the Company anticipates continued revenue growth from replacement filters, which
should also contribute to improved gross profit margins as a result of higher
plant utilization and efficiency.

OPERATING EXPENSES
------------------
Selling, general and administrative (SG&A) expenses for the three and nine month
periods ended September 30, 2003 were $664,000 and $2,065,000, respectively. For
the same periods in 2002, SG&A expenses were $714,000 and $2,099,000,
respectively. Management is expecting a small increase in SG&A spending in the
fourth quarter of 2003 due to additional staff additions and new business
development activities.

Research and development expenses for the three and nine month periods ended
September 30, 2003 were $382,000 and $1,359,000, respectively. For the same
periods in 2002, these expenses were $313,000 and $1,113,000, respectively. The
increase in 2003 is primarily due to product development expenses associated
with a new product launch scheduled for the fourth quarter of 2003. For the
remainder of 2003, the Company plans to continue to invest in new product
development for potential new customers and expand its research capabilities in
the areas of filtration and disinfection technology.

INCOME FROM OPERATIONS
----------------------
Primarily as a result of the increase in net sales, income from operations for
the third quarter was $1,472,000 or 19% of net sales, compared to $920,000 or
15% in 2002. For the nine months ended September 30, 2003, income from
operations was $3,274,000 or 16% of net sales, compared to $2,982,000 or 15% for
the same period in 2002.

INTEREST EXPENSE
----------------
Interest expense was $64,000 and $208,000, respectively, for the three and
nine-month periods ended September 30, 2003. During the same periods in 2002,
interest expense was $93,000 and $270,000, respectively. The decrease in 2003 is
primarily due to lower short-term borrowing rates during the first nine months
of 2003 compared to the same period in 2002.

INCOME TAXES
------------
In 2003 the Company has recorded income tax expense using an estimated combined
federal and state tax rate of 38%. For the three and nine month periods ended
September 30, 2003, the Company recognized income tax expense of $537,000 and
$1,166,000, respectively. The Company has deferred income tax assets,
originating primarily from net operating loss carryforwards, available to offset
the cash requirements of virtually this entire income tax obligation.

 During the first nine months of 2002, under generally accepted accounting
principles, no income tax expense was recorded because the deferred income tax
assets arising from the Company's net operating loss carryforwards were fully
reserved at that time. The reserve against those deferred tax assets was
reversed in the second and fourth quarters of 2002


                                       13
<PAGE>

because of the Company's continued profitability. In 2003, generally accepted
accounting principles require that the Company record federal and state income
tax expense. However, the Company's utilization of its deferred tax assets is
expected to largely offset any cash requirement for such income tax expense.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During the first nine months of 2003, the Company generated $2,613,000 of cash
from operations, compared to $1,450,000 in 2002. The principal reasons for the
increase in cash provided by operations is the utilization of the deferred tax
assets of $1,095,000, which offset the cash requirement for income tax expense,
an increase in accounts payable, and an increase in depreciation expense due to
increased investments in capital equipment. These factors more than offset the
reduction in net income in 2003 and the increases in accounts receivable,
inventories, and current and other assets.

Net cash used in investing activities was $2,738,000 for the first nine months
of 2003, compared to $1,422,000 in 2002. The increase is primarily due to the
Company's investment in capital equipment to support 2004 sales projections and
cost reduction programs.

Net cash provided by financing activities for the first nine months of 2003 was
$66,000, compared to net cash used in financing activities of $45,000 in 2002.
During the first nine months of 2003, the Company made term note payments of
$2,334,000, partially offset by proceeds from its credit line facility of
$2,256,000. In addition to the existing outstanding term loans, the Company has
a $3,000,000 commitment from a bank for new capital equipment purchases. The
Company's revolving credit facility is adequate for the Company's working
capital needs for 2003 and 2004.

A summary of the Company's contractual cash obligations at September 30, 2003 is
set forth in the table below. The amounts shown do not include $2,256,000 that
was outstanding as of September 30, 2003 under the Company's revolving credit
facility, which currently becomes due on May 1, 2005.

