##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q

|  |  |                                                                                                                                          
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|X |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
September 30, 2002
|  |  |                                                                                                                                          
|  |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934                                                 

Commission File Number 1-10981

SBS TECHNOLOGIES, INC.

|                                                                          |  |                                                
|------------------------------------------------------------------------- |  | -----------------------------------------------
|New Mexico
(State or other jurisdiction of
incorporation or organization) |  | 85-0359415
(IRS Employer Identification Number)

2400 Louisiana Blvd. NE
AFC Building 5, Suite 600
Albuquerque, New Mexico 87110
(505) 875-0600

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 and (2) has been subject to such filing
requirements for the past 90 days.

| |  |       |  |    |  | 
| |  | ----- |  | -- |  | 
| |  | YES X |  | NO |  | 

As of November 1, 2002, the Registrant had 14,592,829 shares of its common
stock outstanding.





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TABLE OF CONTENTS



|                                                   |                                                                                       |                                                           |  |  |  |  |  | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|                                                   |                                                                                       | Consolidated Balance Sheets                              
|                                                   |                                                                                       | Consolidated Statements of Operations                    
|                                                   |                                                                                       | Consolidated Statement of Changes in Stockholders Equity
|                                                   |                                                                                       | Consolidated Statements of Cash Flows                    
|                                                   |                                                                                       | Notes to Condensed Consolidated Financial Statements     
|                                                   | Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                   | Quantitative and Qualitative Disclosures about Market Risk                           
|                                                   | Controls and Procedures                                                              
|PART II  OTHER INFORMATION                       
|                                                   | Item 1. Legal Proceedings                                                            
|                                                   | Item 6. Exhibits and Reports on Form 8-K.                                            
|SIGNATURES                                        
|CERTIFICATION                                     
|EXHIBIT INDEX                                     
|EX-10.ac Office/Warehouse Lease                   
|EX-10.ad Amendment #1 to Lease                    
|EX-10.bw Lease Agreement                          
|EX-99.1 Certification Pursuant to 18 USC Sec. 1350
|EX-99.2 Certification Pursuant to 18 USC Sec. 1350



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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Form 10-Q for the Quarter Ended September 30, 2002
Table of Contents

|                               |                                                                                                |                                                                                                  |    |    |   | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -- | -- | - | 
|PART I  FINANCIAL INFORMATION | Page                                                                                          
|                               |                                                                                               
|                               | Item 1  Unaudited Condensed Financial Statements                                              |                                                                                                  |    |    |  
|                               |                                                                                                | Consolidated Balance Sheets
at September 30, 2002 and June 30, 2002                              |    |    | 2 | 
|                               |                                                                                                | Consolidated Statements of Operations,
Three Months Ended September 30, 2002 and 2001            |    |    | 3 | 
|                               |                                                                                                | Consolidated Statement of Changes in Stockholders Equity,
Three Months Ended September 30, 2002 |    |    | 4 | 
|                               |                                                                                                | Consolidated Statements of Cash Flows,
Three Months Ended September 30, 2002 and 2001            |    |    | 5 | 
|                               |                                                                                                | Notes to Unaudited Condensed Consolidated Financial Statements
as of September 30, 2002          |    |    | 6 | 
|                               | Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                                                                  |    | 12 |  
|                               | Item 3  Quantitative and Qualitative Disclosures about Market Risk                            |                                                                                                  |    | 17 |  
|                               | Item 4  Controls and Procedures                                                               |                                                                                                  |    | 18 |  
|PART II  OTHER INFORMATION    |                                                                                                |                                                                                                  |    |   
|                               | Item 1  Legal Proceedings                                                                     |                                                                                                  |    | 19 |  
|                               | Item 6  Exhibits and Reports on Form 8-K                                                      |                                                                                                  |    | 19 |  
|SIGNATURES                     |                                                                                                |                                                                                                  | 20 |   
|CERTIFICATIONS                 |                                                                                                |                                                                                                  | 21 |   
|EXHIBIT INDEX                  |                                                                                                |                                                                                                  | 23 |   





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##### Table of Contents






SBS Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
Thousands (except share amounts)
(Unaudited)



---

|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |          |         |  |  | 
|--------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ------ | ------- | ------------- | ------ | -------- | ------- |  |  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         | September 30, |        | June 30,
|                            |                                                                                                                                                                        |                                            |                                      |        |         | 2002          |        | 2002    
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        |                                            |                                      | Assets |         |               |        |          |         |  |  | 
|Current assets:             |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            | Cash and cash equivalents                                                                                                                                              |                                            | $                                    | 24,780 |         |               |        | 24,811   |        
|                            | Receivables, net                                                                                                                                                       |                                            |                                      | 21,516 |         |               |        | 22,619   |        
|                            | Inventories                                                                                                                                                            |                                            |                                      | 17,788 |         |               |        | 18,428   |        
|                            | Deferred income taxes                                                                                                                                                  |                                            |                                      | 6,715  |         |               |        | 9,446    |        
|                            | Income tax receivable                                                                                                                                                  |                                            |                                      | 7,551  |         |               |        | 4,584    |        
|                            | Prepaid expenses                                                                                                                                                       |                                            |                                      | 1,254  |         |               |        | 1,226    |        
|                            | Other current assets                                                                                                                                                   |                                            |                                      | 265    |         |               |        | 165      |        
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total current assets                       |                                      |        | 79,869  |               |        |          | 81,279  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|Property and equipment, net |                                                                                                                                                                        |                                            | 10,810                               |        |         |               | 11,507 |         
|Goodwill, net               |                                                                                                                                                                        |                                            | 20,357                               |        |         |               | 20,468 |         
|Intangible assets, net      |                                                                                                                                                                        |                                            | 5,899                                |        |         |               | 6,284  |         
|Deferred income taxes       |                                                                                                                                                                        |                                            | 5,571                                |        |         |               | 5,703  |         
|Other assets                |                                                                                                                                                                        |                                            | 397                                  |        |         |               | 407    |         
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total assets                               |                                      | $      | 122,903 |               |        |          | 125,648 | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        |                                            | Liabilities and Stockholders Equity |        |         |               |        |          |         |  | 
|Current liabilities:        |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            | Accounts payable                                                                                                                                                       |                                            | $                                    | 3,092  |         |               |        | 4,361    |        
|                            | Accrued representative commissions                                                                                                                                     |                                            |                                      | 639    |         |               |        | 518      |        
|                            | Accrued compensation                                                                                                                                                   |                                            |                                      | 3,292  |         |               |        | 4,170    |        
|                            | Other current liabilities                                                                                                                                              |                                            |                                      | 2,823  |         |               |        | 2,926    |        
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total current liabilities                  |                                      |        | 9,846   |               |        |          | 11,975  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|Long-term liabilities:      |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            | Other liabilities                                                                                                                                                      |                                            |                                      | 18     |         |               |        | 27       |        
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total liabilities                          |                                      |        | 9,864   |               |        |          | 12,002  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|Stockholders equity:       |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            | Common stock, no par value; 200,000,000 shares authorized,
14,592,829 issued and outstanding at September 30, 2002,
14,628,709 issued and outstanding at June 30, 2002 |                                            |                                      | 86,122 |         |               |        | 86,338   |        
|                            | Accumulated other comprehensive loss                                                                                                                                   |                                            |                                      | (3,321 | )       |               |        | (3,113   | )      
|                            | Retained earnings                                                                                                                                                      |                                            |                                      | 30,238 |         |               |        | 30,421   |        
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total stockholders equity                 |                                      |        | 113,039 |               |        |          | 113,646 | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         
|                            |                                                                                                                                                                        | Total liabilities and stockholders equity |                                      | $      | 122,903 |               |        |          | 125,648 | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |         

See accompanying notes to condensed consolidated financial statements
Page 2





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##### Table of Contents






SBS Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
Thousands (except per share amounts)
(Unaudited)



