##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

|  |  |                                                                                                                                          
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|X |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
September 30, 2001

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

Commission File Number 1-10981

SBS TECHNOLOGIES, INC.

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

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

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

YES X                    NO

As of November 1, 2001, the Registrant had 14,508,658 shares of its common
stock outstanding.





---



SBS Technologies, Inc. and Subsidiaries
Form 10-Q for the Quarter Ended September 30, 2001
Table of Contents


TABLE OF CONTENTS



|                                                  |                                                                      |                                                           |  |  |  |  |  | 
|------------------------------------------------- | -------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
|PART I - FINANCIAL INFORMATION                   
|                                                  | Item 1 -- Condensed Financial Statements                            
|                                                  |                                                                      | Consolidated Balance Sheets                              
|                                                  |                                                                      | Consolidated Statements of Operations                    
|                                                  |                                                                      | Consolidated Statement of Changes in Stockholders' Equity
|                                                  |                                                                      | Consolidated Statement of Cash Flows                     
|                                                  |                                                                      | Notes to Condensed Consolidated Financial Statements     
|                                                  | Item 2 -- Management's Discussion and Analysis                      
|                                                  | Item 3 -- Quantitative and Qualitative Disclosures about Market Risk
|PART II -- OTHER INFORMATION                     
|SIGNATURES                                       
|EXHIBIT INDEX                                    
|EX-10.bl Employment Agreement-Dan Moore          
|EX-10.bm Employment Agreement-P. St. Clair-Holmes



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##### Table of Contents



|                               |                                                                                                             |                                                                                                  |      |    |   | 
|------------------------------ | ----------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ---- | -- | - | 
|PART I  FINANCIAL INFORMATION |                                                                                                             |                                                                                                  | Page |   
|                               |                                                                                                             |                                                                                                  |      |   
|                               | Item 1  Condensed Financial Statements                                                                     |                                                                                                  |      |    |  
|                               |                                                                                                             | Consolidated Balance Sheets
at September 30, 2001 and June 30, 2001                              |      |    | 2 | 
|                               |                                                                                                             | Consolidated Statements of Operations,
Three Months Ended September 30, 2001 and 2000            |      |    | 3 | 
|                               |                                                                                                             | Consolidated Statement of Changes in Stockholders Equity,
Three Months Ended September 30, 2001 |      |    | 4 | 
|                               |                                                                                                             | Consolidated Statements of Cash Flows,
Three Months Ended September 30, 2001 and 2000            |      |    | 5 | 
|                               |                                                                                                             | Notes to Condensed Consolidated Financial Statements
as of September 30, 2001                    |      |    | 6 | 
|                               | Item 2  Managements Discussion and Analysis of Consolidated Financial
Condition and Results of Operations |                                                                                                  |      | 10 |  
|                               | Item 3  Quantitative and Qualitative Disclosures about Market Risk                                         |                                                                                                  |      | 14 |  
|PART II  OTHER INFORMATION    |                                                                                                             |                                                                                                  | 16   |   
|SIGNATURES                     |                                                                                                             |                                                                                                  | 17   |   
|EXHIBIT INDEX                  |                                                                                                             |                                                                                                  | 18   |   





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##### Table of Contents



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










|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |        |          |  |  | 
|--------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------------------------------ | ------ | ------- | ------------- | ------ | ------ | -------- |  |  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         | September 30, |        |        | June 30, | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         | 2001          |        |        | 2001     | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |               |        |        |          | 
|                            |                                                                                                                                                                        |                                            |                                      | Assets |         |               |        |        |          |  |  | 
|Current assets:             |                                                                                                                                                                        |                                            |                                      |        |         |               |        |       
|                            | Cash and cash equivalents                                                                                                                                              |                                            | $                                    | 16,650 |         |               |        | 9,734  |         
|                            | Receivables, net                                                                                                                                                       |                                            |                                      | 26,023 |         |               |        | 27,287 |         
|                            | Inventories                                                                                                                                                            |                                            |                                      | 37,168 |         |               |        | 40,752 |         
|                            | Deferred income taxes                                                                                                                                                  |                                            |                                      | 5,091  |         |               |        | 5,080  |         
|                            | Income tax receivable                                                                                                                                                  |                                            |                                      | 952    |         |               |        | 3,417  |         
|                            | Prepaid expenses                                                                                                                                                       |                                            |                                      | 1,006  |         |               |        | 1,125  |         
|                            | Other current assets                                                                                                                                                   |                                            |                                      | 865    |         |               |        | 802    |         
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total current assets                       |                                      |        | 87,755  |               |        |        | 88,197   | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|Property and equipment, net |                                                                                                                                                                        |                                            | 11,686                               |        |         |               | 11,475 |       
|Intangible assets, net      |                                                                                                                                                                        |                                            | 43,922                               |        |         |               | 45,107 |       
|Other assets                |                                                                                                                                                                        |                                            | 2,327                                |        |         |               | 2,393  |       
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total assets                               |                                      | $      | 145,690 |               |        |        | 147,172  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        |                                            | Liabilities and Stockholders Equity |        |         |               |        |        |          |  | 
|Current liabilities:        |                                                                                                                                                                        |                                            |                                      |        |         |               |        |       
|                            | Notes payable                                                                                                                                                          |                                            | $                                    |       |         |               |        | 2,500  |         
|                            | Accounts payable                                                                                                                                                       |                                            |                                      | 3,554  |         |               |        | 3,771  |         
|                            | Accrued representative commissions                                                                                                                                     |                                            |                                      | 534    |         |               |        | 821    |         
|                            | Accrued compensation                                                                                                                                                   |                                            |                                      | 3,024  |         |               |        | 4,071  |         
|                            | Other current liabilities                                                                                                                                              |                                            |                                      | 2,387  |         |               |        | 1,753  |         
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total current liabilities                  |                                      |        | 9,499   |               |        |        | 12,916   | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|Deferred income taxes       |                                                                                                                                                                        |                                            | 804                                  |        |         |               | 461    |       
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total liabilities                          |                                      |        | 10,303  |               |        |        | 13,377   | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|Stockholders equity:       |                                                                                                                                                                        |                                            |                                      |        |         |               |        |       
|                            | Common stock, no par value; 200,000,000 shares authorized, 14,498,168
issued and outstanding at September 30, 2001,
14,522,080 issued and outstanding at June 30, 2001 |                                            |                                      | 85,199 |         |               |        | 85,476 |         
|                            | Unearned compensation                                                                                                                                                  |                                            |                                      | (457   | )       |               |        | (478   | )       
|                            | Accumulated other comprehensive loss                                                                                                                                   |                                            |                                      | (4,783 | )       |               |        | (5,983 | )       
|                            | Retained earnings                                                                                                                                                      |                                            |                                      | 55,428 |         |               |        | 54,780 |         
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total stockholders equity                 |                                      |        | 135,387 |               |        |        | 133,795  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              
|                            |                                                                                                                                                                        | Total liabilities and stockholders equity |                                      | $      | 145,690 |               |        |        | 147,172  | 
|                            |                                                                                                                                                                        |                                            |                                      |        |         |              

