<PAGE>
                                          
                                   UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549-1004



                                     FORM 10-Q

(Mark One)

           X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          --- 
               SECURITIES EXCHANGE ACT OF 1934
                                       
                   FOR THE QUARTERLY PERIOD ENDED JULY 31, 1998
                                                  -------------
                                       OR

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

                     For the transition period from ___ to ___



                           Commission file number 0-23789
                                                  -------


                           FLOUR CITY INTERNATIONAL, INC.
                           ------------------------------
               (Exact name of registrant as specified in its charter)



               NEVADA                               62-1709152
         ------------------------     ------------------------------------
         (State of Incorporation)     (I.R.S. Employer Identification No.)

               915 Riverview Drive, Suite One, Johnson City, TN 37620
         -----------------------------------------------------------------
                 (Address of principal executive offices, zip code)

                                  (423) 928-2724
                ----------------------------------------------------
                (Registrant's telephone number, including area code)


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

            Common stock 6,267,539 shares outstanding at August 3, 1998

                                       1

<PAGE>

                                          
                           FLOUR CITY INTERNATIONAL, INC.
                                       INDEX
--------------------------------------------------------------------------------


                                                                       PAGE NO.
PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Condensed Consolidated Statement of Income                      3

              Condensed Consolidated Balance Sheet                            4

              Condensed Consolidated Statement of Cash Flows                  5

              Notes to the Condensed Consolidated Financial Statements      6-7

     Item 2.  Management's Discussion and Analysis of Financial Condition 
              and Results of Operations                                    8-12

PART II. OTHER INFORMATION

     Item 2.  Changes in Securities and Use of Proceeds                      13

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

SIGNATURES                                                                   14

EXHIBITS                                                                     15

                                       2

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                           FLOUR CITY INTERNATIONAL, INC.
                     CONDENSED CONSOLIDATED STATEMENT OF INCOME
                (in thousands except per share amounts)  (unaudited)
                                       
<TABLE>
<CAPTION>
                                                                         Three Months Ended             Nine Months Ended
                                                                               July 31                       July 31
                                                                         -------------------          ---------------------
                                                                       1998             1997           1998            1997
                                                                       ----             ----           ----            ----
<S>                                                                    <C>            <C>            <C>            <C>
Revenues                                                               $ 10,004       $ 12,198       $ 23,395       $ 24,871
Cost of revenues                                                         (7,125)        (6,766)       (15,035)       (14,125)
                                                                       --------       --------       --------       --------
   Gross profit                                                           2,879          5,432          8,360         10,746
Selling, general and administrative expenses                             (1,937)        (1,795)        (4,890)        (4,394)
Non-cash stock compensation expense                                         (11)           (17)           (46)           (40)
Amortization of negative goodwill                                           110            109            328            255
                                                                       --------       --------       --------       --------
   Operating profit                                                       1,041          3,729          3,752          6,567
Other income and expense:
   Interest income                                                          155             48            218             70
   Interest expense                                                         (12)           (13)           (34)           (25)
   Equity in income (loss) of unconsolidated affiliates                      26              -            (39)             -
   Foreign currency transaction losses                                      (74)          (637)          (431)          (637)
   Other income                                                              39             76            240            168
                                                                       --------       --------       --------       --------
Income before taxes and minority interests                                1,175          3,203          3,706          6,143
Income taxes                                                               (248)          (770)          (637)        (1,455)
Minority interest in income of consolidated subsidiaries                      -              -              -              7
                                                                       --------       --------       --------       --------
   Net income                                                          $    927       $  2,433       $  3,069       $  4,695
                                                                       --------       --------       --------       --------
                                                                       --------       --------       --------       --------
Earnings per common share (basic)                                      $   0.16       $   0.69       $   0.69       $   2.69
Earnings per common share (diluted)                                    $   0.16       $   0.62       $   0.64       $   2.29
                                                                       --------       --------       --------       --------
                                                                       --------       --------       --------       --------
</TABLE>

              See Notes to Condensed Consolidated Financial Statements

                                       3

<PAGE>

                           FLOUR CITY INTERNATIONAL, INC.
                        CONDENSED CONSOLIDATED BALANCE SHEET
                                   (in thousands)
                                          
