UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-K

 [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                  For the fiscal year ended: November 30, 2003

                                       or

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

                        For the transition period from to

                        Commission file Number: 000-21623

                             OBIE MEDIA CORPORATION

                   4211 West 11th Avenue, Eugene, Oregon 97402

                    (Address of principal executive offices)

                    Issuer's telephone number: (541) 686-8400

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, without par value

                                (Title of class)

         Indicate by check mark 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 past 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.

         [X]  Yes     [ ]   No

         Indicate by check mark whether the issuer is an accelerated filer as
defined in amended SEC Rule 12-b2.

         [ ]  Yes     [X]   No

         Indicate by check mark if disclosure of delinquent filers in response
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

         State issuer's revenues for its most recent fiscal year:  $43,117,340

         State the aggregate market value of the voting stock held by
nonaffiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of the end of the latest
second quarter: $11,285,382 aggregate market value as of May 31, 2003, based on
the price at which the stock was sold.

         Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 5,985,110 shares of
Common Stock, without par value, on February 15, 2004.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates information from the issuer's definitive
proxy statement for the annual meeting of shareholders to be held on May 20,
2004.

FORM 10-K

This Annual Report includes certain forward-looking statements that involve a
number of risks and uncertainties. Obie's actual results could differ materially
from the forward-looking statements. Factors that could cause or contribute to
such differences include: failure to conclude favorable negotiations on pending
transactions with existing transit agency partners or to successfully assimilate
expanded operations; potential impairments of liquidity or capital resources;
inability to generate sufficient advertising revenues to meet contractual
guarantees; inability to renew existing lending arrangements as they expire;
potential for cancellation or interruption of contracts with governmental
agencies; a further decline in the demand for advertising in the areas where we
conduct our business, or a deterioration of business conditions generally in
those areas; slower than expected acceptance of our innovative display products;
competitive factors, including increased competition and price pressures;
changes in the seasonality of our business; and changes in regulatory or other
external factors; as well as those factors listed from time to time in Obie's
SEC reports, including, but not limited to, the factors discussed in this Annual
Report. You should recognize that these forward-looking statements, which speak
only as of the date of this Annual Report, reflect management's expectations
based on information available as of that date; you should not construe our
forward-looking statements as assurances of future performance. We do not intend
to update our forward-looking statements except as required by law.

Unless the context otherwise requires, references in this Annual Report to "Obie
Media," the "Company," "we," "us" or "our" are to Obie Media Corporation, its
subsidiaries, and the management personnel of those entities. Some information
in this Annual Report has been derived from government and industry sources.
Although management believes this information is reliable, it has not been
independently verified.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

Obie Media Corporation is an out-of-home advertising company which markets
advertising space primarily on transit vehicles and outdoor advertising displays
such as billboards and wallscapes. As of November 30, 2003, we had 38 exclusive
agreements with transit districts in the United States and Canada to operate
transit advertising displays.

The markets in which these transit districts are located include nine of the 30
largest U.S. markets (as defined by DMA, or demographic market area)--Dallas;
Portland, Oregon; Sacramento; Hartford; Ft. Lauderdale; St. Louis; Tampa;
Indianapolis; and Kansas City--and the third largest Canadian market, Vancouver,
British Columbia. Since our initial public offering in November 1996, the number
of vehicles on which we have the right to operate transit-advertising displays
has increased from approximately 1,200 to over 7,000. We also operate and
generally own over 1,100 advertising displays on billboards and walls primarily
in Washington, Oregon, California, Montana, Wyoming, Idaho, Utah and South
Dakota. Obie was formed in 1987 as a subsidiary of Obie Industries Incorporated
("Obie Industries"), a family-owned outdoor advertising business. To facilitate
its initial public offering, Obie was separated from Obie Industries in November
1996.
<PAGE>
In September 1998, Obie acquired P & C Media ("P & C"), which had operated in
the out-of-home advertising industry for over 50 years. In August 1999, we
completed a public offering of an additional 1,100,000 shares of common stock.
The net proceeds of the offering, approximately $9.7 million, were used to
reduce debt, including the debt incurred in our acquisition of P & C.