See accompanying notes to condensed consolidated financial statements
Page 2



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##### Table of Contents



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




|                                                |                  |   |                                  |        |  |      |        |        | 
|----------------------------------------------- | ---------------- | - | -------------------------------- | ------ |  | ---- | ------ | ------ | 
|                                                |                  |   | Three Months Ended September 30, |       
|                                                |                  |   |                                  |       
|                                                |                  |   | 2001                             |        |  | 2000 |       
|                                                |                  |   |                                  |        |  |      |       
|Sales                                           |                  | $ | 31,799                           |        |  |      | 43,679 |       
|Cost of sales                                   |                  |   | 15,878                           |        |  |      | 22,234 |       
|                                                |                  |   |                                  |        |  |     
|                                                | Gross profit     |   |                                  | 15,921 |  |      |        | 21,445 | 
|Selling, general and administrative expense     |                  |   | 8,915                            |        |  |      | 7,934  |       
|Research and development expense                |                  |   | 4,274                            |        |  |      | 4,964  |       
|Restructuring charge                            |                  |   | 185                              |        |  |      |       |       
|Amortization of intangible assets               |                  |   | 1,928                            |        |  |      | 1,974  |       
|                                                |                  |   |                                  |        |  |     
|                                                | Operating income |   |                                  | 619    |  |      |        | 6,573  | 
|                                                |                  |   |                                  |        |  |     
|Interest and other income (expense), net        |                  |   | 436                              |        |  |      | (353   | )     
|Foreign exchange gains (losses)                 |                  |   | 49                               |        |  |      | (82    | )     
|                                                |                  |   |                                  |        |  |     
|                                                |                  |   | 485                              |        |  |      | (435   | )     
|                                                |                  |   |                                  |        |  |     
|Income before income taxes                      |                  |   | 1,104                            |        |  |      | 6,138  |       
|Income taxes                                    |                  |   | 456                              |        |  |      | 1,813  |       
|                                                |                  |   |                                  |        |  |     
|Net income                                      |                  | $ | 648                              |        |  |      | 4,325  |       
|                                                |                  |   |                                  |        |  |     
|Net income per common share                     |                  | $ | 0.04                             |        |  |      | 0.32   |       
|                                                |                  |   |                                  |        |  |     
|Net income per common share 
assuming dilution |                  | $ | 0.04                             |        |  |      | 0.29   |       
|                                                |                  |   |                                  |        |  |     

See accompanying notes to condensed consolidated financial statements
Page 3



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##### Table of Contents



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




|                                                |                                          |  |            |   |  |          |        |   |               |             |      |          |  |   |          |       |        |        |        |   |  |   |         |       | 
|----------------------------------------------- | ---------------------------------------- |  | ---------- | - |  | -------- | ------ | - | ------------- | ----------- | ---- | -------- |  | - | -------- | ----- | ------ | ------ | ------ | - |  | - | ------- | ----- | 
|                                                |                                          |  | Common     |   |  |          |        |   |               | Accumulated |      |          |  |   |          |       | Total  |       
|                                                |                                          |  | stock      |   |  |          |        |   |               | other       |      |          |  |   |          |       | stock- |       
|                                                |                                          |  |            |   |  | Unearned |        |   | comprehensive |             |      | Retained |  |   | holders' |      
|                                                |                                          |  | Shares     |   |  | Amount   |        |   | compensation  |             |      | loss     |  |   | earnings |       |        | equity |       
|                                                |                                          |  |            |   |  |          |        |   |               |             |      |          |  |   |          |       |        |        |       
|Balance at June 30, 2001                        |                                          |  | 14,522,080 |   |  | $        | 85,476 |   |               | $           | (478 | )        |  | $ | (5,983   | )     |        | $      | 54,780 |   |  | $ | 133,795 |      
|Exercise of stock options and warrants          |                                          |  | 18,588     |   |  |          | 199    |   |               |             |     |          |  |   |         |       |        |        |       |   |  |   | 199     |      
|Stock repurchased and retired                   |                                          |  | (42,500    | ) |  |          | (488   | ) |               |             |     |          |  |   |         |       |        |        |       |   |  |   | (488    | )    
|Stock-based compensation                        |                                          |  |           |   |  |          | 7      |   |               |             | 21   |          |  |   |         |       |        |        |       |   |  |   | 28      |      
|Income tax benefit from stock
options exercised |                                          |  |           |   |  |          | 5      |   |               |             |     |          |  |   |         |       |        |        |       |   |  |   | 5       |      
|Net income                                      |                                          |  |           |   |  |          |       |   |               |             |     |          |  |   |         |       |        |        | 648    |   |  |   | 648     |      
|Other comprehensive income:                     |                                          |  |            |   |  |          |        |   |               |             |      |          |  |   |          |       |        |        |        |   |  |   |         |      
|                                                | Foreign currency translation adjustments |  |            |  |  |          |        |  |               |             |      |         |  |   |          | 1,200 |        |        |        |  |  |   |         | 1,200 | 
|                                                |                                          |  |            |   |  |          |        |   |               |             |      |          |  |   |          |       |        |       
|Balance at September 30, 2001                   |                                          |  | 14,498,168 |   |  | $        | 85,199 |   |               | $           | (457 | )        |  | $ | (4,783   | )     |        | $      | 55,428 |   |  | $ | 135,387 |      
|                                                |                                          |  |            |   |  |          |        |   |               |             |      |          |  |   |          |       |        |       

