<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                                   FORM 10-KSB

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

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

For the fiscal year ended  August 31, 2000    Commission File Number    0-2331
                          -----------------                            --------

                               GLASSMASTER COMPANY
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          South Carolina                                        57-0283724
----------------------------------------                   ---------------------
      (State of incorporation)                             (IRS Employer ID No.)

      PO Box 788, Lexington SC                                      29071
----------------------------------------                   ---------------------
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number, including area code:   803-359-2594
                                                --------------------------------

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

Securities registered pursuant to Section 12 (g) of the Exchange Act:
  Title of Class:    Common Stock, par value $.03 per share
                  --------------------------------------------------------------

Indicate by an "X" whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days.      YES [X]    NO [ ]

Indicate by an "X" if disclosure of delinquent filers in response to Item 405 of
regulation S-B is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.    [X]

State issuer's revenues for its most recent fiscal year.     $21,546,782   .
                                                         ------------------

The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $874,756 as of October 31, 2000, based on the
average high and low sales price of $1.211 per share.

The number of shares outstanding of the registrant's common stock, as of October
31, 2000 was 1,630,696 shares.


                       DOCUMENTS INCORPORATED BY REFERENCE

The information set forth under items 9, 10, 11, and 12 of Part III of this
report is incorporated by reference from the issuer's definitive proxy statement
for the 2001 annual meeting of stockholders that will be filed no later than
December 31, 2000.

<PAGE>   2

                                     PART I

Item 1.  Business

    (a)(b) General Development and Narrative Description of Business

           Glassmaster Company (the "Company") is a diversified manufacturer of
thermoplastic and thermoset plastic materials, industrial controls, and
electronics which produces a variety of product lines to supply customers
throughout multiple industries. The Company classifies its business into two
operating segments: Industrial Products, consisting of extruded synthetic
monofilaments and pultruded fiberglass and composites and; Controls and
Electronics, consisting of mechanical and electronic controls and electronic
test equipment. For segment and geographic information, see Note 13 of Notes to
Financial Statements.

           The Company was founded in 1946 and incorporated under the laws of
the State of South Carolina. The Company manufactured only fiberglass pleasure
boats until 1982 when, due to the cyclical nature of the pleasure boat business,
the Company began to diversify into industrial-related manufacturing. During
1982 and 1983 the Company developed from within manufacturing facilities to
produce extruded monofilaments and fiberglass antennas. In 1988, the Company
purchased the industrial controls business to further diversify and expand its
line of industrial-related products, and Glassmaster Controls Company, Inc. was
formed. In 1989, the company discontinued the manufacture and sale of fiberglass
boats.

           In recent years, the Company has expanded its product offerings to
include electronic test equipment (the Amtest line of test equipment was
acquired by Glassmaster Controls Company, Inc. in October, 1997) and has
internally developed the capability to provide contract manufacturing services
that produce customized electronic products, including circuit boards utilizing
surface mount and through-hole technologies. Management believes the addition of
electronic capabilities will leverage its ability to provide its existing
customer base with more complete product solutions as well as entice new
customers by offering vertically integrated, mechanical and electronic contract
manufacturing.

           During 1998 and 1999 the Company developed and introduced the
Glassmaster Composite Modular Building System(TM), which is a t-slotted
framework system used in a wide variety of industrial applications, including
machine frames, guarding and enclosures, workstations and tables, and shelving
for storage.

           During the fourth quarter of 1999, the Company announced its decision
to discontinue the manufacture and sale of its marine antennas and other low
margin product lines and in October, 1999 completed the sale of certain related
assets. See Note 12 of Notes to Financial Statements for further discussion.

           There have been no bankruptcy, receivership, or similar proceedings
against the company since its inception. During the last three years there has
been no material acquisition or disposition of any significant amount of assets
other than that described above or in the ordinary course of business.

           The Company's common stock was first offered to the public in 1959
and currently has approximately 1,200 stockholders. The Company's common stock
is currently traded on the Over-the-Counter Bulletin Board (symbol: GLMA.OB).

INDUSTRIAL PRODUCTS

           The Company's Monofilament Division extrudes monofilaments from
nylon, polyester, polyolefins and other engineering resins for use in a wide
array of markets and applications including textiles (sewing thread), lawn and
garden care (trimmer line), recreational products (fish line), and industrial
weaving and industrial filtration. Monofilament, as produced by the Company,
begins with a thermoplastic resin which is processed through a melting device
(extruder) and subsequently oriented to form single strand fibers of various
diameters, tensile strengths and moduli. Specialized monofilaments for
industrial applications are manufactured for use in other major industries
including paper machine clothing for the paper industry and abrasive bristles
for brushes used in metal and wood finishing. The Company markets its
monofilament products primarily on a private brand basis, which are sold by in
house sales efforts and commissioned sales representatives to original equipment
manufacturers and distributors throughout North America and, to a lesser degree,
Europe, South America, and the Pacific Rim.

<PAGE>   3

Item 1.  Business (Cont'd)

           The Company's Composites Division manufactures pultruded fiberglass
(thermoset) and composite profiles that are used in the assembly of the
Glassmaster Composites Modular Building System(TM). This product line is sold by
in house sales efforts to original equipment manufacturers and distributors
throughout North America.

CONTROLS AND ELECTRONICS

           The Company, through its wholly-owned subsidiary, Glassmaster
Controls Company, Inc., located in Kalamazoo, Michigan, manufactures and
assembles a wide range of industrial controls, including mechanical cable and
wire assemblies, mechanical and electronic HVAC instrument panels, and circuit
board-based electronic controls and modules. Industrial controls are used
primarily in medium and large capacity trucks and to a lesser degree,
automobiles, farm equipment, and recreational boats and are sold to original
equipment manufacturers throughout North America by in-house sales efforts and
commissioned manufacturers sales representatives. The Company also manufactures
and assembles the Amtest line of vehicle test equipment used by mechanics,
rebuilders, fleets, and garages to analyze and repair automotive and truck
engines and their related electronic devices. Amtest vehicle test equipment is
sold by in-house sales efforts to distributors throughout North America. The
company also offers custom electronic products utilizing surface mount (SMT) and
through hole circuit board contract assembly that are sold by in-house sales
efforts and manufacturers sales representatives primarily to original equipment
manufacturers in North America.

           The names "Glassmaster", "CompCore", "NYBRAD", and "Glassmaster
Composite Modular Building System" are registered trademarks of the Company. The
Company has applied for a U.S. Patent for its recently introduced product, the
"Glassmaster Composite Modular Building System".

           The Company believes it is a significant competitor in the United
States market for specialty monofilament products. While firm price competition
can be experienced within some lines of the monofilament and flexible wire
control products, overall, the Company produces products which center on
performance, engineering and customer service and it is these product lines
which provide the Company with a stable revenue base. Sales and profitability
growth are dependent to varying degrees upon favorable economic conditions and
penetration into the industrial textile, paper machine clothing, and domestic
truck manufacturing industries, as well as acceptance of recently introduced
electronics and composites products. Unfavorable weather conditions can have an
impact on monofilament trimmer line sales.

           Sales of the Company's industrial products are somewhat seasonal with
sales to the lawn and garden care markets concentrated in the second and third
quarters of the fiscal year (December - May). While some fluctuations in
inventory levels will occur from time to time, the Company is not required to
carry significant amounts of inventory to meet delivery requirements or to carry
unusually large amounts of materials and supplies to insure itself of a
continuous allotment of goods from suppliers. The Company does not provide
extended payment terms to its customers in excess of those normally offered for
these industries. Other than as described in Note 13 of Notes to Financial
Statements, the dependence upon any one customer or small group of customers is
not material. The Company currently offers no product or service requiring
government approval and the effect of existing or probable government
regulations on the operations of the Company is considered to be immaterial.