<TABLE>
<CAPTION>
                                                                    July 31, 1998  October 31, 1997
                                                                    -------------  ----------------
                                                                     (unaudited)
<S>                                                                 <C>            <C>
                        Assets
                        ------
Cash and cash equivalents                                             $  15,099        $  342 
Restricted cash                                                           4,517         3,046 
Accounts receivable, net (note 2)                                        10,465        13,402 
Claims receivable                                                           882           -   
Costs and estimated earnings in excess of                                      
   billings on uncompleted contracts                                      2,000           774 
Notes receivable                                                          1,395         1,395 
Deferred income taxes                                                       481           697 
Other current assets                                                        478           444 
                                                                      ---------     --------- 
   Total current assets                                                  35,317        20,100 
Property, plant and equipment, net                                          514           455 
Receivable from joint ventures                                              721           177 
Investment in joint ventures                                                563           193 
Other assets                                                                 84           158 
                                                                      ---------     --------- 
   Total assets                                                       $  37,199     $  21,083 
                                                                      ---------     --------- 
                                                                      ---------     --------- 
                Liabilities and stockholders' equity
                ------------------------------------
Accounts payable                                                      $   3,356     $   3,262 
Bank borrowings                                                             500           463 
Accrued expenses                                                            888           770 
Billings in excess of cost and estimated earnings
   on uncompleted contacts                                                5,322         5,857 
Advance from shareholders and directors                                     143           148 
Income taxes payable                                                        336           507 
Joint venture corporation capital contribution payable                       24           297 
Other current liabilities                                                    15           285 
                                                                      ---------     --------- 
   Total current liabilities                                             10,584        11,589 
Negative goodwill                                                         1,493         1,821 
Commitments and contingencies (note 4)
Stockholders' equity:
Preferred stock par value $.0001; authorized 5,000,000
   shares; issued and outstanding -0- shares.                                 -             - 
Common stock par value $.0001; authorized 50,000,000
   shares; issued 6,264,469 and 30,516,667 shares at
   July 31, 1998 and October 31, 1997 (note 5)                                1             3 
Additional paid-in capital (note 5)                                      14,908           529 
Retained earnings                                                         9,894         6,824 
Unearned compensation                                                      (141)         (287)
Deferred foreign currency translation adjustment                            460           792 
Stock subscription receivable                                                 -          (188)
                                                                      ---------     --------- 
   Stockholders' equity                                                  25,122         7,673 
                                                                      ---------     --------- 
      Total liabilities and stockholders equity                       $  37,199     $  21,083 
                                                                      ---------     --------- 
                                                                      ---------     --------- 
</TABLE>


              See Notes to Condensed Consolidated Financial Statements

                                       4

<PAGE>

                           FLOUR CITY INTERNATIONAL, INC.
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                            (in thousands)  (unaudited)

<TABLE>
<CAPTION>
                                                                                     Nine Months Ended July 31
                                                                                     -------------------------
                                                                                         1998           1997
                                                                                         ----           ----
<S>                                                                                   <C>            <C>
Cash provided by operating activities:
   Net income                                                                         $  3,069       $  4,695
   Adjustments to reconcile net income to
   net cash provided by operating activities
      Depreciation and amortization                                                       (195)          (221)
      Provision for doubtful accounts                                                      147             - 
      Non-cash compensation expense                                                         46             40
      Deferred income taxes                                                                216            519
   Changes in operating assets and liabilities
   net of effects of acquisitions
      Increase in restricted cash                                                       (1,471)           (65)
      Decrease (increase) in accounts receivable                                         2,600         (3,219)
      Increase in claims receivable                                                       (882)            - 
      Increase in costs and estimated earnings in excess of billings                    (1,226)        (2,442)
      Increase in receivable from joint ventures                                          (544)           (96)
      Increase in accounts payable                                                          94          4,226
      Increase (decrease) in accrued expenses                                              118            (51)
      Decrease in billings in excess of cost and estimated earnings                       (535)        (3,962)
      Increase (decrease) in advance from shareholders and directors                        (5)            35
      Increase (decrease) in Income taxes payable                                         (171)           485
      Other                                                                               (827)         1,070
                                                                                      --------       --------
         Net cash provided by operating activities                                         434          1,014
                                                                                      --------       --------
Cash used in investing activities:
   Purchases of property, plant and equipment                                             (152)          (171)
   Investments in joint ventures                                                          (370)          (273)
                                                                                      --------       --------
      Net cash used in investing activities                                               (522)          (444)
                                                                                      --------       --------
Cash provided by financing activities:
   Net increase in short-term debt                                                          37            292
   Dividends paid                                                                            -           (109)
   Proceeds from issuance of common stock                                               14,666             - 
                                                                                      --------       --------
      Net cash provided by financing activities                                         14,703            183
Effect of exchange rates on cash                                                           142            (38)
                                                                                      --------       --------
   Net increase in cash and cash equivalents                                            14,757            715
Cash and cash equivalents at beginning of period                                           342          1,401
                                                                                      --------       --------
Cash and cash equivalents at end of period                                            $ 15,099       $  2,116
                                                                                      --------       --------
                                                                                      --------       --------
Supplemental cash flow information:
   Interest paid during the period                                                    $     30       $     20
   Taxes paid during the period                                                       $    586       $    243
                                                                                      --------       --------
                                                                                      --------       --------
</TABLE>

              See Notes to Condensed Consolidated Financial Statements

                                       5

<PAGE>
                           FLOUR CITY INTERNATIONAL, INC.
              NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
           (in thousands except share and per share amounts)  (unaudited)

1.  GENERAL
 
     The condensed consolidated financial statements include the accounts of 
Flour City International, Inc. and its wholly owned and majority owned 
subsidiary companies after elimination of material intercompany accounts and 
transactions.  Less than majority owned affiliates over which the Company 
exercises significant influence are accounted for as equity investments.  
Less than twenty percent owned affiliates over which the Company cannot 
exercise significant influence are carried at cost.
     