---

|                                                       |                         |   |                                 |        |      |  |        |        | 
|------------------------------------------------------ | ----------------------- | - | ------------------------------- | ------ | ---- |  | ------ | ------ | 
|                                                       |                         |   | Three Months Ended September 30
|                                                       |                         |   |                                
|                                                       |                         |   | 2002                            |        | 2001
|                                                       |                         |   |                                 |        |     
|Sales                                                  |                         | $ | 27,833                          |        |      |  | 31,799 |       
|Cost of sales                                          |                         |   | 14,379                          |        |      |  | 15,878 |       
|                                                       |                         |   |                                 |        |      |  |        |       
|                                                       | Gross profit            |   |                                 | 13,454 |      |  |        | 15,921 | 
|Selling, general and administrative expense            |                         |   | 8,235                           |        |      |  | 8,915  |       
|Research and development expense                       |                         |   | 4,714                           |        |      |  | 4,274  |       
|Severance and other employee termination costs         |                         |   | 335                             |        |      |  | 185    |       
|Amortization of intangible assets                      |                         |   | 584                             |        |      |  | 1,928  |       
|                                                       |                         |   |                                 |        |      |  |        |       
|                                                       | Operating income (loss) |   |                                 | (414   | )    |  |        | 619    | 
|                                                       |                         |   |                                 |        |      |  |        |       
|Interest and other income, net                         |                         |   | 125                             |        |      |  | 436    |       
|Foreign exchange gains (losses)                        |                         |   | (22                             | )      |      |  | 49     |       
|                                                       |                         |   |                                 |        |      |  |        |       
|                                                       |                         |   | 103                             |        |      |  | 485    |       
|                                                       |                         |   |                                 |        |      |  |        |       
|Income (loss) before income taxes                      |                         |   | (311                            | )      |      |  | 1,104  |       
|Income tax expense (benefit)                           |                         |   | (128                            | )      |      |  | 456    |       
|                                                       |                         |   |                                 |        |      |  |        |       
|Net income (loss)                                      |                         | $ | (183                            | )      |      |  | 648    |       
|                                                       |                         |   |                                 |        |      |  |        |       
|Net income (loss) per common share                     |                         | $ | (0.01                           | )      |      |  | 0.04   |       
|                                                       |                         |   |                                 |        |      |  |        |       
|Net income (loss) per common share  assuming dilution |                         | $ | (0.01                           | )      |      |  | 0.04   |       
|                                                       |                         |   |                                 |        |      |  |        |       

See accompanying notes to condensed consolidated financial statements
Page 3





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##### Table of Contents






SBS Technologies, Inc. and Subsidiaries
Consolidated Statement of Changes in Stockholders Equity
Thousands (except share amounts)
(Unaudited)



---

|                                                        |                                          |  |            |   |               |   |          |   |          |   |        |      |   |   |        |   |  |   |         |      |  
|------------------------------------------------------- | ---------------------------------------- |  | ---------- | - | ------------- | - | -------- | - | -------- | - | ------ | ---- | - | - | ------ | - |  | - | ------- | ---- | -
|                                                        |                                          |  | Common     |   | Accumulated   |   |          |   |          |   | Total 
|                                                        |                                          |  | stock      |   | other         |   |          |   |          |   | stock-
|                                                        |                                          |  |            |   | comprehensive |   | Retained |   | holders'
|                                                        |                                          |  | Shares     |   | Amount        |   | loss     |   | earnings |   | equity
|                                                        |                                          |  |            |   |               |   |          |   |          |   |       
|Balance at June 30, 2002                                |                                          |  | 14,628,709 |   |               | $ | 86,338   |   |          | $ | (3,113 | )    |   | $ | 30,421 |   |  | $ | 113,646 |     
|Exercise of stock options and warrants                  |                                          |  | 4,560      |   |               |   | 13       |   |          |   |       |      |   |   |       |   |  |   | 13      |     
|Stock issued to directors under
restricted stock awards |                                          |  | 5,560      |   |               |   | 92       |   |          |   |       |      |   |   |       |   |  |   | 92      |     
|Stock repurchased and retired                           |                                          |  | (46,000    | ) |               |   | (321     | ) |          |   |       |      |   |   |       |   |  |   | (321    | )   
|Net income (loss)                                       |                                          |  |           |   |               |   |         |   |          |   |       |      |   |   | (183   | ) |  |   | (183    | )   
|Other comprehensive income:                             |                                          |  |            |   |               |   |          |   |          |   |        |      |   |   |        |   |  |   |         |     
|                                                        | Foreign currency translation adjustments |  |            |  |               |   |          |  |          |   |        | (208 | ) |   |        |  |  |   |         | (208 | )
|                                                        |                                          |  |            |   |               |   |          |   |          |   |        |      |   |   |        |   |  |   |         |     
|Balance at September 30, 2002                           |                                          |  | 14,592,829 |   |               | $ | 86,122   |   |          | $ | (3,321 | )    |   | $ | 30,238 |   |  | $ | 113,039 |     
|                                                        |                                          |  |            |   |               |   |          |   |          |   |        |      |   |   |        |   |  |   |         |     

See accompanying notes to condensed consolidated financial statements
Page 4





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##### Table of Contents






SBS Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Thousands
(Unaudited)



---

|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |        |       |        |        |  
|------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------- | ----------------------------------------- | ----- | ------------------ | ------ | ------ | ----- | ------ | ------ | -
|                                                  |                                                                                          |                                                         |                                    |                                           |       | Three months ended
|                                                  |                                                                                          |                                                         |                                    |                                           |       | September 30,     
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                   
|                                                  |                                                                                          |                                                         |                                    |                                           |       | 2002               |        | 2001  
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Cash flows from operating activities:             |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Net income (loss)                                                                        |                                                         | $                                  | (183                                      | )     |                    |        | 648    |      
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Adjustments to reconcile net income (loss) to net
cash provided by operating activities: |                                                         |                                    |                                           |       |                    |        |        |      
|                                                  |                                                                                          | Depreciation                                            |                                    |                                           | 1,030 |                    |        |        | 824   |       
|                                                  |                                                                                          | Amortization of intangible assets                       |                                    |                                           | 584   |                    |        |        | 1,928 |       
|                                                  |                                                                                          | Bad debt expense                                        |                                    |                                           | 125   |                    |        |        | 80    |       
|                                                  |                                                                                          | Deferred income taxes                                   |                                    |                                           | 2,856 |                    |        |        | 374   |       
|                                                  |                                                                                          | Income tax benefit of stock options exercised           |                                    |                                           |      |                    |        |        | 5     |       
|                                                  |                                                                                          | Loss on disposition of assets                           |                                    |                                           | 4     |                    |        |        | 7     |       
|                                                  |                                                                                          | Foreign exchange (gains) losses                         |                                    |                                           | 22    |                    |        |        | (49   | )     
|                                                  |                                                                                          | Stock-based compensation                                |                                    |                                           |      |                    |        |        | 28    |       
|                                                  |                                                                                          | Stock issued to directors under restricted stock awards |                                    |                                           | 92    |                    |        |        |      |       
|                                                  |                                                                                          | Changes in assets and liabilities:                      |                                    |                                           |       |                    |        |        |       |       
|                                                  |                                                                                          |                                                         | Receivables                        |                                           |       | 942                |        |        |       | 1,337  |       
|                                                  |                                                                                          |                                                         | Inventories                        |                                           |       | 600                |        |        |       | 3,906  |       
|                                                  |                                                                                          |                                                         | Income tax receivable              |                                           |       | (2,959             | )      |        |       | 2,424  |       
|                                                  |                                                                                          |                                                         | Prepaids and other assets          |                                           |       | (119               | )      |        |       | 124    |       
|                                                  |                                                                                          |                                                         | Accounts payable                   |                                           |       | (1,292             | )      |        |       | (153   | )     
|                                                  |                                                                                          |                                                         | Accrued representative commissions |                                           |       | 123                |        |        |       | (296   | )     
|                                                  |                                                                                          |                                                         | Accrued compensation               |                                           |       | (872               | )      |        |       | (1,084 | )     
|                                                  |                                                                                          |                                                         | Other current liabilities          |                                           |       | (102               | )      |        |       | 557    |       
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  |                                                                                          |                                                         |                                    | Net cash provided by operating activities |       |                    | 851    |        |       |        | 10,660 |  
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Cash flows from investing activities:             |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Acquisition of property and equipment                                                    |                                                         |                                    | (343                                      | )     |                    |        | (1,013 | )    
|                                                  | Purchase of license agreement                                                            |                                                         |                                    | (200                                      | )     |                    |        |       |      
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  |                                                                                          |                                                         |                                    | Net cash used by investing activities     |       |                    | (543   | )      |       |        | (1,013 | )
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Cash flows from financing activities:             |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Payments on notes payable                                                                |                                                         |                                    |                                          |       |                    |        | (2,500 | )    
|                                                  | Repurchase and retirement of common stock                                                |                                                         |                                    | (321                                      | )     |                    |        | (488   | )    
|                                                  | Proceeds from exercise of stock options and warrants                                     |                                                         |                                    | 13                                        |       |                    |        | 199    |      
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  |                                                                                          |                                                         |                                    | Net cash used by financing activities     |       |                    | (308   | )      |       |        | (2,789 | )
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Effect of exchange rate changes on cash           |                                                                                          |                                                         | (31                                | )                                         |       |                    | 58     |       
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Net change in cash and cash equivalents           |                                                                                          |                                                         | (31                                | )                                         |       |                    | 6,916  |       
|Cash and cash equivalents at beginning of period  |                                                                                          |                                                         | 24,811                             |                                           |       |                    | 9,734  |       
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Cash and cash equivalents at end of period        |                                                                                          | $                                                       | 24,780                             |                                           |       |                    | 16,650 |       
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|Supplemental disclosure of cash flow information: |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Interest paid                                                                            |                                                         | $                                  | 12                                        |       |                    |        | 15     |      
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       
|                                                  | Income taxes paid (received)                                                             |                                                         | $                                  | 44                                        |       |                    |        | (2,315 | )    
|                                                  |                                                                                          |                                                         |                                    |                                           |       |                    |        |       