INDUSTRY OVERVIEW

We have focused our business in the out-of-home advertising industry, which
includes displays on buses, trains, taxis, subways, transit benches and
shelters, billboards, wallscapes on urban buildings, and displays in shopping
centers, malls, airports, stadiums, movie theaters and supermarkets. The
industry has grown significantly in recent years. According to estimates of the
Outdoor Advertising Association of America (the "OAAA"), between 1992 and 2002,
annual revenues generated by the out-of-home advertising industry increased
76.7% to $5.3 billion from $3.0 billion, representing a compound annual growth
rate of approximately 6.5%. In 2002, billboard-related outdoor expenditures on
products such as 30-sheet posters, 8-sheet posters and bulletins totaled 60% of
that $5.3 billion amount, or approximately $3.2 billion; transit-related outdoor
expenditures on products located on buses and trains, and venues such as
commuter rail stations or airports, totaled 17%, or approximately $901 million;
street furniture-related outdoor expenditures on products such as bus shelters
or in-store displays totaled 17%, or approximately $901 million; and alternative
outdoor-related expenditures in venues such as sports arenas or stadiums totaled
6%, or approximately $318 million. As of 2002, the OAAA estimated that there
were approximately 560,000 out-of-home advertising displays in the United
States, operated by more than 500 companies.

We believe the out-of-home medium offers several advantages to advertisers. As
compared with television, newspapers, magazines and direct mail marketing,
out-of-home advertising offers repetitive consumer impacts at a comparatively
low cost-per-thousand impressions relative to other media alternatives
(cost-per-thousand impressions is a commonly used advertising measurement).
Because of its cost-effective nature, we market out-of-home advertising as a
good vehicle to build mass-market support. Out-of-home advertising can also be
used to target a defined audience in a specific location. This allows local
businesses to target a particular geographic area and/or demographic group.
Additionally, increases in automobile travel times due to highway congestion and
continued migration of businesses and residences from cities to outlying suburbs
has increased consumer exposure to out-of-home advertising.

Transit advertising represents a significant portion of the out-of-home
advertising industry, and we have focused our business in this segment of the
industry. According to estimates of the Federal Transit Administration, in 2002
there were approximately 600 transit agencies in the United States operating
more than 45,022 transit buses. The Canadian Urban Transit Association estimated
that approximately 11,805 urban transit vehicles were in use in Canada in 1999.
Transit districts range in size from very large districts with thousands of
vehicles to small districts with 10 or fewer vehicles. Advertising displays
represent a significant source of revenue to transit districts.

Agreements with transit districts are generally awarded through a competitive
proposal process. Each transit district evaluates proposals based on a number of
criteria, but primarily on the basis of the minimum amount that the bidder
guarantees to pay to the district. A transit agreement typically requires the
transit advertising operator to guarantee to pay the transit district the
greater of a minimum stated amount or a percentage of the advertising revenues
generated by the operator's use of the district's vehicles. These expenses
appear on our financial statements included under the heading "Occupancy"
expenses and totaled in aggregate $18,110,736 in fiscal 2003.

The out-of-home advertising industry includes several large advertising and
media companies with operations in multiple markets. It also includes many small
and local companies operating a limited number of displays in a single or a few
local markets. There has been, and we expect there will continue to be,
consolidation in the out-of-home advertising industry.
<PAGE>
OBIE MEDIA STRATEGY

Obie Media's overall business strategy is to expand upon our national presence
to become a leader in the out-of-home advertising industry. Our focus is to
increase revenues and improve profitability by providing local, regional and
national advertisers with efficient access to one or multiple markets. The
following are components of this strategy:

o    DEVELOP REGIONAL OPERATING CENTERS. We seek to increase revenues,
     profitability and operating efficiencies by developing and using regional
     operating centers, or hubs. In developing hubs, we seek to establish an
     initial base of operations in a geographic region by obtaining exclusive
     agreements with one or more significant transit districts. We then seek to
     expand our market presence by bidding for contracts with other transit
     districts in that region and by expanding the range of non-transit products
     and services we can offer there. We believe this hub strategy will help us
     grow revenue and reduce costs by enabling us to provide sales and
     administrative services efficiently to several intra-regional markets from
     one strategically located operating base.

o    ACQUIRE ADDITIONAL TRANSIT ADVERTISING AGREEMENTS. We believe that by
     acquiring additional transit advertising agreements we can increase our
     operating efficiencies and geographic diversity while creating additional
     bases from which to achieve further market penetration. We expect to
     experience increased revenue and profitability from additional transit
     agreements as we continue to implement our direct sales and product
     strategies.