     When reading the financial information contained in this Quarterly 
Report, reference should be made to the financial statements, schedules, and 
notes for the year ended October 31, 1997, included in the Company's amended 
Registration Statement on Form S-1 filed on May 21, 1998, (Commission 
Registration Number 333-43793).
     
     On May 28, 1998, the Company completed the issuance of 2,000,000 shares 
of common stock through an initial public offering resulting in net proceeds 
after estimated expenses of approximately $13,625. On July 9, 1998, the 
Company's underwriters exercised their over-allotment option with respect to 
143,000 shares resulting in net proceeds of approximately $1,041. (See note 
5, Stockholders' Equity.)
     
     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities, the 
disclosure of contingent assets and liabilities at the date of the financial 
statements, and the reported amounts of revenues and expenses during the 
reporting period.  Actual results could differ from those estimates.  On an 
ongoing basis, management reviews its estimates, including those related to 
contracts, litigation, and contingencies, based on current available 
information.  Changes in facts and circumstances may result in revised 
estimates. In the opinion of management, the Condensed Consolidated Financial 
Statements include all material adjustments necessary to present fairly the 
Company's financial position, results of operations, and cash flows.  Such 
adjustments are of a normal recurring nature.  The Company's construction 
projects are awarded in a competitive bidding process.  Due to the nature of 
the process the Company has experienced and may continue to experience 
significant delays in project awards which have caused and may continue to 
cause substantial variations in quarterly results.  The results for this 
interim period are not necessarily indicative of results for the entire year 
or any other interim period.
     
2. ACCOUNTS AND NOTES RECEIVABLE, NET
      
     Accounts and notes receivable are net of allowance for doubtful accounts 
of $863 and $778 at July 31, 1998, and October 31, 1997, respectively.  In 
accordance with terms of long-term contracts, customers withhold certain 
percentages of billings until completion and acceptance of the contracts.  
Final payments of all such amounts withheld which might not be received 
within a one-year period from July 31, 1998, and October 31, 1997, are $4,906 
and $2,825 respectively.  In conformity with trade practice, however, the 
full amount of accounts receivable has been included in current assets.  
Notes receivable consists of a $1,395 note from Armco, Inc. (Armco) related 
to contracts assumed when the Company acquired Flour City Architectural 
Metals, Inc. (FCAM) from Armco.
     
3. INVESTMENT IN JOINT VENTURES
     
     During the third quarter ended July 31, 1998, the Company formed a joint 
venture in the Philippines to perform on two projects in Manila.  The Company 
contributed $200 as an initial investment in the joint venture.  
     
4. COMMITMENTS AND CONTINGENCIES
     
     As of July 31, 1998, the Company had a total of $2,033 in performance
guarantees outstanding in relation to construction contracts in progress in
Thailand and Hong Kong.

     The Company is a party to legal proceedings of the type normally 
associated with the Company's business and involving claims for damages.  In 
one case, the Company filed suit against a subcontractor for non-performance 
in the amount of approximately $1,400 and the subcontractor has filed a 
counterclaim against the
                                       6
<PAGE>

Company in the amount of approximately $1,700. There is currently no 
scheduled date for the commencement of trial.  The aggregate claim amount of 
all outstanding litigation, including the above, is approximately $2.3 
million.  The Company believes it has meritorious defenses in these actions.
     
     FCAM was named as a party to certain environmental actions, which arose 
prior to the Company's purchase of FCAM from Armco. Armco, pursuant to the 
sale agreement, agreed to defend, indemnify, and hold harmless the Company in 
connection with these actions.  
     
     In the opinion of management, any ultimate liability with respect to 
these actions and other litigation to which the Company is a party will not 
have a material effect on the Company's financial position, results of 
operations or cash flows.
     
5. STOCKHOLDERS' EQUITY
      
     On February 24, 1998 the Board of Directors declared a 1 for 7 reverse 
stock split effective May 11, 1998.  All per share and weighted average share 
information has been restated to reflect the effect of such stock split.  
     
