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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-QSB

(Mark One)

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

For the quarterly period ended January 31, 2002

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------------

For the transition period from  to

Commission file number 0-25974

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R-B RUBBER PRODUCTS, INC.(Exact name of registrant as specified in its charter)

Oregon(State or other jurisdiction of incorporation
or organization)

93-0967413(I.R.S. Employer Identification No.)904 E. 10th Avenue, McMinnville, Oregon 97128(Address of principal executive offices)

97128(Zip Code)


Issuer's telephone number, including area code:503-472-4691

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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock without par value(Class)

3,234,271(Outstanding at March 12, 2002)


Transitional Small Business Disclosure Format (check
one): Yes o    No ý

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R-B RUBBER PRODUCTS, INC.  FORM 10-QSB  INDEX

|                             |  |                                                                                                    |  | Page
|---------------------------- |  | -------------------------------------------------------------------------------------------------- |  | ----
|PART IFINANCIAL INFORMATION |  |                                                                                                   
|Item 1.                      |  | Consolidated Financial Statements                                                                  |  |     
|                             |  | Consolidated Balance SheetsJanuary 31, 2002 and April 30, 2001                                    |  | 2   
|                             |  | Consolidated Statements of OperationsThree Months and Nine Months Ended January 31, 2002 and 2001 |  | 3   
|                             |  | Consolidated Statements of Cash FlowsNine Months Ended January 31, 2002 and 2001                  |  | 4   
|                             |  | Notes to Consolidated Financial Statements                                                         |  | 5   
|Item 2.                      |  | Management's Discussion and Analysis or Plan of Operation                                          |  | 7   
|PART IIOTHER INFORMATION    |  |                                                                                                   
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                                   |  | 11  
|Signatures                   |  | 12                                                                                                

1

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R-B RUBBER PRODUCTS, INC.  CONSOLIDATED BALANCE SHEETS

|                                                                                            |                                                                                                   | January 31,
2002                           |           | April 30,
2001
|------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | --------------
|
|ASSETS                                                                                      |                                                                                                   |                                            |           |               
|Current assets:                                                                             |                                                                                                   |                                            |           |               
|                                                                                            | Cash and cash equivalents                                                                         |                                            | $         | 734,510       
|                                                                                            | Accounts receivable, net of allowance of $75,488 and $38,105                                      |                                            |           | 1,376,749     
|                                                                                            | Inventories, net                                                                                  |                                            |           | 1,789,337     
|                                                                                            | Prepaid expenses and other                                                                        |                                            |           | 221,027       
|                                                                                            | Deferred tax asset                                                                                |                                            |           | 62,000        
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total current assets                       |           |               
|Property, plant and equipment, net of accumulated depreciation of $4,767,991 and $4,051,446 |                                                                                                   |                                            | 5,397,678 |               
|Other assets                                                                                |                                                                                                   |                                            | 419,527   |               
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total assets                               |           | $             
|                                                                                            |                                                                                                   |                                            |           |               
|LIABILITIES AND SHAREHOLDERS' EQUITY                                                        |                                                                                                   |                                            |           |               
|Current liabilities:                                                                        |                                                                                                   |                                            |           |               
|                                                                                            | Current portion of long-term debt                                                                 |                                            | $         | 126,185       
|                                                                                            | Current portion of capital lease obligations                                                      |                                            |           | 266,175       
|                                                                                            | Short-term borrowings                                                                             |                                            |           | 835,000       
|                                                                                            | Accounts payable                                                                                  |                                            |           | 396,192       
|                                                                                            | Accounts payablerelated party                                                                    |                                            |           | 132,569       
|                                                                                            | Accrued expenses                                                                                  |                                            |           | 208,526       
|                                                                                            | Income taxes payable                                                                              |                                            |           | 65,228        
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total current liabilities                  |           |               
|Long-term debt, net of current portion                                                      |                                                                                                   |                                            | 982,084   |               
|Capital lease obligations, net of current portion                                           |                                                                                                   |                                            | 620,262   |               
|Deferred income taxes                                                                       |                                                                                                   |                                            | 37,000    |               
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total liabilities                          |           |               
|                                                                                            |                                                                                                   |                                            |           |               
|Commitments and contingencies                                                               |                                                                                                   |                                            |           |               
|Shareholders' equity:                                                                       |                                                                                                   |                                            |           |               
|                                                                                            | Common stock, no par value, 24,000,000 shares authorized; 3,234,271 shares issued and outstanding |                                            |           | 4,311,999     
|                                                                                            | Retained earnings                                                                                 |                                            |           | 2,019,608     
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total shareholders' equity                 |           |               
|                                                                                            |                                                                                                   |                                            |           |               
|                                                                                            |                                                                                                   | Total liabilities and shareholders' equity |           | $             
|                                                                                            |                                                                                                   |                                            |           |               

