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               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549
                            FORM 10-Q

     (Mark One)

     [X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the quarterly period ended February 29, 2004 or

     [ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the transition period from _____ to _____

                 Commission File Number: 0-9061

                    ELECTRO RENT CORPORATION
      Exact name of registrant as specified in its charter

         CALIFORNIA                         95-2412961
(State or Other Jurisdiction             (I.R.S. Employer
of Incorporation or Organization)       Identification No.)

                    6060 SEPULVEDA BOULEVARD
                 VAN NUYS, CALIFORNIA 91411-2501
      (Address of Principal Executive Offices and Zip Code)

                          818 786-2525
      (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X    No

Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).

Yes       No  X

The number of shares outstanding of the registrant's common stock
as of March 16, 2004 was 24,885,267.

                               Page 1

                    ELECTRO RENT CORPORATION

                            FORM 10-Q

                        FEBRUARY 29, 2004

TABLE OF CONTENTS                                           Page

Part I: FINANCIAL INFORMATION                                  3

Item 1. Financial Statements                                   3

Condensed Consolidated Statements of Operations for the        3
Three Months and Nine Months Ended February 29, 2004 and
February 28, 2003 (Unaudited)

Condensed Consolidated Balance Sheets at                       4
February 29, 2004 (Unaudited) and May 31, 2003

Condensed Consolidated Statements of Cash Flows for the        5
Nine Months Ended February 29, 2004 and February 28, 2003
(Unaudited)

Notes to Condensed Consolidated Financial Statements           6
(Unaudited)

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

Item 3. Quantitative and Qualitative Disclosures              20
About Market Risk

Item 4.  Controls and Procedures                              20

Part II: OTHER INFORMATION                                    22

SIGNATURES                                                    24

                               Page 2

Part I.  FINANCIAL INFORMATION
--------------------------------
Item 1. Financial Statements

                              ELECTRO RENT CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (Unaudited) (000's omitted except per share data)

                                  Three Months Ended    Nine Months Ended
                                  Feb. 29,  Feb. 28,  Feb. 29,    Feb. 28,
                                   2004       2003       2004       2003
                                 ---------- ---------- ---------- ----------

Revenues:
  Rentals and leases             $  16,943  $  18,215  $  52,252  $  62,745
  Sales of equipment
    and other revenues               6,623      6,427     18,172     21,732
                                 ---------- ---------- ---------- ----------
    Total revenues                  23,566     24,642     70,424     84,477
                                 ---------- ---------- ---------- ----------
Operating expenses:
  Depreciation of rental
    and lease equipment              7,051     10,861     22,788     34,728
  Costs of revenues other
    than depreciation of
    rental and lease equipment       3,993      4,367     11,245     13,919
  Selling, general and
    administrative expenses          7,453      8,511     25,010     28,758
                                 ---------- ---------- ---------- ----------
    Total operating expenses        18,497     23,739     59,043     77,405
                                 ---------- ---------- ---------- ----------
Operating profit                     5,069        903     11,381      7,072
Interest and investment
  income, net                          283        480      1,116      1,615
                                 ---------- ---------- ---------- ----------
Income before income taxes           5,352      1,383     12,497      8,687

Income taxes                         2,071        526      4,429      3,299
                                 ---------- ---------- ---------- ----------
Net income                       $   3,281  $     857  $   8,068  $   5,388
                                 ========== ========== ========== ==========
Earnings per share:
  Basic                              $0.13      $0.04      $0.32      $0.22
  Diluted                            $0.13      $0.04      $0.32      $0.22

Shares used in per
  share calculation:
  Basic                             24,878     24,817     24,858     24,806
  Diluted                           24,977     24,869     24,937     24,852

                                         Page 3

                              See accompanying notes to
                    condensed consolidated financial statements.

                              ELECTRO RENT CORPORATION

                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (000's omitted)

                                       ASSETS
                                                      (Unaudited)
                                                      February 29,  May 31,
                                                          2004       2003
                                                       ---------- ----------

Cash and cash equivalents                              $  47,961  $ 151,448
Marketable securities                                     27,000     10,000
Accounts receivable, net of allowance for
   doubtful accounts of $1,105 and $1,106                  9,808      6,874
Rental and lease equipment, net of accumulated
   depreciation of $158,032 and $165,334                  86,413     87,344
Other property, net of accumulated depreciation and
   amortization of $11,336 and $10,997                    15,910     16,409
Other                                                      3,847      5,025
                                                       ---------- ----------
                                                       $ 190,939  $ 277,100
                                                       ========== ==========

                        LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Accounts payable                                     $   8,098  $   6,332
  Accrued expenses                                        14,847     13,248
  Deferred revenue                                         2,132      1,833
  Deferred income taxes                                    2,937      3,179
                                                       ---------- ----------
    Total liabilities                                     28,014     24,592
                                                       ---------- ----------
Shareholders' equity:
  Common stock                                            18,860     16,023
  Retained earnings                                      144,065    236,485
                                                       ---------- ----------
    Total shareholders' equity                           162,925    252,508
                                                       ---------- ----------
                                                       $ 190,939  $ 277,100
                                                       ========== ==========

                              See accompanying notes to
                    condensed consolidated financial statements.