           At August 31, 2000, the order backlog was $1,948,006 compared to
$1,868,155 at August 31, 1999.

           The Company has no full-time employees engaged in research and
development activities, however, certain employees at each of the Company's
manufacturing locations spend a portion of their time in new product development
and process improvement. Expenditures for research and development were
approximately $499,000 in 2000 and $912,000 in 1999.

           No material effects have resulted from compliance with federal,
state, and local provisions regulating the discharge of materials into the
environment, or any other regulations protecting the environment. The Company
does not expect to make any material capital expenditures for environmental
control facilities for the current or succeeding fiscal year.

           The Company and its subsidiary furnished employment for approximately
198 persons at August 31, 2000 and 207 persons at August 31, 1999.

<PAGE>   4

Item 2.  Properties

           General corporate offices, the monofilament manufacturing facilities
(Plant I & II), and the Monofilament Division offices are located at 126
Glassmaster Road in Lexington, South Carolina. The total facility is composed of
170,000 square feet, and is owned by the Company in fee simple.

           The Company operates its Composites Division offices and
manufacturing plant at 71 Industrial Park Road in Newberry, South Carolina. The
total facility is composed of 31,000 square feet and is owned by the Company in
fee simple. During September and October, 2000, the company relocated its
Composites Division operations to the Lexington, SC facility and the Newberry,
SC facility is now on the market to be sold.

           Glassmaster Controls Co., Inc. operates its industrial controls
business at 831 Cobb Ave. in Kalamazoo, Michigan. The total facility is composed
of 109,000 square feet and is owned by the Company in fee simple.

           The Company believes that facilities are adequate for the immediate
future, and that the machinery and equipment used in these facilities are well
maintained and in good operating condition. Estimated percentage utilization
capacities during the year ended August 31, 2000 were as follows: Monofilament
Plant - 80%; Composites Plant - 15%; Controls Plant - 50%.

Item 3.  Legal Proceedings

There are no material pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders

           There were no matters submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.

Item 5.  Market for Registrants Common Equity and Related Stockholder Matters

(a)(1) The Company's common stock traded on The Nasdaq SmallCap Market tier of
the Nasdaq Stock Market under the symbol GLMA. On November 8, 1999 the Company's
common stock was de-listed from Nasdaq due to minimum market value of public
float requirements. As of November 8, 1999 the Company's common stock trades on
the Over-the-Counter market Bulletin Board under the symbol GLMA.OB.

(a)(1)(ii)The table below sets forth the high and low sales price per share
during each quarter in the last two years as quoted on the Small Cap Market tier
of the Nasdaq Stock Market.

          Quarter Ending                    High              Low
          --------------                    ----              ---
          August 31, 1998                   2.500            1.500
          November 30, 1998                 1.750            1.750
          March 1, 1999                     2.500            1.000
          May 31, 1999                      1.375             .938
          August 31, 1999                   1.094            1.094
          November 28, 1999                 1.156             .813
          February 27, 2000                 3.375             .250
          May 28, 2000                      2.500             .813
          August 31, 2000                   1.344            1.125

Since September 1, 2000 and to the date of this report, the high and low sales
price per share was $1.297 and $1.031, respectively.

   (b)     There were 1,154 shareholders of record at October 31, 2000.

(c)(1) On October 24, 1997, Directors of the Company declared a cash dividend of
$.03 per common share payable on or about January 30, 1998 to stockholders of
record on January 9, 1998. No other dividends have been declared or paid in the
last three years.

(c)(2) According to the terms of a financing agreement, the Company is
restricted from paying cash dividends unless approved by the lending
institution.

<PAGE>   5

                                     PART II

Item 6.  Management's Discussion and Analysis

Review of Operations

                           Comparison of 2000 to 1999

    Consolidated sales increased 2.5% to $21.5 million during the fiscal year
ended August 31, 2000 compared to prior year sales of $21.0 million. The net
loss for the year was $635,813, or $0.39 per share compared to a net loss of
$995,984, or $0.61 per share last year. The prior year loss includes
non-recurring, after-tax charges of $459,000, or $.28 per share, that were
associated with the Company's decision to discontinue certain product lines.

           NET SALES. Industrial Products segment sales increased 8.8% to $15.8
million, in fiscal year 2000, from $14.6 million during 1999. Sales of specialty
monofilaments increased 14.1% compared with the prior year, primarily due to
revenue from new products recently developed for industrial applications. Sales
of bulk and packaged nylon trimmer line and Nybrad(R) abrasive monofilaments
also improved compared to the prior year, while sewing thread sales declined for
the second consecutive year as difficult market conditions in the North American
textile industry continue. Composites Division sales declined 74% this fiscal
year compared to the prior year due to discontinued product lines and the sale
of the marine antenna business. Sales of the Composite Modular Building
System(TM) improved by 140% versus the prior year period. While revenues from
this product line, introduced in 1999, have been below expectations, a major
industrial supply company, with nationwide distribution, will include this
product line in its 2001 catalog and further sales increases are anticipated as
a result of the additional exposure.
    Controls and Electronics segment sales declined 11.5% to $5.7 million
compared to the prior year due to a slowdown in the heavy truck and bus
manufacturing industry and the discontinuance of a certain product class
resulting from a truck model engineering change. Sales of electronic assemblies
and test equipment gained as the 2000 fiscal year progressed and were ahead of
the prior year by 26%. While the slowdown in truck and bus manufacturing is
expected to continue well into 2001, expanding sales of recently developed
electronic controls and circuit boards should allow overall revenue in the
controls and electronics segment to increase in fiscal 2001.

           GROSS PROFIT. Total gross profit increased more than 20%, from $2.03
million last year to $2.47 million during the 2000 fiscal year, however, the
prior year cost of goods sold included a charge of $599,260 to write down
inventories associated with discontinued product lines. Net of this charge,
prior year gross profit was $2.63 million, or 12.4% of sales versus $2.47
million, or 11.5% of sales this year. The decline in year over year adjusted
gross profit is primarily due to lower sales and related manufacturing
throughput at Controls, as well as higher variable manufacturing expenses
associated with employee benefit costs at Controls. While increased sales and
related throughput at Monofilament led to slightly higher margins at the
division level, disappointing manufacturing performance during the second half
of the fiscal year, when monofilament orders and shipments were accelerating,
restrained gross profit growth there and contributed to the small decline in
consolidated gross profit. Manufacturing process improvements and cost
adjustments are being implemented at all operating divisions and, with continued
increases in revenue anticipated from new product sales, consolidated
comparative gross margins are expected to improve during the 2001 fiscal year.

           EXPENSES. Total expenses declined 11.2% to $2.71 million this year
from $3.05 million last year. Included in the prior year total was a $114,297
loss on the sale of assets related to the discontinued marine antenna product
line. Net of this amount, total expenses declined by approximately $227,000, or
7.8%, when compared to the adjusted prior year total, primarily due to
non-recurring credits and miscellaneous income at Controls and Composites and,
to a lesser degree, selling and administrative expense reductions at Composites.

<PAGE>   6

Item 6.  Management's Discussion and Analysis(Cont'd)

                       Comparison of 2000 to 1999(Cont'd)

           INCOME FROM OPERATIONS. The loss from operations was $239,801 in the
2000 fiscal year, declining from a loss of $1,020,619 during the previous year.
Higher sales and gross profit at Monofilament and a reduced operating loss at
Composites produced an operating profit at the Industrial Products segment of
$412,458 this year compared with a segment operating loss of $681,654 in the
prior fiscal year. Income from operations at the Controls and Electronics
segment declined to $121,097 this year versus $397,403 last year, due to lower
sales and corresponding gross profit.