See accompanying notes to condensed consolidated financial statements
Page 4



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SBS Technologies, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Thousands (except share amounts)
(Unaudited)




|                                                  |                                                                                          |                                               |                                    |                                                  |       |                    |        |       |        |         |        |  
|------------------------------------------------- | ---------------------------------------------------------------------------------------- | --------------------------------------------- | ---------------------------------- | ------------------------------------------------ | ----- | ------------------ | ------ | ----- | ------ | ------- | ------ | -
|                                                  |                                                                                          |                                               |                                    |                                                  |       | Three months ended |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       | September 30,      |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                    |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       | 2001               |        |       | 2000   |        
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                    |        |       |        |        
|Cash flows from operating activities:             |                                                                                          |                                               |                                    |                                                  |       |                    |        |      
|                                                  | Net income                                                                               |                                               | $                                  | 648                                              |       |                    |        | 4,325 |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|                                                  | Adjustments to reconcile net income to net cash provided (used) by
operating activities: |                                               |                                    |                                                  |       |                    |        |       |       
|                                                  |                                                                                          | Depreciation                                  |                                    |                                                  | 824   |                    |        |       | 554    |        
|                                                  |                                                                                          | Amortization of intangible assets             |                                    |                                                  | 1,928 |                    |        |       | 1,974  |        
|                                                  |                                                                                          | Bad debt expense                              |                                    |                                                  | 80    |                    |        |       | 331    |        
|                                                  |                                                                                          | Deferred income taxes                         |                                    |                                                  | 374   |                    |        |       | (1,084 | )      
|                                                  |                                                                                          | Income tax benefit of stock options exercised |                                    |                                                  | 5     |                    |        |       | 2,692  |        
|                                                  |                                                                                          | Loss on disposition of assets                 |                                    |                                                  | 7     |                    |        |       | 9      |        
|                                                  |                                                                                          | Foreign exchange (gains) losses               |                                    |                                                  | (49   | )                  |        |       | 82     |        
|                                                  |                                                                                          | Stock-based compensation                      |                                    |                                                  | 28    |                    |        |       | 7      |        
|                                                  |                                                                                          | Changes in assets and liabilities:            |                                    |                                                  |       |                    |        |       |        |        
|                                                  |                                                                                          |                                               | Receivables                        |                                                  |       | 1,337              |        |       |        | (5,264  | )     
|                                                  |                                                                                          |                                               | Inventories                        |                                                  |       | 3,906              |        |       |        | (10,069 | )     
|                                                  |                                                                                          |                                               | Prepaids and other assets          |                                                  |       | 124                |        |       |        | 287     |       
|                                                  |                                                                                          |                                               | Accounts payable                   |                                                  |       | (153               | )      |       |        | 4,631   |       
|                                                  |                                                                                          |                                               | Accrued representative commissions |                                                  |       | (296               | )      |       |        | (68     | )     
|                                                  |                                                                                          |                                               | Accrued compensation               |                                                  |       | (1,084             | )      |       |        | (1,021  | )     
|                                                  |                                                                                          |                                               | Income taxes                       |                                                  |       | 2,424              |        |       |        | 361     |       
|                                                  |                                                                                          |                                               | Other current liabilities          |                                                  |       | 557                |        |       |        | 908     |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|                                                  |                                                                                          |                                               |                                    | Net cash provided (used) by operating activities |       |                    | 10,660 |       |        |         | (1,345 | )
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Cash flows from investing activities:             |                                                                                          |                                               |                                    |                                                  |       |                    |        |      
|                                                  | Acquisition of property and equipment                                                    |                                               |                                    | (1,013                                           | )     |                    |        | (786  | )     
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|                                                  |                                                                                          |                                               |                                    | Net cash used by investing activities            |       |                    | (1,013 | )     |        |         | (786   | )
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Cash flows from financing activities:             |                                                                                          |                                               |                                    |                                                  |       |                    |        |      
|                                                  | Payments on notes payable                                                                |                                               |                                    | (2,500                                           | )     |                    |        |      |       
|                                                  | Repurchase and retirement of common stock                                                |                                               |                                    | (488                                             | )     |                    |        |      |       
|                                                  | Proceeds from exercise of stock options and warrants                                     |                                               |                                    | 199                                              |       |                    |        | 4,718 |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|                                                  |                                                                                          |                                               |                                    | Net cash (used) provided by financing activities |       |                    | (2,789 | )     |        |         | 4,718  |  
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Effect of exchange rate changes on cash           |                                                                                          |                                               | 58                                 |                                                  |       |                    | (5     | )    
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Net change in cash and cash equivalents           |                                                                                          |                                               | 6,916                              |                                                  |       |                    | 2,582  |      
|Cash and cash equivalents at beginning of period  |                                                                                          |                                               | 9,734                              |                                                  |       |                    | 3,595  |      
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Cash and cash equivalents at end of period        |                                                                                          | $                                             | 16,650                             |                                                  |       |                    | 6,177  |      
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|Supplemental disclosure of cash flow information: |                                                                                          |                                               |                                    |                                                  |       |                    |        |      
|                                                  | Interest paid                                                                            |                                               | $                                  | 15                                               |       |                    |        | 695   |       
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   
|                                                  | Income taxes received, net                                                               |                                               | $                                  | (2,315                                           | )     |                    |        | (167  | )     
|                                                  |                                                                                          |                                               |                                    |                                                  |       |                   

See accompanying notes to condensed consolidated financial statements
Page 5



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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2001
(Unaudited)






|1) |  | Summary of Significant Accounting Policies
|-- |  | ------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The accounting policies as set forth in SBS Technologies, Inc.s (SBS)
Annual Report on Form 10-K for the year ended June 30, 2001 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.