o    MAINTAIN A SIGNIFICANT, PROACTIVE SALES FORCE. We believe we can increase
     display occupancy levels by developing, training and retaining a
     significant, proactive sales force that sells directly to local advertisers
     and, more traditionally, to advertising agencies, thereby maximizing our
     advertising revenues. We believe our ratio of sales personnel to display
     inventory is higher than the industry average. We devote significant
     resources to recruit and train individuals who will excel in our culture
     and in our expected competitive environment. The sales force is motivated
     by an incentive-based compensation program and supported by a network of
     experienced local managers who operate under a centrally coordinated
     marketing plan. Management believes the size, quality and motivation of
     Obie's sales force afford us a competitive advantage.

o    INCREASE REVENUES FROM EXISTING DISPLAY SPACE. We seek to increase the
     revenue potential of our available transit and outdoor advertising display
     inventory by offering innovative transit products and maximizing the
     percentage of time our display space is occupied. We offer innovative
     transit products including vinyl displays that are physically larger than
     traditional transit advertisements. These vinyl displays offer customers
     greater impact while providing us with more revenue from a given transit
     display space. We seek to sell advertising on transit and outdoor displays
     under extended contracts, which enable us to fill display space that would
     normally be vacant between traditional advertising campaigns.

o    SELECTIVELY PURSUE ACQUISITION OPPORTUNITIES. Obie regularly evaluates
     opportunities to enter new markets and increase its presence in existing
     markets through the selective acquisition of out-of-home advertising
     companies or assets. We intend to continue focusing our acquisition efforts
     on expanding around our existing hubs and developing new hubs in regions
     where attractive growth and consolidation opportunities exist.

o    INCREASE INVENTORY OF OUTDOOR DISPLAYS. We look to increase Obie's market
     penetration by acquiring or building additional outdoor displays in new and
     existing markets. Management believes that a resulting increase in
     inventory will provide advertisers a greater variety of display
     alternatives and leverage Obie's existing sales, design and production
     capabilities.

o    EXPAND OBIE MEDIA'S NATIONAL SALES EFFORT. To coordinate and expand our
     sales efforts more effectively to national advertisers and national
     advertising agencies, Obie Media has, through its wholly owned subsidiary
     Select Media, Inc., established national sales offices in Los Angeles,
     Chicago, New York City, and Toronto, and we have a national
<PAGE>
     sales presence in Dallas, San Francisco, and a sales representation
     arrangement in Montreal. Management believes further growth and expansion
     into new markets will continue to increase our national sales. In addition,
     we now also broker national advertising services for out-of-home
     advertising companies in markets other than where we currently operate.

o    ATTRACT NEW ADVERTISERS THROUGH DIRECT LOCAL SALES. By selling directly to
     local businesses not represented by advertising agencies, we seek to obtain
     a larger share of the overall advertising expenditures in our markets and
     broaden our customer base for out-of-home advertising. We dedicate
     substantial resources to directly target local businesses whose advertising
     expenditures may not typically include out-of-home advertising and
     introduce them to the benefits of the medium. Obie also offers
     comprehensive sales, marketing, creative and production services that make
     it easier for these potential customers to purchase out-of-home
     advertising.


o    PRODUCE IN-HOUSE THE VAST MAJORITY OF ADVERTISING DISPLAYS GENERATED
     THROUGH LOCAL DIRECT SALES. We seek to produce a significant amount of
     display content for our transit advertising customers which otherwise would
     be subcontracted to outside vendors. Our in-house production facilities
     have expanded over the last two years and have become an increasingly
     significant part of our business.

PRODUCTS AND MARKETS

Obie Media offers advertisers a wide range of out-of-home advertising products,
including transit advertising and outdoor advertising displays. Our product mix
provides advertisers with significant flexibility in their advertising programs
and allows us to cross-sell multiple products and leverage our design and
production capabilities. We also have benefited from improvements in production
technology, including the use of computerized design, vinyl advertising copy and
improved lighting techniques. These improvements have facilitated a more
dynamic, colorful and creative use of the out-of-home medium.