                                         Page 4

                              ELECTRO RENT CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (Unaudited) (000's omitted)

                                                         Nine Months Ended
                                                        Feb. 29,   Feb. 28,
                                                          2004       2003
                                                       ---------- ----------

Cash flows from operating activities:
  Net income                                           $   8,068  $   5,388
  Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization                         23,504     35,940
    Provision for losses on accounts receivable              518        802
    Tax benefit for stock options exercised                1,441          0
    Gain on sale of rental and lease equipment            (7,068)    (6,270)
    Deferred income taxes                                   (242)        31
    Change in operating assets and liabilities:
      Accounts receivable                                 (3,452)     4,345
      Other assets                                         1,178        722
      Accounts payable                                      (377)       283
      Accrued expenses                                     1,599       (433)
      Deferred revenue                                       299       (636)
                                                       ---------- ----------
      Net cash provided by operating activities           25,468     40,172
                                                       ---------- ----------
Cash flows from investing activities:
  Proceeds from sale of rental and lease equipment        16,655     18,470
  Payments for purchase of rental and lease equipment    (29,301)   (18,935)
  Purchases of marketable securities                     (17,000)         0
  Payments for purchase of other property                   (217)      (507)
                                                       ---------- ----------
      Net cash used in investing activities              (29,863)      (972)
                                                       ---------- ----------
Cash flows from financing activities:
  Proceeds from issuance of common stock                   1,467        171
  Payment for repurchase of common stock                  (1,044)         0
  Payment of common stock dividend                       (99,515)         0
                                                       ---------- ----------
      Net cash provided by (used in)
        financing activities                             (99,092)       171
                                                       ---------- ----------
Net increase (decrease) in cash and cash equivalents    (103,487)    39,371
Cash and cash equivalents at beginning of period         151,448    115,623
                                                       ---------- ----------
Cash and cash equivalents at end of period             $  47,961  $ 154,994
                                                       ========== ==========

                              See accompanying notes to
                    condensed consolidated financial statements.

                                         Page 5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
          (U.S. dollar amounts and shares in thousands,
                    except per share amounts)

Note 1: Basis of Presentation

The interim financial statements included herein have been
prepared by Electro Rent Corporation without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission (the "SEC"). The interim financial statements include
the accounts of Electro Rent Corporation and its wholly owned
subsidiaries, Genstar Rental Electronics, Inc., and ER
International, Inc. (collectively, the "Company") as consolidated
with the elimination of all intercompany transactions. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America
have been condensed or omitted pursuant to such SEC rules and
regulations. Nevertheless, the Company believes that the
disclosures are adequate to make the information presented not
misleading. These financial statements should be read in
conjunction with the audited financial statements and notes
thereto included in the Company's latest Annual Report as found
on Form 10-K. In the opinion of management, all adjustments,
including normal recurring adjustments necessary to present
fairly the financial position of the Company with respect to the
interim financial statements and the results of its operations
for the interim period ended February 29, 2004, have been
included. Certain reclassifications have been made to prior
year amounts to conform to the 2004 presentation. The results of
operations for interim periods are not necessarily indicative of
results for the full year.

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

Note 2: Stock-Based Compensation

At February 29, 2004, the Company had four stock option plans,
which are described more fully in Note 10 in the Company's 2003
Annual Report on Form 10-K. The Company accounts for stock
options using the intrinsic value method under the provisions of
Accounting Principles Board ("APB") Opinion No. 25 and provides
proforma net income and proforma earnings per share disclosures
for employee stock option grants as if the fair-value-based
method, defined in Statement of Financial Accounting Standards
("SFAS") No. 123, Accounting for Stock-Based Compensation, had
been applied. Had the Company determined compensation cost based
on the fair value at the grant date for its stock options under
SFAS No. 123, the Company's net income would have been reduced to
the pro forma amounts indicated below for the three and nine
months periods presented:

                               Page 6

                                    Three Months     Nine Months
                                       Ended            Ended
                                  ---------------  ---------------
                                   Feb.     Feb.    Feb.     Feb.
                                    29,      28,     29,      28,
                                   2004     2003    2004     2003
                                  -------  ------- -------  -------
Net income, as reported            $3,281     $857  $8,068   $5,388
Deduct: Total stock-based
  employee compensation expense
  determined under the fair value
  based method for all awards,
  net of related tax effects         (251)    (233)   (751)    (699)
                                  -------  ------- -------  -------
Proforma net income                $3,030     $624  $7,317   $4,689
                                  =======  ======= =======  =======

Basic income per share, as reported $0.13    $0.04   $0.32    $0.22
Proforma basic income per share     $0.12    $0.03   $0.29    $0.19