|2) |  | Receivables, net
|-- |  | ----------------

Receivables, net consist of the following:

|                                     |  |               |        |   |          |  |        |  
|------------------------------------ |  | ------------- | ------ | - | -------- |  | ------ | -
|                                     |  | September 30, |        |   | June 30, | 
|Thousands                            |  | 2001          |        |   | 2001     | 
|                                     |  |               |        |   |          | 
|Accounts receivable                  |  |               | 27,106 |   |          |  | 28,267 |  
|Less allowance for doubtful accounts |  |               | (1,083 | ) |          |  | (980   | )
|                                     |  |               |        |   |          | 
|                                     |  |               | 26,023 |   |          |  | 27,287 |  
|                                     |  |               |        |   |          | 



|3) |  | Inventories
|-- |  | -----------

Inventories consist of the following:

|                              |  |               |        |  |          |  |        | 
|----------------------------- |  | ------------- | ------ |  | -------- |  | ------ | 
|                              |  | September 30, |        |  | June 30, | 
|Thousands                     |  | 2001          |        |  | 2001     | 
|                              |  |               |        |  |          | 
|Raw materials                 |  |               | 23,998 |  |          |  | 22,743 | 
|Work in process               |  |               | 5,881  |  |          |  | 6,873  | 
|Finished goods                |  |               | 5,559  |  |          |  | 9,892  | 
|Inventory consigned to others |  |               | 1,730  |  |          |  | 1,244  | 
|                              |  |               |        |  |          | 
|                              |  |               | 37,168 |  |          |  | 40,752 | 
|                              |  |               |        |  |          | 



|4) |  | Earnings Per Share
|-- |  | ------------------



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

Page 6



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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2001
(Continued)
(Unaudited)



| |                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------
| | A reconciliation of the numerator and denominator of the per share and
per share  assuming dilution calculation follows:

|                                                                                   |  |                    |        |  |      |  |        | 
|---------------------------------------------------------------------------------- |  | ------------------ | ------ |  | ---- |  | ------ | 
|                                                                                   |  | Three months ended |       
|Thousands except per share amounts                                                 |  | September 30,      |       
|                                                                                   |  |                    |       
|                                                                                   |  | 2001               |        |  | 2000 | 
|                                                                                   |  |                    |        |  |      | 
|Net Income Per Common Share                                                        |  |                    |        |  |      |  |        | 
|Net income                                                                         |  | $                  | 648    |  |      |  | 4,325  | 
|                                                                                   |  |                    |        |  |      | 
|Weighted-average common shares outstanding used
in earnings per share computations |  |                    | 14,532 |  |      |  | 13,405 | 
|                                                                                   |  |                    |        |  |      | 
|Net income per common share                                                        |  | $                  | 0.04   |  |      |  | 0.32   | 
|                                                                                   |  |                    |        |  |      | 
|Net Income Per Common Share  Assuming Dilution                                    |  |                    |        |  |      |  |        | 
|Net income                                                                         |  | $                  | 648    |  |      |  | 4,325  | 
|                                                                                   |  |                    |        |  |      | 
|Weighted-average common shares outstanding used
in earnings per share computations |  |                    | 14,861 |  |      |  | 14,793 | 
|                                                                                   |  |                    |        |  |      | 
|Net income per common share  assuming dilution                                    |  | $                  | 0.04   |  |      |  | 0.29   | 
|                                                                                   |  |                    |        |  |      | 
|Shares Used in Net Income per Share Computations                                   |  |                    |        |  |      |  |        | 
|Average outstanding common shares                                                  |  |                    | 14,532 |  |      |  | 13,405 | 
|Incremental shares from assumed conversions 
dilutive potential common shares     |  |                    | 329    |  |      |  | 1,388  | 
|                                                                                   |  |                    |        |  |      | 
|Shares used in net income per common share 
assuming dilution computations        |  |                    | 14,861 |  |      |  | 14,793 | 
|                                                                                   |  |                    |        |  |      | 



| |                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the three months ended September 30, 2001 and 2000, options to
purchase 1,817,082 and 34,784 shares of common stock, respectively,
were outstanding but were not included in the computation of net income
per common share  assuming dilution because the options exercise
prices were greater than the average market price of the common shares.



|5) |  | Comprehensive Income
|-- |  | --------------------



| |                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Comprehensive income for the three months ended September 30, 2001 and
2000 was $1.8 million and $2.9 million, respectively. The difference
between comprehensive income and net income was related to foreign
currency translation adjustments.



|6) |  | Segment Financial Data
|-- |  | ----------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In July 2001, SBS segment structure was redefined in conjunction with
managements realignment of operations and market development efforts.
SBS operates through four operating segments: the Communications Group,
the Commercial Group, the Government Group and the Systems Group. The
Communications Group consists of SBS Technologies, Inc., Communications
Products and SDL Communications Inc. The Commercial Group consists of
SBS Technologies, Inc., Connectivity Products

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2001 (Continued)(Unaudited)



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | and SBS Technologies, Inc., Modular I/O. The Government Group consists
of SBS avionics and telemetry division, SBS Technologies, Inc.,
Embedded Computers, and SBS German operations. SBS Technologies,
Inc., Industrial Computers is included in the Systems Group. These
segments are based primarily on the markets and customers that are
served and have managers who report directly to the chief operating
decision-maker. Reportable segments for all periods presented have
been restated to conform to the new segment reporting structure.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SBS measures its segments results of operations based on income before
income taxes and before allocation of corporate overhead expenses,
amortization of goodwill and intangibles from acquisitions, corporate
interest income and expense, and acquired in-process research and
development charges associated with purchase business combinations.
Beginning July 1, 2001, for consistency with prior periods, certain
corporate sales and marketing costs have been allocated among segments.
These allocations were pro-rata based on sales for each SBS subsidiary
receiving benefit. The accounting policies used to measure segment
results of operations are the same as those referred to in Note 1.