TRANSIT ADVERTISING. As of November 30, 2003, we had 38 exclusive agreements
with transit districts in the United States and Canada to operate transit
advertising displays on over 7,000 transit vehicles. The markets in which these
transit districts are located include nine of the 30 largest U.S.
markets--Dallas; Portland, Oregon; St. Louis; Sacramento; Hartford; Ft.
Lauderdale; Tampa, Indianapolis, and Kansas City, Missouri--and the
third-largest Canadian market, Vancouver, British Columbia. Pursuant to Obie's
transit advertising agreements, we are the exclusive seller of exterior
advertising on the transit vehicles operated by the contracting transit
districts. Typically, these agreements also provide us the right to sell
advertising on the interior of the vehicles.

Agreements with transit districts are awarded through a competitive proposal
process. Each transit district evaluates proposals based on a number of
criteria, but primarily on the basis of the minimum amount that the bidder
guarantees to pay to the district and the maximum total revenues available to
the district under the agreement. A transit agreement typically requires the
transit advertising operator to guarantee the transit district the greater of a
minimum stated amount or a percentage of the advertising revenues generated by
the operator's use of the district's vehicles. These expenses appear on Obie's
financial statements included under the heading "Occupancy" expenses and totaled
in aggregate $18,110,736 in fiscal 2003. Transit advertising operators often
must post performance bonds or letters of credit to secure their guarantees
under their transit agreements. Our transit agreements typically have terms of
three to five years, with renewals or extensions granted either unilaterally at
the discretion of the transit district or upon the mutual agreement of the
district and Obie Media. Some of our transit district agreements provide that
the transit district may terminate the agreement before the end of the specified
term at the convenience of the transit district, or if the transit district
determines that such termination is in the public best interest. Obie also sells
advertising on more than 700 transit benches in Portland, Oregon, approximately
100 transit shelters in Cincinnati, more than 250 benches in Fort Worth, Texas
and on 28 transit shelters and 104 benches in Kelowna, B.C. Management believes
these products complement Obie's other product offerings and intends to attempt
to secure additional shelters, and transit benches in our markets.
<PAGE>
Transit districts range in size from very large districts with thousands of
vehicles to small districts with 10 or fewer vehicles. Through our hub strategy
and proactive marketing to local advertisers, we can offer our services
efficiently to large and small transit districts. The following table sets forth
certain information about Obie Media's transit district agreements as of
November 30, 2003:

<TABLE>
<CAPTION>
TRANSIT DISTRICT AGREEMENTS                DMA RANK     NO. OF VEHICLES SERVED*    SINCE    EXPIRATION DATE
                                                                                                (FISCAL)
<S>                                         <C>                <C>                  <C>           <C>
British Columbia
         Vancouver                          3 (CDN)            1,310                1998          2005
         Victoria and 27 smaller districts  14 (CDN)             485                1998          2005
         Kelowna                            NA                    42                2002          2006
Texas
         Dallas                             7                    751                1997          2005
Oregon
         Portland                           24                   827                1994          2006
         Eugene and Springfield             120                  130                1980 (1)      2004
         Salem                              NA                    69                1994          2005
         Corvallis                          NA                     9                2004          2008
Missouri
         St. Louis                          21                   534                1999          2004
         Kansas City                        31                   228                1999          2004
Wisconsin
         Milwaukee                          33                   493                1992 (2)      2006
         Madison                            85                   182                1999          2005
         Racine                             NA                    23                1997 (2)      2006
         Kenosha                            NA                    30                1996 (2)      2004
Connecticut
         Hartford, New Haven and Stamford   27                   380                1996 (2)      2005
         Danbury                            NA                    52                1999          2004
         New Britain                        NA                    20                1981 (2)     Annual
         Waterbury                          NA                    41                1981 (2)     Annual
California
         Sacramento                         19                   229                1994          2005
         Stockton                           19                    77                1989         Annual
Florida
         Ft. Lauderdale                     17                   202                1998 (2)      2006
         West Palm Beach                    39                   139                1998 (2)      2008
         Daytona Beach                      20                    50                1981 (2)      2006
         Tampa                              13                   150                2001          2006
Indiana
         Indianapolis                       25                   139                2001          2004
Ontario, Canada
         London                             10 (CDN)             172                1999          2008
         Burlington                         NA                    48                1999          2004
         Oshawa                             16 (CDN)              52                1999          2004
         Mississauga                        NA                   360                2002          2005
         Niagara Falls                      NA                    22                1999          2004
 Washington
         Spokane                            80                   100                1999          2006

