UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Form 10-Q

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

For the quarterly period ended March 31, 2004

Commission file number 1-10981



SBS Technologies, Inc.



|New Mexico                                                     | 85-0359415                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

2400 Louisiana Blvd. NE AFC Building 5, Suite 600
Albuquerque, New Mexico      87110

(505) 875-0600

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

Indicate by check mark whether the Registrant is an accelerated filer (as defined in
Rule 121(b)2 of the Securities Exchange Act of 1934). YES [ X ]
      NO [       ]

The total number of shares outstanding of the registrant's Common Stock as of May 11, 2004 was 15,266,469.







SBS Technologies, Inc. and Subsidiaries

                            Form 10-Q for the Quarter Ended March 31, 2004

                                    Table of Contents



|                                                                                                                         | Page No.
|------------------------------------------------------------------------------------------------------------------------ | --------
|Forward Looking Statements                                                                                               | 2       
|                                                                                                                         |         
|PART I.   FINANCIAL INFORMATION                                                                                          |         
|                                                                                                                         |         
|Item 1.   Unaudited Condensed Financial Statements:                                                                      |         
|                                                                                                                         |         
|Consolidated Balance Sheets as of
         March 31, 2004 and June 30, 2003                                              | 3       
|                                                                                                                         |         
|Consolidated Statements of Operations for the Three and Nine
          
         Months Ended March 31, 2004 and 2003    | 4       
|                                                                                                                         |         
|Consolidated Statement of Changes in Stockholders' Equity, 
          
         for the Nine Months Ended March 31, 2004 | 5       
|                                                                                                                         |         
|Consolidated Statements of Cash Flows for the Nine
          
         Months Ended March 31, 2004 and 2003              | 6       
|                                                                                                                         |         
|Notes to Condensed Consolidated Financial Statements as of March 31, 2004                                                | 7       
|                                                                                                                         |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations    | 14      
|                                                                                                                         |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                     | 22      
|                                                                                                                         |         
|Item 4.   Controls and Procedures                                                                                        | 22      
|                                                                                                                         |         
|PART II.  OTHER INFORMATION                                                                                              |         
|                                                                                                                         |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                               | 24      
|                                                                                                                         |         
|SIGNATURES                                                                                                               | 25      
|                                                                                                                         |         
|EXHIBIT INDEX                                                                                                            | 26      

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FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements with
respect to the financial condition, results of operations and business of SBS
Technologies, Inc. and subsidiaries (referred to variously as "SBS", "we", "us"
and "our"). You may find many of these statements by looking for words like
"intends," "expects," "projects," "believes," "anticipates" or similar
expressions in this Form 10-Q. We consider all statements regarding anticipated
or future matters, including the following, to be forward-looking
statements:

- statements about future events and our future financial
performance;
- expected sales and gross margin;
- financing plans and expectations of internally-generated
cash flows, including cash flows from employee stock option exercises;
- new product introductions;
- growth of the markets we serve;
- business strategy and competitive position;
- plans and objectives of management for future
operations;
- growth opportunities for existing products and services;
and
- benefits from new technology.

These statements are not guarantees of our future
performance. They are based upon our assumptions and assessments only on the
date we made them and in light of our experience and our perception of
historical trends, current conditions, expected future developments, and other
factors we believe to be appropriate. Our assumptions and assessments include
the volume and product mix of sales, estimates of costs and inventory and
receivable levels based on preliminary information, and others. Risks,
uncertainties, and other important factors could cause actual performance or
achievements to be materially different from those we may project. These risks,
uncertainties, and factors include:

- general business and economic conditions affecting our
customers and their end customers, including changes in the size and program
priorities of military procurement budgets, may be less favorable than we
expect, resulting in lower sales and earnings;
- a high degree of uncertainty and rapid change in the
markets addressed by our products, which may affect the timing and amount of
future sales levels or cause the market value of our inventory to decline,
resulting in reduced gross profit levels;
- customer demand for and acceptance of our products, which
may be less than we expect, which may decrease both sales and margins;
- our ability to acquire and integrate new businesses,
which may be more costly than we expect;
- our ability to design, test, and introduce new products
on a timely basis, which if not timely, may decrease both sales and
margins;
- the financial condition of our customers, which, if less
favorable than we expect, could result in reduced sales and earnings;
- changes in foreign currency exchange rates, which could
impact our financial results;
- changes in U.S. and foreign laws and regulations, which
could result in increased costs, lowered sales, or reduced earnings;
and
- the other risk factors listed under "Risk Factors"
included in SBS' Annual Report on Form 10-K for the year ended June 30,
2003.

Many of the factors that will determine these items are
beyond our ability to control or predict. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of the date of
this Form 10-Q. We do not undertake any obligation to update publicly or revise
any forward-looking statements, whether as a result of new information, future
events, or otherwise.

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SBS Technologies, Inc. and Subsidiaries

                             Consolidated Balance Sheets

                           Thousands (except share amounts)

                                      (Unaudited)

`March 31,    June 30,
                                                                             2004        2003
                                                                          ----------  ----------
                             Assets                                     
Current assets:
  Cash and cash equivalents............................................. $   37,491  $   37,130
  Receivables, net .....................................................     24,110      23,164
  Inventories...........................................................     26,960      16,816
  Income tax receivable.................................................      3,209       4,830
  Deferred income taxes.................................................      1,143       1,629
  Prepaid expenses......................................................      1,897       1,661
  Other current assets..................................................        540         431
                                                                          ----------  ----------
    Total current assets................................................     95,350      85,661

Property and equipment, net.............................................      7,979       8,462
Goodwill, net...........................................................     16,917      16,124
Intangible assets, net..................................................      5,322       6,906
Deferred income taxes...................................................     11,149      11,086
Other assets............................................................        270         371
                                                                          ----------  ----------
    Total assets........................................................ $  136,987  $  128,610
                                                                          ==========  ==========
                Liabilities and Stockholders' Equity                    
Current liabilities:
  Accounts payable...................................................... $    5,369  $    3,990
  Accrued representative commissions....................................      1,033         688
  Accrued compensation..................................................      4,032       4,595
  Accrued severance and consolidation costs.............................      1,021         224
  Other current liabilities ............................................      2,201       2,977
                                                                          ----------  ----------
    Total current liabilities...........................................     13,656      12,474
Other long-term liabilities.............................................         19          29
                                                                          ----------  ----------
    Total liabilities...................................................     13,675      12,503

Stockholders' equity:
  Common stock, no par value; 200,000,000 shares authorized;
    15,213,206 issued and outstanding at Match 31, 2004,
    14,989,248 issued and outstanding at June 30, 2003..................     92,623      89,916
  Unearned compensation.................................................        (82)        (37)
  Accumulated other comprehensive income................................      2,326         257
  Retained earnings.....................................................     28,445      25,971
                                                                          ----------  ----------
    Total stockholders' equity..........................................    123,312     116,107
                                                                          ----------  ----------
    Total liabilities and stockholders' equity.......................... $  136,987  $  128,610
                                                                          ==========  ==========`

See accompanying notes to condensed consolidated financial statements.