|                            |                    |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       |  |        |           |  |  |         |   |  | 
|--------------------------- | ------------------ | ------------------- |  |  |  | ----- | ------ | -------------- | ----- |  | ---------- | ----- |  | ---------- | ------ | - | ------- | ------------- | ----- | ------- | ----- |  | ------ | --------- |  |  | ------- | - |  | 
|                            |                    |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       |  |        | Corporate |  |  |         |   | 
|                            |                    |                     |  |  |  |       |        | Communications |       |  | Commercial |       |  | Government |        |   | Systems |               |       | and un- |       |  |        |           | 
|Thousands                   |                    |                     |  |  |  | Group |        |                | Group |  |            | Group |  |            | Group  |   |         | allocated (1) |       |         | Total | 
|                            |                    |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       | 
|                            | Three months ended |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       |  |        |           |  |  |         |   | 
|                            |                    | September 30,       |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       |  |        |           |  |  |         |   |  | 
|Gross Sales                 | 2001               |                     |  |  |  |       | 7,256  |                |       |  | 8,628      |       |  |            | 13,495 |   |         |               | 3,390 |         |       |  |       |           |  |  | 32,769  |  
|Inter-segment sales         |                    |                     |  |  |  |       | (102   | )              |       |  | (238       | )     |  |            | (509   | ) |         |               | (121  | )       |       |  |       |           |  |  | (970    | )
|                            |                    |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       | 
|Sales to external customers |                    |                     |  |  |  |       | 7,154  |                |       |  | 8,390      |       |  |            | 12,986 |   |         |               | 3,269 |         |       |  |       |           |  |  | 31,799  |  
|Gross Sales                 | 2000               |                     |  |  |  |       | 19,316 |                |       |  | 10,606     |       |  |            | 11,704 |   |         |               | 3,407 |         |       |  |       |           |  |  | 45,033  |  
|Inter-segment sales         |                    |                     |  |  |  |       | (186   | )              |       |  | (177       | )     |  |            | (494   | ) |         |               | (497  | )       |       |  |       |           |  |  | (1,354  | )
|                            |                    |                     |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       | 
|Sales to external customers |                    |                     |  |  |  |       | 19,130 |                |       |  | 10,429     |       |  |            | 11,210 |   |         |               | 2,910 |         |       |  |       |           |  |  | 43,679  |  
|Segment profit (loss)       | 2001               |                     |  |  |  |       | 973    |                |       |  | 1,476      |       |  |            | 3,483  |   |         |               | (139  | )       |       |  | (4,689 | )         |  |  | 1,104   |  
|(Income before taxes)       | 2000               |                     |  |  |  |       | 5,496  |                |       |  | 2,514      |       |  |            | 2,233  |   |         |               | (40   | )       |       |  | (4,065 | )         |  |  | 6,138   |  
|                            |                    | As of September 30, |  |  |  |       |        |                |       |  |            |       |  |            |        |   |         |               |       |         |       |  |        |           |  |  |         |   |  | 
|Total Assets                | 2001               |                     |  |  |  |       | 28,169 |                |       |  | 14,030     |       |  |            | 25,197 |   |         |               | 7,289 |         |       |  | 71,005 |           |  |  | 145,690 |  
|                            | 2000               |                     |  |  |  |       | 35,190 |                |       |  | 16,198     |       |  |            | 23,081 |   |         |               | 7,842 |         |       |  | 65,036 |           |  |  | 147,347 |  



|(1) |  | The corporate and unallocated column includes amounts for corporate items. With regard to results of operations, corporate and unallocated includes corporate overhead,
substantially all interest expense, interest income, and amortization of goodwill and intangibles from acquisitions. Corporate assets primarily include cash and cash
equivalents, related party notes receivable, deferred and current income tax assets and intangible assets.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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SBS Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2001(Continued)(Unaudited)



|7) |  | Related Party Transactions
|-- |  | --------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Effective March 9, 2001, Grahame E. Rance was appointed to the positions
of President and Chief Executive Officer of SBS and member of the Board
of Directors. Mr. Rance succeeded Christopher J. Amenson, who
remained as
Chairman of the Board of Directors of SBS until November 8, 2001, at
which time Mr. Rance was appointed as Chairman. As part of his compensation
package, Mr. Rance received a $1,893,750 interest free loan from SBS,
paid in cash on April 4, 2001. Forgiveness of the loan will occur
ratably over six annual anniversaries of Mr. Rances employment with
SBS. At September 30, 2001, the balance on the loan was $1,732,407.
Additionally, Mr. Rance received a $570,000 interest free loan from SBS
which is repayable upon the sale of his former home.



|8) |  | Restructuring Charge
|-- |  | --------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SBS announced to its employees on August 14, 2001, workforce reductions
and certain facility consolidation actions, which were approved by the
SBS Board of Directors on July 18, 2001 as part of SBS 2002 operating
plan. These actions included notification to 58 employees,
approximately 11% of SBS total workforce, that their positions would be
eliminated by the end of September 2001, and plans to consolidate the
test, packaging and support functions performed at SBS Newark,
California and Mansfield, Massachusetts facilities to its St. Paul,
Minnesota and Carlsbad, California facilities, respectively.
Accordingly, this quarter, SBS recorded approximately $185,000 in
restructuring costs that are non-recurring or infrequent in occurrence.
This charge represents severance and other employee related costs. As
of September 30, 2001, cash payments of approximately $106,000 have been
made; the remaining $79,000 will be paid out over the next two quarters.
SBS anticipates that substantially all of the restructuring will be
completed in the year ending June 30, 2002.



|9) |  | Subsequent Event
|-- |  | ----------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On October 10, 2001, SBS executed a letter of intent to acquire
Interactive Circuits and Systems Ltd. (ICS), an Ontario, Canada-based
provider of advanced board and system level products for data
acquisition, signal and image processing, advanced Software Defined
Radio (SDR) and wireless applications. Closing of the transaction is
contingent upon the negotiation and execution of the purchase agreement,
covenants not to complete, confidentiality agreements, employment
agreements, completion of satisfactory due diligence, and approval, as
necessary, by any applicable Canadian and/or U.S. regulatory
authorities. SBS expects to fund the acquisition through bank
financing.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001




The following discussion and analysis should be read in conjunction with the
SBS Financial Statements and Notes thereto. Information discussed
herein, other than statements of historical fact, that addresses future
financial performance, activities, events or developments that SBS or
management intends, expects, projects, believes or anticipates will or may
occur in the future are forward-looking statements. These statements are based
upon certain assumptions and assessments made by management of SBS in light of
its experience and its perception of historical trends, current conditions,
expected future developments and other factors it believes to be appropriate.
The forward-looking statements included in this Form 10-Q are also subject to a
number of risks and uncertainties, including but not limited to economic,
competitive, supply and demand, governmental and technological factors
affecting SBS operations, markets, products, services, prices, and other risk
factors listed in the Companys Form 10-K for the year ended June 30, 2001.
These forward-looking statements are not guarantees of future performance, and
actual results, developments and business decisions may differ from those
expressed or implied by these forward-looking statements.