           INTEREST EXPENSE. Interest expense increased to $758,136 this year
compared with $669,006 in the previous fiscal year. The increased interest
expense is primarily due to higher average borrowings to support working capital
and finance additional electronics equipment at Controls, coupled with higher
average interest rates on short term borrowings.

           PROVISION FOR INCOME TAXES. The Company has recognized a total
benefit from income taxes in the current year of $362,124, compared with a
benefit of $693,641 in the prior year. The benefit recognized in the current and
prior year relate primarily to deferred taxes due to federal and state net
operating loss carry-forwards that will be used to offset future taxable income.


                           Comparison of 1999 to 1998
                      (Excerpted from the 1999 Form 10-KSB)

    Consolidated sales for the fiscal year ended August 31, 1999 were $21.0
million compared to $24.6 million last year, a decrease in sales of 14.3%. The
net loss for the year was $995,984, or $.61 per share. The loss includes
non-recurring, after-tax charges of $459,000, or $.28 per share, that were
associated with the Company's decision to discontinue certain product lines. Net
income last year was $119,434, or $.07 per share.

           NET SALES. In the industrial products segment, sales declined 20% to
$14.6 million from $18.1 million in 1998. Sales of monofilament products
decreased 18% compared with the prior year, due to declines in shipments of
textile related weaving filaments and sewing thread, and nylon trimmer line.
Difficult market conditions in the North American textile industry caused by
competitive pressures from Asian imports impacted demand from Monofilament
Division customers doing business in these markets. Sales of nylon trimmer line
were lower primarily due to the decision by a key customer, involved in the
re-packaging of bulk trimmer line for sale into the retail market, to
discontinue their re-packaging division because of pricing pressures from the
large retailers. The decline in sales of bulk line to this customer was
partially offset by expanded internal winding and packaging capabilities that
enabled sales of re-packaged line directly to the retail distribution chain.
Sales of monofilament are expected to improve as textile-related markets slowly
recover and current and potential customers complete the product evaluation
process of recently developed specialty monofilaments.
    At the Composites Division, sales declined approximately 44% from the prior
year due to discontinued product lines, lower sales of marine antennas, and
disappointing sales of the recently introduced product, The Glassmaster
Composite Modular Building System(TM). At the end of the 1998 fiscal year, this
division discontinued the manufacture and sale of pultruded fiberglass handles,
used primarily in lawn, garden, and home tools, which accounted for
approximately half of the 44% decline in sales. The lower sales of marine and CB
antennas accounted for the remainder of the decrease in Composites division
sales. Due to declining sales and changing technologies, and to concentrate its
full efforts on the new Glassmaster Composite Modular Building System(TM), the
Composites Division announced during the 1999 fourth quarter that the
manufacture and sale of fiberglass marine and CB antennas would be discontinued.
Certain assets related to this product line were sold in October, 1999 (refer to
Note 12 of Notes to Financial Statements for further information). While sales
of the new product line, the Glassmaster Composite Modular Building System(TM),
have been modest to date during customer product evaluation, new distributor
agreements have been formulated and additional sales and design support is now
available. Improved results for this product line are expected in the 2000
fiscal year.
    In the controls and electronics segment, Glassmaster Controls Company
("Controls") sales increased 1.5% to $6.5 million, compared to last year's $6.4
million, due to improved electronic product sales and steady demand from its
base of heavy truck manufacturing customers that offset slow sales to farm
equipment manufacturers. Expanded circuit-board manufacturing capacity and new
product engineering and development efforts should allow further sales growth in
the electronics product line as the 2000 fiscal year progresses.

<PAGE>   7

Item 6.  Management's Discussion and Analysis(Cont'd)


                       Comparison of 1999 to 1998(Cont'd)
                      (Excerpted from the 1999 Form 10-KSB)

           GROSS PROFIT. Total gross profit declined from $3.9 million last year
to $2.0 million this year, due to the decrease in sales at Monofilament and
non-recurring charges at Composites. When expressed as a percent of sales, gross
profit was 9.6% of sales this year, down from 16.1% of sales in the prior year.
As discussed more fully in Note 12 of Notes to Financial Statements, $599,260
was charged to Composites cost of goods sold to write down inventories
associated with discontinued product lines. Absent this charge, gross profit was
$2.6 million, or 12.4% of sales this year, still well below the prior year's
16.1% of sales and primarily due to the costs associated with maintaining a
trained, technical workforce at Monofilament, notwithstanding lower sales and
reduced production requirements. Gross profit margins, expressed in dollars and
as a percentage of sales, will improve as sales and related manufacturing
throughput increase at Monofilament and new product sales at Composites and
Controls begin to contribute higher margin revenue.

           EXPENSES. Total expenses were down from $3.1 million last year to
$3.0 million this year. Included in the current year total was a $114,297 loss
on the sale of assets related to the discontinued marine antenna product line.
Net of this amount, total expenses declined by approximately $180,000, primarily
due to lower variable selling expenses, which decreased in tandem with the lower
industrial products sales volumes.

           INCOME FROM OPERATIONS. Income (Loss) from Operations was
($1,020,619) in the current year versus an operating profit of $826,948 last
year. Lower sales and gross profit at Monofilament and non-recurring charges at
Composites caused a loss from operations at the industrial products segment of
$681,654 this year compared with operating income of $1.2 million last year.
Income from operations at the controls and electronics segment declined to
$397,000 this year compared to $434,000 last year, due to higher fixed costs
associated with the expanded electronics product line.

           INTEREST EXPENSE. Interest expense increased to $669,000 this year
compared with $628,000 in the previous fiscal year. The increased interest
expense is primarily due to higher average short-term borrowings required to
support working capital.

           PROVISION FOR INCOME TAXES. The Company has recognized a total
benefit from income taxes in the current year totaling $693,641. The current
portion of the income tax benefit ($83,515) is due to a federal net operating
loss carryback, for which the Company will receive a cash refund of prior taxes
paid. The deferred portion of the income tax benefit relates primarily to
federal and state net operating loss carry-forwards that will be used to offset
future taxable income. Income tax expense in the last fiscal year was $79,108.


Liquidity and Capital Resources

   Cash provided (used) by operating activities was ($230,952) this fiscal year
compared with $56,653 during the prior year. The decline in cash from operations
is due to increases in accounts receivable and inventories attributable to
higher sales and manufacturing activity at Monofilament in the current year
versus the prior year period.

   Cash used by investing activities increased slightly to $676,034 this year
compared to $640,140 last fiscal year. The increase is due to higher capital
spending at Controls to expand electronics production capacity. The additional
investment in fixed assets was mostly offset by a decline in cash surrender
values of life insurance as a result of cash values that were extracted from
certain key-man life insurance policies covering individuals no longer employed
by the company.

   Net cash provided by financing activities was $970,710 this year versus
$566,978 in the prior fiscal year. Additional long-term debt at Controls,
associated with capital equipment acquired to expand electronics production
capabilities and to refinance existing long-term mortgage debt that was
maturing, combined with additional term debt to finance acquisition of extrusion
equipment at Monofilament, account for the increase. During the first quarter of
the 2001 fiscal year, Glassmaster Controls invested $100,000 to acquire
equipment to expand its metal fabrication capabilities that will be required for
new business that will initiate during the third quarter of this fiscal year.
The company entered into a five-year term loan to fund this purchase. No other
material capital expenditures are currently planned.