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SBS Technologies, Inc. and Subsidiaries

              Consolidated Statements of Operations

               Thousands (except per share amounts)

                                      (Unaudited)

`Three Months Ended      Nine Months Ended
                                                               March 31,               March 31,
                                                         ----------------------  ----------------------
                                                             2004        2003        2004        2003
                                                         ----------  ----------  ----------  ----------
Sales.................................................. $   36,592  $   28,906  $   95,672  $   85,999
Cost of sales..........................................     18,888      14,775      49,001      43,309
                                                         ----------  ----------  ----------  ----------
Gross profit...........................................     17,704      14,131      46,671      42,690

Selling, general and administrative expense............      8,307       8,409      23,924      25,176
Research and development expense.......................      5,471       4,160      15,029      13,581
Employee severance and consolidation costs.............        165          --       2,495         598
Amortization of intangible assets......................        538         452       1,638       1,488
                                                         ----------  ----------  ----------  ----------
Operating income.......................................      3,223       1,110       3,585       1,847
                                                         ----------  ----------  ----------  ----------
Interest and other income, net.........................         95         116         541         341
Foreign exchange losses................................        (38)        (28)       (320)        (54)
                                                         ----------  ----------  ----------  ----------
                                                                57          88         221         287
                                                         ----------  ----------  ----------  ----------
Income before income taxes and cumulative
    effect of change in accounting principle...........      3,280       1,198       3,806       2,134
Income tax expense.....................................      1,148         387       1,332         640
                                                         ----------  ----------  ----------  ----------
Income before cumulative effect of
    change in accounting principle.....................      2,132         811       2,474       1,494
Cumulative effect of change in accounting
    principle (net of income taxes of $3,412)..........         --          --          --      (6,058)
                                                         ----------  ----------  ----------  ----------
Net income (loss)...................................... $    2,132  $      811  $    2,474  $   (4,564)
                                                         ==========  ==========  ==========  ==========
Earnings per share data:
Net income (loss) per share:
  Income before cumulative effect...................... $     0.14  $     0.06  $     0.16  $     0.10
  Cumulative effect of change in accounting principle..         --          --          --       (0.41)
                                                         ----------  ----------  ----------  ----------
Net income (loss)...................................... $     0.14  $     0.06  $     0.16  $    (0.31)
                                                         ==========  ==========  ==========  ==========
Net income (loss) per share - assuming dilution:
  Income before cumulative effect...................... $     0.14  $     0.06  $     0.16  $     0.10
  Cumulative effect of change in accounting principle..         --          --          --       (0.41)
                                                         ----------  ----------  ----------  ----------
Net income (loss)...................................... $     0.14  $     0.06  $     0.16  $    (0.31)
                                                         ==========  ==========  ==========  ==========`

See accompanying notes to condensed consolidated financial statements.

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SBS Technologies, Inc. and Subsidiaries

               Consolidated Statement of Changes in Stockholders' Equity

                        For Nine Months Ended March 31, 2004

                           Thousands (except share amounts)

                                      (Unaudited)

`Accumulated
                                                                                       other                 Total
                                                        Common Stock       Unearned    compre-               Stock-     Compre-
                                                   ----------------------   compen-   hensive    Retained   holders'   hensive
                                                     Shares      Amount     sation     income    earnings    Equity     income
                                                   -----------  ---------  ---------  ---------  ---------  ---------  ---------
Balances at June 30, 2003......................... 14,989,248  $  89,916  $     (37) $     257  $  25,971  $ 116,107
Exercise of stock options.........................    212,682      2,330         --         --         --      2,330
Income tax benefit from stock option exercises ...         --        237         --         --         --        237
Stock-based compensation..........................         --         --         95         --         --         95
Restricted stock awards issued to directors ......     11,276        140       (140)        --         --         --
Net income........................................         --         --         --         --      2,474      2,474  $   2,474
Other comprehensive income:
  Foreign currency translation adjustments........         --         --         --      2,069         --      2,069      2,069
                                                                                                                       ---------
Comprehensive income..............................                                                                    $   4,543
                                                   -----------  ---------  ---------  ---------  ---------  ---------  =========
Balances at March 31, 2004........................ 15,213,206  $  92,623  $     (82) $   2,326  $  28,445  $ 123,312
                                                   ===========  =========  =========  =========  =========  =========`

See accompanying notes to condensed consolidated financial statements.

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SBS Technologies, Inc. and Subsidiaries

                           Consolidated Statements of Cash Flows

                                       Thousands

                                      (Unaudited)

`Nine Months Ended
                                                                                March 31,
                                                                        ------------------------
                                                                            2004         2003
                                                                        -----------  -----------
Cash flows from operating activities:
  Net income (loss)................................................... $     2,474  $    (4,564)
  Cumulative effect of change in accounting principle, net............          --        6,058
                                                                        -----------  -----------
  Income before cumulative effect of change in accounting principle...       2,474        1,494
  Adjustments to reconcile net income (loss) to
    net cash provided by operating activities:
      Depreciation and amortization...................................       4,601        4,489
      Bad debt expense................................................          17          346
      Deferred income taxes...........................................         455        5,309
      Income tax benefit from stock option exercises..................         237           --
      Non-cash compensation...........................................          80           --
      Foreign exchange losses.........................................         320           55
      Stock-based compensation........................................          95          246
      Changes in assets and liabilities:
        Receivables...................................................        (579)         476
        Inventories...................................................      (9,734)         996
        Income tax receivable.........................................       1,624       (5,194)
        Prepaid expenses and other....................................        (301)        (897)
        Accounts payable..............................................       1,072       (1,426)
        Accrued representative commissions............................         328          319
        Accrued compensation..........................................        (638)        (850)
        Accrued severance and consolidation costs.....................         796           --
        Other liabilities.............................................        (815)         (76)
                                                                        -----------  -----------
        Net cash provided by operating activities.....................          32        5,287

Cash flows from investing activities:
  Acquisition of property and equipment...............................      (2,373)        (985)
  Purchase of license agreement.......................................          --         (200)
  Other...............................................................         104           --
                                                                        -----------  -----------
        Net cash used by investing activities.........................      (2,269)      (1,185)

Cash flows from financing activities:
  Repurchase and retirement of common stock...........................          --         (321)
  Proceeds from exercise of stock options.............................       2,330           13
                                                                        -----------  -----------
        Net cash provided (used) by financing activities..............       2,330         (308)
Effect of exchange rate changes on cash...............................         268          294
                                                                        -----------  -----------
        Net change in cash and cash equivalents.......................         361        4,088
Cash and cash equivalents at beginning of period......................      37,130       24,811
                                                                        -----------  -----------
Cash and cash equivalents at end of period............................ $    37,491  $    28,899
                                                                        ===========  ===========
Supplemental disclosure of cash flow information:
  Interest paid.......................................................          --           12
                                                                        ===========  ===========
  Income taxes (received) paid, net...................................        (118)         528
                                                                        ===========  ===========`

See accompanying notes to condensed consolidated financial statements.

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SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements

                               March 31, 2004

                                      (Unaudited)

1)	Summary of Significant
Accounting Policies

The accounting policies as set forth in SBS Technologies,
Inc.'s (SBS or the Company) Annual Report on Form 10-K for the year ended June
30, 2003 have been adhered to in preparing the accompanying interim condensed
consolidated financial statements. 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. Certain
reclassifications have been made to prior year balances to conform to current
year presentation.

The Company adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, (SFAS 142) on
July 1, 2002. In accordance with the provisions of SFAS 142, the Company
completed the required transitional goodwill impairment analysis during the year
ended June 30, 2003 and recorded a transitional impairment charge of
approximately $9.5 million ($6,058,000, net of income taxes) effective July 1,
2002.