See accompanying notes to condensed consolidated financial statements
Page 5





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##### Table of Contents






SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited)



---



| | 1) |  | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | The accounting policies as set forth in SBS Technologies, Inc.s (SBS)
Annual Report on Form 10-K for the year ended June 30, 2002 have been
adhered to in preparing the accompanying interim condensed consolidated
financial statements except as amended for the following discussion on
accounting for goodwill. These statements are unaudited but include all
adjustments, consisting of normal recurring adjustments that SBS
considers necessary for a fair presentation of the financial position,
results of operations, and cash flows for such interim periods. Results
for such interim periods are not necessarily indicative of results for a
full year.                      
|
| |    |  | The Company adopted Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets(SFAS 142) on July 1, 2002. SFAS 142
eliminates the amortization of goodwill and other intangible assets that
have indefinite useful lives. Amortization will continue to be recorded
for intangible assets with definite useful lives. SFAS 142 also requires at
least an annual impairment review of goodwill and other intangible assets.
Any asset deemed to be impaired is to be written down to its fair value.
The Company has not completed its review of goodwill for impairment in
accordance with SFAS 142; however, the review will be completed by December
31, 2002.
|
| | 2) |  | Receivables, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |    |  | Receivables, net consist of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|                                     |  |               |        |          |  |  |        |  
|------------------------------------ |  | ------------- | ------ | -------- |  |  | ------ | -
|                                     |  | September 30, |        | June 30,
|Thousands                            |  | 2002          |        | 2002    
|                                     |  |               |        |         
|Accounts receivable                  |  |               | 22,840 |          |  |  | 23,992 |  
|Less allowance for doubtful accounts |  |               | (1,324 | )        |  |  | (1,373 | )
|                                     |  |               |        |          |  |  |        |  
|                                     |  |               | 21,516 |          |  |  | 22,619 |  
|                                     |  |               |        |          |  |  |        |  



| | 3) |  | Inventories                          
| | -- |  | -------------------------------------
|
| |    |  | Inventories consist of the following:

|                |  |               |        |          |  |  |        | 
|--------------- |  | ------------- | ------ | -------- |  |  | ------ | 
|                |  | September 30, |        | June 30,
|Thousands       |  | 2002          |        | 2002    
|                |  |               |        |         
|Raw materials   |  |               | 10,038 |          |  |  | 9,663  | 
|Work in process |  |               | 5,095  |          |  |  | 5,328  | 
|Finished goods  |  |               | 2,655  |          |  |  | 3,437  | 
|                |  |               |        |          |  |  |        | 
|                |  |               | 17,788 |          |  |  | 18,428 | 
|                |  |               |        |          |  |  |        | 



| |  |  | For the three-month period ended September 30, 2002, approximately
$375,000 of inventory previously written down to zero had been sold.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited) (Continued)



---



| | 4) |  | Goodwill and Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | Effective July 1, 2002, SBS adopted Statement of Financial Standards No.
142 (SFAS 142), Goodwill and Other Intangible Assets, and no longer
amortizes goodwill. As of the date of adoption, SBS had unamortized
goodwill of approximately $20.5 million, subject to the transition
provisions of SFAS 142. There was no goodwill amortization expense for
the three-month period ended September 30, 2002, whereas goodwill
amortization amounted to $1.2 million for the three-month period ended
September 30, 2001.
|
| |    |  | The following table presents the impact of the adoption of SFAS 142 on
the Companys reported net income (loss) and net income (loss) per
applicable common share had SFAS 142 been in effect in fiscal 2001:                                                                                                                                                                                                                                                                                                              

|                                                         |                        |                 |      |                    |   |      |       |       |     | 
|-------------------------------------------------------- | ---------------------- | --------------- | ---- | ------------------ | - | ---- | ----- | ----- | --- | 
|                                                         |                        |                 |      | Three months ended
|Thousands except per share amounts                       |                        | September 30,  
|                                                         |                        |                
|                                                         |                        |                 |      | 2002               |   | 2001
|                                                         |                        |                 |      |                    |   |     
|Reported net income (loss)                               |                        | $               | (183 | )                  |   | $    | 648   |      
|                                                         |                        |                 |      |                    |   |      |       |      
|Adjustments:                                             |                        |                 |      |                    |   |      |       |      
|                                                         | Goodwill amortization  |                 |      |                   |   |      |       | 1,164 |    
|                                                         | Workforce amortization |                 |      |                   |   |      |       | 19    |    
|                                                         | Income tax affect      |                 |      |                   |   |      |       | (489  | )  
|                                                         |                        |                 |      |                    |   |      |       |      
|                                                         |                        | Net adjustments |      |                    |  |      |       |       | 694 | 
|                                                         |                        |                 |      |                    |   |      |       |      
|Adjusted net income (loss)                               |                        | $               | (183 | )                  |   | $    | 1,342 |      
|                                                         |                        |                 |      |                    |   |      |       |      
|Reported net income (loss) per share                     |                        | $               | (.01 | )                  |   | $    | .04   |      
|Adjusted net income (loss) per share                     |                        | $               | (.01 | )                  |   | $    | .09   |      
|                                                         |                        |                 |      |                    |   |      |       |      
|Reported net income (loss) per share  assuming dilution |                        | $               | (.01 | )                  |   | $    | .04   |      
|Adjusted net income (loss) per share  assuming dilution |                        | $               | (.01 | )                  |   | $    | .09   |      

(continued)

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited) (Continued)



---

The following table discloses information regarding the carrying amounts and
associated accumulated amortization for intangible assets subject to
amortization after the adoption of SFAS 142.

Amortized Intangible Assets

|                          |       |        |                          |              |             |                     |       |       |  |   |       |       | 
|------------------------- | ----- | ------ | ------------------------ | ------------ | ----------- | ------------------- | ----- | ----- |  | - | ----- | ----- | 
|                          |       |        |                          |              |             |                     |      
|                         
|                          |       |        | As of September 30, 2002
|                         
|                          |       |        | Gross carrying           |              | Accumulated |                     |       |       | 
|Thousands                 |       | amount |                          | amortization |             | Net carrying amount
|                          |       |        |                          |              |             |                    
|Core-developed technology |       | $      | 8,753                    |              |             | $                   | 4,963 |       |  | $ | 3,790 |      
|License agreements        |       |        | 2,436                    |              |             |                     | 1,075 |       |  |   | 1,361 |      
|Covenant not-to-compete   |       |        | 1,623                    |              |             |                     | 1,083 |       |  |   | 540   |      
|Other intangibles         |       |        | 300                      |              |             |                     | 92    |       |  |   | 208   |      
|                          |       |        |                          |              |             |                     |       |       |  |   |       |      
|                          | Total |        | $                        | 13,112       |             |                     | $     | 7,213 |  |   | $     | 5,899 | 
|                          |       |        |                          |              |             |                     |       |       |  |   |       |      

|                          |       |   |                     |        |              |   |                     |       |  |   |       |       | 
|------------------------- | ----- | - | ------------------- | ------ | ------------ | - | ------------------- | ----- |  | - | ----- | ----- | 
|                          |       |   | As of June 30, 2002
|                         
|                          |       |   | Gross carrying      |        | Accumulated  |   |                     |       | 
|                          |       |   | amount              |        | amortization |   | Net carrying amount
|                          |       |   |                     |        |              |   |                    
|Core-developed technology |       | $ | 8,753               |        |              | $ | 4,723               |       |  | $ | 4,030 |      
|License agreements        |       |   | 2,236               |        |              |   | 826                 |       |  |   | 1,410 |      
|Covenant not-to-compete   |       |   | 1,623               |        |              |   | 996                 |       |  |   | 627   |      
|Other intangibles         |       |   | 300                 |        |              |   | 83                  |       |  |   | 217   |      
|                          |       |   |                     |        |              |   |                     |       |  |   |       |      
|                          | Total |   | $                   | 12,912 |              |   | $                   | 6,628 |  |   | $     | 6,284 | 
|                          |       |   |                     |        |              |   |                     |       |  |   |       |      



| |  |  | There were no unamortized intangible assets outstanding as of the period
ending September 30, 2002 and there was one license agreement unamortized
at June 30, 2002 for $136,000 which was written off during the quarter
ended September 30, 2002.      
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  |                                                                                                                                                                                                                                                          
| |  |  | The following table summarizes the amortization expense attributable to
intangible assets for the three month periods ended September 30, 2002
and 2001, as well as estimated amortization expense for the fiscal years
ending in June 2003 through 2007.