<PAGE>   8

Item 6.  Management's Discussion and Analysis(Cont'd)


   The company sustained net loses of $635,813 and $995,984 during fiscal years
ended August 31, 2000 and 1999, respectively, and as a result, are in violation
of certain financial covenants contained in its primary lending agreements.
These agreements currently provide a revolving working capital line of credit
and long term equipment and real estate financing for the industrial products
segment in South Carolina. The lender currently providing a $2.5 million working
capital credit line has informed the company that it will not be renewing this
credit facility and has asked the company to find an alternative funding source
by December 31, 2000. The company has received a commitment, pending due
diligence, from the lender currently providing its long term financing, that it
will take over the credit line and provide the company with its working capital
for a period of one year. This lender has waived the financial loan covenants
for the current year and will include revised covenants as part of the proposed
new financing agreements. It is currently anticipated the revolving credit
facility with be funded by December 31, 2000.

   To further enhance the working capital position of the company, the company
intends to issue up to $500,000 in subordinated convertible debentures. These
debentures will be issued for a five year period and will be convertible into
the common stock of the company at the end of two years. The debentures will be
sold in a private placement during the second quarter of the 2001 fiscal year.


   During the first quarter of the 2001 fiscal year, the company relocated its
Composites Division operations in Newberry, South Carolina to its Lexington,
South Carolina facility. This consolidation of operations will reduce operating
expenses and make better use of under utilized manufacturing space in Lexington.
The Newberry facility is now on the market to be sold and the company intends to
use the proceeds from the sale to reduce outstanding debt.

   The company currently anticipates that its cash requirements during the 2001
fiscal year will be provided from operations and from borrowings under existing
and committed credit lines as well as proceeds from the convertible debentures.



Item 7.  Financial Statements

           Financial Statements of Glassmaster Company and the Notes to
Financial Statements for the fiscal years ended August 31, 2000 and 1999 appear
on pages 12 through 23, the Index to the Exhibits and Exhibits appear on pages
25 through 27, and the Report of Independent Auditors appears on page 24 of this
report.



Item 8.  Changes in Disagreements with Accountants on Accounting and Financial
Disclosure

           There have been no changes in or disagreements with accountants on
accounting financial disclosures.

<PAGE>   9

                                    PART III

Items 9, 10, 11, and 12. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16 (a) of the Exchange Act; Executive
Compensation; Security Ownership of Certain Beneficial Owners and Management;
and Certain Relationships and Related Transactions.

           Information for items 9-12 of this report appears in the Proxy
Statement for the 2001 Annual Meeting of Shareholders to be held on January 19,
2001 and is incorporated herein by reference.




                                     PART IV


Item 13.  Exhibits and Reports on Form 8-K

    (a)    Exhibits (numbered in accordance with Item 601 of Regulation S-B)

           Exhibit No.                          Exhibit
           -----------                          -------

               3.1                          Amended and Restated Certificate of
                                            Incorporation of the Company, filed
                                            as Exhibit 3.1 to Form 10-K for the
                                            year ended August 31, 1991 and
                                            incorporated herein by reference.

               3.2                          Amended and Restated Bylaws of the
                                            Company, filed as exhibit 3.2 to
                                            Form 10-K for the year ended August
                                            31, 1991 and incorporated herein by
                                            reference.

              10                            Amended and restated Glassmaster
                                            Company 1992 Incentive Stock Option
                                            Plan, filed as exhibit 10 to Form
                                            10-KSB for the year ended August 31,
                                            1993 and incorporated herein by
                                            reference.

              11                            Statement re Computation of Per
                                            Share Earnings

              21                            Subsidiaries of the Registrant

              27                            Financial Data Schedule (SEC use
                                            only)

    (b)    Reports on Form 8-K

           No reports on Form 8-K were filed during the fourth quarter of the
           fiscal year ended August 31, 2000.

<PAGE>   10

                                   Signatures


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



GLASSMASTER COMPANY


By   /s/ Raymond M. Trewhella                By   /s/ Steven R. Menchinger
  ------------------------------------          --------------------------------
    Raymond M. Trewhella, President              Steven R. Menchinger, Corporate
     (Principal Executive Officer)                  Controller and Treasurer
                                                  (Principal Financial Officer)
                                                  (Principal Accounting Officer)

Date      November 30, 2000                  Date      November 30, 2000
     ---------------------------------            ------------------------------



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


By   /s/ Stephen W. Trewhella               By    /s/ Raymond M. Trewhella
  -----------------------------------          ---------------------------------
     Stephen W. Trewhella, Director             Raymond M. Trewhella, Director

Date      November 30, 2000                 Date       November 30, 2000
     --------------------------------            ------------------------------


By     /s/ H. D. Harrelson                  By     /s/ Melvin L. Chavis
  -----------------------------------          ---------------------------------
       H. D. Harrelson, Director                  Melvin L. Chavis, Director

Date      November 30, 2000                 Date       November 30, 2000
     --------------------------------            ------------------------------


By       /s/ James F. Kane
  -----------------------------------
       James F. Kane, Director

Date      November 30, 2000
     --------------------------------

<PAGE>   11

                               GLASSMASTER COMPANY

                                  LEXINGTON, SC

                              FINANCIAL STATEMENTS

                   FISCAL YEARS ENDED AUGUST 31, 2000 AND 1999



                                                    Page No.
                                                    --------

       Balance Sheet .................................12
       Statement of Stockholders Equity ..............13
       Income Statement ..............................14
       Statement of Cash Flows .......................15
       Notes to Financial Statements .................16-23

       Independent Auditor's Report ..................24

<PAGE>   12

                               GLASSMASTER COMPANY
                                  LEXINGTON SC
                                  BALANCE SHEET
                            AUGUST 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                            August 31, 2000                 August 31, 1999
                                                       -------------------------        ------------------------
<S>                                                     <C>             <C>              <C>             <C>
Assets
------
Cash                                                                    $  190,021                       $  126,297
Accounts Receivable - Trade                             $3,404,922                       $2,737,998
Less:  Allowance for Doubtful Accts                         53,050       3,351,872           61,643       2,676,355
                                                        ----------                       ----------
Accounts Receivable - Other                                                 17,522                          144,884
Inventories                                                              3,172,858                        2,832,108
Prepaid Expenses                                                           174,957                           70,110
Income Tax Refund Receivable                                                                                 83,515
Deferred Income Taxes                                                       19,572                           15,878
                                                                       -----------                      -----------
Current Assets                                                           6,926,802                        5,949,147
--------------

Fixed Assets (Net of Depreciation)
------------
   Manufacturing Property                                                5,581,579                        5,696,875

Other Assets                                                               952,872                          630,276
------------                                                           -----------                      -----------

Total Assets                                                           $13,461,253                      $12,276,298
------------                                                           ===========                      ===========


Liabilities
-----------
Accounts Payable                                                         2,343,844                        1,404,325
Accrued Expenses                                                           208,326                          297,787
Notes and Mortgages Payable - Current                                    3,574,664                        2,913,952
                                                                       -----------                      -----------
Current Liabilities                                                      6,126,834                        4,616,064
-------------------

Other Liabilities
-----------------
   Notes and Mortgages Payable -
         Long Term                                                       5,114,622                        4,804,624
                                                                       -----------                      -----------

Total Liabilities                                                       11,241,456                        9,420,688
-----------------

Stockholders' Equity
--------------------
Capital Stock (Authorized 5,000,000 Shares
   $.03 Par - 1,630,696 Shares Issued
   and Outstanding)                                         48,921                           48,921
Paid-In Capital                                          1,357,840                        1,357,840
Donated Capital                                            124,210                          124,210
Retained Earnings                                          688,826       2,219,797        1,324,639       2,855,610
                                                           -------     -----------        ---------     -----------

Total Liabilities and Equity                                           $13,461,253                      $12,276,298
----------------------------                                           ===========                      ===========
</TABLE>


                 The accompanying notes to financial statements
                    are an integral part of this statement.