     On May 28, 1998, the Company completed the registration and issuance of 
2,000,000 shares of the Company's $0.0001 par value common stock resulting in 
net proceeds after deducting estimated issuance costs of approximately 
$13,625. The proceeds of the offering will be used to establish or acquire an 
interest in a fabrication facility in the People's Republic of China, capital 
expenditures in connection with a joint venture in Mexico, capital 
expenditures at its Johnson City, Tennessee fabrication facility, working 
capital and general corporate purposes.  In addition, increased stockholders' 
equity resulting from the offering will allow the Company to secure more and 
larger bonding facilities.  On July 9, 1998, the Company's underwriters 
exercised their over-allotment option with respect to 143,000 shares 
resulting in net proceeds of approximately $1,041.  Pending the application 
of the net proceeds the Company intends to invest the net proceeds in 
short-term, interest-bearing, investment grade securities.  Additional 
paid-in capital was increased by approximately $14,666 and common stock was 
increased by a de minimus amount. Due to recent economic developments in the 
region, the Company has delayed its plans to increase its manufacturing base 
in Asia.

6. FOREIGN EXCHANGE
     
     Almost all of the foreign currency transaction gains and losses 
recognized in income to date relate to the baht denominated Empire Towers 
project located in Bangkok, Thailand.  As of July 31, 1998, the Company had 
filed acknowledged claims totaling $3,790 to recoup losses resulting from the 
devaluation of the baht.  At July 31, 1998, the total amounts due to the 
Company under the Empire Towers contract (including exchange loss claims) are 
the baht-equivalent of $1,684.  (See "Factors That May Affect Future Results" 
in "Management's Discussion And Analysis Of Financial Condition And Results 
Of Operations.")

                                       7

<PAGE>

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

OVERVIEW

     Flour City International, Inc. (the Company), a Nevada corporation 
existing under a charted granted in 1987, is a worldwide leader in the 
design, fabrication and installation of custom exterior wall systems (known 
as "curtain wall") used in the construction of a wide range of commercial and 
governmental buildings.  The Company works closely with architects, general 
contractors and owners/developers in the development and construction of 
highly recognizable mid-rise and high-rise office buildings, public-use 
buildings such as courthouses and airport terminals and other well-known 
landmark buildings and uniquely designed structures.

     The Company's principal subsidiaries are Flour City Architectural 
Metals, Inc., a Delaware corporation (FCAM), and Flour City Architectural 
Metals (Pacific) Limited (FCAM Pacific), a British Virgin Islands 
corporation.  FCAM was initially formed in 1893 under the name Flour City 
Ornamental Iron Company as a specialty metals fabricator for the 
architectural industry, and was a subsidiary of Armco, Inc. (Armco) 
immediately prior to the merger.  FCAM Pacific was formerly known as Hockley 
International Limited, an independent corporation.

     THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND 
UNCERTAINTIES.  THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE 
ELSEWHERE IN THIS REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES 
LITIGATION REFORM ACT OF 1995.  THE SECTION BELOW ENTITLED "FACTORS THAT MAY 
AFFECT FUTURE RESULTS" SETS FORTH AND INCORPORATES BY REFERENCE CERTAIN 
FACTORS THAT COULD CAUSE ACTUAL FINANCIAL RESULTS OF THE COMPANY TO DIFFER 
MATERIALLY FROM THESE STATEMENTS.

RESULTS OF OPERATIONS

QUARTER ENDED JULY 31, 1998 COMPARED TO QUARTER ENDED JULY 31, 1997

     REVENUES.  Revenues decreased by 18.0% from $12,198 to $10,004 in the 
third quarter ended July 31, 1998, from the third quarter ended July 31, 
1997. Revenues generated by projects in North America decreased by 26.1% from 
$7,244 to $5,356 in the third quarter ended July 31, 1998 from the third 
quarter ended July 31, 1997.  Revenues generated by projects in Asia 
decreased 6.2% from $4,954 to $4,648 in the third quarter ended July 31, 1998 
from the third quarter ended July 31, 1997. The decline in revenues is 
typical of the cyclical nature of the Company's business, reflecting the 
simultaneous completion phase of a number of older projects and startup phase 
of newer projects.
     
     GROSS PROFIT.  Gross profits declined 47.0% from $5,432 to $2,879 in the 
third quarter ended July 31, 1998, from the third quarter ended July 31, 
1997. Gross margin as a percent of revenues decreased 15.7% from 44.5% to 
28.8% in the third quarter ended July 31, 1998, from the third quarter ended 
July 31, 1997. The decline in gross margins is primarily due to a decline in 
mix of projects in startup and completion phases versus projects in the 
operating phase.
     
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses increased from $1,795 in the third quarter of 1997 to 
$1,914 in the third quarter ended July 31, 1998.  Selling, general and 
administrative expenses as a percent of revenues increased to 19.1% as 
compared to 14.7% for the same periods of 1997.  The Company's selling, 
general and administrative expenses are incurred to support current and 
anticipated business levels and are by design relatively insensitive to 
short-term changes in revenues.    
     