|                                |                              |                    |           |   |       |    
|------------------------------- | ---------------------------- | ------------------ | --------- | - | ----- | ---
|Aggregate amortization expense: |                              |                    |           |  
|                                | For the three-months ended:  |                    | Thousands
|                                |                              | September 30, 2002 |           | $ | 584   |    
|                                |                              | September 30, 2001 |           | $ | 1,928 | (a)
|                                |                              |                    |           |  
|Estimated amortization expense: |                              |                    |           |  
|                                | For the fiscal years ending: |                    |           |   |      
|                                |                              | June 30, 2003      |           | $ | 1,940 |    
|                                |                              | June 30, 2004      |           | $ | 1,673 |    
|                                |                              | June 30, 2005      |           | $ | 1,271 |    
|                                |                              | June 30, 2006      |           | $ | 847   |    
|                                |                              | June 30, 2007      |           | $ | 719   |    



|(a) |  | Totals for the three months ended September 30, 2001 includes
$1.2 million of goodwill and workforce amortization.
|--- |  | ------------------------------------------------------------------------------------------------------------------

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited) (Continued)



---



| |  |  | Changes in the carrying amount of goodwill for the three-month period
ended September 30, 2002 are as follows:
| |  |  | --------------------------------------------------------------------------------------------------------------

|                                         |  |                    |        |                  |  |       |        |  |  |   |        |  
|---------------------------------------- |  | ------------------ | ------ | ---------------- |  | ----- | ------ |  |  | - | ------ | -
|Total Goodwill by Operating Segment     
|                                        
|                                         |  | Communications and |        | Commercial and   |  |       |        | 
|Thousands                                |  | Enterprise Group   |        | Government Group |  | Total
|                                         |  |                    |        |                  |  |      
|Balance at June 30, 2002                 |  |                    | $3,448 |                  |  | $     | 17,020 |  |  | $ | 20,468 |  
|Foreign currency translation adjustments |  |                    |       |                  |  |       | (111)  |  |  |   | (111   | )
|                                         |  |                    |        |                  |  |       |        |  |  |   |        |  
|Balance at September 30, 2002            |  |                    | $3,448 |                  |  | $     | 16,909 |  |  | $ | 20,357 |  
|                                         |  |                    |        |                  |  |       |        |  |  |   |        |  



| | 5) |  | Earnings Per Share                                                                                                                                                                                                                                                                                                                                          
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | Net income (loss) per common share is based on weighted average shares
outstanding. Net income (loss) per common share  assuming dilution
includes the dilutive effects of potential common shares outstanding
during the period. A reconciliation of the numerator and denominator
of the per share and per share  assuming dilution calculations follow:

|                                                                                   |  |                    |        |      |  |  |        | 
|---------------------------------------------------------------------------------- |  | ------------------ | ------ | ---- |  |  | ------ | 
|                                                                                   |  | Three months ended
|Thousands except per share amounts                                                 |  | September 30,     
|                                                                                   |  |                   
|                                                                                   |  | 2002               |        | 2001
|                                                                                   |  |                    |        |     
|Net Income (Loss) Per Common Share                                                 |  |                    |        |      |  |  |        | 
|Net income (loss)                                                                  |  | $                  | (183   | )    |  |  | 648    | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Weighted-average common shares outstanding used in
earnings per share computations |  |                    | 14,615 |      |  |  | 14,532 | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Net income (loss) per common share                                                 |  | $                  | (0.01  | )    |  |  | 0.04   | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Net Income (Loss) Per Common Share  Assuming Dilution                             |  |                    |        |      |  |  |        | 
|Net income (loss)                                                                  |  | $                  | (183   | )    |  |  | 648    | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Weighted-average common shares outstanding used in
earnings per share computations |  |                    | 14,615 |      |  |  | 14,861 | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Net income (loss) per common share  assuming dilution                             |  | $                  | (0.01  | )    |  |  | 0.04   | 
|                                                                                   |  |                    |        |      |  |  |        | 

|                                                                                   |  |                    |        |      |  |  |        | 
|---------------------------------------------------------------------------------- |  | ------------------ | ------ | ---- |  |  | ------ | 
|                                                                                   |  | Three months ended
|Thousands except per share amounts                                                 |  | September 30,     
|                                                                                   |  |                   
|                                                                                   |  | 2002               |        | 2001
|                                                                                   |  |                    |        |     
|Shares Used in Net Income (Loss) per Share Computations                            |  |                    |        |      |  |  |        | 
|Average outstanding common shares                                                  |  |                    | 14,615 |      |  |  | 14,532 | 
|Incremental shares from assumed conversions 
potential common shares              |  |                    |       |      |  |  | 329    | 
|                                                                                   |  |                    |        |      |  |  |        | 
|Shares used in net income (loss) per common share 
assuming dilution computations |  |                    | 14,615 |      |  |  | 14,861 | 
|                                                                                   |  |                    |        |      |  |  |        | 

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited) (Continued)



---



| |    |  | Due to the reported net loss for the three months ended September 30,
2002, 22,710 potential common shares were not included in the
computation of net loss per common share  assuming dilution because
the effect would be anti-dilutive. For the three months ended
September 30, 2002 and 2001, options to purchase 3,376,444 and
1,817,082 shares of common stock, respectively, were outstanding but
were not included in the computation of net income (loss) per common
share  assuming dilution because the options exercise prices were
greater than the average market price of the common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 6) |  | Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |    |  | Comprehensive income (loss) for the three months ended September 30,
2002 and 2001 was ($391,000) and $1.8 million, respectively. The
difference between comprehensive income (loss) and net income (loss)
was related to foreign currency translation adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | 7) |  | Segment Financial Data                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |    |  | SBS operates worldwide through two operating segments: the
Communications and Enterprise Group and the Commercial and Government
Group. The Communications and Enterprise Group consists of SBS
Technologies, Inc., Communications and Enterprise Group (formerly SBS
Technologies, Inc., Communications Products which merged in September
2002 with SDL Communications, Inc. and SBS Technologies, Inc.,
Industrial Computers). The Commercial and Government Group consists of
SBS Technologies, Inc., Commercial Group, SBS Technologies, Inc.
Government Group (formerly SBS Technologies, Inc., Embedded Computers
and SBS avionics and telemetry division whose assets were conveyed to
SBS Technologies, Inc., Government Group from SBS Technologies, Inc. in
July 2002), SBS Technologies GmbH & Co. KG and ortecElectronic
Assembly GmbH. These segments are based on the markets that are served
and the products that are provided to those markets. Each segment has
its own sales and distribution channels and has a manager who reports
directly to the President and Chief Operating Officer. Reportable
segments for all periods presented have been reclassified to conform to
the current segment reporting structure.
|
| |    |  | SBS measures its segments results of operations based on income (loss)
before income taxes and prior to allocation of corporate overhead
expenses other than marketing costs, the majority of amortization
associated with acquisitions and substantially all interest income and
expense. The accounting policies used to measure segment results of
operations are the same as those referred to in Note 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                                                                                 |  |                |        |              |  |                 |        |       |  |  |   |  |  |  |        |  
|-------------------------------------------------------------------------------- |  | -------------- | ------ | ------------ |  | --------------- | ------ | ----- |  |  | - |  |  |  | ------ | -
|                                                                                 |  | Communications |        | Government   |  |                 |        |       |  |  |   | 
|                                                                                 |  | & Enterprise   |        | & Commercial |  | Corporate &     |        |       |  | 
|Thousands                                                                        |  | Group          |        | Group        |  | Unallocated (1) |        | Total
|                                                                                 |  |                |        |              |  |                 |        |      
|Three-month period ended September 30                                            |  |                |        |              |  |                 |        |       |  |  |   |  |  |  |        |  
|                                                                                 |  |                |        |              |  |                 |        |       |  |  |   |  |  |  |        |  
|Gross Sales                    
                  