The
accompanying notes are an integral part of these statements.

2

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R-B RUBBER PRODUCTS, INC.  CONSOLIDATED STATEMENTS OF OPERATIONS

|                                            |                            | Three Months Ended January 31, |           | Nine Months Ended January 31, |  
|------------------------------------------- | -------------------------- | ------------------------------ | --------- | ----------------------------- | -
|
|
|Sales, net                                  |                            | $                              | 3,239,741 |                               | $
|Cost of sales                               |                            |                                | 2,353,018 |                               |  
|                                            |                            |                                |           |                               |  
|                                            | Gross profit               |                                |           | 886,723                       |  
|                                            |                            |                                |           |                               |  
|Operating expenses:                         |                            |                                |           |                               |  
|                                            | Selling                    |                                |           | 283,899                       |  
|                                            | General and administrative |                                |           | 430,105                       |  
|                                            |                            |                                |           |                               |  
|                                            |                            |                                | 714,004   |                               |  
|                                            |                            |                                |           |                               |  
|Operating income                            |                            |                                | 172,719   |                               |  
|                                            |                            |                                |           |                               |  
|Other income (expense):                     |                            |                                |           |                               |  
|                                            | Interest income            |                                |           | 5,310                         |  
|                                            | Other income (expense)     |                                |           | 9,426                         |  
|                                            | Interest expense           |                                |           | (50,402                       | )
|                                            |                            |                                |           |                               |  
|                                            | Other expense, net         |                                |           | (35,666                       | )
|                                            |                            |                                |           |                               |  
|Income before income taxes                  |                            |                                | 137,053   |                               |  
|Income tax expense                          |                            |                                | (44,976   | )                             |  
|                                            |                            |                                |           |                               |  
|Net income                                  |                            | $                              | 92,077    |                               | $
|                                            |                            |                                |           |                               |  
|Basic net income per share                  |                            | $                              | 0.03      |                               | $
|                                            |                            |                                |           |                               |  
|Shares used in basic net income per share   |                            |                                | 3,234,271 |                               |  
|                                            |                            |                                |           |                               |  
|Diluted net income per share                |                            | $                              | 0.03      |                               | $
|                                            |                            |                                |           |                               |  
|Shares used in diluted net income per share |                            |                                | 3,285,040 |                               |  
|                                            |                            |                                |           |                               |  

The
accompanying notes are an integral part of these statements.