     FOREIGN CURRENCY EXCHANGE GAINS AND LOSSES.  Foreign exchange losses 
decreased to $74 for the third quarter ended July 31, 1998, compared to $637 
in the third quarter ended July 31, 1997, due to fluctuations in the exchange 
rate of the Thai baht.  To the extent that foreign currencies strengthen or 
weaken against the U.S. dollar and the extent to which the Company's 
long-term contracts are denominated in foreign currencies, the Company will 
continue to experience translation and transaction gains and losses.









     INCOME TAXES.  Income taxes decreased to $248 in the third quarter ended 
July 31, 1998 compared to $770 in the third quarter ended July 31, 1997. The 
decrease is attributable to a reduction in the mix of U.S. source income 
versus foreign source income. The Company's effective consolidated tax rate 
was 21.1% in the third quarter ended July 31, 1998, compared to 24.0% in the 
third quarter ended July 31, 1997. The effective tax rate on U.S. source 
income was approximately 36.8% in the third quarter ended July 31, 1998, 
compared to 45.6% in the same period of 1997.

                                       8

<PAGE>

     BACKLOG.  The Company's backlog increased to approximately $79 million 
at July 31, 1998, including $35 million attributable to the Company's 
Philippines joint venture, from approximately $45 million at October 31, 
1997.  The Company's construction projects are awarded in a competitive 
bidding process. Due to the nature of the process the Company has experienced 
and may continue to experience significant delays in project awards which 
have caused and may continue to cause substantial variations in backlogs and 
quarterly results.

NINE MONTHS ENDED JULY 31, 1998 COMPARED TO NINE MONTHS ENDED JULY 31, 1997

The Company's acquisition of FCAM was effective January 1, 1997, accordingly, 
1997 results include the results of FCAM since that date.

     REVENUES.  Revenues decreased by 5.9% to $23,395 in the nine-month 
period ended July 31, 1998, compared $24,871 in the same period of 1997 due 
to decreased project activity. Revenues generated by projects in North 
America remained unchanged at $13,661 in the nine-month period ended July 31, 
1998 compared to $13,614 in the same period of 1997.  Revenues generated by 
projects in Asia decreased by 13.5% from $11,257 to $9,734 in the nine-month 
period ended July 31, 1998 compared to the same period of 1997.

     GROSS PROFIT.  Gross profit decreased 22.2% from $10,746 to $8,360 in 
the nine-month period ended July 31, 1998, compared to the same period of 
1997 due to decreased project activity at lower margins in 1998 compared to 
the same period of 1997.  Gross profit margin as a percent of revenues 
decreased 7.5% from 43.2% to 35.7% in the nine-month period ended July 31, 
1998, compared to the same period of 1997.
     
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and 
administrative expenses increased 10.8% from $4,394 to $4,867 in the 
nine-month period ended July 31, 1998 compared to the same period of 1997 due 
to increased costs associated with increased current and anticipated levels 
of business. Selling, general and administrative expenses as a percent of 
revenues increased to 20.8% as compared to 17.7% for the same periods.
     
     FOREIGN CURRENCY EXCHANGE GAINS AND LOSSES.  Foreign exchange losses 
were $431 net of gains for the nine-month period ended July 31, 1998 compared 
to losses of $637 in the same period of 1997.  Practically all losses were 
due to fluctuations in the exchange rate of the Thai baht.  To the extent 
that foreign currencies strengthen or weaken against the U.S. dollar, and the 
extent to which long-term contracts are denominated in foreign currencies, 
the Company will continue to experience translation and transaction gains and 
losses.

     INCOME TAXES.  Income taxes decreased to $637 in the nine-month period 
ended July 31, 1998, compared to $1,455 in the same period of 1997. The 
decrease is attributable to a reduction in the mix of U.S. source income 
versus foreign source income. The Company's effective consolidated tax rate 
was 17.2% in the nine-month period ended July 31, 1998, compared to 23.7% in 
the same period of 1997. The effective tax rate on U.S. source income was 
approximately 37.8% in the nine-month period ended July 31, 1998 compared to 
37.0% in the same period of 1997.

     BACKLOG.  The Company's backlog increased to approximately $79 million 
at July 31, 1998, including $35 million attributable to the Company's 
Philippines joint venture, from approximately $45 million at October 31, 
1997.  The Company's construction projects are awarded in a competitive 
bidding process. Due to the nature of the process the Company has experienced 
and may continue to experience significant delays in project awards which 
have caused and may continue to cause substantial variations in backlogs and 
quarterly results.