                  
      2002 |  |                | 6,914  |              |  |                 | 20,948 |       |  |  |  |  |  |  | 27,862 |  
|Inter-segment sales                                                              |  |                |       |              |  |                 | (29    | )     |  |  |  |  |  |  | (29    | )
|                                                                                 |  |                |        |              |  |                 |        |       |  |  |   |  |  |  |        |  
|Sales to external customers                                                      |  |                | 6,914  |              |  |                 | 20,919 |       |  |  |  |  |  |  | 27,833 |  
|                                                                                
|Gross Sales
                  
                  
                  
       2001 |  |                | 10,586 |              |  |                 | 22,052 |       |  |  |  |  |  |  | 32,638 |  
|Inter-segment sales                                                              |  |                | (164   | )            |  |                 | (675   | )     |  |  |  |  |  |  | (839   | )
|                                                                                 |  |                |        |              |  |                 |        |       |  |  |   |  |  |  |        |  
|Sales to external customers                                                      |  |                | 10,422 |              |  |                 | 21,377 |       |  |  |  |  |  |  | 31,799 |  

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited) (Continued)



---

|                                                                                 |                                                                               |       |        |                |        |                 |        |             |        |  |        |        |        |  |         |       |         | 
|-------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ----- | ------ | -------------- | ------ | --------------- | ------ | ----------- | ------ |  | ------ | ------ | ------ |  | ------- | ----- | ------- | 
|                                                                                 |                                                                               |       |        | Communications |        | Government      |        |             |        |  |        |        |        | 
|                                                                                 |                                                                               |       |        | & Enterprise   |        | & Commercial    |        | Corporate & |        |  |        |       
|Thousands                                                                        |                                                                               | Group |        | Group          |        | Unallocated (1) |        | Total      
|                                                                                 |                                                                               |       |        |                |        |                 |        |            
|Three-month period ended September 30                                            |                                                                               |       |        |                |        |                 |        |             |        |  |        |        |        |  |         |      
|                                                                                 |                                                                               |       |        |                |        |                 |        |             |        |  |        |        |        |  |         |      
|Segment profit (Income (loss)
                  
                
2002           |                                                                               |       | (1,680 | )              |        |                 | 4,499  |             |        |  | (3,130 | )      |        |  | (311    | )    
|                                                                                 | before taxes)                   
               
                
       2001 |       |        | 834            |        |                 |        | 4,959       |        |  |        | (4,689 | )      |  |         | 1,104 |        
|As of September 30,                                                              |                                                                               |       |        |                |        |                 |        |             |        |  |        |        |        |  |         |      
|Total Assets                   
                
               
           2002 |                                                                               |       | 13,353 |                |        |                 | 35,767 |             |        |  | 73,783 |        |        |  | 122,903 |      
|                                                                                 |                                                                               | 2001  |        |                | 35,458 |                 |        |             | 39,227 |  |        |        | 71,005 |  |         |       | 145,690 | 



---

|(1) |  | The corporate and unallocated column includes amounts for corporate items. With regard to results of operations,
corporate and unallocated includes corporate overhead expenses other than corporate marketing costs, substantially all
interest expense, substantially all interest income and substantially
all amortization associated with acquisitions.
Corporate assets primarily include cash and cash equivalents, deferred and current income tax assets, goodwill and
intangible assets.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8) |  | Severance and Other Employee Termination Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    |  | For the quarter ended September 30, 2002, SBS recorded severance and
other employee termination charges of $335,000. Due to the continued
depressed economic and market conditions facing its Communications and
Enterprise Group, on July 22, 2002, SBS notified 19 full and part-time
employees at its Madison, Wisconsin engineering design center that their
jobs had been eliminated. Additionally, for the same reason, on
September 30, 2002, SBS notified 22 employees of the Communications and
Enterprise Group that their jobs were being eliminated. Also, during the
quarter ended September 30, 2002, severance costs were incurred for 2
other employees who were notified that their jobs had been eliminated.
As of September 30, 2002, of the $335,000 of severance and other employee
termination costs, cash payments of $89,000 were made, and the remaining
$246,000 will be paid through the quarter ending March 31, 2003.
|
| |    |  | During the year ended June 30, 2002, based on unfavorable economic and
market conditions, facility consolidation actions, and the decision to
exit the legacy PCI Chassis product line, SBS reduced its employee base,
resulting in elimination of 159 positions in manufacturing, research and
development, administration, and sales and marketing. As a result, for
the year ended June 30, 2002, employee severance and other termination
charges of approximately $1,253,000 were recorded. As of September 30,
2002, cash payments of $1,116,000 had been made, $21,000 of the original
charge was reversed as a result of the decision not to terminate certain
originally notified employees, and the remaining $116,000 will be paid
through the quarter ending December 31, 2002.                                                                                                                                                       

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002



---

The following discussion and analysis should be read in conjunction with SBS
Financial Statements and Notes thereto. Information discussed herein, other
than statements of historical fact, that addresses future financial
performance, activities, events or developments that SBS or management intends,
expects, projects, believes or anticipates will or may occur in the future are
forward-looking statements. These forward-looking statements include expected
sales and gross margin for the quarter ending December 31, 2002, expectations
of internally-generated cash flows, expectations of SBS breakeven sales level,
and expectations for government spending. These statements are based upon
certain assumptions and assessments made by management of SBS in light of its
experience and its perception of historical trends, current conditions,
expected future developments and other factors it believes to be appropriate.
These assumptions and assessments include the volume and product mix of sales,
estimates of costs and inventory and receivable levels based on preliminary
information, and other items. The forward-looking statements included in this
Form 10-Q are also subject to a number of risks, uncertainties, and other
factors which could cause the actual results to differ materially from those
contained in the forward-looking statements. These include but are not limited
to economic, competitive, supply and demand, governmental, and technological
factors affecting SBS operations, markets, products, services, and prices, a
high degree of uncertainty and rapid change in the markets addressed by SBS
products, customer demand for SBS products, and other risk factors listed in
the Companys Form 10-K for the year ended June 30, 2002. These
forward-looking statements are not guarantees of future performance, and actual
results, developments, and business decisions may differ materially from those
expressed or implied by these forward-looking statements.

Overview

SBS designs and builds open-architecture embedded computer products that enable
OEMs to serve the commercial, communications, enterprise and government
markets. SBS products are integrated into a variety of applications including
communications networking, medical imaging, industrial automation and military
systems. The portfolio includes an extensive line of CPU boards, computer
interconnections, avionics, telemetry, and fully integrated systems and
enclosures that system designers can easily utilize to create a custom solution
specific to the users unique application. SBS objective is to continue to
capitalize on its design expertise and customer service capabilities to enhance
product quality and reduce time to market for OEM customers. SBS has grown, and
intends to continue to do so, through a combination of internal growth and
acquisitions. SBS completed ten acquisitions between 1992 and June 30, 2002
that broadened SBS product offerings and customer base. SBS achieves internal
growth by expanding its existing product lines through new product development,
through increasing penetration of its existing customer base, and by adding new
customers.

Sales for the three-month period ended September 30, 2002, were $27.8 million,
a 12.5% decrease from the $31.8 million in sales for the three-month period
ended September 30, 2001. Net loss for the three-month period ended September
30, 2002 was $(183,000), or net loss per common share  assuming dilution of
$(0.01). This compares to net income for the three-month period ended
September 30, 2001 of $648,000, or net income per common share  assuming
dilution of $0.04. SBS continues to experience depressed market and economic
conditions in its communications and commercial markets and management does not
expect significant improvement in sales into these markets in fiscal 2003.
Management expects some growth in sales to government customers in fiscal 2003
due to an expected increase in Department of Defense development and field
deployment expenditures.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America 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. Estimates are used when accounting for items such
as inventory, allowances for doubtful accounts, depreciation and amortization
periods, income taxes, and intangible assets. These estimates and assumptions
are evaluated on an on-going basis and may require adjustment. Actual results
could differ from the estimates under different assumptions or conditions. The
policies discussed below are considered by management to be critical to an
understanding of SBS consolidated financial statements because their
application places the most significant demands on managements judgment, with
financial reporting results relying on estimation about the effect of matters
that are inherently uncertain. SBS did not make any changes to these policies
during the quarter ended September 30, 2002. For additional accounting
policies, see Note 1 to the condensed consolidated financial statements,
Summary of Significant Accounting Policies.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---