<PAGE>   13

                               GLASSMASTER COMPANY
                                  LEXINGTON SC
                        STATEMENT OF STOCKHOLDERS EQUITY
                   FISCAL YEARS ENDED AUGUST 31, 2000 AND 1999



                                        August 31, 2000      August 31, 1999
                                        ---------------      ---------------

Capital Stock:
-------------
   Balance - September 1                  $   48,921           $   48,837
   Proceeds from Sale of Shares
      Under Stock Option Plan                                          84
                                          -----------          ------------
   Balance - August 31                        48,921               48,921
   -------------------                    -----------          ------------

Additional Paid In Capital:
--------------------------
   Balance - September 1                   1,357,840            1,355,124
   Proceeds from Sale of Shares
      Under Stock Option Plan                                       2,716
                                          -----------          ------------
   Balance - August 31                     1,357,840            1,357,840
   -------------------                    -----------          ------------

Donated Capital:                             124,210              124,210
---------------                           -----------          ------------

Retained Earnings:
-----------------
   Balance - September 1                   1,324,639            2,320,623
   Net Income (Loss)                        (635,813)            (995,984)
   Common Stock Dividends Paid
                                         ------------          ------------
   Balance - August 31                       688,826            1,324,639
   -------------------                   ------------          ------------

Total Stockholders Equity                 $2,219,797           $2,855,610
-------------------------                ============          ============


                 The accompanying notes to financial statements
                    are an integral part of this statement.

<PAGE>   14

                               GLASSMASTER COMPANY
                                  LEXINGTON SC
                                INCOME STATEMENT
                   FISCAL YEARS ENDED AUGUST 31, 2000 AND 1999


                                              August 31, 2000   August 31, 1999
                                              ---------------   ---------------

Sales                                            $21,546,782       $21,024,882
-----
  Cost of Sales                                   19,081,495        18,998,635
                                                 ------------      ------------

Gross Profit on Sales                              2,465,287         2,026,247
---------------------

Expenses
--------
  Selling Expense                                  1,118,767         1,131,315
  General and Administrative and Other Expense     1,575,583         1,889,672
  Provision for Doubtful Accounts                     10,738            25,879
                                                 ------------      ------------
      Total Expenses                               2,705,088         3,046,866
                                                 ------------      ------------

Income (Loss) from Operations                       (239,801)       (1,020,619)
-----------------------------

  Interest Expense                                   758,136           669,006
                                                 ------------      ------------

Income (Loss) Before Income Taxes                   (997,937)       (1,689,625)
---------------------------------

Provision for Income Taxes
--------------------------
  Current                                             12,271           (83,515)
  Deferred                                          (374,395)         (610,126)
                                                 ------------      ------------
      Total - Provision for Income Taxes            (362,124)         (693,641)
                                                 ------------      ------------

Net Income (Loss)                                $  (635,813)      $  (995,984)
-----------------                                ============      ============


Earnings (Loss) Per Common Share
--------------------------------
  (Basic and Diluted)
  -------------------
  Income from Continuing Operations              $      (.39)      $      (.61)
  ---------------------------------              ============      ============

      Net Income (Loss) Per Share                $      (.39)      $      (.61)
      ---------------------------                ============      ============



                 The accompanying notes to financial statements
                    are an integral part of this statement.

<PAGE>   15

                               GLASSMASTER COMPANY
                                  LEXINGTON SC
                             STATEMENT OF CASH FLOWS
                   FISCAL YEARS ENDED AUGUST 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                          August 31, 2000       August 31, 1999
                                                                          ---------------       ---------------
<S>                                                                        <C>                   <C>
Cash Flows From Operating Activities
------------------------------------
   Net Income (Loss)                                                         ($635,813)              ($995,984)
   Adjustments to Reconcile Net Income to Net Cash
    Provided (Used) by Operating Activities:
      Depreciation & Amortization                                              855,435                 910,324
      Increase (Decrease) in Deferred Income Taxes                            (374,395)               (610,126)
      (Loss) Gain on Sale of Assets                                              6,884                 145,829
      Changes in Operating Assets and Liabilities:
         Accounts Receivable Decrease (Increase)                              (675,517)                696,987
         Accounts Receivable - Other Decrease (Increase)                       127,361                (138,008)
         Inventories Decrease (Increase)                                      (347,555)                318,700
         Prepaid Expenses Decrease (Increase)                                  (87,090)                (12,190)
         Income Tax Refund Receivable Decrease (Increase)                       83,515                 (83,515)
         Accounts Payable Increase (Decrease)                                  905,684                (199,746)
         Accrued Expenses Increase (Decrease)                                  (89,461)                 41,297
         Income Taxes Payable Increase (Decrease)                                                      (16,915)
                                                                           ------------            ------------

   Net Cash Provided (Used) by Operating Activities                           (230,952)                 56,653
                                                                           ------------            ------------

Cash Flows From Investing Activities
------------------------------------
   Cash Payments for the Purchase of Fixed Assets                             (704,975)               (524,589)
   Cash Payments for the Procurement of Patents                                (38,735)
   Cash Advanced from Cash Surrender Value-Life Insurance                      174,681
   Cash Surrender Value - Life Insurance                                      (107,005)               (115,551)
                                                                           ------------            ------------

   Net Cash Provided (Used) by Investing Activities                           (676,034)               (640,140)
                                                                           ------------            ------------

Cash Flows From Financing Activities
------------------------------------
   Proceeds From Issuance of Common Stock                                                                2,800
   Proceeds From Issuance of Short-term Debt                                   300,000                 200,000
   Proceeds From Issuance of Long-Term Debt                                  1,463,501                 266,736
   Principal Payments on Short-Term Debt                                      (250,000)
   Principal Payments on Long-Term Debt                                     (1,058,201)               (629,760)
   Net Increase (Decrease) in Line of Credit                                   515,410                 727,202
                                                                           ------------            ------------

   Net Cash Provided (Used) by Financing Activities                            970,710                 566,978
                                                                           ------------            -------------

Net Increase (Decrease) in Cash                                                 63,724                 (16,509)
-------------------------------

Cash at Beginning of Year                                                      126,297                 142,806
-------------------------                                                  ------------            ------------

Cash at End of Year                                                        $   190,021             $   126,297
-------------------                                                        ============            ============

Supplemental Disclosures of Cash Flow Information
-------------------------------------------------
   Cash Paid For:
     Interest (Net of Amount Capitalized)                                  $   752,052             $   675,880
     Income Taxes Paid                                                                                  16,915
</TABLE>



                 The accompanying notes to financial statements
                    are an integral part of this statement.

<PAGE>   16

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999


Note 1.  Summary of Significant Accounting Policies

                  Description of Business

                    Glassmaster Company is a manufacturer and supplier of
                  extruded (thermoplastic) synthetic monofilament, pultruded
                  (thermoset) fiberglass products and composites. Glassmaster
                  Controls Company, Inc., its wholly owned subsidiary, designs,
                  manufactures, and assembles a wide range of electronic and
                  mechanical industrial controls and electronic testing
                  equipment. Information about the Company's business operating
                  segments is presented in more detail in Note 13.

                  Use of Estimates

                     The preparation of financial statements in conformity with
                  generally accepted accounting principles requires management
                  to make estimates and assumptions that affect certain reported
                  amounts and disclosures. Accordingly, actual results could
                  differ from those estimates.

                  Principles of Consolidation

                     The consolidated financial statements for the year ended
                  August 31, 2000 and 1999, include the accounts of Glassmaster
                  Company and its wholly owned subsidiary, Glassmaster Controls
                  Company, Inc. which was organized and incorporated under the
                  laws of the State of Michigan, on October 28, 1988. All
                  material intercompany transactions have been eliminated.