Results of Operations

Three Months Ended September 30, 2001 Compared To Three Months Ended September
30, 2000

Sales.For the three-month period ended September 30, 2001, sales decreased
27.2%, or $11.9 million, from $43.7 million for the three-month period ended
September 30, 2000, to $31.8 million. Unit shipments increased within the
Systems Group and among all product lines within the Government Group segment.
Unit shipments declined within the Communications Group due to the depressed
conditions within the telecommunications market that affected the Groups
customers. Current unfavorable economic and market conditions combined with
several project delays resulted in a decline of unit shipments within the
Commercial Group. SBS expects that second quarter sales within the
Communications and Commercial Group will be consistent with the quarter ended
September 30, 2001. Actual results may vary.

Gross Profit.For the three-month period ended September 30, 2001, gross
profit decreased 25.8%, or $5.5 million, from $21.4 million for the three-month
period ended September 30, 2000, to $15.9 million. For the three-month period
ended September 30, 2001, gross profit as a percentage of sales increased to
50.1% from 49.1% for the three-month period ended September 30, 2000, primarily
resulting from a change in sales mix within the Communications Group to lower
volume higher margin products. Based on managements expectations of sales
projections for the second quarter of fiscal 2002, gross profit as a percentage
of sales is expected to be consistent with the quarter ended September 30,
2001. Actual results may vary.

Selling, General and Administrative Expense.For the three-month period ended
September 30, 2001, selling, general and administrative (SG&A) expense
increased 12.4%, or $981,000 from $7.9 million for the three-month period ended
September 30, 2000, to $8.9 million. This increase is primarily due to the
strengthening of SBS sales and marketing efforts associated with the
realignment of its business, combined with the addition of a corporate business
development department, relocation expenses for recently hired corporate
employees, and depreciation and consulting expenses associated with the
implementation of SBS customer relationship management system. This increase,
combined with the decrease in sales, resulted in an increase in SG&A expense as
a percentage of sales to 28.0% in the three month period ended September 30,
2001 from 18.2% in the three-month period ended September 30, 2000.

Research and Development Expense.For the three-month period ended September
30, 2001, research and development (R&D) expense decreased 13.9%, or $690,000
from $5.0 million for the three-month period ended September 30, 2000, to $4.3
million. This decrease is primarily due to the Governments Groups reduction
in material and consulting costs associated with development programs that were
completed in fiscal 2001. For the three-month period ended September 30, 2001,
R&D expense as a percentage of sales increased to 13.4% from 11.4% in the
three-month period ended September 30, 2000, primarily due to the decrease in
sales volume.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001

(Continued)

Interest and Other Income (Expense), Net.   For the three-month period ended
September 30, 2001, net interest and other income of $436,000 consisted
primarily of a recovery from insurance of $307,000, and interest income
associated with surplus cash. For the three-month period ended September 30,
2000, net interest expense of $353,000 consisted primarily of interest expense
associated with borrowings used to fund the acquisition of SDL.

Foreign Exchange Gains (Losses).For the three-month periods ended September
30, 2001 and 2000, foreign exchange gains (losses) were primarily attributable
to the change in exchange rates relating to interest payable on debt from SBS
foreign subsidiary.

Income Taxes.For the three-month period ended September 30, 2001, income
taxes represented an effective rate of 41.3%, primarily due to a higher
percentage of foreign source pre-tax income. For the period ended September
30, 2000, the effective tax rate, excluding the retroactive tax adjustment
resulting from a favorable ruling by the German tax authorities, would have
been approximately 36.0%.

Earnings Per Share.For the three-month period ended September 30, 2001, net
income per common share was $0.04 compared to $0.32 for the three-month period
ended September 30, 2000. For the three-month period ended September 30,
2001, net income per common share-assuming dilution was $0.04 compared to $0.29
for the three-month period ended September 30, 2000.

Review of Business Segments

SBS is managed and operates through four operating segments: the Communications
Group, the Commercial Group, the Government Group, and the Systems Group.

The following is a discussion of sales to external customers and segment profit
for each reportable segment. SBS does not allocate to these segments corporate
overhead, substantially all of the amortization expense associated with
acquisitions, substantially all interest income earned on cash balances,
interest expense associated with SBS borrowing facilities and acquired
in-process research and development charges. This measure of segment profit
described above is referred to in this review as Segment Profit.

Communications Group

For the three-month period ended September 30, 2001, Communications Group sales
to external customers decreased 62.6%, or $11.9 million, from $19.1 million for
the three-month period ended September 30, 2000 to $7.2 million. This decrease
is primarily due to the slowdown of several of the Groups telecommunications
infrastructure customers. SBS expects that second quarter sales will be
consistent with the quarter ended September 30, 2001. Actual results may vary.

For the three-month period ended September 30, 2001, Communications Group
Segment Profit decreased 82.3%, or $4.5 million, from $5.5 million for the
three-month period ended September 30, 2000, to $1.0 million. This decrease
was due to depressed conditions within the telecommunications market, affecting
the Groups customers. For the same reason, Segment Profit as a percentage of
sales decreased from 28.7% for the three-month period ended September 30, 2000
to 13.6% for the three-month period ended September 30, 2001.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001

(Continued)

Commercial Group

For the three-month period ended September 30, 2001, Commercial Group sales to
external customers decreased 19.6%, or $2.0 million from $10.4 million for the
three-month period ended September 30, 2000 to $8.4 million. Sales of the
Groups general purpose I/O products and computer connectivity and expansion
unit products decreased 28.0%, and 10.0%, respectively, primarily as a result
of current unfavorable economic and market conditions and several delayed
projects. SBS expects that second quarter sales will be consistent with the
quarter ended September 30, 2001. Actual results may vary.

For the three-month period ended September 30, 2001, Commercial Group Segment
Profit decreased 41.3%, or $1.0 million, from $2.5 million for the three-month
period ended September 30, 2000 to $1.5 million. This decrease was primarily
due to the decrease in sales among the Groups product lines. For the same
reason, Segment Profit as a percentage of sales decreased from 24.1% for the
three-month period ended September 30, 2000 to 17.6% for the three-month period
ended September 30, 2001.