Stock Based Compensation

The Company applies the intrinsic-value-based method of
accounting prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations, to
account for its fixed-plan stock options. Under this method, compensation
expense is recorded on the date of grant only if the current market price of the
underlying stock exceeded the exercise price. Substantially all stock-based
compensation reflected in reported net income (loss) relates to restricted stock
award grants to members of the Company's Board of Directors, as all employee
stock options granted under the Company's stock option plans had an exercise
price equal to the market value of the underlying common stock on the grant
date. Statement of Financial Accounting Standards No. 123,

`Three Months Ended    Nine Months Ended
                                                                           March 31,             March 31,
                                                                      --------------------  --------------------
Thousands (except per share amounts)                                      2004       2003       2004       2003
                                                                      ---------  ---------  ---------  ---------
Net income (loss), as reported...................................... $   2,132  $     811  $   2,474  $  (4,564)
Add: stock-based employee compensation included
  in reported net income (loss), net of tax effects.................        21         17         58         27
Deduct: stock-based employee compensation determined
  under fair value method for all awards, net of tax effects........      (590)      (753)    (1,202)    (2,641)
                                                                      ---------  ---------  ---------  ---------
Pro forma net income (loss)......................................... $   1,563  $      75  $   1,330  $  (7,178)
                                                                      =========  =========  =========  =========
Net income (loss) per common share - as reported.................... $    0.14  $    0.06  $    0.16  $   (0.31)
                                                                      =========  =========  =========  =========
Net income (loss) per common share - pro forma...................... $    0.10  $    0.01  $    0.09  $   (0.49)
                                                                      =========  =========  =========  =========
Net income (loss) per common share assuming dilution - as reported.. $    0.14  $    0.06  $    0.16  $   (0.31)
                                                                      =========  =========  =========  =========
Net income (loss) per common share assuming dilution - pro forma.... $    0.10  $    0.01  $    0.09  $   (0.49)
                                                                      =========  =========  =========  =========`

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SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

2)	Receivables, net

Receivables, net consist of the following:

`March 31,    June 30,
Thousands                                      2004         2003
                                            -----------  -----------                          
Accounts receivable....................... $    24,608  $    24,000
Less allowance for doubtful accounts......        (498)        (836)
                                            -----------  -----------
                                           $    24,110  $    23,164
                                            ===========  ===========`

3)	Inventories

Inventories consist of the following:

`March 31,    June 30,
Thousands                                      2004         2003
                                            -----------  -----------                          
Raw materials............................. $    12,317  $     8,793
Work in process...........................       7,283        5,414
Finished goods............................       7,360        2,609
                                            -----------  -----------
                                           $    26,960  $    16,816
                                            ===========  ===========`

During the three and nine month periods ended March 31, 2004,
approximately $210,000 and $665,000, respectively, of inventory previously
written down to zero cost had been sold.

4)	Goodwill and Intangible Assets

The Company adopted SFAS 142 on July 1, 2002. In accordance
with the provisions of SFAS 142, the Company completed the required transitional
goodwill impairment analysis during the year ended June 30, 2003. As a result,
the Company recorded a transitional impairment charge of approximately $9.5
million ($6,058,000 net of income taxes) which has been reflected as a
cumulative effect of a change in accounting principle in the nine months ended
March 31, 2003 in the accompanying consolidated statements of operations.

The Company completed the required annual goodwill impairment
analysis for the fiscal year ended June 30, 2003, as of April 1, 2003, and the
estimated fair value of goodwill was determined to be in excess of its carrying
value, indicating the underlying goodwill was not impaired at that date.

Changes in the carrying amount of goodwill for the nine
months ended March 31, 2004 are as follows:

`Total Goodwill by Operating Segment
Thousands                                    Americas      Europe        Total
                                            -----------  -----------  -----------             
Balance at June 30, 2003.................. $     3,496  $    12,628  $    16,124
Income tax refund in excess of
  amount recorded at acquisition .........        (104)          --         (104)
Foreign currency translation adjustments .         108          789          897
                                            -----------  -----------  -----------
Balance at March 31, 2004................. $     3,500  $    13,417  $    16,917
                                            ===========  ===========  ===========`

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SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

The following table discloses information regarding the
carrying amounts and associated accumulated amortization for intangible assets
subject to amortization.

`Amortized Intangible Assets
---------------------------------------------------------------------------------
                                    Estimated     Gross                    Net
                                      useful    carrying   Accumulated  carrying
 Thousands                             life      amount    amortization  amount
                                    ----------  ---------  -----------  ---------
As of March 31, 2004                
  Core developed technology........ 2 - 7 yrs  $   9,752  $     6,530  $   3,222
  License agreements............... 2 - 5 yrs      2,425        1,659        766
  Covenant not to compete.......... 3 - 5 yrs      2,887        1,767      1,120
  Other intangibles................ 8 - 17 yrs       368          154        214
                                                ---------  -----------  ---------
        Total                                  $  15,432  $    10,110  $   5,322
                                                =========  ===========  =========
As of June 30, 2003                 
  Core developed technology........ 2 - 7 yrs  $   9,723  $     5,679  $   4,044
  License agreements............... 2 - 5 yrs      2,561        1,424      1,137
  Covenant not to compete.......... 3 - 5 yrs      2,842        1,365      1,477
  Other intangibles................ 8 - 17 yrs       368          120        248
                                                ---------  -----------  ---------
        Total......................            $  15,494  $     8,588  $   6,906
                                                =========  ===========  =========`

The following table summarizes estimated amortization expense
for future periods as follows:

`Estimated amortization expense:                          Thousands                                 
  Remainder of fiscal year ending June 30, 2004........ $     551
  For the fiscal years ending:
      June 30, 2005....................................     1,734
      June 30, 2006....................................     1,310
      June 30, 2007....................................     1,181
      June 30, 2008....................................       512
      Thereafter.......................................        34
                                                         ---------
                                                        $   5,322
                                                         =========`

5)	Product Warranty Liability

The Company's customers receive a warranty, generally for
a period of two years, upon purchase of products. The Company accrues estimated
costs to repair or replace potentially defective products when products are
shipped and revenue is recognized. Estimated warranty costs are based upon prior
actual warranty costs for substantially similar products. The following table
presents the activity in the Company's product warranty liability for the nine
months ended March 31, 2004:

`Estimated amortization expense:                          Thousands                                 
  Remainder of fiscal year ending June 30, 2004........ $     551
  For the fiscal years ending:
      June 30, 2005....................................     1,734
      June 30, 2006....................................     1,310
      June 30, 2007....................................     1,181
      June 30, 2008....................................       512
      Thereafter.......................................        34
                                                         ---------
                                                        $   5,322
                                                         =========`

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SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

6)	Earnings Per Share

Net income (loss) per share is based on weighted average
shares outstanding. Net income (loss) per share - assuming dilution includes the
dilutive effects of potential common shares outstanding during the period.

`Three Months Ended    Nine Months Ended
                                                               March 31,             March 31,
                                                         --------------------  --------------------
Thousands (except per share amounts)                         2004       2003       2004       2003
                                                         ---------  ---------  ---------  ---------
Income before cumulative effect of change
   in accounting principle............................. $   2,132  $     811  $   2,474  $   1,494
Cumulative effect of change in accounting principle....        --         --         --     (6,058)
                                                         ---------  ---------  ---------  ---------
Net income (loss)...................................... $   2,132  $     811  $   2,474  $  (4,564)
                                                         =========  =========  =========  =========
                                                                                                   
Net income (loss) per share                                                                        
Weighted-average common shares outstanding.............    15,162     14,602     15,082     14,605
                                                         =========  =========  =========  =========
Income before cumulative effect of change
   in accounting principle............................. $    0.14  $    0.06  $    0.16  $    0.10
Cumulative effect of change in accounting principle....        --         --         --      (0.41)
                                                         ---------  ---------  ---------  ---------
Net income (loss)...................................... $    0.14  $    0.06  $    0.16  $   (0.31)
                                                         =========  =========  =========  =========
                                                                                                   
Net income (loss) per share - assuming dilution                                                    
Weighted-average common shares outstanding
   used in earnings per share computations.............    15,581     14,628     15,368     14,605
                                                         =========  =========  =========  =========
Income before cumulative effect of change
   in accounting principle............................. $    0.14  $    0.06  $    0.16  $    0.10
Cumulative effect of change in accounting principle....        --         --         --      (0.41)
                                                         ---------  ---------  ---------  ---------
Net income (loss)...................................... $    0.14  $    0.06  $    0.16  $   (0.31)
                                                         =========  =========  =========  =========
                                                                                                   
Shares Used in Per Share Computations                                                              
Weighted average common shares outstanding.............    15,162     14,602     15,082     14,605
Incremental shares from assumed conversions -
   potential common shares ............................       419         26        286         --
                                                         ---------  ---------  ---------  ---------
Shares used in computations - assuming dilution........    15,581     14,628     15,368     14,605
                                                         =========  =========  =========  =========`

Due to the reported net loss for the nine months ended March
31, 2003, 25,651 potential common shares were not included in the computation of
earnings per share - assuming dilution because the effect would be anti-
dilutive. For the three and nine month periods ended March 31, 2004, options to
purchase 998,591 and 1,650,682 shares of common stock, respectively, were
outstanding but were not included in the computation of earnings per share -
assuming dilution because the options' exercise prices were greater than the
average market price of the common shares. For the three and nine-month periods
ended March 31, 2003, options to purchase 3,293,689 and 3,276,063 shares of
common stock, respectively, were outstanding but were not included in the
computation of earnings per share - assuming dilution because the options'
exercise prices were greater than the average market price of the common
shares.