3

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R-B RUBBER PRODUCTS, INC.  CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                 |                                                                                             | Nine Months Ended January 31,                     |                           
|------------------------------------------------ | ------------------------------------------------------------------------------------------- | ------------------------------------------------- | --------------------------
|
|
|Cash flows from operating activities:            |                                                                                             |                                                   |                           
|                                                 | Net Income                                                                                  |                                                   | $                         
|                                                 | Adjustments to reconcile net income to net cash provided by (used in) operating activities: |                                                   |                           
|                                                 |                                                                                             | Depreciation and amortization                     |                           
|                                                 |                                                                                             | Changes in current assets and liabilities:        |                           
|                                                 |                                                                                             |                                                   | Accounts receivable, net  
|                                                 |                                                                                             |                                                   | Inventories, net          
|                                                 |                                                                                             |                                                   | Prepaid expenses and other
|                                                 |                                                                                             |                                                   | Accounts payable          
|                                                 |                                                                                             |                                                   | Accrued expenses          
|                                                 |                                                                                             |                                                   | Income taxes payable      
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|Cash flows from investing activities:            |                                                                                             |                                                   |                           
|                                                 | Additions to property, plant and equipment                                                  |                                                   |                           
|                                                 | Other, net                                                                                  |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 | Cash flows from financing activities:                                                       |                                                   |                           
|                                                 |                                                                                             | Net borrowings under short-term credit facilities |                           
|                                                 |                                                                                             | Proceeds from exercise of stock options           |                           
|                                                 |                                                                                             | Payments on long-term debt                        |                           
|                                                 |                                                                                             | Payments on capital lease obligations             |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|Increase (decrease) in cash and cash equivalents |                                                                                             |                                                   | 135,327                   
|Cash and cash equivalents:                       |                                                                                             |                                                   |                           
|                                                 | Beginning of period                                                                         |                                                   |                           
|                                                 |                                                                                             |                                                   |                           
|                                                 | End of period                                                                               |                                                   | $                         
|                                                 |                                                                                             |                                                   |                           

The
accompanying notes are an integral part of these statements.

4

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R-B RUBBER PRODUCTS, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unaudited)

Note 1. Basis of Presentation

The financial information included herein for the three and nine months ended January 31, 2002 and 2001 and the financial information as of
January 31, 2002 is unaudited; however, such information reflects all adjustments consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash flows for the interim periods. The interim financial statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's April 30, 2001 Form 10-KSB. The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.

Note 2. Inventories

Inventories are stated at the lower of average cost, which approximates the first-in, first-out method, or market (net realizable value),
and include materials, labor and manufacturing overhead. Unsalable or unusable items are carried at scrap value and reprocessed.

|               |  | January 31, 2002 |           | April 30, 2001
|-------------- |  | ---------------- | --------- | --------------
|Raw materials  |  | $                | 97,440    |               
|Finished goods |  |                  | 1,664,297 |               
|Other          |  |                  | 27,600    |               
|               |  |                  |           |               
|               |  | $                | 1,789,337 |               
|               |  |                  |           |               

Note 3. Line of Credit and Short-term Loan

In September 2001, the Company amended its $1,000,000 operating line of credit to extend the expiration date to October 1, 2002. The line of credit
bears interest at prime, which was 4.75 percent at January 31, 2002. The Company had $335,000 outstanding under this line of credit at January 31, 2002. In conjunction with the
amendment of the line of credit, the Company converted $500,000 of the outstanding credit line balance into a $500,000 term loan, which also bears interest at prime. The term loan is paid interest
only on a monthly basis with the principal due on September 20, 2002. At January 31, 2002, the Company had $500,000 outstanding under this loan. Under terms of the line of credit and
term loan agreements, the Company is required to maintain certain financial covenants. At January 31, 2002, the Company was in compliance with all of its covenants. These short-term
loans are secured by accounts receivable and inventories.