<PAGE>

         Jefferson County                   NA                    13                1999          2004
         Yakima                             127                   20                1999          2004
         Tri-Cities                         127                   92                2001          2005
         Vancouver                          24                   110                2001          2006
         Wenatchee                          NA                    51                2001          2006
         Longview                           NA                    12                2003          2009
         Grays Harbor                       NA                    30                2003         Annual
Total                                                          7,674
</TABLE>

(1)  This agreement was serviced by a division of Obie Industries (Obie Media's
parent corporation until 1996) prior to 1987, when Obie Media was formed.

(2)  These dates reflect periods of service under agreements with P & C, which
Obie Media acquired in September 1998.

o    Approximate number of vehicles.

     The above transit district agreements are scheduled to expire as follows:

 FISCAL YEAR            NUMBER OF AGREEMENTS      APPROXIMATE NUMBER OF VEHICLES
                        SCHEDULED TO EXPIRE          COVERED UNDER AGREEMENTS
                                                           SCHEDULED TO
                                                              EXPIRE

    2004                        15                             1,436
    2005                        9                              3,858
    2006                        10                              2048
    2007                        0                                  0
    2008                        3                                320
    2009                        1                                 12


TRANSIT ADVERTISING PRODUCTS. We offer traditional and innovative,
non-traditional transit advertising products. Traditionally, transit
advertisements have been inserted into metal frames mounted on the exterior or
interior of a bus. Industry standard sizes include "Kings," "Queens," "Tails"
and "Heads." While still offering traditional advertising products, Obie Media
also offers vinyl displays that cover almost the entire side and/or rear of a
bus. These vinyl products create significant additional revenue potential per
bus when compared to traditional products. Management believes these products
also give Obie a competitive advantage in bidding for transit advertising
agreements in districts that use, or are willing to use them.

OUTDOOR ADVERTISING DISPLAYS. Obie Media owns and operates over 1,100 billboards
primarily in Washington, Oregon, California, Montana, Wyoming, Utah, South
Dakota, and Idaho. Many of our billboards are directional bulletins, which are
large format displays ranging from 160 to 672 square feet in size. Our bulletins
are generally located on major thoroughfares and provide greater impact and
higher value than traditional posters.

We lease the property underlying our billboards, generally under 10-year leases
that give us renewal rights for two additional five-year periods. The lessor
typically reserves the right to cancel the lease if construction of permanent
improvements on the subject property conflicts with the billboard.
<PAGE>
Most of Obie's billboards were designed and installed within the last decade,
and most are built of steel and engineered to withstand high winds. More than
two-thirds of our billboards are illuminated. The displays are insured against
damage caused to them by storms, vandalism and most other causes. Obie Media
also leases building walls in urban areas for wallscape displays. Wallscapes are
painted or printed on vinyl surfaces or directly on the sides of buildings. Obie
currently leases 7 building walls for wallscape displays in Seattle, 16 in
Portland and 19 in Spokane. The following table gives the number of Obie's
outdoor displays at November 30, 2003:

MARKET                   DISPLAYS

Washington                 509
Oregon                     159
California                  78
Montana                    167

Wyoming, Utah,
South Dakota, & Idaho      247
                           ---
Total                    1,160

SALES AND SERVICE. In each of Obie's principal markets, we maintain a large,
high quality, proactive sales force. Management believes Obie's ratio of sales
personnel to display inventory is higher than the industry average. At November
30, 2003, Obie had 100 sales and marketing employees. Obie's superior sales and
service efforts are a key element in maximizing our inventory occupancy levels.

Management views our proactive sales efforts as an important part of our
culture. In recruiting a sales force, we screen applicants carefully. We
typically hire college graduates who have demonstrated their suitability and
aptitude to excel in our unique sales environment. New sales employees undergo
extensive training and are supervised by regional sales managers with
substantial advertising sales experience. The company also uses a computer
based, on-line customer service and management software system that can be
accessed and utilized wherever Internet connectivity is available. Obie Media
and each of our sales representatives jointly establish individual sales
targets. Management meets monthly with all our salespeople to acknowledge and
reward individuals who are meeting or exceeding their targets. A sales
representative's compensation depends heavily on meeting or exceeding individual
targets.