| |  |  | Revenue Recognition. Revenue is generally recognized when goods are
shipped to the customer, provided that SBS has received a valid purchase
order, the price is fixed, title has transferred, collection of the
associated receivable is reasonably assured, and there are no remaining
significant obligations. Where customer acceptance provisions exist,
revenue is recognized only when SBS is certain that the products meet
all of the specified criteria for customer acceptance and all other
revenue recognition criteria have been met.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Inventory Valuation. SBS records inventory write-downs based on
estimates of obsolescence or unmarketable inventory, taking into account
historical usage, forecasted future demand, and general market
conditions. Write-downs may also be recorded based on SBS decisions to
discontinue the marketing of certain products or product lines. If
SBS forecasts are incorrect, market conditions deteriorate, or SBS
decides to exit other product lines, additional inventory write-downs
may be required. If market conditions or demand are better than
expected, SBS may sell inventories that have been previously written
down.                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  |  | Allowances for Doubtful Accounts. SBS maintains allowances for
doubtful accounts receivable resulting from the failure of its customers
to make required payments. The estimate is based on the aging of SBS
accounts receivable, SBS historical write-off experience, and the
current and projected financial condition of customers. If SBS
misinterprets the financial condition of customers or if the financial
condition of customers deteriorates, additional allowances for doubtful
accounts may be required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  |  | Long-Lived and Intangible Assets. SBS evaluates the carrying value
of long-lived and intangible assets whenever certain events or changes
in circumstances indicate that the carrying amount may not be
recoverable. These events or circumstances include, but are not limited
to, a prolonged industry or economic downturn, a significant decline in
SBS market value, or significant reductions in projected future cash
flows. An asset would be considered to be impaired if future
undiscounted cash flows, without consideration of interest, are
insufficient to recover the carrying amount of the asset. Once deemed
impaired, a charge to expense is recognized to the extent that the
carrying amount of the asset exceeds fair value. Fair value is
generally determined by calculating the discounted future cash flows
using a discount rate based upon SBS weighted average cost of capital.
Estimates of future cash flows require significant judgment, and any
change in these estimates may result in additional impairment charges.
|
| |  |  | Income Taxes. SBS estimates of current and deferred income taxes
reflect SBS assessment of current and future taxes to be paid or
received on items reflected in the financial statements, giving
consideration to both timing and probability of realization. Estimates
of current income taxes include estimates for items such as general
business credits and benefits from foreign sales. Actual income taxes
could vary from these estimates due to future changes in income tax laws
or review of SBS tax returns by taxing authorities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Results of Operations

Three Months Ended September 30, 2002 Compared To Three Months Ended September 30, 2001

Sales.For the three-month period ended September 30, 2002, sales decreased
12.5%, or $4.0 million, from $31.8 million for the three-month period ended
September 30, 2001, to $27.8 million. Unit shipments decreased within the
Communications and Enterprise Group, primarily due to the continued depressed
market and economic conditions affecting this Group, customer delays of
existing backlog, and order cancellations. Unit shipments of the Commercial
and Government Group declined across all product lines due to the current
depressed market and economic conditions, partially offset by sales related to
the products acquired from the Essential Communications asset acquisition
completed on March 4, 2002. Management does not expect significant improvement
in the communications and commercial markets in fiscal 2003. Management
expects some growth in sales to government customers in fiscal 2003 due to an
expected increase in Department of Defense development and field deployment
expenditures. SBS expects the consolidated sales for the quarter ending
December 31, 2002 will be consistent with the quarter ended September 30, 2002
however, actual results may vary materially.

Page 13





---



##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---

Gross Profit.For the three-month period ended September 30, 2002, gross
profit decreased 15.5%, or $2.5 million, from $15.9 million for the three-month
period ended September 30, 2001, to $13.5 million, primarily due to the decline
in sales. Gross profit as a percentage of sales decreased to 48.3% from the
50.1% in the three-month period ended September 30, 2001. This decrease was
primarily due to a change in the sales mix within the Communications and
Enterprise Group to lower margin products. During the three-month period ended
September 30, 2002, SBS utilized approximately $375,000 of inventory that had
been written down to zero cost during fiscal 2002, favorably impacting gross
margin as a percentage of sales by 1.3%. Based on managements expectations
of sales for the quarter ending December 31, 2002, management expects gross
profit as a percentage of sales to be similar to that of the first quarter of
fiscal 2003.

Selling, General and Administrative Expense.For the three-month period ended
September 30, 2002, selling, general and administrative (SG&A) expense
decreased 7.6%, or $680,000 from $8.9 million for the three-month period ended
September 30, 2001, to $8.2 million. This decrease was primarily due to the
cost reductions implemented throughout the quarter ended June 30, 2002 and the
quarter ended September 30, 2002. For the three-month period ended September
30, 2002, SG&A expense as a percentage of sales increased from 28.0% for the
quarter ended September 30, 2001, to 29.6% as the reduction in SG&A expense
wasnt sufficient to offset the reduction in sales.

Research and Development Expense.For the three-month period ended September
30, 2002, research and development (R&D) expense increased 10.3%, or $440,000,
from $4.3 million for the three-month period ended September 30, 2001, to $4.7
million. This increase was primarily due to the addition of research and
development employees added as a result of the acquisition of the assets of
Essential Communications completed on March 4, 2002. For the three-month
period ended September 30, 2002, R&D expense as a percentage of sales increased
to 16.9% from 13.4% in the three-month period ended September 30, 2001, due to
the decrease in sales volume and the costs associated with the additional
employees discussed above.

Severance and Other Employee Termination Costs.For the quarter ended September
30, 2002, SBS recorded severance and other employee termination charges of
$335,000. Due to the continued depressed economic and market conditions facing
its Communications and Enterprise Group, on July 22, 2002, SBS notified 19 full
and part-time employees at its Madison, Wisconsin engineering design center
that their jobs had been eliminated. Additionally, for the same reason, on
September 30, 2002, SBS notified 22 employees of the Communications and
Enterprise Group that their jobs were being eliminated. Also, during the
quarter ended September 30, 2002, severance costs were incurred for 2 other
employees who were notified that their jobs had been eliminated. As of
September 30, 2002, of the $335,000 of severance and other employee termination
costs, cash payments of $89,000 made been made. The remaining $246,000 will be
paid through the quarter ending March 31, 2003.

Amortization of Intangible Assets.For the three-month period ended September
30, 2002, amortization of intangible assets was $584,000, compared to $1.9
million for the three-month period ended September 30, 2001. Effective July 1,
2002, SBS adopted Statement of Financial Standards No. 142 (SFAS 142),
Goodwill and Other Intangible Assets, and no longer amortizes goodwill. As
of the date of adoption, SBS had unamortized goodwill of approximately $20.5
million, subject to the transition provisions of SFAS 142. There was no
goodwill amortization expense for the three-month period ended September 30,
2002, whereas goodwill amortization amounted to approximately $1.2 million for
the three-month period ended September 30, 2001. Additionally, a write-down of
$136,000 was recorded in connection with a prepaid license agreement for a
product that SBS determined during the quarter ended September 30, 2002, would
not be brought to market.

Interest and Other Income, Net. For the three-month period ended September 30,
2002, net interest and other income of $125,000 consisted primarily of interest
income associated with surplus cash. For the three-month period ended
September 30, 2001, net interest and other income of $436,000 consisted
primarily of a recovery from insurance of $307,000 and interest income
associated with surplus cash.

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---



##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---

Income Tax Expense (Benefit).For the three-month periods ended September 30,
2002 and 2001, income tax expense (benefit) represented effective rates of
(41.2)% and 41.3%, respectively. A tax benefit related to the net loss for the
quarter ended September 30, 2002 was recorded primarily due to SBS ability to
realize the benefit through tax loss carry-backs to prior periods.

Earnings Per Share.For the three-month period ended September 30, 2002, net
loss per common share and net loss per common share  assuming dilution was
$(0.01) compared to net income per share and net income per common share 
assuming dilution of $0.04 for the three-month period ended September 30, 2001.

Review of Business Segments

SBS operates internationally through two operating segments: the Communications
and Enterprise Group and the Commercial and Government Group. The
Communications and Enterprise Group consists of SBS Technologies, Inc.,
Communications and Enterprise Group (formerly SBS Technologies, Inc.,
Communications Products which merged in September 2002 with SDL Communications,
Inc. and SBS Technologies, Inc., Industrial Computers). The Commercial and
Government Group consists of SBS Technologies, Inc., Commercial Group, SBS
Technologies, Inc. Government Group (formerly SBS Technologies, Inc., Embedded
Computers and SBS avionics and telemetry division whose assets were conveyed
to SBS Technologies, Inc., Government Group from SBS Technologies, Inc. in July
2002), SBS Technologies GmbH & Co. KG and ortecElectronic Assembly GmbH.
These segments are based on the markets that are served and the products that
are provided to those markets. Each segment has its own sales and distribution
channels and has a manager who reports directly to the President and Chief
Operating Officer.