<TABLE>
<CAPTION>
                                                                       PAYMENTS DUE BY PERIOD
----------------------------------------------------------------------------------------------------------------------------
                                                         REMAINDER                                                 2007 AND
CONTRACTUAL OBLIGATIONS                    TOTAL          OF 2003        2004          2005             2006      THEREAFTER
----------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>               <C>          <C>            <C>             <C>           <C>
Long Term Debt                          $6,167,000        $617,000     $2,467,000     $2,467,000      $616,000      $     --
----------------------------------------------------------------------------------------------------------------------------
Operating Leases                         1,164,000          65,000        262,000        267,000       274,000       296,000
----------------------------------------------------------------------------------------------------------------------------
Capital Lease                               23,000           4,000          8,000          8,000         3,000            --
----------------------------------------------------------------------------------------------------------------------------
Firm Commitments to Purchase Equipment     750,000         750,000             --             --            --            --
----------------------------------------------------------------------------------------------------------------------------
Total                                   $8,104,000      $1,436,000     $2,737,000     $2,742,000      $893,000      $296,000
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

The Company had net working capital (total current assets less total current
liabilities) of $2,243,000 as of September 30, 2003, compared to $2,826,000 as
of December 31, 2002. The decrease in working capital of $583,000 is primarily
due to increases in notes payable to bank and accounts payable of $2,256,000 and
$1,753,000, respectively. These


                                       14
<PAGE>

increases were partially offset by an increase in accounts receivable of
$2,669,000 and decrease in current maturities of long-term debt of $473,000. The
increase in notes payable to bank was used to pay down bank term debt of
$2,334,000. The increase in accounts payable is primarily due to increases in
inventories and capital equipment purchases. In addition, the Company continues
to negotiate longer payment terms with its suppliers. The increase in accounts
receivable is primarily because of increased sales during third quarter 2003 as
compared to sales in the last half of 2002. In addition, effective July 1, 2003,
the Company extended the payment terms with its largest customer from an average
of 75 to 90 days. The increase in inventory is necessary to support increased
sales levels and the increased number of products the Company sells to its
customer base. The increase in prepaid expenses is primarily due to deposits for
the Company's insurance premiums and deposits for raw materials purchases.

Management believes that cash flow from operations along with the Company's term
loans and revolving credit line availability will provide the necessary capital
to finance the Company's growth plans and the contractual obligations summarized
above.

FACTORS AFFECTING RESULTS OF OPERATIONS
---------------------------------------
The Company's sales are primarily to two large manufacturers of home appliances
and 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 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 customers. However, there are no
contractual commitments from the Company's major customers as to the timing,
amount or continuance of their orders and the Company has no "firm order
backlog." The loss of any of the Company's major customers or a significant
disruption in the order flow from any of them would have a serious adverse
effect on the Company.

FOREIGN CURRENCY EFFECTS
------------------------
Because of the Company's lower sales to international markets, as compared to
the domestic market, foreign currency exchange rate fluctuations did not have a
significant impact on the demand for the Company's products in foreign markets.
The Company anticipates this trend to continue during 2003 and into 2004.

EFFECTS OF INFLATION
--------------------
The Company believes that during 2003 and 2002 inflation has not had 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."


                                       15
<PAGE>

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, sufficiency of working capital, 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
and procedures as of the end of the period covered by this report. Based upon
that review, they have concluded that these controls and procedures are
effective in ensuring that material information related to the Company is made
known to them by others within the Company.

(b)      Changes in Internal Controls Over Financial Reporting.

There have been no significant changes in internal control 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
registrant's internal control over financial reporting.

PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are included herein:

         31.1     Certifications pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act).

         31.2     Certifications pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act).

         32.      Certifications pursuant Section 906 of the Sarbanes-Oxley Act
                  of 2002 (18 U.S.C.ss.1350).



                                       16
<PAGE>

(b)      Reports on Form 8-K.

On August 5, 2003, the Company furnished a Current Report on Form 8-K to the
Securities and Exchange Commission reporting under Items 7 and 12 information
that related to the Company's second quarter earnings press release.


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.

Dated:  October 31, 2003              WTC Industries, Inc.

                                       By: /s/  James J. Carbonari
                                           -----------------------------------
                                           President, Chief Executive Officer

                                       By: /s/  Gregory P. Jensen
                                           -----------------------------------
                                           Chief Financial Officer












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