                  Revenue Recognition

                  The Company recognizes revenue from product sales upon
                  shipment to its customers.

                  Reclassifications

                  Certain prior year amounts have been reclassified to
                  conform to the current year presentation.

                  Cash and Cash Equivalents

                     For the purpose of the statement of cash flows, the company
                  considers all short-term debt securities purchased with a
                  maturity of three months or less to be cash equivalents.

                  Accounts Receivable and Allowances

                     Accounts receivable are the result of the Company's sales
                  activities. The company provides an allowance for losses on
                  trade receivables based on a review of its past collection
                  history. Accounts receivables have been reduced by an
                  allowance for doubtful accounts in the amount of $53,050 and
                  $61,643 for the years ended August 31, 2000 and 1999,
                  respectively.

                  Inventories

                     The method of determining the amount of inventories is the
                  lower of cost or market on a first-in, first-out basis.

                  Inventories as shown on the Balance Sheet are classified
                  below:

                                                2000                1999
                                                ----                ----
                    Materials             $ 1,583,936         $ 1,312,182
                    Work in Process           486,191             513,101
                    Finished Products       1,102,731           1,006,825
                                        ---------------------------------

                    Total                   3,172,858           2,832,108
                    -----               =================================

<PAGE>   17

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999

Note 1.  Summary of Significant Accounting Policies (Cont'd)


                  Advertising

                     The company follows the policy of charging the costs of
                  advertising to expense as incurred. Advertising expense was $
                  100,348 and $73,578 for the years ended August 31, 2000 and
                  1999, respectively.

                  Research and Development

                     Research and development costs are charged to expense as
                  incurred. The costs incurred for the years ended August 31,
                  2000 and 1999 were $498,609 and $912,173, respectively. Those
                  costs have generally been charged to cost of good sold.

                  Long-Lived Assets

                     The Company periodically evaluates long-lived assets for
                  impairment of value by assessing current and future cash flows
                  including the consideration of factors such as business
                  trends, prospects and market conditions.

                  Income Taxes

                     Income taxes are provided for in accordance with SFAS No.
                  109, "Accounting for Income Taxes" which requires that income
                  taxes be provided for using the liability method.

                  Newly Issued Accounting Standards

                     In June 1997, the Financial Accounting Standards Board
                  issued SFAS No. 131, "Disclosures about Segments of an
                  Enterprise and Related Information," which establishes
                  standards for the way that public business enterprises report
                  information about operating segments in annual and interim
                  financial statements. The Company has adopted SFAS No. 131 in
                  the 1999 fiscal year. See Note 13 for disclosures relative to
                  the Company's business segments.

Note 2.  Fixed Assets

                     The basis for determining the values of fixed assets is
                  cost. Included in land is property valued at $100,374 that was
                  donated to the Company by Lexington County, South Carolina.

                     The provision for depreciation charged against income for
                  the fiscal years ended August 31, 2000 and 1999, totaled
                  $836,268 and $877,437, respectively. The company computes
                  depreciation using the straight line method over the estimated
                  useful lives of the assets as indicated below. The company
                  utilizes applicable accelerated methods for tax purposes.

<TABLE>
<CAPTION>
                                                                                                 Estimated Useful
                                                                 2000                1999              Lives
                                                                 ----                ----              -----
                 <S>                                   <C>                 <C>                    <C>
                 Land                                  $      190,274      $      190,274               N/A
                 Buildings                                  3,836,361           3,820,989         30 to 40 years
                 Furniture and Fixtures                       487,743             439,557           5 to 7 years
                 Automotive Equipment                         245,184             272,443           3 to 5 years
                 Plant Equipment                            7,237,590           6,635,805          7 to 10 years
                 Tooling & Dies                               700,078             637,566           3 to 5 years
                                                       ---------------------------------------
                 Total                                     12,697,230             996,634
                 Less:
                 Accumulated Depreciation                  (7,115,651)         (6,299,759)
                                                       ---------------------------------------
                 Fixed Assets, net                          5,581,579           5,696,875
                 -----------------                     =======================================
</TABLE>

<PAGE>   18
                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999

Note 3. Income Taxes

                     Components of the provision (benefit) for income taxes on
                  continuing operations are shown below:
<TABLE>
<CAPTION>
                                               2000                               1999
                                               ----                               ----
                                     Current          Deferred          Current          Deferred
                                     -------          --------          -------          --------
                  <S>                  <C>           <C>               <C>              <C>
                  Federal              12,271        $(308,276)        $ (83,515)       $(504,075)
                  State                                (66,119)                          (106,051)
                              --------------------------------------------------------------------
                  Total                12,271         (374,395)          (83,515)        (610,126)
                  -----       ====================================================================
</TABLE>

                  The principal elements accounting for the difference between
                  the statutory federal income tax rate and the effective rates
                  are:
<TABLE>
<CAPTION>
                                                                 2000           1999
                                                                 ----           ----
                  <S>                                          <C>            <C>
                  Expected tax at statutory rates              $     0        $      0
                  Refund of tax due to NOL carryback            12,271         (83,515)
                                                         --------------  ---------------
                  Current Tax Provision                         12,271         (83,515)
                  ---------------------                  ==============  ===============
</TABLE>
                     For South Carolina tax purposes a net operating loss
                  carry-forward of $3,313,308 is available for future periods.
                  The carry-forward will expire in the year ended August 31,
                  2015. For Federal tax purposes, the corporation sustained net
                  operating losses of $958,771 and 1,730,727 for the years ended
                  August 31, 2000 and 1999 respectively. A total of $ 305,465 of
                  the NOL from August 31, 1999 was used to carryback to tax
                  years 1996 and 1997 resulting in a refund of previously paid
                  taxes of $71,244. The remaining NOL of $2,384,033 is available
                  for future periods and will expire in the year ended August
                  31, 2020.

                     For income tax reporting, an Alternative Minimum Tax credit
                  of $28,697 is indefinitely available to reduce future regular
                  taxes. For financial statement reporting, the credit has been
                  recognized as a deferred tax asset.

                  The net deferred tax assets and liabilities consisted of the
                  following components as of August 31, 2000 and 1999.
<TABLE>
<CAPTION>
                                                                       2000          1999
                                                                       ----          ----
                  <S>                                              <C>             <C>
                  Deferred Tax Assets Relating to:
                      Allowance for Doubtful Accounts              $  19,572       $  15,878
                      Alternative Minimum Tax Credit                  28,697          16,446
                      Federal and State NOL carryforwards            965,831         649,679
                  Deferred Tax Liabilities Relating to:
                      Property and Equipment                        (567,894)       (610,192)
                                                                --------------  -------------

                  Net Deferred Tax Asset (Liability)                 446,206          71,811
                                                                ==============  =============
</TABLE>
                  The components giving rise to the deferred tax assets and
                  liability described above have been included in the
                  accompanying balance sheet as of August 31, 2000 and 1999 as
                  follows:

                                           2000              1999
                                           ----              ----
                  Current Assets         $ 19,572         $ 15,878
                  Other Assets            426,634           55,933

Note 4.  Accounts Receivable - Other

                    Accounts Receivable - Other consists mainly of the
                  receivable due from the sale of certain assets related to the
                  discontinued antenna product line. This transaction is
                  discussed in more detail in Note 12.