The following is a discussion of sales to external customers and segment profit
(loss) for each reportable segment. In the measure of segment profit or loss
(Segment Profit (Loss)), SBS does not allocate the following to these
segments:



| |  |  | A majority of the amortization expense associated with acquisitions,
| | - |  | --------------------------------------------------------------------
|
| |  |  | substantially all interest income earned on cash balances, and      
|
| |  |  | corporate overhead costs, excluding corporate marketing costs.      

Communications and Enterprise Group

|                                 |  |                    |  |                       |  |  |  | 
|-------------------------------- |  | ------------------ |  | --------------------- |  |  |  | 
|                                 |  | Sales to           |  |                       |  | 
|Three months ended September 30, |  | External Customers |  | Segment Profit (Loss)
|                                 |  |                    |  |                      
|FY03                             |  | $  6.9 million     |  | $(1.7) million       
|FY02                             |  | $10.4 million      |  | $0.8 million         

For the three-month period ended September 30, 2002, Communications and
Enterprise Group sales to external customers decreased 33.7%, or $3.5 million,
from $10.4 million for the three-month period ended September 30, 2001, to $6.9
million. This decrease was primarily due to the continued depressed market and
economic conditions affecting this Group. This Group continues to experience
customer delays of existing backlog and cancellations of backlog orders by the
Groups telecommunications infrastructure customers. SBS expects that the
Groups sales in the quarter ending December 31, 2002 will be lower than sales
in the quarter ended September 30, 2002, primarily due to continued depressed
market conditions although, actual results may vary materially.

Page 15



---



##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---

For the three-month period ended September 30, 2002, Communications and
Enterprise Group Segment (Loss) was $(1.7) million, compared to Segment Profit
of $834,000 for the three-month period ended September 30, 2001. This decrease
was primarily due to the decrease in sales and a change in product mix to lower
margin products, severance expense relating to employee reductions implemented
during the quarter, and the write-down of a prepaid license agreement for a
product that SBS determined during the quarter, would not be brought to market.
This was partially offset by a reduction of SG&A expense and R&D expense
resulting from cost reductions implemented over the past several quarters. For
the same reasons, Segment Profit (Loss) as a percentage of sales decreased from
8.0% for the three-month period ended September 30, 2001 to (24.3%) for the
three-month period ended September 30, 2002.

Commercial and Government Group

|                                 |  |                    |  |                |  |  |  | 
|-------------------------------- |  | ------------------ |  | -------------- |  |  |  | 
|                                 |  | Sales to           |  |                |  | 
|Three months ended September 30, |  | External Customers |  | Segment Profit
|                                 |  |                    |  |               
|FY03                             |  | $20.9 million      |  | $4.5 million  
|FY02                             |  | $21.4 million      |  | $5.0 million  

For the three-month period ended September 30, 2002, Commercial and Government
Group sales to external customers decreased 2.1%, or $500,000 from $21.4
million for the three-month period ended September 30, 2001 to $20.9 million.
Sales declined across all product lines due to the current depressed market and
economic conditions, partially offset by approximately $795,000 in sales
related to the products acquired from the Essential Communications asset
acquisition completed on March 4, 2002. SBS expects that the Groups sales in
the quarter ending December 31, 2002 will be slightly higher than sales in the
quarter ended September 30, 2002, primarily due to an expected increase in
sales to government customers however, actual results may vary materially.

For the three-month period ended September 30, 2002, Commercial and Government
Group Segment Profit was $4.5 million, compared to Segment Profit of $5.0
million for the three-month period ended September 30, 2001. This decrease was
primarily due to the decrease in sales and the additional R&D expense resulting
from the Essential Communications asset acquisition, partially offset by a
reduction in SG&A expense due to cost reductions implemented during fiscal year
2002. For the same reasons, Segment Profit as a percentage of sales declined
from 23.2% for the three-month period ended September 30, 2001 to 21.5% for the
three-month period ended September 30, 2002.

Liquidity and Financial Condition

SBS uses a combination of the sale of equity securities, internally generated
funds and bank borrowings to finance its acquisitions, working capital
requirements, capital expenditures and operations.

Cash totaled $24.8 million at September 30, 2002, unchanged from June 30, 2002.
Net cash provided by operating activities was $851,000 and proceeds from the
exercise of stock options totaled $13,000. The receipt of this cash was offset
by $200,000 for the prepayment of a license agreement, $343,000 for the
purchase of capital equipment, and $321,000 paid to repurchase shares of SBS
common stock pursuant to a repurchase plan initially adopted for a one year
period by the Board of Directors on September 14, 2001 and extended until
September 2003. During the three-month period ended September 30, 2002,
accounts receivable declined $942,000 due to a decline in sales and an
improvement in collection days, and inventory declined $600,000 due to SBS
continued improvement in the management of its inventories. Liabilities were
in line with the current level of business.

At June 30, 2002, SBS was out of compliance with the cash flow coverage ratio
covenant of its amended $30.0 million Credit Agreement (Agreement) with Bank
of America, N.A., primarily due to the inventory write-down and charges for
impairment of identifiable intangibles and goodwill recorded in the fourth
quarter of fiscal 2002. At no time during the three-month period ended
September 30, 2002 were any borrowings drawn on the Agreement. On September
20, 2002, SBS canceled the Agreement. Management does not believe, as of the
date of this report and based upon managements assessment of future cash needs
and sources of cash, that SBS liquidity needs require SBS to have a credit
facility in place at this time.

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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---

Management believes that SBS internally generated funds will be sufficient to
finance its current operations and capital expenditures, excluding
acquisitions, for at least the next twelve months. Because long-term cash flow
cannot be predicted with certainty, it is possible in the future that SBS could
require external financing through bank facilities, the sale of equity or debt
securities, or other sources of capital. The sale of any equity or debt
facilities, if required, may result in additional dilution to the shareholders.
SBS cannot be certain that additional financing will be available, in amounts,
or on terms, acceptable to SBS or at all.

As of the date of this report, SBS does not have any material capital
expenditure commitments. As of September 30, 2002, SBS had $362,000 in
remaining severance payments to employees, due at various dates through the
quarter ending March 31, 2003 (see Severance and Other Employee Termination
Charges). SBS is also committed under noncancelable operating leases that
expire at various dates through fiscal 2006, as described in Managements
Discussion and Analysis in SBS Annual Report on Form 10-K for the fiscal year
ended June 30, 2002.

For the three-month period ended September 30, 2002, there was no significant
impact from inflation.

New Accounting Standards

In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with
Exit of Disposal Activities, which addresses financial accounting and
reporting for costs associated with exit of disposal activities and nullifies
EITF Issue No. 94-3 Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). The principal difference between SFAS 146 and EITF 94-3
is SFAS 146s requirement for recognition of a liability for a cost associated
with an exit or disposal activity. SFAS 146 requires that a liability be
recognized when the liability is incurred. Under EITF 94-3, a liability for an
exit cost was recognized at the date of an entitys commitment to an exit plan.
SFAS 146 also establishes that fair value is the objective for initial
measurement of the liability. The provisions of SFAS 146 are effective for
exit or disposal activities that are initiated after December 31, 2002. SBS
does not expect the adoption of SFAS 146 to have a material impact on its
financial statements or results of operations.

Business Outlook

Consistent with SBS press release dated October 15, 2002, SBS management
expects sales for the second quarter of fiscal 2003 to be similar to the first
quarter. Management believes that, excluding any transitional impairment
charges and costs associated with any future employee severance or asset
write-offs caused by unfavorable customer circumstances, SBS is structured so
that it is reasonable to expect the company to break-even at a quarterly sales
rate of between $27.0 million and $27.5 million.




Quantitative and Qualitative Disclosures about Market Risk

SBS liquid investment is cash invested in either money market accounts or in
overnight repurchase agreements. Due to the nature of these investments, SBS
believes that the market risk related to these investments is minimal.

SBS, as a result of its German operating and financing activities, is exposed
to market risk from changes in foreign currency exchange rates. To date, SBS
has not entered into any foreign exchange forward contracts to reduce its
exposure to changes in foreign currency exchange rates.

Page 17



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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 2002
(continued)



---




Controls and Procedures

With the participation of management, SBS Chief Executive Officer and Chief
Financial Officer evaluated SBS disclosure controls and procedures as of
September 30, 2002 (the Evaluation Date as referred to in the Certifications
of the Chief Executive Officer and the Chief Financial Officer). Based upon
this evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that SBS disclosure controls and procedures are effective to ensure
that material information required to be disclosed by the Company in the
reports filed or submitted by it under the Securities and Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commissions rules and forms.