Obie has significantly expanded its national sales presence in recent years. To
complement our growth, we have established, through our wholly owned subsidiary
Select Media, Inc., national sales and marketing offices in Los Angeles,
Chicago, New York City and Toronto. Obie's national sales team services national
advertising accounts, calls on customers in major cities where Obie Media does
not have sales offices and supports Obie's sales force in local markets. We also
provide a national advertising brokerage service to other outdoor advertising
companies in markets in which we do not currently operate.

Management works directly with companies and advertising agencies to coordinate
the marketing, production and installation of advertising displays. Obie's sales
personnel also serve as customer service representatives, maintaining frequent
and regular contact with our advertising customers to resolve customer concerns
in the field. Management believes that our high quality customer service
contributes to customer loyalty and results in improved renewal rates.

Out-of-home advertisements are traditionally sold for a few months at a time. To
increase occupancy, we employ several techniques to encourage customers to
commit to longer contracts, including offering incentives through Obie's rate
structure and pricing policies. We sell certain innovative signature transit
products primarily by means of year-long contracts coupled with flights of
value-added traditional displays. We also sell space on almost all of our
outdoor advertising displays by means of extended contracts, and offer outdoor
display customers the opportunity to rotate their advertisements among several
display faces within the same market.
<PAGE>
DESIGN AND PRODUCTION

Obie maintains its own design and production facilities in Eugene, Oregon. We
offer advertisers customized design and production services as well as display
space. Charges for design and production are typically added to the cost of the
space and billed to customers over the life of the advertising contract.
Management believes that our design and production capabilities gives us a
significant competitive advantage in direct sales to advertisers, particularly
those we target who do not have an advertising agency, and brings new customers
to the out-of-home advertising medium.

The design department works with these advertisers and with our sales
representatives to create advertising copy, design and layout. Customers that
are represented by advertising agencies generally arrange for the production of
their ads, with Obie Media providing installation services. We increasingly act
as a broker with respect to this production. In the second quarter of fiscal
2001, we acquired a second large-format digital production printer for an
approximate cost of $400,000 and a third in December 2001 for approximately
$250,000. This additional capacity allows us to produce approximately 95% of
contracted production services in-house.

MARKETING

Obie Media's full-service marketing department is responsible for many projects,
however, its main priority is to provide direct support to our sales force
through a variety of materials and services that help maximize and generate
sales. These materials and services include targeted quarterly sales promotions
which feature value added advertising packages, staff incentives,
self-promotional advertising campaigns, sales support materials, web site
development, and public relations support.

One service in particular that has proven to be highly effective in generating
sales on the local, regional, and national level is a cutting edge software
program called Portfolio and MapInfo Professional(R). This powerful market
analysis tool enables us to provide a highly desirable free service to our
clients and transit agency partners. We can profile specific geographies, define
individual lifestyle characteristics and behaviors, including spending and
transportation habits, and then overlay that information directly onto transit
route or outdoor location maps.

For example, our demographic specialist can create maps and reports that will
show a local restaurant owner how many families in the immediate area eat out on
a regular basis, family income levels, transportation habits, and locations of
competing restaurants. This information is then overlaid onto transit maps
showing the local restaurant owner how transit advertising can help reach the
restaurant's target audience.

Our marketing department is continually researching and implementing sales
support programs that allow our sales force to be informed of the latest
industry trends and sales techniques to penetrate the marketplace.

CUSTOMERS

Obie Media maintains a broad base of local, regional and national advertising
customers. Most of our regional and national customers are represented by
advertising agencies. Consistent with standard industry practice, advertising
agencies working with us typically retain 15% of the gross advertising revenues
from their accounts. Advertising agencies generally create the artistic design
and written content of their customers' advertising. They plan and implement
their customers' overall advertising campaigns, including the selection and
purchase of advertising media. Our sales personnel, including the national sales
team, are trained to work closely with advertising agencies to service the needs
of these customers.