LIQUIDITY AND CAPITAL RESOURCES

     Management expects that the Company will have sufficient liquidity to 
meet ordinary future short-term and long-term business needs. Sources of 
liquidity generally available to the Company include cash from operations, 
availability under its credit facility, cash and cash equivalents, and the 
issuance of capital stock.

                                       9

<PAGE>

Operating Activities

     Net cash provided by operating activities was $434 for the nine months 
ended July 31, 1998, compared to $1,014 for the nine months ended July 31, 
1997. During the nine months ended July 31, 1998, the U.S. dollar equivalent 
of $3,790 was recorded as a claim receivable on the Empire Towers project to 
compensate the Company for a reduction in the U.S. dollar equivalent of 
accounts receivable due to the devaluation of the Thai baht.  As of July 31, 
1998, $2,908 of the $3,790 had been collected. (see "Factors That May Effect 
Future Results").
     
Investing Activities
     
     During the nine months ended July 31, 1998, the Company contributed $20 
to the startup of a curtain-wall fabrication joint venture in the PRC, $150 
to the startup of a joint venture in Mexico, and $200 to the startup of a 
joint venture in the Philippines.  Contributions totaled $273 in the same 
period of 1997.

     Expenditures for capital equipment during the nine months ended July 31, 
1998, totaled $152 compared to $171 for the same period of 1997.  Capital 
expenditures for the remainder of 1998 and first half of 1999 are expected to 
be approximately $8 million higher than those in 1997 due to planned 
increases in the Company's manufacturing and fabrication facilities.

Financing Activities

     During the quarter ended July 31, 1998, the Company completed the 
registration and issuance of 2,143,000 shares, including the underwriters 
over-allotment, of the Company's $0.0001 par value common stock resulting in 
net proceeds after deducting estimated issuance costs of approximately 
$14,666.  The proceeds of the offering will be used to establish or acquire 
an interest in a fabrication facility in the People's Republic of China, 
capital expenditures in connection with a joint venture in Mexico, capital 
expenditures at its Johnson City, Tennessee fabrication facility, working 
capital and general corporate purposes. Due to recent economic developments 
in Asia, the Company has delayed its plans to increase its manufacturing base 
in that area.

     The Company maintains $2,000 of revolving lines of credit at banking 
facilities in the United States and Hong Kong $500 of which was drawn at July 
31, 1998.  The net increase in short-term debt amounted to $37 in the nine 
months ended July 31, 1998, compared to $292 in the same period of 1997.
     
     During the nine months ended July 31, 1997, the Company declared and 
paid dividends of $109 to stockholders of record.

Effect of Exchange Rates on Cash

     The Company maintains foreign currency operating cash deposits and 
collateral in countries where the Company does business.  Such deposits and 
collateral are predominately used for construction projects in process and 
administrative matters.  During the nine months ended July 31, 1998, the 
Company gained approximately $142 due to the effect of exchange rates on cash 
compared to a loss of $38 during the same period of 1997.

General

     The Company attempts to structure payment arrangements with its 
customers to match costs incurred under projects.  To the extent the Company 
is not able to match costs, it relies on its cash reserves and its credit 
facility to meet its working capital needs.  As of July 31, 1998, the Company 
had working capital in excess of $24 million.

YEAR 2000 COMPLIANCE
 
     The Company believes that the software packages currently in use and 
expected to be in use prior to the year 2000 are year 2000 compliant. Other 
systems such as those in use by the Company's vendors, service providers, 
customers, or unconsolidated affiliates may not be year 2000 compliant. The 
Company does not expect that the financial impact of required modifications 
to the Company's software, if any, will be material to the Company's 
financial position, cash flows or results of operations in any given year.

                                       10

<PAGE>

EFFECT OF INFLATION

     During the past three years, the rate of inflation in many of the Asian 
countries in which the Company operates significantly exceeded that of the 
U.S. However, the Company generally has been able to reduce the impact of 
inflation on profitability by increasing the prices of its products and 
reducing operating costs. No assurance can be given that the Company will be 
able to minimize the impact of inflation on profitability in the future.

RECENTLY ISSUED ACCOUNTING STANDARDS

     SEGMENT INFORMATION -- In June 1997, the FASB issued SFAS No. 131, 
Disclosures About Segments of an Enterprise and Related Information, which 
supersedes portions of SFAS No. 14, Financial Reporting for Segments of a 
Business Enterprise. SFAS No. 131 is effective for the Company commencing in 
its year ending October 31, 1999. Company management has not completely 
assessed the effects of SFAS No. 131 on its segment reporting, however, it 
does not currently believe that there will be significant changes from the 
information currently being reported.