---





SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

7)	Comprehensive Income (Loss)

Comprehensive income was $1.0 million and $4.5 million
for the three and nine months ended March 31, 2004, respectively, and $1.5
million for the three months ended March 31, 2003. Comprehensive loss of ($2.7)
million for the nine months ended March 31, 2003, includes a transitional
impairment charge of $6,058,000, net of tax, as a result of the Company's
adoption of SFAS 142 effective July 1, 2002. The difference between
comprehensive income (loss) and net income (loss) was related to foreign
currency translation adjustments.

8) 	Segment Financial Data

As a result of changes in management responsibility, the
Company's desire to enhance its regional-based sales and service to the
Company's European customers and the June 2003 acquisition of SBS Canada
(formerly Avvida Systems), the Company changed its reportable segments to a
structure based on geographic markets. This change has enabled management to
focus on regional market development, alignment of sales channels with
customers' product needs, and enhancement of customer service and satisfaction.

The Company operates worldwide through two operating
segments: the Americas Group and the Europe Group. Each segment has management
who report directly to the Company's Chief Executive Officer and its own sales
and distribution channels. The Americas Group consists of the Company's
operations based in the United States and Canada including the engineering,
test, and assembly activities in Albuquerque, New Mexico; Mansfield,
Massachusetts; Newark, California; Raleigh, North Carolina; St. Paul, Minnesota;
and Waterloo, Ontario, Canada, as well as the manufacturing operations located
in St. Paul, Minnesota. The Europe Group consists of the Company's operations
based in Germany which include the engineering, test, assembly, and
manufacturing activities located in Augsburg and Mindelheim, Germany.

SBS measures the results of operations for segments (segment
profit (loss)) based on income (loss) before income taxes and the cumulative
effect of change in accounting principle and prior to (a) the allocation of
corporate overhead expenses other than marketing costs, (b) substantially all
amortization associated with acquisitions and (c) interest income and interest
expense from our U.S. operations. The accounting policies used to measure
segment profit (loss) are the same as those referred to in note 1. Reportable
segments for all periods presented have been reclassified to conform to the
current segment reporting structure.

`Americas    Europe     Corporate &
Thousands                                     Group      Group    Unallocated (1)   Total
                                            ---------  ---------  --------------  ---------
Three month periods ended March 31
Gross sales........................  2004  $  27,835  $  11,903  $           --  $  39,738
Inter-segment sales................           (1,585)    (1,561)             --     (3,146)
                                            ---------  ---------  --------------  ---------
Sales to external customers........        $  26,250  $  10,342  $           --  $  36,592

Gross sales........................  2003  $  23,976  $   7,640  $           --  $  31,616
Inter-segment sales................           (1,261)    (1,449)             --     (2,710)
                                            ---------  ---------  --------------  ---------
Sales to external customers........        $  22,715  $   6,191  $           --  $  28,906

Segment profit (loss)                2004  $   4,578  $   2,105  $       (3,403) $   3,280
                                     2003  $   2,939  $   1,495  $       (3,236) $   1,198`

---





SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

`Americas    Europe     Corporate &
Thousands                                     Group      Group    Unallocated (1)   Total
                                            ---------  ---------  --------------  ---------
Nine month periods ended March 31
Gross sales........................  2004  $  74,102  $  30,454  $           --  $ 104,556
Inter-segment sales................           (4,135)    (4,749)             --     (8,884)
                                            ---------  ---------  --------------  ---------
Sales to external customers........        $  69,967  $  25,705  $           --  $  95,672

Gross sales........................  2003  $  73,806  $  17,933  $           --  $  91,739
Inter-segment sales................           (2,030)    (3,710)             --     (5,740)
                                            ---------  ---------  --------------  ---------
Sales to external customers........        $  71,776  $  14,223  $           --  $  85,999

Segment profit (loss)                2004  $   8,058  $   5,481  $       (9,733) $   3,806
                                     2003  $   8,491  $   3,138  $       (9,495) $   2,134

Total Assets
  As of March 31, 2004 ............        $  39,083  $  24,874  $       73,030  $ 136,987
  As of June 30, 2003 .............        $  35,798  $  17,540  $       75,272  $ 128,610`

(1)

9) 	Employee Severance and Consolidation
Costs

On June 12, 2003, the Company announced the closure of
its Carlsbad, California facility and the consolidation of its manufacturing
operations into the Company's St. Paul, Minnesota facility, centralizing all
manufacturing in the United States to one facility. The total employee severance
and consolidation costs incurred as a result of the consolidation were
approximately $3.6 million. The total costs include employee severance and
related costs recorded over the remaining service period, consolidation costs
recorded as incurred, lease termination costs recorded on the cease use date
(all in accordance with SFAS 146), and leasehold improvement impairment charges
recorded as a result of the announcement in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-
Lived Assets.

---





SBS Technologies, Inc. and Subsidiaries

                Notes to Condensed Consolidated Financial Statements - Continued

                               March 31, 2004

                                      (Unaudited)

The following table summarizes the accounting for the
consolidation and closure of the Company's Carlsbad, California facility:

`Thousands
                                               Employee
                                               severance   Property     Lease
                                              and related     and     termination   Other
Description                                      costs     equipment    charge      costs      Total
--------------------------------------------  -----------  ---------  ----------  ---------  ---------
Quarter ended June 30, 2003
Employee severance and consolidation costs.. $       290  $     841  $       --  $      --  $   1,131
Expenditures................................         (66)        --          --         --        (66)
Write-offs..................................          --       (841)         --         --       (841)
                                              -----------  ---------  ----------  ---------  ---------
Accrued at June 30, 2003....................         224         --          --         --        224

Nine months ended March 31, 2004
Employee severance and consolidation costs..         470         --       1,495        530      2,495
Expenditures................................        (694)        --        (474)      (530)    (1,698)
                                              -----------  ---------  ----------  ---------  ---------
Accrued at March 31, 2004................... $        --  $      --  $    1,021  $      --  $   1,021
                                              ===========  =========  ==========  =========  =========`

The lease termination charge, recorded on the cease use date
as a result of closure of the Company's Carlsbad, California facility,
represents the estimated fair value of the remaining future lease payments and
related obligations, net of estimated sublease income, over the term of the
lease. The remaining costs represent primarily lease obligations expected to be
paid monthly through April 2006.

On July 22, 2002, due to the continued depressed economic and
market conditions impacting the Company's communications customers, SBS notified
19 full and part-time employees at our Madison, Wisconsin engineering design
center that their jobs had been eliminated. For the same reasons, on September
30, 2002, SBS notified 22 additional employees that their jobs were being
eliminated and 12 other employees were notified that their jobs had been
eliminated during the three months ended December 31, 2002. Also, SBS paid lease
termination fees of approximately $186,000 in connection with the closure of
certain locations during the three months ended December 31, 2002.
As a result, for the nine months ended March 31, 2003, SBS recorded
employee severance and consolidation costs of $598,000. There are no
costs remaining to be paid related to these activities at March 31, 2004.