Diluted income per share,
  as reported                       $0.13    $0.04   $0.32    $0.22
Proforma diluted income per share   $0.12    $0.03   $0.29    $0.19

As described in Note 10 of this Quarterly Report on Form 10-Q,
the Company made an extraordinary distribution of $4.00 per
common share on January 14, 2004.  In connection with the
distribution, stock options under the Company's four plans held
by employees and directors of the Company that were not exercised
prior to the distribution date were re-priced to preserve the
economic benefit of the stock options at such time.  The re-
pricing was implemented in accordance with the provisions for an
equity restructuring under Financial Accounting Standards Board
("FASB") Interpretation No. ("FIN") 44, "Accounting for Certain
Transactions Involving Stock Compensation -- an Interpretation of
APB Opinion No. 25."  Accordingly, no compensation expense
resulted from the re-pricing of the options.  However, because
FIN 44 limited the re-pricing adjustments, an additional 362,847
options were granted in order to preserve the economic benefit of
the stock options.  The exercise price of the re-priced options
ranges from $6.22 to $14.71.

Note 3: Impairment of Assets

The carrying value of equipment held for rental and lease is
assessed when factors indicating an impairment are present.  The
Company recognizes impairment losses on equipment held for rental
and lease when the expected future undiscounted cash flows are
less than the asset's carrying value, in which case the asset is
written down to its estimated fair value.

                               Page 7

Note 4: Noncash Investing and Financing Activities

The Company had accounts payable and other accruals related to
acquired equipment totaling $8,386 and $6,243 as of February 29,
2004 and May 31, 2003, respectively, and $5,928 and $6,626 as of
February 28, 2003 and May 31, 2002, respectively, which will be
paid in the following period.

Note 5: Capital Leases

The Company has certain customer leases providing bargain
purchase options, which are accounted for as sales-type leases.
The Company's condensed consolidated balance sheets at February
29, 2004 and May 31, 2003 include investment in sales-type leases
of $702 and $671, net of deferred interest of $40 and $39, in
"other assets."  Interest income is recognized over the life of
the lease using the effective interest method.

Note 6: Restructuring Charge

Due to the prolonged downturn in our industry, in May 2003 the
Company restructured its business as part of its continuing
program to create efficiencies within its operations. In the
quarter ended May 31, 2003, the Company recorded restructuring
charges of $821 in selling, general and administrative expenses,
which included the following:

     Reducing the Company's workforce by approximately 27
     employees, mainly in the Duluth, Georgia, warehouse and
     sales office, resulting in a severance charge of
     approximately $220.   Approximately $113 was paid in May
     2003, and the remainder was paid in the first quarter of
     fiscal 2004.

     Closing of the Duluth, Georgia, warehouse, which reduced the
     Company's facilities.  Property and equipment that was
     disposed of or removed from operations resulted in a charge
     of $31 and consisted primarily of leasehold improvements,
     equipment and furniture and fixtures. In addition, we
     incurred a charge of $570 associated with the lease related
     to the closed facility, which represents the fair value of
     the liability determined based on the remaining lease
     rentals, reduced by estimated sublease rentals. Amounts
     accrued (net of estimated sublease proceeds) related to the
     facility closure will be paid over the remaining lease term
     through May 2005.

                               Page 8

                       Remaining     Cash       Remaining
                       Liability   Payments     Liability
                       Balances                 Balances
                         as of                    as of
                        May 31,                 February
                         2003                   29, 2004
                        --------    --------     --------
Severance                  $107      $(107)         $  0
Lease commitments           570       (246)          324
                       --------    --------     --------
                           $677      $(353)         $324
                       ========    ========     ========

Note 7: Segment Reporting

SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information," establishes annual and interim reporting
standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and
major customers.  Under SFAS No. 131, the Company's operations
are treated as one operating segment because discrete financial
information is not available for its product groups.

Although the Company has no reportable segments, it has two
groups of similar products:  test and measurement (T&M) and data
products (DP) equipment.  The Company's equipment pool, based on
acquisition cost, comprised $190,677 of T&M equipment and $53,767
of DP equipment at February 29, 2004, and $194,433 of T&M
equipment and $58,245 of DP equipment at May 31, 2003.

Revenues for these product groups were as follows for the third
quarter of fiscal:

                                     T&M        DP      Total
              2004
Rentals and leases                  $12,015    $4,928   $16,943
Sales of equipment and other
  Revenues                            6,155       468     6,623
                                   --------  --------  --------
                                    $18,170    $5,396   $23,566
                                   ========  ========  ========
              2003
Rentals and leases                  $12,201    $6,014   $18,215
Sales of equipment and other
  Revenues                            4,945     1,482     6,427
                                   --------  --------  --------
                                    $17,146    $7,496   $24,642
                                   ========  ========  ========

Revenues for these product groups were as follows for the first
nine months of fiscal:

                                     T&M        DP      Total
              2004
Rentals and leases                  $36,887   $15,365   $52,252
Sales of equipment and other
  Revenues                           16,475     1,697    18,172
                                   --------  --------  --------
                                    $53,362   $17,062   $70,424
                                   ========  ========  ========
              2003
Rentals and leases                  $40,204   $22,541  $ 62,745
Sales of equipment and other
  Revenues                           18,122     3,610    21,732
                                   --------  --------  --------
                                    $58,326   $26,151   $84,477
                                   ========  ========  ========

                               Page 9

No single customer accounted for more than 10% of total revenues
during the first nine months of fiscal 2004 and 2003.  In
addition, total foreign country customers and operations
accounted for no more than 10% of the Company's revenues and long-
lived assets for the same periods.