5

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Note 4. Earnings Per Share

Following is a reconciliation of basic earnings per share ("EPS") and diluted EPS:

|Three Months Ended January 31,          |  | 2002 |        | 2001
|--------------------------------------- |  | ---- | ------ | ----
|
|Basic EPS                               |  |      |        |     
|Income available to Common Shareholders |  | $    | 92,077 |     
|                                        |  |      |        |     
|Diluted EPS                             |  |      |        |     
|Effect of dilutive stock options        |  |      |       |     
|                                        |  |      |        |     
|Income available to Common Shareholders |  | $    | 92,077 |     
|                                        |  |      |        |     

|Nine Months Ended January 31,           |  | 2002 |         | 2001
|--------------------------------------- |  | ---- | ------- | ----
|
|Basic EPS                               |  |      |         |     
|Income available to Common Shareholders |  | $    | 367,671 |     
|                                        |  |      |         |     
|Diluted EPS                             |  |      |         |     
|Effect of dilutive stock options        |  |      |        |     
|                                        |  |      |         |     
|Income available to Common Shareholders |  | $    | 367,671 |     
|                                        |  |      |         |     

237,120 and 132,240 shares issuable pursuant to stock options have not been included in the above calculations for the three and
nine-month periods ended January 31, 2002 and 2001, respectively, since they would have been antidilutive.

6

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Note 5. Segment Reporting

The Company has determined that it currently operates in two segments, manufactured products and tire recovery and processing. The tire recovery and processing is
performed at our 100% owned subsidiary, RB Recycling, Inc. ("RB Recycling").

|Quarter Ended January 31, 2002     |  | RB Rubber |            | RB Recycling |   | Elimination |   | Total
|---------------------------------- |  | --------- | ---------- | ------------ | - | ----------- | - | -----
|Sales, net                         |  | $         | 2,975,030  |              | $ | 605,937     |   | $    
|Depreciation and amortization      |  |           | 202,194    |              |   | 47,557      |   |      
|Income before taxes                |  |           | 73,568     |              |   | 63,485      |   |      
|Quarter Ended January 31, 2001     |  |           |            |              |   |             |   |      
|Sales, net                         |  | $         | 2,733,301  |              | $ | 321,864     |   | $    
|Depreciation and amortization      |  |           | 208,027    |              |   | 10,054      |   |      
|Income (loss) before taxes         |  |           | 288,074    |              |   | (150,829    | ) |      
|Nine Months Ended January 31, 2002 |  | RB Rubber |            | RB Recycling |   | Elimination |   | Total
|Sales, net                         |  | $         | 8,866,915  |              | $ | 1,744,071   |   | $    
|Depreciation and amortization      |  |           | 636,062    |              |   | 102,871     |   |      
|Income before taxes                |  |           | 340,826    |              |   | 201,374     |   |      
|January 31, 2002                   |  |           |            |              |   |             |   |      
|Total assets                       |  | $         | 10,513,825 |              | $ | 1,013,830   |   | $    
|Nine Months Ended January 31, 2001 |  |           |            |              |   |             |   |      
|Sales, net                         |  | $         | 7,808,340  |              | $ | 1,016,076   |   | $    
|Depreciation and amortization      |  |           | 645,859    |              |   | 28,532      |   |      
|Income (loss) before taxes         |  |           | 1,063,860  |              |   | (456,444    | ) |      
|January 31, 2001                   |  |           |            |              |   |             |   |      
|Total assets                       |  | $         | 9,771,132  |              | $ | 514,520     |   | $    

Item 2. Management's Discussion and Analysis or Plan of Operation

Forward Looking Statements

This Quarterly Report on Form 10-QSB, including Management's Discussion and Analysis or Plan of Operation, contains forward-looking statements
that involve a number of risks and uncertainties. Future market conditions are subject to supply and demand conditions and decisions of other market participants over which the Company has no control
and which are inherently very difficult to predict.
Accordingly, there can be no assurance that the Company's revenues or gross margins will conform to management's expectations. In addition, there are other factors that could cause actual results to
differ materially, including competitive pressures, increased demand for the Company's raw materials, unanticipated difficulties in integrating acquired technologies or businesses and the risk factors
listed from time to time in the Company's Securities and Exchange Commission reports, including, but not limited to, the report on Form 10-KSB for the year ended April 30,
2001. The Company cautions the reader that these forward looking statements, such as the statements concerning new product introductions, future tire chip processing and mat making capabilities and
the ability to obtain and utilize lower cost raw materials, are only predictions and are not statements of historical fact.