Government Group

For the three-month period ended September 30, 2001, Government Group sales to
external customers increased 15.8%, or $1.8 million, from $11.2 million for the
three-month period ended September 30, 2000 to $13.0 million. Sales of the
Groups avionics and telemetry products increased 6.7%, primarily due to the
release of the conduction-cooled PMC design. Sales of the Groups computer
processor products increased 26.8%, primarily due to the focus on high volume
production business.

For the three-month period ended September 30, 2001, Government Group Segment
Profit increased 56.0%, or $1.3 million from $2.2 million for the three-month
period ended September 30, 2000 to $3.5 million. This increase was primarily
due to the gross profit contribution from the increase in sales and the
reduction in R&D material and consulting costs associated with avionics and
telemetry development programs that were completed during fiscal 2001. Segment
Profit as a percentage of sales increased from 19.9% for the three-month period
ended September 30, 2000 to 26.8% for the three-month period ended September
30, 2001, primarily resulting from the reduced R&D costs.

Systems Group

For the three-month period ended September 30, 2001, Systems Group sales to
external customers increased 12.3%, or $359,000, from $2.9 million for the
three-month period ended September 30, 2000 to $3.3 million. This increase was
primarily due to an increase in sales to semiconductor manufacturers.

For the three-month period ended September 30, 2001, Systems Group segment loss
increased from $40,000 for the three-month period ended September 30, 2000 to
$139,000, primarily due to increased expenses associated with the strengthening
of SBS sales and marketing efforts.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001
(Continued)

Liquidity and Capital Resources

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

Cash totaled $16.6 million at September 30, 2001, an increase of $6.9 million
from June 30, 2001. This increase was the result of $10.7 million of cash flow
from operations, partially offset by $1.0 million of expenditures for capital
equipment, $2.5 million of payments on SBS line of credit, and $0.5 million
paid to repurchase shares of SBS common stock pursuant to a
repurchase plan adopted by the Board of Directors on September 14,
2001 and implemented from September 20 to September 26, 2001. During the three-month period
ended September 30, 2001, inventory and accounts receivable
declined, consistent with the decline in sales. Liabilities were in line with the current level of business.

As of September 30, 2001, there were no borrowings drawn on SBS $30.0 million
Credit Agreement (Agreement) with Bank of America, N.A. and SBS was in
compliance with all of the covenants of the Agreement. Management is currently
negotiating an amendment to the Agreement, to reduce the revolving credit
facility to $20.0 million and obtain a three year term loan. The revolving
credit facility will terminate on December 31, 2002. The term loan will be
used to finance the acquisition of ICS (See Subsequent Event) and will
terminate on December 31, 2004.

Management believes that its financial resources, including its internally
generated funds and debt capacity, will be sufficient to finance SBS current
operations and capital expenditures, excluding acquisitions, for the next
twelve months.

For the three-month period ended September 30, 2001, there was no significant
impact from inflation.

New Accounting Standards

In October, 2001, the FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. SFAS 144
supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of, but retains many of the fundamental
provisions of SFAS 121. SFAS 144 also supersedes APB Opinion No. 30,
Reporting the Results of Operations, Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions. SFAS 144 retains the requirement in Opinion 30 to
report separately discontinued operations and extends that reporting to a component of an entity that either has been
disposed of or is classified as held for sale. SFAS 144 is effective for
fiscal years beginning after December 15, 2001 and interim periods within those
fiscal years. Early application is permitted. SBS does not expect the
adoption of SFAS 144 to have a material impact on its financial statements or
results of operations.

In June, 2001, the FASB issued SFAS 143 Accounting for Asset Retirement
Obligations, which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
the associated retirement costs. The standard applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development and/or normal use of the asset. SFAS
143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The fair value of the liability is added
to the carrying amount of the associated asset and this additional carrying
amount is depreciated over the life of the asset. The liability is accreted at
the end of each period through charges to operating expense. If the obligation
is settled for other than the carrying amount of the liability, SBS will
recognize a gain or loss on settlement. SBS is required to adopt the
provisions of SFAS 143 for the quarter ending September 30, 2002. SBS does not
expect the adoption of SFAS 143 to have a material impact on its financial
statements or results of operations.

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SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001
(Continued)




In July 2001, the FASB issued SFAS 141, Business Combinations, and SFAS 142,
Goodwill and Other Intangible Assets. SFAS 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001 as well as all purchase method business combinations completed after
June 30, 2001. SFAS 141 also specifies criteria that intangible assets acquired in a
purchase method business combination must meet to be recognized and reported
apart from goodwill. Any purchase price allocable to an assembled workforce may
not be accounted for separately. SFAS 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead be tested for impairment at least annually in accordance with the
provisions of SFAS 142. SFAS 142 will also require that intangible assets with
estimable useful lives be amortized over their respective estimated useful
lives to their estimated residual values, if any, and reviewed for impairment
in accordance with SFAS 144, which supersedes SFAS 121.

SBS is required to adopt the provisions of SFAS 141 on July 1, 2002. Before the
adoption of SFAS 142, goodwill and intangible assets acquired in business
combinations completed before July 1, 2001 will continue to be amortized and
tested for impairment in accordance with the appropriate pre-SFAS 142
accounting requirements.

SFAS 141 will require, upon adoption of SFAS 142, that SBS evaluate its
existing intangible assets and goodwill that were acquired in prior purchase
business combinations, and make any necessary reclassifications in order to
conform with the new criteria in Statement 141 for recognition apart from
goodwill. Upon adoption of SFAS 142, SBS will be required to reassess the
useful lives and residual values of all intangible assets acquired, and make
any necessary amortization period adjustments by the end of the first interim
period after adoption. In addition, to the extent an intangible asset is
identified as having an indefinite useful life, SBS will be required to test
the intangible asset for impairment in accordance with the provisions of SFAS
142 within the first interim period. Any impairment loss will be measured as of
the date
of adoption and recognized as the cumulative effect of a change in accounting
principle in the first interim period.