Note 8: Computation of Earnings Per Share

Following is a reconciliation of the denominator used in the
computation of basic and diluted EPS for the three months and
nine months ended February 29, 2004 and February 28, 2003:

                                 Three Months   Nine Months
                                    Ended          Ended
                                 ------------   ------------
                                 Feb.   Feb.    Feb.    Feb.
                                 29,     28,    29,     28,
                                 2004   2003    2004    2003
                                ------  ------ ------  ------
Denominator:
  Denominator for basic earnings
    per share-weighted average
    common shares outstanding   24,878  24,817 24,858  24,806
  Effect of dilutive-options        99      52     79      46
                                ------  ------ ------  ------
                                24,977  24,869 24,937  24,852
                                ======  ====== ======  ======
Net income                      $3,281    $857 $8,068  $5,388
Earnings per share:
  Basic                          $0.13   $0.04  $0.32   $0.22
  Diluted                        $0.13   $0.04  $0.32   $0.22

Note 9: Commitments and Contingencies

The Company leases certain facilities under various operating
leases. Most of the lease agreements provide the Company with the
option of renewing its lease at the end of the initial lease
term, at the fair rental value, for periods of up to five years.
In most cases, management expects that in the normal course of
business facility leases will be renewed or replaced by other
leases.

The Company is subject to legal proceedings and business disputes
involving ordinary and routine claims. The ultimate legal and
financial liability with respect to such matters cannot be
estimated with certainty and requires the use of estimates in
recording liabilities for potential litigation settlements.
Estimates for losses from litigation are made after consultation
with outside counsel. If estimates of potential losses increase
or the related facts and circumstances change in the future, the
Company may be required to record either more or less litigation
expense. It is management's opinion that none of the open matters
at February 29, 2004 will have a material adverse effect on the
Company's financial condition or operations.

                               Page 10

Note 10:  Extraordinary Distribution

On January 14, 2004, the Company paid an extraordinary
distribution of $4.00 per outstanding common share, which totaled
$99,515.  The record date for the extraordinary distribution was
December 16, 2003, and the ex-dividend date was January 15, 2004.

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

                               Page 11

The following discussion addresses the financial condition of the
Company as of February 29, 2004 and the results of operations for
the three and nine month periods ended February 29, 2004 and
February 28, 2003.  This discussion should be read in conjunction
with the Management's Discussion and Analysis section included in
the Company's 2003 Annual Report on Form 10-K (pages 5-11) to
which the reader is directed for additional information.

General

The Company generates revenues through the rental, lease and sale
of electronic equipment, primarily test and measurement (T&M) and
personal computer-related (DP) equipment.  In the third quarter
of fiscal 2004, 70.9% of rental and lease revenues was derived
from T&M equipment.  This percentage has been increasing over the
last four years as a result of a steady erosion of DP rental and
lease revenues related to declines in product purchase prices and
unit volume.  Rental revenues comprised 75.7% of rental and lease
revenue, which percentage has been increasing over the last four
years due to a significant decline in personal computer leasing
activity.  The sale of used equipment at the end of its rental
and lease life represents a significant portion of revenues.  The
gain on sale of used equipment increased from $6.3 million for
the first nine months of fiscal 2003 to $7.1 million for the same
period in fiscal 2004.  The Company's customers are primarily
large and mid-sized corporations in various market segments.  The
Company's major market segments include telecommunications,
aerospace and defense, manufacturing and consulting.

The Company's profitability is primarily a function of the volume
and pricing of rental, lease and sales transactions, and
utilization of the equipment pool.  Significant changes in the
purchase or disposal price of equipment or interest rates can
also have a significant effect on the Company's profitability,
depending on the ability of the Company to adjust rental and
lease rates and sales prices for these changes.  The Company's
business requires significant expenditures for equipment and,
consequently, requires substantial liquidity to finance such
expenditures.

After four years of steady declines, demand for rental equipment
has gradually increased during the first nine months of fiscal
2004, reflecting what we believe to be a slight pick up in the
global economy.  The amount of equipment on rent, based on
acquisition cost, increased from $93.8 million at February 28,
2003, to $102.1 million at February 29, 2004.  However, rental
rates and lease rates remained very competitive, and DP leasing
activity continued to decline.  Overall utilization for the
Company's equipment pool, based on acquisition cost, increased
from 52.9% at February 28, 2003, to 60.6% at February 29, 2004,
which reflects increasing demand and the Company's continued
liquidation and write-off of under-performing assets.  During the
same period, monthly rental rates declined by 3.4% and monthly
lease rates declined by 3.1%.