---



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

For a description of SBS' critical accounting policies and an
understanding of the significant factors that influenced SBS' performance during
the three and nine months ended March 31, 2004 and 2003, this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
(MD&A) should be read in conjunction with the consolidated financial
statements, including the related notes, appearing in Item 1 of this Form 10-Q,
as well as our Annual Report on Form 10-K for the year ended June 30, 2003.

Company Overview

We design and build open-architecture embedded computer products that
enable original equipment manufacturers to serve the commercial, communications
and government markets. Our embedded computer products are used in a wide range
of industries, including telecommunications, medical electronics, industrial
automation and defense. Embedded computers are put inside or made part of larger
systems to process information, control machines, move computer data between
machines, and interact with people. They are found in machines ranging from
aircraft to complex medical equipment, and are used for a variety of
applications, such as retrieving satellite information and controlling
manufacturing assembly lines.

We serve a broad range of customers. We currently list more than 400 products
in the product section of our website, www.sbs.com. We help our customers get to
market more quickly, more reliably and more economically by providing a wide
range of standard and customized embedded computer products. Our products
include processor boards, input/output modules, networking devices, and complete
computer systems.

Technology drives our growth. As embedded computer applications expand, we
broaden our product lines to meet our customers' needs and to attract new
customers. We invest in technology and customer service so that we can grow with
our customers. We have grown, and intend to continue to do so, through a
combination of internal growth and acquisitions. We grow by adding new products
and improving existing products through our research and development program,
attracting new customers with our products and service, and acquiring other
companies. We completed eleven acquisitions between 1992 and March 31, 2004 that
broadened our product offerings and customer base.

Executive Summary

During the quarter and nine months ended March 31, 2004, we noted:

- Sales for the quarter were $36.6 million;
- Net income was $2.1 million and net income per share - assuming dilution for
the quarter was $0.14, compared with $0.06 for the comparable period of the
prior year.

Included in the results for the quarter were employee severance and
consolidation costs associated with the closure of the Carlsbad, California
facility of approximately $165,000, which negatively impacted net income per
common share - assuming dilution by ($0.01) on an after tax basis. As of March
31, 2004, management believes that all of the costs associated with this
consolidation effort have been recorded.

- Our book-to-bill ratio for the quarter was .97 to 1; and our book-to-bill
ratio for the nine months was 1.08 to 1.

Book-to-bill ratio represents the net value of customer orders received
and booked each period divided by total sales.

- Order backlog was $44.4 million as of March 31, 2004, compared to $45.5
million as of December 31, 2003;

Order backlog represents customer orders that have been contracted for
future delivery. Accordingly, these orders have not yet been recognized as
revenue, but represent potential future revenue.

- Eleven Design Wins were achieved during the quarter.

Each reported design win represents an initial purchase order of a minimum
of $100,000 and is forecasted to produce a minimum of $500,000 in sales annually
when in production.

By end market, the design wins included six in the government market, two
in the commercial market, and three in the communications market.

- During the quarter, one commercial customer represented approximately 12% of
our total sales and one communications customer and one government customer
represented between 5% and 10% of our total sales. We had no other customer
whose sales represented more than 5% of our total.

Financial Highlights

Select financial highlights during the three and nine months ended March
31, 2004 compared to the three and nine months ended March 31, 2003 and the
quarter ended December 31, 2003 follows:

`Three Months Ended                        Nine Months Ended
                           ---------------------------------------------------  --------------------
                                March 31,                                            March 31,
Thousands (except          --------------------     %      Dec. 31,      %      --------------------     %
  per share amounts)           2004       2003   change      2003     change        2004       2003   change
                           ---------  --------- ---------  --------- ---------  ---------  --------- ---------
Sales.................... $  36,592  $  28,906      26.6% $  32,503      12.6% $  95,672  $  85,999      11.2%
                           =========  =========            =========            =========  =========

Net income (loss)(*)..... $   2,132  $     811     162.9% $   1,532      39.2% $   2,474  $  (4,564)   -154.2%
                           =========  =========            =========            =========  =========

Net income (loss) per
  share - assuming
  dilution (**).......... $    0.14  $    0.06            $    0.10            $    0.16  $   (0.31)
                           =========  =========            =========            =========  =========`

|* The financial results for the nine months ended March 31,
2003 include a transitional impairment charge of $6,058,000, net of tax, or
($0.41) per common share - assuming dilution, for the cumulative effect of the
change in accounting for goodwill, resulting from SBS' adoption of SFAS 142
effective July 1, 2002.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** Employee severance and consolidation costs associated with
the closure of the Carlsbad, California facility negatively impacted net income
per common share - assuming dilution by approximately ($0.01) and ($0.11) on an
after tax basis for the three and nine months ended March 31, 2004,
respectively.           

See detailed analysis of the financial results below.

Results of Operations

(references to fiscal 2004 and fiscal 2003 relate to
interim periods of the fiscal years ending on June 30)

The following table sets forth for the periods
indicated certain operating data as a percentage of sales:

`Three Months Ended      Nine Months Ended
                                                               March 31,               March 31,
                                                         ----------------------  ----------------------
                                                             2004        2003        2004        2003
                                                         ----------  ----------  ----------  ----------
Sales..................................................      100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales..........................................       51.6 %      51.1 %      51.2 %      50.4 %
                                                         ----------  ----------  ----------  ----------
Gross profit...........................................       48.4 %      48.9 %      48.8 %      49.6 %

Selling, general and administrative expense............       22.7 %      29.1 %      25.0 %      29.3 %
Research and development expense.......................       15.0 %      14.4 %      15.7 %      15.8 %
Employee severance and consolidation costs.............        0.5 %        -- %       2.6 %       0.7 %
Amortization of intangible assets......................        1.4 %       1.6 %       1.8 %       1.7 %
                                                         ----------  ----------  ----------  ----------
Operating income.......................................        8.8 %       3.8 %       3.7 %       2.1 %
                                                         ----------  ----------  ----------  ----------
Interest and other income, net.........................        0.3 %       0.4 %       0.6 %       0.4 %
Foreign exchange losses................................       (0.1)%      (0.1)%      (0.3)%      (0.0)%
                                                         ----------  ----------  ----------  ----------
                                                               0.2 %       0.3 %       0.3 %       0.4 %
                                                         ----------  ----------  ----------  ----------
Income before income taxes and cumulative
    effect of change in accounting principle...........        9.0 %       4.1 %       4.0 %       2.5 %
Income tax expense.....................................        3.2 %       1.3 %       1.4 %       0.8 %
                                                         ----------  ----------  ----------  ----------
Income before cumulative effect of
    change in accounting principle.....................        5.8 %       2.8 %       2.6 %       1.7 %
Cumulative effect of change in accounting
    principle (net of income taxes of $3,412)..........         -- %        -- %        -- %      (7.0)%
                                                         ----------  ----------  ----------  ----------
Net income (loss)......................................        5.8 %       2.8 %       2.6 %      (5.3)%
                                                         ==========  ==========  ==========  ==========`

Three and Nine Month Periods Ended March 31, 2004 compared to the Three and
Nine Month Periods Ended March 31, 2003

Sales

Our total sales during the three and nine months ended March 31, 2004
compared to the three and nine months ended March 31, 2003 and the quarter ended
December 31, 2003 follows:

`Three Months Ended                        Nine Months Ended
                           ---------------------------------------------------  --------------------
                                March 31,                                            March 31,
                           --------------------     %      Dec. 31,      %      --------------------     %
Thousands                      2004       2003   change      2003     change        2004       2003   change
                           ---------  --------- ---------  --------- ---------  ---------  --------- ---------
Sales.................... $  36,592  $  28,906      26.6% $  32,503      12.6% $  95,672  $  85,999      11.2%
                           =========  =========            =========            =========  =========`

For the third quarter of fiscal 2004, sales increased $7.7 million compared
to the same period of fiscal 2003, of which approximately $982,000 is the result
of the impact of a weakening U.S. dollar on the translation of our Europe Group
financial statements. On a sequential basis, sales increased $4.1 million
compared with sales for the prior quarter of fiscal 2004. Sales for the second
quarter included approximately $2.0 million of sales that were delayed at the
end of the quarter ended September 30, 2003 due to production issues associated
with certain advanced technology systems.