     COMPREHENSIVE INCOME -- In June 1997, the FASB issued SFAS No. 130, 
Reporting Comprehensive Income, which becomes effective for the Company 
commencing in its year ending October 31, 1999. Company management does not 
believe, based on current activities, that adoption of this statement will 
have a significant effect on its financial statements except to the extent 
that cumulative foreign currency translations are included in comprehensive 
income.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     GENERAL. The Company has experienced in the past, and expects to 
experience in the future, substantial variations in its results of operations 
in any quarterly or annual reporting period as a result of numerous factors, 
many of which are out of the Company's control.  The Company's operating 
results may vary because of: downturns in one or more segments of the 
construction industry; changes in economic conditions; the Company's failure 
to obtain or delays in awards of major projects; the cancellation or delay of 
major projects; or the Company's failure to timely replace projects that have 
been completed or are nearing completion.  Any of these factors could cause 
the Company's results of operations to fluctuate significantly from period to 
period, including on a quarterly basis.  The Company's projects are, and in 
the foreseeable future will continue to be, awarded by private or 
governmental entities in a competitive bidding process. Due to the nature of 
the bidding and award process, the Company has experienced, and in the future 
expects to experience, significant delays in project awards.  These delays 
have caused and will continue to cause substantial variations in quarterly 
results. In addition, no assurance can be given that the timing of a project 
award will be consistent with the Company's expectations.

     The Company's results of operations are affected primarily by: the level 
of commercial and government sponsored building construction in its principal 
markets; the Company's ability to win project contracts and its accuracy in 
project cost estimating; the Company's success in utilizing its resources 
efficiently; the Company's ability to complete contracts in a timely and 
cost-effective manner; and the mix of domestic and international projects. 
The level of commercial building construction activity is affected by many 
factors such as: local, regional, national and international economic and real 
estate conditions; interest rates; availability of financing; and office 
building occupancy rates in metropolitan areas in which the Company markets 
its services.  The level of government sponsored construction activity is 
influenced by the levels of tax revenues, the need for new or upgraded public 
facilities such as airports or courthouses and government spending policies 
and initiatives designed to stimulate local or regional economies.  The 
Company expects that publicly funded projects will continue to provide a 
significant portion of its revenues for the foreseeable future.

     INCOME TAXES.  Prior to acquiring FCAM the Company was not subject to 
U.S. income tax and earned most of its income in jurisdictions with no or 
relatively low income tax rates. The Company believes that it will continue 
to earn a significant portion of its income outside of the U.S. and that the 
majority of its offshore income will not be subjected to U.S. income tax. As 
revenues from U.S. projects increase relative to revenues from international 
projects, the Company's overall tax rate will increase.





     FOREIGN EXCHANGE RISKS. The Company generally attempts to mitigate 
foreign exchange risk by entering into contracts providing for payment in 
U.S. dollars instead of the local currency wherever possible, nonetheless 
local currency must be used to pay for local labor, raw materials or other 
local country costs of operations.  The

                                       11

<PAGE>
Company currently has contracts denominated in the Hong Kong dollar, Thai 
baht and Philippine peso. Future contracts may be denominated in the currency 
of other countries.
     
     Materials and services to perform project contracts are procured 
globally. Aluminum extrusion is typically the largest material cost and is 
generally denominated in U.S. dollars. Glass purchases are generally 
denominated in U.S. dollars unless sourced locally in a foreign locale. The 
expenses associated with erection services are generally denominated in local 
currency.  To the extent that foreign currencies weaken against the U.S. 
dollar, the Company will experience translation losses due to the revaluation 
of accounts payable, accounts receivable and other asset and liability 
accounts.
     
     The Company generally attempts to contract to secure compensation for 
devaluation of local currencies relative to the U.S. dollar. In these 
instances, although the Company may incur translation losses, the Company 
seeks to offset such losses by increases in the amount of local currency 
payable to the Company under contract so as to approximate the original U.S. 
dollar equivalent value of the contract. There can be no assurance that the 
Company will be successful in negotiating contracts with terms that maintain 
an U.S. dollar equivalency.
     
     As of July 31, 1998, the Company's backlog of non-US dollar based 
contracts totaled approximately $43 million.  Of that amount contract 
provisions to ensure U.S. dollar equivalency did not protect approximately 
$16 million.  At July 31, 1998, the Company maintained funds in Hong Kong 
dollars, Thai baht, and Philippine pesos for project operations, cash 
guarantees and operating costs totaling approximately $4 million.  Exchange 
rate fluctuations in local currency denominated contracts that do not have a 
U.S. dollar equivalency, and in bank exchange rates in general, could have a 
material adverse effect on the Company's financial position, results of 
operations, and cash flows.

     EMPIRE TOWERS PROJECT. The Company has a contract for work to be 
performed on the Empire Towers project located in Bangkok, Thailand (the 
"Empire Towers Contract") which is denominated in Thai baht.  Pursuant to a 
clause in the Empire Towers Contract, which provides protection for changes 
in government policy, the Company filed claims for change orders to recoup 
losses resulting from the devaluation of the baht and has reflected $882 of 
such claim as a receivable at July 31, 1998.
     