                               Page 12

We believe that demand for rental electronic equipment should
further improve if the U.S. economy continues to recover.  Also,
increased defense spending on advanced weapons and intelligence
systems should benefit the Company.  Until demand improves
further, the Company will strive to operate the business
efficiently at the current activity level.

The following table shows the revenue and income trends over the
last five quarters:

                                  Three Months Ended
                                 -------------------
                         Feb.    Nov.    Aug.    May     Feb.
                         29,     30,     31,     31,     28,
                         2004    2003    2003    2003    2003
                                 (1)             (2)
                        ------  ------  ------  ------  ------
Rentals and leases     $16,943 $18,628 $16,681 $17,922 $18,215

Sales of equipment and
  other reveneus         6,623   5,533   6,016   6,397   6,427
Net income (loss)        3,281   2,662   2,126 (20,374)    857
Net income before write-
  off of goodwill        3,281   2,662   2,126   3,599     857

(1)  For the three months ended November 30, 2003, rentals and
leases included $1,200 from the reversal of various customer
credits; selling, general and administrative expenses included a
$2,300 accrual related to the retirement of the Company's
president; and income taxes were reduced by $400 due to a change
in estimated liability.

(2)  The three months ended May 31, 2003 included a non-cash
charge of $37,135 for the write-off of the goodwill primarily
associated with the acquisition of the rental business from GE
Capital in November 1997, and $2,000 in other pre-tax income
received from the settlement of litigation.

Results of Operations

Comparison of Three Months Ended February 29, 2004 and February
28, 2003

Revenues

Total revenues for the three months ended February 29, 2004
decreased $1.1 million, or 4.4%, to $23.6 million, compared to
$24.6 million in the same period in the prior year.  The decline
in total revenues was due to a decrease in rental and lease
revenues of 7.0%, and an increase in sales of equipment and other
revenues of 3.0%.

                               Page 13

Rental and lease revenues in the third quarter of fiscal 2004
were $16.9 million, a 7.0% decline from the same period in the
prior year.  This decrease was the result of lower demand in the
Company's major market segments, stemming from the global
economic slowdown over the last year, and the excess supply of
equipment available for customers to purchase.  Additionally, DP
rental revenue continued to be negatively impacted by eroding
purchase prices of new personal computers and by competition.  As
a result of the stabilization of revenues over the last three
quarters, however, there is less of a year on year decline than
in recent quarters.

Sales of equipment and other revenues were $6.6 million in the
third quarter of fiscal 2004, an increase of 3.0% as compared to
the third quarter of fiscal 2003.  This increase primarily
reflects relatively large sales of leased equipment to one
leasing customer, partially offset by lower demand and the
Company's smaller rental and lease equipment pool.

Operating Expenses

Depreciation of rental and lease equipment decreased from $10.9
million, or 59.6% of rental and lease revenues, in the third
quarter of fiscal 2003, to $7.1 million, or 41.6% of rental and
lease revenues, in the third quarter of fiscal 2004.  These
declines reflect the Company's continued liquidation and previous
write-downs of under-performing assets.

Costs of revenues other than depreciation decreased 8.5% from
$4.4 million in the third quarter of fiscal 2003 to $4.0 million
in the third quarter of fiscal 2004.  Costs of revenues other
than depreciation primarily includes the cost of equipment sales,
which decreased from 66.7% of equipment sales in the third
quarter of fiscal 2003 to 56.6% of equipment sales in the third
quarter of fiscal 2004.  The decrease in this percentage is
largely due to the fact that the equipment sold in the third
quarter of fiscal 2004 was more fully depreciated, and was
purchased more often by customers already leasing the equipment,
which typically results in higher margins.

Selling, general and administrative expenses decreased $1.0
million, or 12.4%, to $7.5 million in the third quarter of fiscal
2004 as compared to $8.5 million in the third quarter of fiscal
2003.  These expenses as a percentage of total revenues decreased
from 34.5% in the third quarter of fiscal 2003 to 31.6% in the
third quarter of fiscal 2004.  The decline in SG&A expenses is
the result of continuous reductions in almost all areas of the
business, with approximately 63.1% of the reduction relating to a
decline in personnel costs.  The Company's employees currently
total 254, a 23.2% decline from the end of the third quarter of
fiscal 2003.

Interest and Investment Income

Net interest and investment income of $283,000 for the third
quarter of fiscal 2004 was 41.0% lower than $480,000 recorded in
the third quarter of the prior year, mainly as a result of
decreased investments due to an extraordinary distribution paid
to common shareholders on January 14, 2004.  In addition,
interest rates were lower in the current quarter.

                               Page 14

Income Taxes

The effective tax rate increased slightly to 38.7% in the third
quarter of fiscal 2004, as compared to 38.0% for the same period
in the prior year.