For the nine months ended March 31, 2004, sales increased $9.7 million
compared to the same period of fiscal 2003, of which approximately $2.3 million
is the result of the impact of a weakening U.S. dollar on the translation of the
Company's Europe Group financial statements. Sales for the three and nine months
ended March 31, 2004 include approximately $0.3 million and $0.9 million
contributed from the acquisition of SBS Canada (formerly Avvida Systems) in June
2003.

Sales by end market for the current quarter and year-to-date periods of
fiscal 2004 compare to the comparable periods of fiscal 2003 and the prior
fiscal quarter as indicated below:

`SALES BY END MARKET
                                        (dollars in thousands)
                          March 31,   % of     March 31,   % of     Dec. 31,    % of
                            2004      total      2003      total      2003      total
                          --------- ---------  --------- ---------  --------- ---------
Three months ended:
  Government............ $  17,806        49% $  14,935        52% $  17,918        55%
  Commercial............    11,676        32%     8,949        31%     8,865        27%
  Communications........     7,110        19%     5,022        17%     5,720        18%
                          --------- ---------  --------- ---------  --------- ---------
Total................... $  36,592       100% $  28,906       100% $  32,503       100%
                          ========= =========  ========= =========  ========= =========

                          March 31,   % of     March 31,   % of
                            2004      total      2003      total
                          --------- ---------  --------- ---------                     
Nine months ended:
  Government............ $  48,864        51% $  43,760        51%
  Commercial............    29,203        31%    29,622        34%
  Communications........    17,605        18%    12,617        15%
                          --------- ---------  --------- ---------
Total................... $  95,672       100% $  85,999       100%
                          ========= =========  ========= =========`

For the three months ended March 31, 2004, sales to government customers
increased 19.2%, sales to commercial customers increased 30.5% and sales to
communications customers increased 41.6%, all compared with the comparable
period of the prior fiscal year. For the nine months ended March 31, 2004, sales
to government customers increased 11.7%, sales to commercial customers decreased
1.4% and sales to communications customers increased 39.5%, all compared with
the nine months ended March 31, 2003. To align with current management
responsibility, sales to a majority of our enterprise customers are reflected as
sales to commercial customers.

Looking forward, we are pleased with the design wins and increased bookings
level this fiscal year. Based on projections from our customers, we expect a
favorable book-to-bill ratio during the quarter ending June 30, 2004. We are
continuing to see improvement in our markets. The government market is still
strong with increasing requirements for system level solutions. The
communications and enterprise markets are continuing to rebound, and our
customers' forecasts are more aggressive. In the commercial market, we are
seeing steady demand from semiconductor and medical equipment manufacturers.
Based on our forecasts and order backlog, we expect sales for the quarter ending
June 30, 2004 to be between $37 million and $38 million; however, actual results
may vary.

Gross Profit

Gross profit during the three and nine months ended March 31, 2004 compared
to the three and nine months ended March 31, 2003 and the quarter ended December
31, 2003 follows:

`Three months ended                         Nine months ended
                               -----------------------------------------------------  -------------------------------
                                     March 31,                                              March 31,
                               --------------------  Increase/  Dec. 31,   Increase/  --------------------  Increase/
Thousands                         2004       2003    (decrease)   2003     (decrease)    2004       2003    (decrease)
                               ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Gross profit................. $  17,704  $  14,131      3,573  $  16,034      1,670  $  46,671  $  42,690      3,981
                               =========  =========  =========  =========  =========  =========  =========  =========
Gross profit as a percent
  of sales...................      48.4%      48.9%                 49.3%                 48.8%      49.6%
                               =========  =========             =========             =========  =========
Utilization of inventory
  previously written down
  to zero cost............... $     210  $     192             $     225             $     665  $     742
                               =========  =========             =========             =========  =========`

Gross profit as a percent of sales for the three and nine months ended March
31, 2004, decreased from levels noted in fiscal 2003 principally as a result of
a higher proportion of sales of lower margin products in relation to total
sales. The decrease for this quarter in gross profit as a percent of sales
compared to the preceding quarter is primarily due to the impact of sales
relating to several large, lower margin communications and commercial production
orders. For the quarter ending June 30, 2004, we anticipate gross profit as a
percentage of sales to be similar to the percentage experienced during the
quarter ended March 31, 2004; however, actual results may vary.

Selling, General and Administrative Expense

Selling, general and administrative (SG&A) expense during the three and
nine months ended March 31, 2004 as compared to the three and nine months ended
March 31, 2003 follows:

`Three months ended               Nine months ended
                               -------------------------------  -------------------------------
                                    March 31,                        March 31,
                               --------------------  Increase/  --------------------  Increase/
Thousands                          2004       2003   (decrease)     2004       2003   (decrease)
                               ---------  ---------  ---------  ---------  ---------  ---------                      
SG&A expense................. $   8,307  $   8,409  $    (102) $  23,924  $  25,176  $  (1,252)
                               =========  =========  =========  =========  =========  =========

As a percent of sales........      22.7%      29.1%                 25.0%      29.3%
                               =========  =========             =========  =========`

For the three and nine months ended March 31, 2004, SG&A expense
decreased 1.2% and 5.0%, respectively, compared to the same periods of the prior
fiscal year, due primarily to the cost reduction efforts implemented in
connection with the consolidation of operations during the past several
quarters, partially offset by the costs added as a result of the acquisition of
SBS Canada in June 2003. For these reasons, together with increased sales,
SG&A expense as a percentage of sales declined in fiscal 2004 compared with
fiscal 2003.

Research and Development Expense

Research and development (R&D) expense during the three and nine months
ended March 31, 2004 as compared to the three and nine months ended March 31,
2003 follows:

`Three months ended               Nine months ended
                               -------------------------------  -------------------------------
                                    March 31,                        March 31,
                               --------------------  Increase/  --------------------  Increase/
Thousands                          2004       2003   (decrease)     2004       2003   (decrease)
                               ---------  ---------  ---------  ---------  ---------  ---------                      
R&D expense.................. $   5,471  $   4,160  $   1,311  $  15,029  $  13,581  $   1,448
                               =========  =========  =========  =========  =========  =========

As a percent of sales........      15.0%      14.4%                 15.7%      15.8%
                               =========  =========             =========  =========`

Increasing our intellectual property is a key element of our growth strategy.
During the quarter ended March 31, 2004, we introduced 10 new products as we
continue to implement this segment of our strategy. As a result, for the three
and nine months ended March 31, 2004, research and development (R&D) expense
increased over fiscal 2003 levels as the life cycle of research and development
efforts causes these expenses to fluctuate from quarter to quarter. R&D
expense as a percentage of sales during fiscal 2004 was in line with our current
development plan and remained consistent with fiscal 2003 levels.

Employee Severance and Consolidation Costs

On June 12, 2003, we announced that we would be closing our Carlsbad,
California facility and consolidating its manufacturing operations into our St.
Paul, Minnesota facility, centralizing all manufacturing in the United States to
one facility. This consolidation was completed in August, 2003. As a result of
these actions, we recorded employee severance and consolidation costs totaling
$165,000 and $2.5 million during the three-month and nine-month periods ended
March 31, 2004, respectively.

These costs included the following for the three and nine months ended March
31, 2004:

- Employee severance and related costs of $20,000 and $470,000, respectively,
(recorded over the remaining service period in accordance with SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities) due to
the reduction of our workforce. There were no amounts remaining to be paid at
March 31, 2004.
- Other consolidation costs of $135,000 and $530,000, respectively, (recorded
as incurred in accordance with SFAS 146) as a result of the consolidation of our
communications operations to other facilities. There were no amounts remaining
to be paid at March 31, 2004.
- Lease termination costs of $10,000 and $1,495,000, respectively, (recorded
on the cease use date in accordance with SFAS 146) as a result of the closure of
our Carlsbad, California facility in August 2003. The lease termination costs
represent the estimated fair value of the remaining future lease payments and
related obligations, net of estimated sublease income, over the term of the
lease. The remaining lease obligations are expected to be paid monthly through
April 2006.