Note 5.  Other Assets

                   Other assets are composed of the following:

                                                         2000            1999
                                                         ----            ----
                   CSV Life Insurance               $ 440,139       $ 507,811
                   Deferred Tax Assets                426,634          55,933
                   Loan Fees, net of Amortization      46,223          52,125
                   Other                               39,876          14,407
                                                  ---------------------------

                   Total                              952,872         630,276
                   -----                          ===========================
<PAGE>   19

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999

Note 6.  Notes and Mortgages Payable

                  Substantially all property, plant and equipment and a portion
                  of CSV Life Insurance are pledged as collateral for the
                  scheduled borrowings. In addition, inventories and customer
                  receivables are pledged as collateral to provide the company
                  and it's subsidiary with revolving lines of credit for working
                  capital requirements. The amount available for borrowings
                  under these lines of credit varies with fluctuations in the
                  amount of inventories on hand and customer receivables
                  outstanding with maximum available credit lines of $2,500,000
                  for the company and $650,000 for the company's subsidiary. The
                  balances as of August 31, 2000 were $1,934,006 and $410,000
                  and the balances as of August 31, 1999 were $1,388,598 and
                  $440,000. These credit agreements are subject to renegotiation
                  and renewal on a three-year basis. The current contracts will
                  expire December 31, 2000 and January 29, 2002.

                   Special provisions of the loan agreements restrict payment of
                  cash dividends without the consent of the lender as well as
                  providing for minimum working capital requirements and maximum
                  debt to net worth requirements in addition to providing for
                  other minimum financial ratio requirements. The company was in
                  violation of several of these loan covenants as of August 31,
                  2000. One of the company's lenders has requested an earlier
                  expiration date on their revolving credit line and has asked
                  the company to seek other financing. The company currently has
                  reached a tentative agreement with the lender holding the
                  company's mortgage loan on its South Carolina operations to
                  take over this credit line. This lender has waived the current
                  financial loan covenants for the current year and is in the
                  process of re-evaluating and adjusting the covenants as a part
                  of the proposed new financing package.

                  The following table sets forth the Company's indebtedness
                  as of August 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                 2000                               1999
                                                   -----------------------------------------------------------------
                                                          Current        Long-Term        Current         Long-Term
                                                          -------        ---------        -------         ---------
           <S>                                           <C>            <C>              <C>             <C>
           Mortgages, interest from 8.15% to              $466,323      $4,363,795        $434,624       $4,482,521
           8.8% fixed, maturities to 2008
           Notes, interest from prime + .5% to           2,344,007                       1,828,598
           prime + 1.25%, due within 1 year
           Installment Notes, interest from                264,334         750,827         198,630          161,473
           1.9% to prime + 1%, maturities to
           2002
           Local Government 2nd Mortgage,                                                    2,100          160,630
           interest at 3% fixed, maturity Nov.
           9, 1999
           Notes from Individuals, interest                200,000                         350,000
           ranging from 9.5% to 10%, maturities
           within 12 months
           Notes from Officers, interest 8.25%             300,000                         100,000
           to prime + 1%, due within 1 year
                                                  ------------------------------------------------------------------

           Total                                         3,574,664       5,114,622       2,913,952        4,804,624
           -----                                  ==================================================================
</TABLE>

                  The Prime interest rate was 9.50% and 8.50% for the years
                  ended August 31, 2000 and 1999 respectively.

                     The principal maturities on the notes and mortgages payable
                  over the next five years is as follows:

                  Fiscal Year Ending                      Amount
                  ------------------                      ------
                         2001                           $ 3,574,664
                         2002                               730,054
                         2003                               752,517
                         2004                             1,098,450
                         2005                               654,269
                      After 2005                          1,879,332
                                               ---------------------

                        Total                             8,689,286
                                               =====================

<PAGE>   20

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999


Note 7.  Leases

                  The Company entered into an operating lease for various
                  pieces of equipment on August 19, 1997. The lease calls
                  for monthly payments of $11,171 for a period of sixty
                  months. Future minimum lease payments under the lease are
                  as follows:

                  Fiscal Year Ending                 Amount
                  ------------------                 ------
                         2001                             $ 134,052
                         2002                               122,881
                                               ---------------------

                        Total                               256,933
                                               =====================


Note 8.  Stock Options

                    The Company has an incentive stock option plan. Under the
                  plan the Company may grant options for up to 260,000 shares of
                  common stock. Options granted under the plan become
                  exercisable at varying percentages from date of grant through
                  expiration, either at termination of employment or ten years
                  after date of grant. The exercise price of each option is
                  equal to the market price of the company's stock on the date
                  of grant. The exercise prices for the options range from $1 to
                  $4.

                     Following is a summary of the status of the incentive stock
                  options for the years ended August 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                  2000                              1999
                                                     -------------------------------    -----------------------------
                                                                        Weighted                         Weighted
                                                                        Average                           Average
                                                       Number of        Exercise         Number of       Exercise
                                                         Shares           Price            Shares          Price
                                                     --------------- ---------------    -------------- --------------
                       <S>                                   <C>            <C>             <C>              <C>
                       Outstanding-Beg. of Year              33,700         $  3.34         36,500           $  3.34
                       Exercised                                                            (2,800)             1.00
                       Forfeited                             (9,300)           3.43
                                                     ------------------------------     ----------------------------
                       Outstanding-End of Year               24,400            3.51         33,700              3.54
                                                     ==============================     ============================
</TABLE>

                  Following is a summary of the status of the incentive
                  options outstanding at August 31, 2000:

<TABLE>
<CAPTION>
                                         Outstanding Options                                Exercisable Options
                  ------------------------------------------------------------------    -----------------------------
                                                         Weighted       Weighted
                                                         Average        Average
                                                        Remaining       Exercise                      Exercise
                   Exercise Price       Number       Contractual Life     Price            Number        Price
                   --------------       ------       ----------------     -----            ------        -----
<S>                  <C>              <C>               <C>           <C>                <C>           <C>
                     $  1.00           4,000            2 years       $  1.00             4,000        $  1.00
                        4.00          20,400            4 years          4.00            20,400           4.00
</TABLE>


Note 9.  Earnings Per Share

                  The weighted average number of shares used in the computation
                  of basic and diluted earnings per common share were 1,630,696
                  in 2000 and 1,629,354 in 1999. Options on 24,400 and 33,700
                  shares of common stock as of August 31, 2000 and 1999
                  respectively were not included in computing diluted earnings
                  per share because their effects were antidilutive.

<PAGE>   21

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999

Note 10.  Defined Contribution Plan

                     The Company established a qualified 401(K) defined
                  contribution plan effective January 1, 1990. The plan year
                  ends on December 31. Participation in the plan is voluntary
                  and employees may contribute from 1% to 15% of eligible
                  compensation on a tax-deferred basis. The amount to be
                  contributed by the company will be determined each year prior
                  to December 1. The company match for both years is $.25 cents
                  for each $1.00 of employee contributions up to a maximum 6% of
                  eligible compensation.

                     The plan provides for the company to make a discretionary
                  contribution on behalf of all eligible employees (those with
                  one full year of active service) regardless of whether they
                  have elected to voluntarily participate in the plan. This
                  discretionary contribution will be allocated based on a ratio
                  of the employees total W-2 earnings to the total W-2 earnings
                  of all eligible employees. Any discretionary contribution will
                  be dependent upon the overall profitability of the corporation
                  and will be made with the approval of the Board of Directors.

                     The amount of expense charged to operations was $52,460
                  for the year ended August 31, 2000 and $40,471 for 1999.

Note 11.  Financial Instruments

                  (A) Balance Sheet Financial Instruments
                     The carrying amount reported in the balance sheets for cash
                  and cash equivalents, accounts receivable and accounts payable
                  approximates fair value because of the immediate or short-term
                  maturity of these financial instruments. The carrying amount
                  for long-term debt approximates fair value because the
                  underlying instruments are primarily at current market rates.