There have been no significant changes in the Companys internal controls or,
to the knowledge of SBS management, in other factors that could significantly
affect these controls, including any corrective actions with regard to
significant deficiencies and material weaknesses, subsequent to the Evaluation
Date.

Page 18





---



##### Table of Contents






PART II  OTHER INFORMATION




Item 1. Legal Proceedings



| |  |  | During the three-month period ended September 30, 2002, SBS received
notice of a claim for patent infringement regarding the sale of SBS
PCMCIA product line. Management is currently evaluating the claim. Due
to uncertainty regarding the ultimate outcome of this matter, SBS is
currently unable to determine an estimate of the amount or range, if any,
of potential loss. However, management believes the outcome of this
matter will not have a material impact on SBS financial position.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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



| | (a) |  | Exhibits (exhibit reference numbers refer to Item 601 of Regulation S-K)
| | --- |  | ------------------------------------------------------------------------

| |       |  |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ----- |  |  | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 03.i  |  |  | (1) |  | Restated Articles of Incorporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 03.ii |  |  | (1) |  | Restated and Amended Bylaws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 04.a  |  |  | (1) |  | Article VI of the Restated Articles of Incorporation, as included in the Restated
Articles of Incorporation of SBS Technologies, Inc.                                                                                                                                                                                                                                                                                                                                                                                          
| | 04.b  |  |  | (1) |  | Articles I and II of the Restated and Amended Bylaws of SBS Technologies, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 04.c  |  |  | (1) |  | Form of certificate evidencing Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | 04.1  |  |  | (1) |  | Rights Agreement dated September 15, 1997 between SBS Technologies, Inc. and
First Security Bank (now Wells Fargo), National Association, as Rights Agent, which
includes the form of Right Certificate as Exhibit A and the Summary of Rights to
Purchase Common Stock as Exhibit B.2 and Agreement to Serve as Rights Agent; on
January 21, 1998, pursuant to Section 21 of the Shareholder Rights Agreement dated
September 15, 1997, SBS appointed Norwest Bank Minnesota N.A. (now Wells Fargo) as
Successor Rights Agent.
| | 10.ac |  |  | (1) |  | Office/Warehouse Lease between Lutheran Brotherhood, a Minnesota Corporation, and
Bit 3 Computer Corporation, a wholly-owned subsidiary of SBS Technologies, Inc.,
dated September 5, 1997.                                                                                                                                                                                                                                                                                                                                    
| | 10.ad |  |  | (1) |  | Amendment #1 to Lease between Lutheran Brotherhood, a Minnesota Corporation, and
Bit 3 Computer Corporation, a wholly-owned subsidiary of SBS Technologies, Inc.,
dated December 23, 1997.                                                                                                                                                                                                                                                                                                                                     
| | 10.bw |  |  | (1) |  | Lease Agreement between Teal Properties, LLC and SBS Technologies, Inc. dated
October 2, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 99.1  |  |  | (1) |  | Certification of Christopher J. Amenson, Chairman and Chief Executive Officer,
Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                        
| | 99.2  |  |  | (1) |  | Certification of James E. Dixon, Jr., Chief Financial Officer, Pursuant to 18 U.S.C.
Section 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                        



| | (b) |  | Reports on Form 8-K  None
| | --- |  | --------------------------
|
| | (1) |  | See Exhibit Index         

Page 19





---



##### Table of Contents






SIGNATURES

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

|                        |  |                                                                                        
|----------------------- |  | ---------------------------------------------------------------------------------------
|                        |  | SBS TECHNOLOGIES, INC.                                                                 
|                       
|Date: November 13, 2002 |  | /s/ Christopher J. AmensonChief Executive Officer
and Chairman of the Board            
|                       
|Date: November 13, 2002 |  | /s/ James E. Dixon, Jr.Vice President,
Chief Financial Officer;
Secretary and Treasurer

Page 20





---



##### Table of Contents






CERTIFICATION

I, Christopher J. Amenson, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                               
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of SBS Technologies,
Inc.;                                                                                                                                                                                                                                                 
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:                                                                                                 



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

|   |  |                                                                                                                                                                                                                                   
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons of equivalent
function):



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

|   |  |                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|       |  |                   |  |                                                                                      
|------ |  | ----------------- |  | -------------------------------------------------------------------------------------
|Dated: |  | November 11, 2002 |  | /s/ Christopher J. AmensonChristopher J. Amenson
Chairman and Chief Executive Officer

Page 21





---



##### Table of Contents



CERTIFICATION

I, James E. Dixon, Jr., certify that:

|   |  |                                                                                                                                                                                                                                                                                                                               
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of SBS Technologies,
Inc.;                                                                                                                                                                                                                                                 
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this quarterly
report;                      
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:                                                                                                 



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

|   |  |                                                                                                                                                                                                                                   
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons of equivalent
function):



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        

|   |  |                                                                                                                                                                                                                                                                                                                                                                                          
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|       |  |                   |  |                                                                                                            
|------ |  | ----------------- |  | -----------------------------------------------------------------------------------------------------------
|Dated: |  | November 11, 2002 |  | /s/ James E. Dixon, Jr.James E. Dixon, Jr.
Vice President, Chief Financial Officer,
Secretary and Treasurer

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##### Table of Contents






SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX

|               |  |             |     |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                |  |  |  | 
|-------------- |  | ----------- | --- | ---------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ |  |  |  | 
|Exhibit Number |  | Description |     | Method of Filing |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                               
|               |  |             |     |                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                               
|03.i           |  |             | (1) |                  |  | Restated Articles of Incorporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  |                              
|03.ii          |  |             | (2) |                  |  | Restated and Amended Bylaws                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                              
|04.a           |  |             | (1) |                  |  | Article VI of the Restated Articles of Incorporation,
as included in the Restated Articles of Incorporation
of SBS Technologies, Inc.                                                                                                                                                                                                                                                                                                                                                                                                  |  |                              
|04.b           |  |             | (2) |                  |  | Articles I and II of the Restated and Amended Bylaws of
SBS Technologies, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                              
|04.c           |  |             | (3) |                  |  | Form of certificate evidencing Common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                              
|04.1           |  |             | (4) |                  |  | Rights Agreement dated September 15, 1997 between SBS
Technologies, Inc. and First Security Bank (now Wells Fargo),
 National Association, as Rights Agent, which includes the form
 of Right Certificate as Exhibit A and the Summary of Rights to
 Purchase Common Stock as Exhibit B.2, and Agreement to Serve
 as Rights Agent; on January 21, 1998, pursuant to Section 21 of
 the Shareholder Rights Agreement dated September 15, 1997, SBS
 appointed Norwest Bank Minnesota N.A. (now Wells Fargo) as
 Successor Rights Agent |  |                              
|10.ac          |  |             |     |                  |  | Office/Warehouse Lease between Lutheran Brotherhood,
a Minnesota Corporation, and Bit 3 Computer Corporation,
   a wholly-owned subsidiary of SBS Technologies, Inc., dated
September 5, 1997.                                                                                                                                                                                                                                                                                                                                         |  | Filed herewith electronically.
|10.ad          |  |             |     |                  |  | Amendment #1 to Lease between Lutheran Brotherhood,
a Minnesota Corporation, and Bit 3 Computer Corporation,
     a wholly-owned subsidiary of SBS Technologies, Inc., dated
December 23, 1997.                                                                                                                                                                                                                                                                                                                                        |  | Filed herewith electronically.
|10.bw          |  |             |     |                  |  | Lease Agreement between Teal Properties, LLC and
SBS Technologies, Inc. dated October 2, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Filed herewith electronically.
|99.1           |  |             |     |                  |  | Certification of Christopher J. Amenson, Chairman and
Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.                                                                                                                                                                                                                                                                                                                                                |  | Filed herewith electronically.
|99.2           |  |             |     |                  |  | Certification of James E. Dixon, Jr., Chief Financial Officer,
Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                |  | Filed herewith electronically.



---

|(1) |  | Incorporated by reference to Exhibit 3.i, of the Registrants
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Incorporated by reference to Exhibit 3.ii, of the Registrants
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.                                                                  
|   
|(3) |  | Incorporated by reference to Exhibit 4.c, of the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.                                                                       
|   
|(4) |  | Incorporated by reference to Exhibit 4.1 to the Registrants Form
8-K filed September 23, 1997, and to Exhibit 99.1a of the
Registrants Quarterly Report on Form 10-Q for quarter ended March
31, 1998.

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