7

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Results of Operations

Sales for the third quarter of fiscal 2002, which ended January 31, 2002, were up $291,000, or 9.9 percent, to $3.2 million from
$2.9 million in the third quarter of fiscal 2001, which ended January 31, 2001. Sales growth resulted primarily from continued marketing efforts, which also increased personnel and
travel expenses. The growth in the market for ancillary products has been a significant source of new business. Ancillary products, which are purchased for resale from other manufacturers, include
natural rubber mats and other recycled rubber matting. Sales of ancillary products were up 45.7 percent, or $113,000, to $360,000 in the third quarter of fiscal 2002 from $247,000 in the third
quarter of fiscal 2001. Sales of products manufactured by the Company increased 5.2 percent, or $129,000, to $2.6 million in the third quarter of fiscal 2002 from $2.5 million in
the third quarter of fiscal 2001. Tire collection fees were up 22.9 percent, or $49,000, to $264,000 in the third quarter of fiscal 2002 from $215,000 in the third quarter of fiscal 2001.

Sales
for the nine months ended January 31, 2002 increased $1.3 million, or 15.2 percent, to $9.7 million from $8.4 million in the nine months ended
January 31, 2001. Sales of ancillary products increased 131.6 percent, or $545,000, to $959,000 for the nine months ended January 31, 2002 from $414,000 for the nine months ended
January 31, 2001. Sales of products manufactured by the Company increased $465,000, or 6.2 percent, to $7.9 million for the nine months ended January 31, 2002 from
$7.4 million for the nine months ended January 31, 2001. Finally, revenues from tire recycling fees increased $278,000, or 46.4 percent, to $877,000 for the nine months ended
January 31, 2002 from $599,000 for the nine months ended January 31, 2001.

Cost
of sales for the third quarter of fiscal 2002 increased $216,000, or 10.1 percent, to $2.3 million (72.6 percent of net sales) from $2.1 million
(72.5 percent of net sales) in the third quarter of fiscal 2001. The increase is primarily due to the increased sales volume.

Cost
of sales for the nine months ended January 31, 2002 increased by $1.1 million, or 18.4 percent, to $6.9 million (70.5 percent of net sales) from
$5.8 million (68.6 percent of net sales) in the first nine months of fiscal 2001. The increase is primarily due to the increase in sales volume, which accounted
for approximately $841,000 of the growth. Additionally, higher unit costs in the first quarter of fiscal 2002 resulted in higher operating cost of approximately $124,000. Also, the Company
participates in a group workers compensation insurance policy with Dash Multi-Corp, a related party, which is subject to retrospective charges based on claims experience at RB Rubber
Products, Inc. The latest retrospective adjustment resulted in an increase to cost of sales in the quarter ended October 31, 2001 that totaled $73,000.

The
Company's raw materials include tire chips, buffings and granulated rubber. Tire chips are processed from scrap tires, which are collected and processed at the Company's RB Recycling
facility in Portland, Oregon. The tire chips are then shipped to the McMinnville plant for further processing to crumb rubber, which is the main feedstock for the Company's mat manufacturing process.
With improvements made to the Company's tire chip processing and manufacturing plant in McMinnville, the Company has increased its consumption of tire chips. As a result, pounds of tire chips
utilized, which were all processed at the Company's recycling facility, increased from 58.5 percent of total raw materials during the quarter ended January 31, 2001 to
70.4 percent during the quarter ended January 31, 2002.

Selling
expense increased $60,000, or 26.5 percent, to $284,000 (8.8 percent of net sales) for the third quarter of fiscal 2002, from $224,000 (7.6 of net sales) for the
third quarter of fiscal 2001. Further, for the nine months ended January 31, 2002, selling expenses increased $150,000, or 20.8 percent, to $871,000 (8.9 percent of net sales)
from $721,000 (8.5 percent of net sales) for the nine months ended January 31, 2001. The increases in dollars spent and as a percentage of net sales are primarily due to planned
increases in sales and marketing personnel and related travel expenses to continue to build the Company's sales.