Comparison of Nine Months Ended February 29, 2004 and February
28, 2003

Revenues

Total revenues for the nine months ended February 29, 2004
decreased $14.1 million, or 16.7%, to $70.4 million compared to
$84.5 million in the same period in the prior year.  The decline
in total revenues was due to a decrease in rental and lease
revenues of 16.7%, and a decrease in sales of equipment and other
revenues of 16.4%.

Rental and lease revenues in the first nine months of fiscal 2004
were $52.3 million, a 16.7% decline from the same period in the
prior year.  This decrease was the result of lower demand in the
Company's major market segments, stemming from the global
economic slowdown over the last year, and excess supply of
equipment on the market available for customers to purchase.
Additionally, DP rental revenue continued to be negatively
impacted by eroding purchase prices of new personal computers and
by competition.  Included in rental and lease revenues for the
nine months ended February 29, 2004, is $1.2 million from the
reversal of various accounts receivable credits no longer owed to
customers.  There was no significant comparable revenue in first
nine months of fiscal 2003.

Sales of equipment and other revenues were $18.2 million in the
first nine months of fiscal 2004, a decrease of 16.4% as compared
to the first nine months of fiscal 2003.  This decrease reflects
lower demand and the Company's smaller rental and lease equipment
pool.

Operating Expenses

Depreciation of rental and lease equipment decreased from $34.7
million, or 55.3% of rental and lease revenues, in the first nine
months of fiscal 2003, to $22.8 million, or 43.6% of rental and
lease revenues, in the first nine months of fiscal 2004.  These
declines reflect the Company's continued liquidation and previous
write-downs of under-performing assets.

Costs of revenues other than depreciation decreased 19.2% from
$13.9 million in the first nine months of fiscal 2003 to $11.2
million in the first nine months of fiscal 2004.  Costs of
revenues other than depreciation primarily includes the cost of
equipment sales, which decreased from 66.1% of equipment sales in
the first nine months of fiscal 2003 to 57.6% of equipment sales
in the first nine months of fiscal 2004.  The decrease in this
percentage is largely due to the fact that the equipment sold in
the first three quarters of fiscal 2004 was more fully
depreciated, and resulted more often from sales of leased
equipment to leasing customers, which typically results in higher
margins.

                               Page 15

Selling, general and administrative expenses decreased $3.7
million, or 13.0% to $25.0 million, in the first nine months of
fiscal 2004 as compared to $28.8 million in the first nine months
of fiscal 2003.  The first nine months of fiscal 2004 includes a
$2.3 million accrual related to the retirement of the Company's
President.  Excluding the one-time charge, SG&A expenses declined
by $6.0 million, or 21.0%, in the first nine months of fiscal
2004 compared to the same period in the prior year.  Excluding
the one-time charge, these expenses as a percentage of total
revenues decreased from 34.0% in the first nine months of fiscal
2003 to 32.3% in the first nine months of fiscal 2004.  The
decline in SG&A expenses is the result of continuous reductions
in almost all areas of the business, with approximately 59.1% of
the reduction relating to reduced personnel costs.

Interest and Investment Income

Net interest and investment income of $1.1 million for the first
nine months of fiscal 2004 was 30.9% lower than $1.6 million
recorded in the first nine months of the prior year, mainly as a
result of decreased investments due to the extraordinary
distribution paid to common shareholders on January 14, 2004.  In
addition, interest rates were lower in the current year.

Income Taxes

The effective tax rate was 35.4% for the first nine months of
fiscal 2004 as compared to 38.0% for the same period in the prior
year.  This rate reduction is due to the completion of the
Company's 2000 federal tax audit.  As a result, the Company re-
evaluated its accrued liability for income taxes and reduced
income tax expense by approximately $400,000 for the second
quarter of fiscal 2004.

Liquidity and Capital Resources

Historically, the Company's primary capital requirements have
been purchases of rental and lease equipment and debt service.
The Company generally purchases equipment throughout each year to
replace equipment that has been sold, and to maintain adequate
levels of rental equipment to meet existing and new customer
demands.  However, the rental and leasing market for personal
computers and T&M equipment has declined over the last three to
four years, and, accordingly, the Company's equipment purchases
also had declined.  During the first nine months of fiscal 2004
the Company experienced a modest increase in overall rental
activity, although rental rates continue to be depressed.  To
support some areas of potential growth for both T&M and DP
equipment, and to keep the Company's equipment pool
technologically up-to-date the Company increased purchases of
equipment in the first nine months of fiscal 2004 over the
previous nine month period.  The Company has had no bank
borrowings since the third quarter of fiscal 2001.

                               Page 16

On January 14, 2004, the Company paid an extraordinary cash
distribution of $4 per share, or approximately $99.5 million to
its shareholders of record on December 16, 2003.  Subject to the
effects of that distribution, cash and cash equivalents are
likely to continue to accumulate, however, the rate at which cash
accumulates compared to the past couple of years could slow down
as a result of two primary reasons.  First, if demand for rental
and lease equipment continues to pick up, the Company is likely
to further increase its equipment purchases to support its rental
business.  Second, the Company could decide to buy back
additional shares of its common stock under the Company's stock
repurchase program, finance an acquisition, or pursue other
opportunities.  The Company has invested its cash balance in U.S.
government money market funds and other instruments with
maturities of less than 90 days.