Employee severance and consolidation costs of $598,000 recorded during the
nine months ended March 31, 2003 were primarily the result of workforce
reductions implemented as a result of the depressed market conditions impacting
our communications market customers.

Amortization of Intangible Assets

For the three and nine months ended March 31, 2004, amortization of
intangible assets was $538,000 and 
$1.6 million, respectively, compared to $452,000 and $1.5 million for the
comparable periods of fiscal 2003. Amortization expense increased in fiscal 2004
due to the purchased identifiable intangible assets recorded in connection with
the acquisition of SBS Canada (formerly Avvida Systems) in June 2003. In
addition, amortization expense in fiscal 2003 included a write-down of $136,000
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 and nine months ended March 31, 2004, net interest and other
income of $95,000 and $541,000, respectively, included interest received in
September 2003 in connection with income tax refunds of payments made in prior
periods of approximately $250,000. Excluding the interest on the tax refunds in
fiscal 2004, net interest and other income represented primarily interest income
associated with surplus cash, which declined from fiscal 2003 levels due to
lower interest rates.

Foreign Exchange Losses

For the three and nine months ended March 31, 2004, foreign exchange losses
of $38,000 and $320,000, respectively, represent primarily realized and
unrealized losses on certain inter-company transactions that are denominated in
non-functional currencies due to changes in currency exchange rates as a result
of the weakening of the U.S. dollar during fiscal 2004.

Income Tax Expense

For the three and nine months ended March 31, 2004, income tax expense was
recorded based upon our estimated worldwide effective tax rates for fiscal year
2004 of 35.0%. This compares to income tax expense recorded for the three and
nine months ended March 31, 2003, using estimated worldwide effective tax rates
of 32.3% and 30.0%, respectively. The change in the estimated worldwide
effective income tax rates was due principally to the impact of a shift in the
mix of pre-tax income from domestic and foreign sources.

Cumulative Effect of Change in Accounting Principle

For the nine month period ended March 31, 2003, we recorded a transitional
impairment charge of $9.5 million ($6,058,000 net of tax), reported as a
cumulative effect of change in accounting principle, as a result of our adoption
of Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets, (SFAS 142) effective July 1, 2002.

Earnings Per Share

For the three and nine months ended March 31, 2004, net income per common
share and net income per common share - assuming dilution were $0.14 and $0.16,
respectively. This compares to net income per common share and net income per
common share - assuming dilution of $0.06 for the three month period ended March
31, 2003, and income per share before the cumulative effect of the change in
accounting principle of $0.10 during the nine month period ended March 31, 2003.
For the nine-month period ended March 31, 2003, net loss per share and net loss
per common share - assuming dilution of $(0.31) included the impact of the
cumulative effect of change in accounting for goodwill of $(0.41) per common
share as a result of our adoption of SFAS 142 effective July 1, 2002.

Review of Business Segments

During fiscal 2004, we changed our reportable segments to a structure
based on geographic markets as a result of changes in management responsibility,
our desire to enhance our regional-based sales and service to our European
customers, and the June 2003 acquisition of SBS Canada (formerly Avvida
Systems). This change has enabled management to focus on regional market
development, alignment of sales channels with customers' product needs, and
enhancement of customer service and satisfaction.

We operate worldwide through two operating segments: the Americas Group and
the Europe Group. Each segment has management who report directly to our Chief
Executive Officer and its own sales and distribution channels. The Americas
Group consists of our operations based in the United States and Canada,
including the engineering, test, and assembly activities in Albuquerque, New
Mexico; Mansfield, Massachusetts; Newark, California; Raleigh, North Carolina;
St. Paul, Minnesota; and Waterloo, Ontario, Canada; as well as the manufacturing
operations located in St. Paul, Minnesota. The Europe Group consists of our
operations based in Germany, which include the engineering, test, assembly, and
manufacturing activities located in Augsburg and Mindelheim, Germany.

The following is a discussion of sales to external customers and segment
profit (loss) for each reportable segment. We measure the results of operations
for segments (Segment Profit (Loss)) based on income (loss) before income taxes
and the cumulative effect of change in accounting principle and before:

- the allocation of corporate overhead expenses other than marketing costs;
- substantially all amortization expense associated with acquisitions; and
- interest income earned on U.S. operations cash balances.

Americas Group

`Three Months Ended                       Nine Months Ended
                                ---------------------------------------------------  --------------------
                                     March 31,                                            March 31,
                                --------------------     %      Dec. 31,      %      --------------------     %
Thousands                          2004       2003    change      2003     change       2004       2003    change
                                ---------  --------- ---------  --------- ---------  ---------  --------- ---------
Sales to External Customers... $  26,250  $  22,715      15.6% $  23,440      12.0% $  69,967  $  71,776      -2.5%
                                =========  =========            =========            =========  =========

Segment Profit ............... $   4,578  $   2,939      55.8% $   3,601      27.1% $   8,058  $   8,491      -5.1%
                                =========  =========            =========            =========  =========`

| | Note - segment profit (loss) for the three and nine months
ended March 31, 2004 includes approximately $0.2 million and $2.5 million,
respectively, of employee severance and consolidation costs as a result of the
consolidation of our communications operations that resulted in the closure of
our Carlsbad, California facility in August 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sales to External Customers

Segment Profit (Loss). Segment profit increased $1.6 million, or
55.8%, for the three months ended March 31, 2004, and segment profit decreased
approximately $433,000, or (5.1)%, for the nine months ended March 31, 2004,
both compared to the comparable periods of the prior fiscal year. On a
sequential basis, segment profit increased
$977,000, or 27.1%, compared with the prior quarter. Segment profit in the nine
months of fiscal 2004 declined primarily as a result of approximately $2.5
million of employee severance and consolidation costs being recorded from the
consolidation of our communications operations that resulted in the closure of
our Carlsbad, California facility in August 2003, partially offset by a change
in sales mix to higher margin products together with reduced SG&A expenses
as a result of the actions discussed above. For these reasons, segment profit as
a percentage of sales to external customers was 17.4% and 11.5% for the three
and nine months of fiscal 2004, compared with 12.9% and 11.8% for the same
periods of fiscal 2003.

Europe Group

`Three Months Ended                       Nine Months Ended
                                ---------------------------------------------------  --------------------
                                     March 31,                                            March 31,
                                --------------------     %      Dec. 31,      %      --------------------     %
Thousands                          2004       2003    change      2003     change       2004       2003    change
                                ---------  --------- ---------  --------- ---------  ---------  --------- ---------
Sales to External Customers... $  10,342  $   6,191      67.0% $   9,063      14.1% $  25,705  $  14,223      80.7%
                                =========  =========            =========            =========  =========

Segment Profit................ $   2,105  $   1,495      40.8% $   2,066       1.9% $   5,481  $   3,138      74.7%
                                =========  =========            =========            =========  =========`

Sales to External Customers. Unit shipments of the Group's products
increased for all periods resulting in increased sales to external customers.
For the three and nine months ended March 31, 2004, sales to external customers
increased $4.1 million and $11.5 million, respectively, compared to the
comparable periods of the prior fiscal year, of which approximately $982,000 and
$2.5 million, respectively, was the result of changes in currency exchange rates
used to translate the Group's financial statements to U.S. dollars. On a
sequential basis, sales to external customers increased $1.3 million, compared
with the prior quarter. The Group's sales to external customers for the three
and nine months ended March 31, 2004 included an increase of approximately
$500,000 and $2.5 million, respectively, of sales that, before the transfer of
sales and support for our European customers to our German operations, would
have been included in sales of the Americas Group.