8

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General
and administrative expenses increased $22,000, or 5.4 percent, to $430,000 (13.3 percent of net sales) for the third quarter of fiscal 2002, from $408,000
(13.8 percent of net sales), for the quarter ended January 31, 2001. For the nine months ended January 31, 2002, general and administrative expenses increased $95,000, or
7.7 percent, to $1.3 million (13.5 percent of net sales) from $1.2 million (14.5 percent of net sales) for the nine months ended January 31, 2001. The
increase in dollars spent in the nine-month period relates primarily to a charge of $60,000 in the second quarter of fiscal 2002 to the reserve for doubtful accounts. The remaining
increases in dollars spent are a result of increased salaries and related payroll tax expenses. The charge to the reserve was reflective of the increased credit risk attributed to the general downturn
in economic conditions.

Income
tax expense was recorded at the effective rate of 32.2 percent for the nine months ended January 31, 2002, compared to 38.1 percent for the first nine months
of fiscal 2001. The reduction in rate for the current year reflects the usage of State of Oregon tax credits earned through purchasing equipment to enhance recycling in the state.

Net
income increased $2,000, or 2.8 percent, to $92,000 (2.8 percent of net sales) for the third quarter of fiscal 2002 from $90,000 (3.0 percent of net sales) for
the third quarter of fiscal 2001. In the nine months ended January 31, 2002, net income decreased $8,000 to $368,000 (3.8 percent of net sales) from $376,000 (4.5 percent of net
sales) for the nine months ended January 31, 2001. Changes in net income relate primarily to the specific changes in revenues and expenses as discussed above.

Liquidity and Capital Resources

At January 31, 2002, working capital was $2.2 million, including $735,000 in cash and cash equivalents, $1.4 million in accounts receivable
and $1.8 million in inventory offset by accounts payable and other current liabilities. In the nine month period ended January 31, 2002, working capital increased by $227,000, and the
current ratio decreased to 2.06:1 at January 31, 2002 from 2.17:1 at April 30, 2001.

Cash
and cash equivalents increased $136,000 to $735,000 at January 31, 2002 from $599,000 at April 30, 2001. The increase is a result of short-term borrowings
of $400,000 and cash provided from operations of $600,000, offset by $582,000 used for the purchase of equipment and $287,000 used for the reduction of long-term debt and capital leases.

Accounts
receivable increased $155,000 to $1.4 million at January 31, 2002, compared to $1.2 million at April 30, 2001, primarily as a result of increased
sales in January 31, 2002 compared with April 30, 2001. Accounts receivable turnover was at 9.4 times per year as of January 31, 2002 verses 9.2 times per year as of
April 30, 2001.

Inventories
increased $269,000 to $1.8 million at January 31, 2002, from $1.5 million at April 30, 2001, primarily as a result of increased stocking levels of
ancillary products, offset in part by reduced levels of the Company's manufactured goods. Due to the lead-time for ordering ancillary products, the Company has increased stocking levels to
accommodate the increased sales volume. Inventory turnover was 5.1 times per year as of both January 31, 2002 and April 30, 2001.

Prepaid
expenses and other assets increased $49,000 to $221,000 at January 31, 2002, from $172,000 at April 30, 2001, primarily due to the payment of property taxes and
insurance premiums in advance of their expense recognition.

Accounts
payable and accounts payable related parties increased $77,000 to $529,000 at January 31, 2002 from $452,000 at April 30, 2001, primarily as a result of the timing
of payments made.

Accrued
expenses decreased $117,000 to $209,000 at January 31, 2002 from $326,000 at April 30, 2001, primarily due to a reduction in accrued insurance premiums.