A key component of our sales and marketing strategy is the proactive marketing
of services to local advertisers. Local advertisers tend to have smaller
advertising budgets and require greater assistance from our production and
creative personnel to design and produce advertising copy. With respect to local
sales, we often expend significant sales efforts on educating potential
out-of-home advertising customers about the cost and reach benefits of the
medium and on developing advertising
<PAGE>
strategies. While price and availability of display space are important factors
in local sales, service and customer relationships are also critical. Management
believes that our strength in sales, design and service gives us an advantage in
local sales, and that our direct sales focus on local companies significantly
contributes to increased advertising space occupancy and renewal rates. Further,
management believes this focus is an important competitive advantage that
enables us to serve smaller transit districts efficiently.

No single advertising customer represented more than 10 percent of Obie's
revenues for any of the periods presented in the accompanying financial
statements.

COMPETITION

Obie Media's markets are highly competitive. In the transit advertising market,
we compete with other out-of-home advertising companies that submit proposals
for exclusive agreements with transit districts by means of a formal proposal
process. In the outdoor advertising display market, we compete with other
out-of-home advertising companies for customers. We also compete for customers
with other advertising media, including broadcast, satellite and cable
television, radio, print media, direct mail marketing and displays in shopping
centers and malls, airports, stadiums, movie theaters and supermarkets and on
taxis, trains and subways. Substantial competition exists among all advertising
media on a cost-per-thousand-impressions basis and on the ability to effectively
reach a particular demographic section of the market. As a general matter,
competition is confined to defined geographic markets.

In recent years, there has been significant consolidation among Obie's
competitors, including consolidation between out-of-home advertising companies
and broadcast or other media companies. For example, in May 1999, Infinity
Broadcasting Corporation ("Infinity"), now a subsidiary of Viacom Inc. and the
sole shareholder of Viacom Outdoor (formerly TDI Worldwide, Inc.) agreed to
acquire Outdoor Systems, Inc., a leading company in the outdoor advertising
display market. In 2002, Clear Channel Communications, Inc. acquired The
Ackerley Group, Inc., the parent of outdoor media company, AK Media.

Several of our competitors, including diversified media companies such as
Viacom, are substantially larger, better capitalized, more widely known and have
access to substantially greater resources than Obie Media. These traits may
provide competitive advantages, particularly in large advertising markets.

TRANSIT. The transit advertising market has historically been fragmented,
consisting of a few national transit-advertising companies with operations in
multiple markets and numerous small companies operating under one or a few
agreements. In large advertising markets, we encounter direct competition for
transit agreements from Viacom Outdoor, the largest transit advertising company
in the United States, and a dominant competitor in such markets. Competition
among transit advertising companies is primarily based on obtaining and
retaining agreements with transit districts. Agreements with transit districts
are awarded primarily on the basis of the minimum amount the bidder guarantees
to the district. Other factors that transit districts may consider in awarding
agreements are the bidder's financial ability to support its minimum revenue
guarantee, the bidder's business reputation and the soundness of the bidder's
marketing plan. The agreements generally give the operator the exclusive right
to provide transit-advertising services within the transit district. The number
and nature of competitors for each agreement depends upon the desirability of
the market, including the number of vehicles operated by the transit district,
and the size and rank of the market.

OUTDOOR ADVERTISING DISPLAYS. The outdoor advertising display market is also
fragmented. Several large outdoor advertising companies have operations in
multiple markets. Many smaller companies operate a limited number of displays in
a single or a few local markets. Although some consolidation has occurred in
this segment of the out-of-home industry over the past few years, the OAAA
estimated that, as of 2002, there were approximately 560,000 outdoor displays in
the United States operated by more than 500 companies. The primary competitive
factors in the outdoor advertising display market are the location of a
company's displays and the price charged for their use.
<PAGE>
GOVERNMENT REGULATION

The government extensively regulates the outdoor advertising industry at the
federal, state and local levels. These laws and regulations limit the growth of
outdoor advertising companies and operate as a substantial barrier to entry into
the industry and, in limited circumstances, may restrict advertising content.
Construction of new outdoor structures has been substantially restricted to
commercial and industrial areas. Many jurisdictions also have restricted the
location, relocation, height and size of outdoor advertising structures. Some
jurisdictions also restrict the ability to enlarge or upgrade existing
structures, such as converting from wood to steel or from non-illuminated to
illuminated displays, and restrict the reconstruction of structures that are
substantially destroyed as a result of storms or other causes. Some
jurisdictions have enacted local laws and ordinances that prohibit wallscapes
and other outdoor advertising on urban buildings.