During the first nine months of fiscal 2004 and 2003 net cash
provided by operating activities was $25.5 million and $40.2
million, respectively.  The decrease in fiscal 2004 results
primarily from the decline in revenues and operating margins
before depreciation and amortization expense, and changes in
operating assets and liabilities.

During the nine months ended February 29, 2004 net cash used in
investing activities was $29.9 million, compared to $1.0 million
in the same period of the prior year.  This increase is mostly
attributable to the purchase of marketable securities and
increased payments for the purchase of rental and lease
equipment.

During the first nine months of fiscal 2003 net cash flows
provided by financing activities were $171,000 compared to $99.1
million used in financing activities for the same period in
fiscal 2004.  This primarily reflects the payment of the
extraordinary distribution discussed above.

The Company has a $10.0 million revolving line of credit with an
institutional lender, subject to certain restrictions, to meet
equipment acquisition needs as well as working capital and
general corporate requirements.  The Company had no borrowings
outstanding at February 29, 2004.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On a regular basis, management reviews these estimates
including those related to asset lives and depreciation methods,
impairment of long-lived assets including intangibles, allowance
for doubtful accounts, and contingencies and litigation. These
estimates are based on management's historical experience and on
various other assumptions believed to be reasonable under the
circumstances. Actual results may differ from these estimates
under different assumptions or conditions. Management believes,
however, that the estimates, including those for the above-listed
items, are reasonable.

                               Page 17

Management believes the following critical accounting policies
affect the more significant judgments and estimates used in the
preparation of the Company's financial statements:

Asset lives and depreciation methods:  The Company's primary
business involves the purchase and subsequent rental and leasing
of long-lived electronic equipment.  Management has chosen asset
lives that it believes correspond to the economic life of the
related asset. Management has chosen depreciation methods that it
believes matches the benefit to the Company from the asset with
the associated costs. These judgments have been made based on
management's expertise in each equipment type that the Company
carries.  If the asset life and depreciation method chosen do not
reduce the book value of the asset to at least the estimated
future cash flows from the asset to the Company, the Company
would be required to record an impairment.

Impairment of long-lived assets: When factors indicate an
impairment is present, management reviews the carrying value of
its rental and leasing equipment and intangible assets to
determine if the carrying value of the assets may not be
recoverable due to current and forecasted economic conditions.
This requires management to make estimates related to future
undiscounted cash flows from the assets. If these estimates or
the related assumptions change in the future, management may be
required to record additional impairment charges.

Allowance for doubtful accounts:  The Company maintains
allowances for doubtful accounts for estimated losses resulting
from the inability of customers to make rental and lease
payments.  These estimates are primarily based on the amount of
time that has lapsed since payments were due, as well as specific
knowledge related to the individual customer orders and the
ability of one or more of customers to make the required
payments.  If the financial condition of the Company's customers
deteriorates, additional allowances could be required that would
reduce income.  Conversely, if the financial condition of the
customers improves or if legal remedies to collect past due
amounts are more successful than expected, the allowance for
doubtful accounts may need to be reduced and income would be
increased.

                               Page 18

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

Except for the historical statements and discussions, statements
contained in this Form 10-Q constitute forward-looking statements
within the meaning of section 21E of the Securities Exchange Act
of 1934.  These forward-looking statements reflect the current
views of the Company's management with respect to future events
and financial performance; however, you should not put undue
reliance on these statements.  All plans, projections, and future
estimates are forward-looking statements, which in some, but not
all, cases, are identified by words such as "anticipate,"
"believes," "expects," "intends," "future," and other similar
expressions.  Forward-looking statements are subject to certain
risks and uncertainties, not all of which are disclosed in this
Form 10-Q.  Although the Company believes its management's
assumptions are reasonable, it is likely that at least some of
these assumptions will not come true.  Accordingly, the Company's
actual results will probably differ from the outcomes contained
in any forward-looking statement, and those differences could be
material.  Factors that could cause or contribute to these
differences include, among others, those risks and uncertainties
discussed under the sections contained in this Form 10-Q entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and in "Quantitative and Qualitative
Disclosure About Market Risk Related to Interest Rates and
Foreign Currency Exchange Rates," as well as in the Company's
Annual Report on Form 10-K for the year ended May 31, 2003
including the "Risk Factors" attached as Exhibit 99 to that
document, the Company's Proxy Statement for its 2003 Annual
Meeting of Shareholders and the Company's other filings with the
Securities and Exchange Commission.  Should one or more of the
risks discussed in any of those documents, or any other risks,
materialize, or should one or more of the Company's underlying
assumptions prove incorrect, the Company's actual results may
vary materially from those anticipated, estimated, expected or
projected.  In light of the risks and uncertainties, there can be
no assurance that any forward-looking information will in fact
prove to be correct.  We do not undertake any obligation to
update forward-looking statements.