9

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Capital
expenditures of $582,000 resulted primarily from the addition of equipment, which is intended to be used in the Company's manufacturing process.

At
January 31, 2002, the Company had a $1,000,000 operating line of credit, which bears interest at prime, 4.75 percent at January 31, 2002, and expires
October 1, 2002. The Company had an outstanding balance of $335,000 under this line of credit at January 31, 2002. The Company also has a $500,000 term loan, which also bears interest at
prime. The term loan is paid interest only on a monthly basis with the principal due on September 20, 2002. At January 31, 2002, the Company had $500,000 outstanding under this loan.
Under terms of the line of credit and term loan agreements, the Company is required to maintain certain financial covenants. At January 31, 2002, the Company was in compliance with all of its
covenants. These short-term loans are secured by accounts receivable and inventories.

New Accounting Pronouncements

In June 2000, the FASB issued Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activitiesan amendment of FASB Statement No. 133" ("SFAS No. 133"). In June 1999, the FASB issued Statement of Financial Accounting Standards No. 137,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 137"). SFAS No. 137 is an amendment to Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities". SFAS Nos. 137 and 138 establish accounting and reporting standards for all derivative instruments. SFAS Nos. 133, 137 and 138 are effective for
fiscal years beginning after June 15, 2000. The Company does not have any derivative instruments nor does it participate in hedging activities and therefore, the adoption of SFAS Nos. 133, 137
and 138 in the first quarter of fiscal 2002 did not have an impact on its financial position or results of operations.

In
September 2000, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) reached a final consensus on Issue No. 00-10,
"Accounting for Shipping and Handling Fees and Costs" (EIFT 00-10). The EITF concluded that amounts billed to a customer in a sale transaction related to shipping and handling should be
classified as revenue. The EITF further concluded that shipping and handling costs incurred by a seller should be reported as operating expenses. The Company has historically recorded certain shipping
and handling expenses as a reduction of related freight revenues, in accordance with common industry practice. To comply with the EITF consensus, the Company reclassified shipping and handling
expenses to cost of sales for all periods presented. The impact of the adoption of EITF 00-10 is to increase sales and cost of sales for the three and nine-month periods ended
January 31, 2001 (unaudited) by $136,394, and $374,768, respectively.
There was no other effect on the Company's consolidated balance sheets, statements of operations, shareholders' equity or cash flows.

In
July 2001, the Financial Accounting Standards Board issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS No. 142 changes the accounting for goodwill from
an amortization method to an impairment-only approach. Thus, amortization of goodwill, including goodwill recorded in past business combinations, will cease upon adoption of that
Statement, which, for the Company, will be fiscal year 2003. The Company does not expect that the adoption of either SFAS No. 141 or SFAS No. 142 will have a significant impact on the
financial condition or results of operations of the Company.

In
August 2001, the FASB approved SFAS No. 143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143"), which will be effective beginning fiscal year 2003.
SFAS No. 143 addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.
In October 2001, the FASB approved SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"), which

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supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS No. 121") and the accounting and
reporting provisions of APB 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" for the disposal of a segment of a business. SFAS No. 144 retains many of the fundamental provisions of SFAS No. 121, but resolves certain
implementation issues. SFAS No. 144 will be effective for fiscal year 2002. We are in the process of evaluating the financial statement impact of adoption of SFAS No. 143 and SFAS
No. 144

PART IIOTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K



No
exhibits are required to be filed herewith.



The
Company did not file any reports of Form 8-K during the quarter ended January 31, 2002.

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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.

|Date: March 14, 2002 |  | R-B RUBBER PRODUCTS, INC.                                                           
|-------------------- |  | ------------------------------------------------------------------------------------
|                     |  | By:                                                                                 
|                     |  | Ronald L. Bogh President                                                            
|                     |  | By:                                                                                 
|                     |  | Donald Overturf Chief Financial Officer
(Principal Financial and Accounting Officer)

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