     In January 1998, the counterparty to the contract did not pay the amount 
billed on the scheduled payment date and requested that it be included in the 
final claim settlement.  In March 1998, the counterparty acknowledged 
liability for the baht-equivalent of approximately $3 million, and agreed to 
pay such amount in installments beginning in March 1998 through June 1998.  
On April 2, 1998, the Company received an acknowledgment from the 
counterparty for an additional $882 to be paid by July 31, 1998, which 
remained uncollected at July 31, 1998.
     
     At July 31, 1998, the total amounts due to the Company under the Empire 
Towers Contract (including exchange loss claims) are the baht-equivalent of 
$1,684.  As of July 31, 1998, the Company had collected the equivalent of 
$2,908 in relation to the claim for losses as a result of the baht 
devaluation. Management believes that all amounts due under the Empire Towers 
contract are collectable.  However, in the event of non-payment, the Company 
may be required to seek recourse through legal or other proceedings in 
Thailand or other non-U.S. jurisdictions, which could have a material adverse 
effect on the Company's financial position, results of operations, and cash 
flows.

     POLITICAL UNCERTAINTIES.  One of the Company's manufacturing affiliates 
is located in the People's Republic of China (PRC) outside the Hong Kong 
Special Administrative Region.  Due to recent economic developments in the 
region, the Company has delayed its plans to increase its manufacturing base 
in Asia. Economic development in the area may be limited as well by the 
imposition of measures intended to control economic conditions, the 
inadequate development of an infrastructure and the potential unavailability 
of adequate transportation, adequate power and water supplies, satisfactory 
roads and communications and raw materials and parts.  Changes in 
governmental policies, laws, regulations, or the interpretation thereof, or 
the imposition of restrictions on imports and sources of raw materials, 
increased taxes as well as general economic conditions including interest 
rates or rates of inflation could have a material adverse affect on the 
Company's financial position, results of operations, and cash flows.

                                       12

<PAGE>

PART II.  OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Information as of July 31, 1998, required by Item 701(f) of Regulation S-K is 
set forth below:

The Company's registration statement on Form S-1, Commission file number 
333-43793, for 2,000,000 shares of the Company's common stock was filed with 
the Commission and was declared effective on May 21, 1998. All of the shares 
offered to the public were sold by the termination date of May 28, 1998. On 
July 3, 1998, the Company's underwriters exercised their option with respect 
to an over-allotment of 143,000 shares of common stock.  The aggregate price 
of the 2,143,000 shares was $17,144,000.

                           FLOUR CITY INTERNATIONAL, INC.
                                    COMMON STOCK
                      EXPENSES OF ISSUANCE AND USE OF PROCEEDS
                                AS OF JULY 31, 1998
                                   (in thousands)
<TABLE>
<S>                                                                   <C>
          Aggregate offering price of amount sold to date             $  17,144 
          Expenses of issuance:
             Underwriters discount                                        1,286 
             SEC registration fee                                             9 
             NASD filing fee                                                  3 
             NASDAQ National Market listing fee                              67 
             Blue sky fees and expenses including legal fees                 15 
             Printing costs                                                  260 (note 1)
             Registrar and Transfer Agent fees                                 5 (note 1)
             Legal fees and expenses                                         370 (note 1)
             Underwriters nonaccountable expense allowance                   257 
             Accounting fees and expenses                                    175 (note 1)
             Miscellaneous                                                    31 (note 1)
                                                                      ----------
                Total expenses of issuance                                 2,478 (note 1)
                                                                      ----------
          Net proceeds                                                    14,666 
          Use of proceeds:
             Direct or indirect payment to directors,
                officers, 10% owners, affiliates and others                    - (note 2)
             Proceeds used for construction of plant, building,
                and facilities                                                 - (note 2)
             Proceeds used for purchase and installation of 
                machinery and equipment                                       10 
             Proceeds used for investment in joint ventures                  334 
             Proceeds used for working capital                             2,505 
             Temporary investments in U.S. Government 
                securities, 1-A commercial paper,
                and cash deposits
                                                                      ----------
                                                                      $   11,817 
                                                                      ----------
                                                                      ----------
                                                                      
</TABLE>

          Notes:
          1 - estimated as of July 31, 1998
          2 - none expended as of July 31, 1998

                                       13

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS
     
     11   Calculation of Earnings Per Share
     
     27.1 Financial Data Schedule
     
(b)  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the quarter ended July 31, 1998.


                                     SIGNATURES
                                          
                                          
Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned, thereunto duly authorized, on the 14th day of September, 1998.

FLOUR CITY INTERNATIONAL, INC.



/s/ ROBERT O. BRUCE
-----------------------
Robert O. Bruce
Chief Financial Officer

                                       14