                               Page 19

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
And Risk Related to Foreign Currency Exchange Rates

We manage our investment portfolio in accordance with our
Investment Policy.  The primary objectives of our Investment
Policy are to preserve principal, maintain a high degree of
liquidity to meet operating needs, and obtain competitive returns
subject to prevailing market conditions.  Investments are made
primarily in government and non-government money market funds and
high-grade securities, while avoiding concentration in anything
other than U.S. government securities and subject to appropriate
diversification.  These investments are subject to risk of
default, changes in credit rating and changes in market value.
These investments are also subject to interest rate risk and will
decrease in value if market interest rates increase.  However,
due to the conservative nature of our investments and relatively
short effective maturities of debt instruments, interest rate
risk is mitigated.  Our Investment Policy specifies credit
quality standards for our investments and limits the amount of
exposure from any single issue, issuer or type of investment.  We
do not own derivative financial instruments in our investment
portfolio.

The Company is subject to risks associated with foreign currency
rate fluctuations to the extent of financing arrangements for
rented and leased equipment denominated in Canadian dollars.  The
Company has determined that hedging of these assets is not cost
effective and instead attempts to minimize its risks due to
currency and exchange rate fluctuations through working capital
management. The Company does not believe that any foreseeable
change in currency rates would materially or adversely affect its
financial position or results of operations.

Item 4: Controls and Procedures

(a) Evaluation of disclosure controls and procedures

The Company's management, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, evaluated
the effectiveness the Company's disclosure controls and
procedures as of the end of the period covered by this report.
Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and
procedures as of the end of the period covered by this report are
functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports
filed under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods
specified in the SEC's rules and forms.  A controls system, no
matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and
no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company
have been detected.

                               Page 20

(b)  Change in Internal Control over Financial Reporting

No change in the Company's internal control over financial
reporting occurred during the Company's most recent fiscal
quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting.

                               Page 21

Part II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.

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

On December 1, 2003, the Company filed a Proxy Statement on
Schedule 14a to seek shareholder approval for (i) a reverse stock
split and (ii) a stock option anti-dilution provision.  Only
shareholders of record at the close of business on November 14,
2003 were entitled to submit consents on the Proposals.

The first measure was approved by the shareholders by a vote of
19,844,484 for and 323,043 against.  The second measure was also
approved by the shareholders by a vote of 15,570,314 for and
4,597,213 against.

Item 6.  Exhibits and Reports on Form 8-K

(a)

Exhibit #   Description
---------   -----------
3           Articles of Incorporation (Restated) and bylaws are
            incorporated by reference to Exhibits 1.2 and 6.1,
            respectively, of Registration Statement (Form S-14),
            File No. 2-63532.  A copy of the Restated Articles of
            Incorporation and the Certificate of Amendment of
            Restated Articles of Incorporation filed October 24,
            1988 are incorporated by reference to Exhibit (3) to
            the Annual Report (Form 10-K) for the fiscal year
            ended May 31, 1989.  A copy of the Certificate of
            Amendment of Restated Articles of Incorporation filed
            October 15, 1997 is filed as Exhibit (3) to the
            Annual Report (Form 10-K) for the fiscal year ended
            May 31, 1999.  A copy of the amendment to the bylaws
            adopted October 6, 1994 is incorporated by reference
            to the Annual Report (Form 10-K) for the fiscal year
            ended May 31, 1995.  A copy of the amendment to the
            bylaws adopted November 15, 1996 is incorporated by
            reference to Exhibit (3) of the Annual Report (Form
            10-K) for the fiscal year ended May 31, 1997

11          Statement re computation of per share earnings is
            incorporated by reference to Exhibit 11 of the Annual
            Report (Form 10-K) for the fiscal year ended May 31,
            2003

22          Inside front cover and pages 5-12 and 14-29 of the
            2003 Annual Report are incorporated by reference to
            Exhibit 22 of the Annual Report (Form 10-K) for the
            fiscal year ended May 31, 2003.

                               Page 22

31.1        Rule 13a-14(a)/15d-14(a) Certification of Chief
            Executive Officer

31.2        Rule 13a-14(a)/15d-14(a) Certification of Chief
            Financial Officer

32.1        Section 1350 Certification by Principal Executive
            Officer

32.2        Section 1350 Certification by Chief Financial Officer

(b) Current Reports on Form 8-K

The Company furnished to the SEC a Current Report on Form 8-K,
dated as of December 19, 2003, to disclose the issuance of a
press release by the Company reporting the Company's earnings for
the second quarter of fiscal 2004.
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereto duly authorized.

                               Page 23

ELECTRO RENT CORPORATION

DATED:  March 25, 2004

/s/ Craig R. Jones
Craig R. Jones
Vice President and Chief Financial Officer

                               Page 24
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