In connection with SFAS 142s transitional goodwill impairment evaluation, SBS
will be required to perform an assessment of whether there is an indication
that goodwill is impaired as of the date of adoption. To accomplish this, SBS
must identify its reporting units and determine the carrying value of each
reporting unit by assigning the assets and liabilities, including the existing
goodwill and intangible assets, to those reporting units as of the date of
adoption. SBS will then have up to six months from the date of adoption to
determine the fair value of each reporting unit and compare it to the reporting
units carrying amount. To the extent a reporting units carrying amount
exceeds its fair value, an indication exists that the reporting units goodwill
may be impaired and SBS must perform the second step of the transitional
impairment test. In the second step, SBS must compare the implied fair value of
the reporting units goodwill, determined by allocating the reporting units
fair value to all of its assets (recognized and unrecognized) and liabilities
in a manner similar to a purchase price allocation in accordance with SFAS 141,
to its carrying amount, both of which would be measured as of the date of
adoption. This second step is required to be completed as soon as possible, but
no later than the end of the year of adoption. Any transitional impairment loss
will be recognized as the cumulative effect of a change in accounting principle
in SBS statement of earnings.

Because of the extensive effort needed to comply with adopting SFAS 141 and
SFAS 142, it is not practicable to reasonably estimate the impact of adopting
these standards on SBS financial statements at the date of this report,
including whether it will be required to recognize any transitional impairment
losses as the cumulative effect of a change in accounting principle.

Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the information on this risk that was
provided in the SBS Form 10-K for the year ended June 30, 2001.

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##### Table of Contents



SBS Technologies, Inc. and Subsidiaries
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations
September 30, 2001
(Continued)

Business Outlook

Consistent with SBS press release dated October 16, 2001, management expects
little change in SBS second quarter financial results as compared to the first
quarter of fiscal 2002. Management expects second quarter sales to be between
$30.0 million and $33.0 million and net income per common share  assuming
dilution to be break even to slightly profitable. Actual results may vary.

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##### Table of Contents



PART II  OTHER INFORMATION




|        |  |                                                           
|------- |  | ----------------------------------------------------------
|Item 1. |  | Legal Proceedings  None                                  
|Item 2. |  | Changes in Securities  None                              
|Item 3. |  | Defaults by the Company upon its Senior Securities  None 
|Item 4. |  | Submission of Matters to a Vote of Security Holders  None
|Item 5. |  | Other Information  None                                  
|Item 6. |  | Exhibits and Reports on Form 8-K.                         

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

|      |  |  |     |     |  |                                                                                                                                                                                                                                                                     
|----- |  |  | --- | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|03.i  |  |  | (1) |     |  | Restated Articles of Incorporation                                                                                                                                                                                                                                  
|03.ii |  |  | (1) |     |  | Restated and Amended Bylaws                                                                                                                                                                                                                                         
|04.a  |  |  | (1) |     |  | Article VI of the Restated Articles of Incorporation, as included
in the Restated                                                                                                                                                                                   
|04.b  |  |  | (1) |     |  | Articles of Incorporation of SBS Technologies, Inc.
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, 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
|10.bl |  |  | (1) | (*) |  | Employment agreement between SBS Technologies, Inc. and Dan Moore, dated
April 6, 2001                                                                                                                                                                              
|10.bm |  |  | (1) | (*) |  | Employment agreement between SBS Technologies, Inc. and Penny St. Clair Holmes, dated
April 23, 2001                                                                                                                                                                

|    |  |                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------
|(b) |  | Reports on Form 8-K  None                                                                            
|    |  |                                                                                                       
|(1) |  | See Exhibit Index                                                                                     
|(*) |  | Indicates a management contract or compensatory plan or arrangement
required to be filed as an exhibit

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##### Table of Contents



SIGNATURES




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

|                        |  |                                                                                             
|----------------------- |  | --------------------------------------------------------------------------------------------
|                        |  | SBS TECHNOLOGIES, INC.                                                                      
|                        |  |                                                                                             
|Date: November 13, 2001 |  | /s/ Grahame E. Rance                                                                        
|                        |  | Chief Executive Officer
and President                                                       
|                        |  |                                                                                             
|Date: November 13, 2001 |  | /s/ James E. Dixon, Jr.                                                                     
|                        |  | Vice President,
Finance and Administration;
Chief Financial Officer, Secretary and
Treasurer

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##### Table of Contents



SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX




|               |  |             |                  |  |  |                                                                                                                                                                                                                                                                      |  |                              
|-------------- |  | ----------- | ---------------- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------
|Exhibit Number |  | Description | Method of Filing | 
|               |  |             |                  | 
|03.i           |  |             | (1)              |  |  | Restated Articles of Incorporation                                                                                                                                                                                                                                   |  |                             
|03.ii          |  |             | (2)              |  |  | Restated and Amended Bylaws                                                                                                                                                                                                                                          |  |                             
|04.a           |  |             | (3)              |  |  | Article VI of the Restated Articles of Incorporation,
as included in the Restated Articles of Incorporation
of SBS Technologies, Inc.                                                                                                                                |  |                             
|04.b           |  |             | (4)              |  |  | Articles I and II of the Restated and Amended Bylaws of
SBS Technologies, Inc.                                                                                                                                                                                       |  |                             
|04.c           |  |             | (5)              |  |  | Form of certificate evidencing Common stock                                                                                                                                                                                                                          |  |                             
|04.1           |  |             | (6)              |  |  | Rights Agreement dated September 15, 1997 between SBS
Technologies, Inc. and First Security Bank, 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 |  |                             
|10.bl          |  |             |                  |  |  | Employment
agreement between SBS Technologies, Inc. and Dan Moore, dated
April 6, 2001                                                                                                                                                                               |  | filed
electronically herewith
|10.bm          |  |             |                  |  |  | Employment
agreement between SBS Technologies, Inc. and Penny St. Clair-Holmes,
dated April 23, 2001                                                                                                                                                                 |  | filed
electronically herewith



|(1) |  | Incorporated by reference to Exhibit 3.i, of the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000. 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Incorporated by reference to Exhibit 3.ii, of the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000.
|   
|(3) |  | Incorporated by reference to Exhibit 3.i, of the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000. 
|   
|(4) |  | Incorporated by reference to Exhibit 3.ii, of the Registrants Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000.
|   
|(5) |  | Incorporated by reference to Exhibit 4.c, of the Registrants Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001.     
|   
|(6) |  | Incorporated by reference to Exhibit 4.1 to the Registrants Form 8-K
filed September 23, 1997.                                       

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