Segment Profit. For the three and nine month periods ended March 31,
2004, segment profit increased $610,000 or 40.8%, and $2.3 million, or 74.7%,
respectively, compared to the comparable periods of the prior year, due
primarily to the increase in sales, offset partially by an increase in SG&A
and R&D expenses commensurate with the growth in the business. On a
sequential basis, segment profit was relatively unchanged compared with the
prior quarter. For these reasons, segment profit as a percentage of sales was
20.4% and 21.3% for the three and nine month periods of fiscal 2004,
respectively, compared to 24.1% and 22.1% for the comparable periods of fiscal
2003.

Liquidity and Financial Condition

We use a combination of internally generated funds, the sale of equity
securities, and bank borrowings to finance our operations, acquisitions, working
capital requirements and capital expenditures. Management believes that our
internally generated funds will be sufficient to finance our current operations
and capital expenditures, excluding acquisitions, for at least the next twelve
months. Because long-term cash flow cannot be predicted with certainty, in the
future we might 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 securities, if required, may result in additional dilution to the
shareholders. We cannot be certain that additional financing will be available,
in amounts, or on terms, acceptable to us.

Our cash balance of $37.5 million at March 31, 2004 represents an increase of
$0.4 million during the nine months ended March 31, 2004. Sources of the
increase include:

`Cash flows from:                                Thousands
   Operating activities.........................  $      32
   Investing activities.........................     (2,269)
   Financing activities.........................      2,330
   Net effect of exchange rate changes on cash..        268
                                                   ---------
                                                  $     361
                                                   =========`

Net cash inflows are comprised of cash provided by operating activities of
$32,000, which includes cash flows of 
$4.6 million from depreciation and amortization and $2.2 million from the
receipt of income tax refunds of payments made in prior periods, and cash
provided by financing activities of $2.3 million as a result of the exercise of
stock options. However, future cash inflows as a result of employee stock option
exercises are difficult to predict with certainty. These cash inflows were
offset by $2.4 million used for the purchase of capital equipment during the
period as we upgraded some of our manufacturing and test equipment. During the
nine month period ended March 31, 2004, the increase in accounts receivable used
cash from operations of $579,000, and the increase in inventory levels, in line
with the current level of business, used cash from operations of $9.7 million,
both excluding the impact of foreign currency translation adjustments.
Liabilities also increased by approximately $1.2 million, consistent with our
current level of business.

As of the date of this report, we do not have any material capital
expenditure commitments.

As of March 31, 2004, we were committed under noncancelable operating leases
that expire at various dates through fiscal 2008, as described in Management's
Discussion and Analysis in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2003.

For the nine-month period ended March 31, 2004 there was no significant
impact from inflation.

Business Outlook

We are pleased with the design wins and increased bookings level this
fiscal year. Based on projections from our customers, we expect a favorable
book-to-bill ratio during the quarter ending June 30, 2004. We are continuing to
see improvement in our markets. The government market is still strong with
increasing requirements for system level solutions. The communications and
enterprise markets are continuing to rebound, and our customers' forecasts are
more aggressive. In the commercial market, we are seeing steady demand from
semiconductor and medical equipment manufacturers. Based on our forecasts and
order backlog, we expect sales for the quarter ending June 30, 2004 to be
between $37 million and $38 million; however, actual results may vary.

Management expects that corporate representatives of SBS will meet privately
during the quarter with investors, investment analysts, the media and others,
and may reiterate the Business Outlook published in this Form 10-Q. At the same
time, this Form 10-Q and the included Business Outlook will remain publicly
available on our Web site (www.sbs.com). Unless a notice stating
otherwise is published, the public can continue to rely on the Business Outlook
published on the Web site as representing our current expectations on matters
covered.

Recently Issued Accounting Standards

In December 2003, the SEC issued Staff Accounting Bulletin (SAB) No. 104,
Revenue Recognition.  SAB 104 revises or rescinds portions of the
interpretive guidance included in Topic 13 of the codification of staff
accounting bulletins in order to make this interpretive guidance consistent with
current authoritative accounting and auditing guidance and SEC rules and
regulations.  The adoption of SAB 104 did not impact our results of
operations or financial condition.

Item 3- 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,
we believe that the market risk related to these investments is minimal. As a
result of our German and Canadian operating and financing activities, we are
exposed to market risk from changes in foreign currency exchange rates. As of
March 31, 2004, we have no plans or intentions to enter into foreign exchange
forward contracts to reduce exposure to changes in foreign currency exchange
rates.

Item 4- Controls and Procedures

Quarterly Controls Evaluation and Related CEO and CFO Certifications

As of the end of the period covered by this Quarterly Report on Form 10-
Q, we evaluated the effectiveness of the design and operation of "disclosure
controls and procedures" (Disclosure Controls). The controls evaluation was done
under the supervision and with the participation of management, including our
Chief Executive Officer (CEO) and Chief Financial Officer (CFO).

Attached as Exhibits to this Quarterly Report on Form 10-Q are certifications
of the CEO (Exhibit 31.1) and the CFO (Exhibit 31.2), which are required in
accordance with Rule 13a-14 of the Securities Exchange Act of 1934 (the Exchange
Act). This Controls and Procedures section includes the information concerning
the controls evaluation referred to in the certifications and it should be read
in conjunction with the certifications for a more complete understanding of the
topics presented.

Disclosure Controls and Internal Controls

Disclosure Controls are procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act, such as
this Quarterly Report, is recorded, processed, summarized and reported within
the time periods specified in the U.S. Securities and Exchange Commission's
rules and forms. Disclosure Controls are also designed to ensure that the
information is accumulated and communicated to our management, including the CEO
and CFO, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting (Internal Controls) are procedures
which are designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures that: (1)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of SBS; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of SBS are being made
only in accordance with authorizations of management and directors of SBS; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of SBS' assets that could have a
material effect on the financial statements.  To the extent that components
of our Internal Controls are included in our Disclosure Controls, they are
included in the scope of our quarterly controls evaluation.

Limitations on the Effectiveness of Controls

Our management, including the CEO and CFO, does not expect that our
Disclosure Controls or Internal Controls will prevent all error and all fraud. A
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system's objectives will be
met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions or deterioration in the degree of compliance with policies or
procedures. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Conclusions

Based on our controls evaluation (with the participation of our CEO and
CFO), as of the end of the period covered by this report, our CEO and CFO have
concluded that, subject to the limitations noted above, our disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) are effective to ensure that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.

There was no change in our internal control over financial reporting during
our third fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.

---



PART II - OTHER INFORMATION

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) | Second 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, we appointed Norwest Bank Minnesota N.A. (now Wells Fargo) as Successor
Rights Agent.
|14    | (1) | Code of Ethics.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|31.1  | (1) | Certification of the Company's Chief Executive
Officer under Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                   
|31.2  | (1) | Certification of the Company's Chief Financial
Officer under Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                   
|32.1  | (1) | Certification of the Chief Executive Officer,
Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                        
|32.1  | (1) | Certification of the Chief Financial Officer,
Pursuant to 18 U.S.C. Section 1350 As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                        

(1) See Exhibit Index

(b) Reports on Form 8-K during the quarter

During the quarter ended March 31, 2004, we filed the following
current reports on Form 8-K:

1.   On January 20, 2004, SBS Technologies, Inc. filed a Form
8-K regarding its financial results for the quarter and six months ended
December 31, 2003.

---



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.
                       (Registrant)

By: /s/ Clarence W. Peckham       Clarence W. PeckhamChief Executive Officer

By: /s/ James E. Dixon Jr.   	James E. Dixon Jr.Executive Vice President and 
Chief Financial Officer

Date: May 14, 2004

---





|INDEX TO
EXHIBITS
|-----------------
|                 
|ExhibitNumber    
|3.i              
|3.ii             
|4.a              
|4.b              
|4.c              
|4.1              
|14               
|31.1             
|31.2             
|32.1             
|32.2             

---