                  (B) Concentration of Credit Risk
                     Financial instruments that potentially subject the Company
                  to concentrations of credit risk consist of accounts
                  receivable. All receivables originate from the Company's
                  normal business activities as described in note one. These
                  receivables are unsecured.

Note 12.  Discontinued Product Lines and Charges Against Earnings

                     In the fourth quarter of the fiscal year ended August 31,
                  1999, the Company announced its decision to discontinue the
                  manufacture and sales of its marine antennas and other low
                  margin product lines included in its Industrial Products
                  operating segment. A pre-tax charge of $713,557 was included
                  in income from operations as of August 31, 1999. Of this
                  amount, $599,260 was charged to cost of goods sold to
                  write-down certain inventories associated with the
                  discontinued product lines to estimated net realizable value.
                  Concurrently, the Company began the process of selling and
                  disposing of the related assets. On October 20, 1999, the
                  Company reached a final agreement to sell the inventory,
                  equipment and tooling, customer lists, and other assets
                  associated with the marine antenna product line for $170,000.
                  The sale resulted in a loss of $114,297, which has been
                  included in general and administrative expenses for the year
                  ended August 31, 1999 and accounts for the balance of the
                  pre-tax charge. The Company had received $32,056 of the sales
                  price prior to the end of fiscal 1999. The remaining $137,944
                  of the sales price was recorded as an other receivable as of
                  August 31, 1999. The receivable was subsequently collected in
                  December of 1999.

Note 13. Business Segments

                     The Company classifies its business into two segments based
                  on products offered and geographic location; Industrial
                  Products and Controls and Electronics. The Industrial Products
                  segment produces extruded synthetic monofilament line,
                  pultruded fiberglass products, and composites that are sold to
                  original equipment manufacturers and distributors for use in a
                  variety of industrial applications and markets. The Controls
                  and Electronics segment produces electronic testing equipment,
                  flexible cable controls, mechanical and electronic HVAC
                  controls, and molded control panels that are sold to original
                  equipment manufacturers and distributors in the heavy truck,
                  marine, and agricultural industries and is a contract
                  manufacturer of custom electronic products.

<PAGE>   22

                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999

Note 13.  Business Segments (Cont'd)

                  The accounting policies of the segments are the same as those
                  described in the summary of significant accounting policies.
                  The Company evaluates performance based on profit or loss from
                  operations before income taxes not including nonrecurring
                  gains and losses. There are currently no significant
                  intersegment sales and transfers, therefore no eliminations
                  have been made to the information below.

                     Included in the tables below is relevant financial data
                  provided by each reportable segment. The amounts shown in the
                  Other column are generally those expenses and assets which are
                  associated with the Company's corporate headquarters and other
                  entity wide expenses which have not been included in segment
                  information.
<TABLE>
<CAPTION>
                                                                       Year Ended August 31, 2000
                                                 ---------------------------------------------------------------
                                                 Industrial        Controls &
                                                  Products         Electronics         Other            Total
                                                 ----------        -----------       ----------      -----------
<S>                                              <C>                <C>              <C>             <C>
                  Segment Assets                 $8,107,502         $3,941,836       $1,411,915      $13,461,253
                  Expenditures for
                  Segment Assets                    349,363            363,972           14,522          727,857
                  Depreciation and
                    Amortization                    540,678            277,313           37,444          855,435
                  Research and
                  Development                       470,930             27,679                           498,609
                  Revenues from
                    External Customers           15,840,246          5,706,536                        21,546,782
                  Segment Profit (Loss)             412,458            121,097         (773,356)        (239,801)
                  Interest Expense                                                                       758,136
                                                                                                      ----------
                  Income (Loss) Before
                    Income Taxes                                                                        (997,937)
                                                                                                      ==========
</TABLE>
<TABLE>
<CAPTION>
                                                                     Year Ended August 31, 1999
                                                 ---------------------------------------------------------------
                                                 Industrial        Controls &
                                                  Products         Electronics        Other             Total
                                                 ----------        -----------      ----------       -----------
<S>                                                 <C>               <C>              <C>              <C>
                  Segment Assets                 $7,545,244        $3,554,726       $1,775,864       $12,875,834
                  Expenditures for Segment
                    Assets                          291,320           207,916           25,353           524,589
                  Depreciation and
                    Amortization                    581,879           264,976           63,469           910,324
                  Research and
                  Development                       865,153            47,020                            912,173
                  Revenues from
                    External Customers           14,563,196         6,461,686                         21,024,882
                  Segment Profit (Loss)            (681,654)          397,403         (736,367)       (1,020,618)
                  Interest Expense                                                                       669,006
                                                                                                      ----------
                  Income (Loss) Before
                    Income Taxes                                                                      (1,689,625)
                                                                                                      ==========
</TABLE>



<PAGE>   23


                               GLASSMASTER COMPANY
                          NOTES TO FINANCIAL STATEMENTS
                            AUGUST 31, 2000 AND 1999


Note 13.  Business Segments (Cont'd)

          Geographic Information
<TABLE>
<CAPTION>
                                                                               Year Ended August 31, 2000
                                                                    ----------------------------------------------
                                                                                        Total           Long-Lived
                                                                      Revenues          Assets            Assets
                                                                    -----------      -----------        ----------
<S>                                                                 <C>              <C>                <C>
                  United States                                     $17,676,605      $13,461,253        $5,581,579
                  Other Foreign Countries                             3,870,177
</TABLE>
<TABLE>
<CAPTION>
                                                                               Year Ended August 31, 1999
                                                                    ----------------------------------------------
                                                                                        Total           Long-Lived
                                                                      Revenues          Assets             Assets
                                                                    -----------      -----------        ----------
<S>                                                                 <C>              <C>                <C>
                  United States                                     $17,745,967      $12,276,298        $5,696,875
                  Other Foreign Countries                             3,279,015
</TABLE>

                  Revenues in the above schedule are attributed to countries
                  based on the location of the customer.


Major Customer

                     Revenues from one customer of Glassmaster Company's
                  Controls and Electronics segment represented approximately
                  $1,913,486 and $2,724,865 of the Company's consolidated
                  revenues for the years ended August 31, 2000 and 1999,
                  respectively.



<PAGE>   24


                          Independent Auditor's Report



To the Board of Directors and Stockholders
Glassmaster Company
126 Glassmaster Road
Lexington, S.C.  29072


   We have audited the accompanying consolidated balance sheets of Glassmaster
Company and subsidiary as of August 31, 2000 and 1999, and the related
statements of income, stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

   In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Glassmaster
Company and subsidiary as of August 31, 2000 and 1999, and the consolidated
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.


Brittingham, Dial, and Jeffcoat
Certified Public Accountants
West Columbia, SC
November 10, 2000


<PAGE>   25


                                  Exhibit Index


                                                                      Sequential
Exhibit No.                      Exhibit                               Page No.
-----------                      -------                              ----------

    3.1       Amended and Restated Certificate of Incorporation of
              the Company, filed as Exhibit 3.1 to Form 10-K for the
              year ended August 31, 1991 and incorporated herein
              by reference.                                               ---

    3.2       Amended and Restated Bylaws of the company, filed as
              Exhibit 3.2 to Form 10-K for the year ended August 31,
              1991 and incorporated herein by reference.                  ---

   10         Amended and restated Glassmaster Company 1992 Incentive
              Stock Option Plan, filed as exhibit 10 to Form 10-KSB
              for the year ended August 31, 1993 and incorporated
              herein by reference.                                        ---

   11         Computation of Earnings Per Share for two years ended
              August 31, 2000 and 1999.                                    26

   21         Subsidiaries of the Company.                                 27

   27         Financial Data Schedule (SEC use only).                     ---