Management believes our displays conform to current laws and regulations. When
leasing property for the installation of new outdoor advertising displays, we
carefully reviews applicable laws, including building, sign and zoning
ordinances. Because billboards are typically located adjacent to roads and
highways, they are also subject to condemnation or other actions by governmental
entities in the event of road or highway improvement or expansion. While
compensation for such actions is generally available, under existing state and
local regulations, we may not be permitted to relocate any condemned displays.

In limited circumstances, laws and governmental regulations may restrict the
content of outdoor advertising. For example, some states have banned all outdoor
advertising of tobacco products. In November 1998, 46 states signed a settlement
agreement with the four largest American tobacco companies. Among other things,
the agreement bans transit and outdoor advertising of the companies' tobacco
products in the 46 states. The U.S Congress has also considered legislation that
would severely restrict or ban such advertising. The outdoor advertising
industry is thus heavily regulated and existing or future laws or regulations
could adversely affect the industry. To date, our operations have not been
materially adversely affected by such laws and regulations.

EMPLOYEES

At November 30, 2003, we had 221 full-time and 12 part-time employees, of whom
100 were primarily engaged in sales and marketing, 28 were engaged in art design
and production, 42 were engaged in installation, construction or maintenance of
transit or outdoor advertising displays, and 61 were employed in financial,
administrative or similar capacities. None of our employees are covered by
collective bargaining agreements, except for 4 installers in Portland, Oregon
and 10 installers in British Columbia, Canada. Management believes that our
relationships with our employees are good.
<PAGE>
ITEM 2.    DESCRIPTION OF PROPERTIES

Obie's headquarters are located in a 20,000 square foot facility in Eugene,
Oregon. The headquarters includes space for our centralized design and
production departments, as well as our accounting, credit, marketing and
management personnel. The headquarters is leased from Obie Industries, an
affiliate of Obie Media, pursuant to a lease under which Obie Media moved into
the facility and began paying rent in May 1997. Lease payments were
approximately $344,000 in fiscal 2003 and $329,000 in each of fiscal 2002 and
2001. Brian Obie, Obie's Chairman of the Board, President and Chief Executive
Officer, is the President, a director and the controlling shareholder of Obie
Industries. Delores Mord, Obie's Secretary and a director of Obie Media, is Vice
President, a director and a shareholder of Obie Industries. Management believes
the headquarters lease carries terms, including rental rates, term, and other
rights and obligations, which are substantially similar to those that would be
available in arms' length transactions from unrelated parties.

Obie leases parcels of property beneath outdoor advertising structures. our site
leases are generally for a term of ten years, with two five-year renewal options
at our discretion. We also lease local operating offices for sales, service and
installation in Spokane and Yakima, Washington; Portland and Salem, Oregon; Ft.
Lauderdale, West Palm Beach, Daytona Beach and Tampa, Florida; Hartford and New
Haven, Connecticut; Cincinnati, Ohio; Dallas and Fort Worth, Texas; Sacramento
and Stockton, California; St. Louis and Kansas City, Missouri; Milwaukee and
Madison, Wisconsin; Indianapolis, Indiana; Billings and Great Falls, Montana;
Vancouver, Victoria, Kelowna and Nanaimo, British Columbia; and London,
Mississauga, Whitby and Burlington, Ontario. Obie also leases national sales
offices in Los Angeles, Chicago, New York City and Toronto. Total lease payments
for the forgoing leases were $2.6 million, $2.7 million, and $2.1 million for
fiscal 2003, 2002 and 2001, respectively.

ITEM 3.    LEGAL PROCEEDINGS

Obie is occasionally subject to litigation in the ordinary course of its
business, and actively defends all such lawsuits. We do not expect that the
effect of any ongoing proceedings will be material to our financial position,
results of operations or cash flows.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No matters were submitted to a vote of Obie Media's shareholders during the
fourth quarter of fiscal 2003.

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

Since November 21, 1996, Obie Media's Common Stock has been traded on the Nasdaq
Market under the symbol "OBIE." The following table presents the high and low
bid prices of Obie's Common Stock as reported by The Nasdaq Stock Market, as
<PAGE>
adjusted to give retroactive effect to 11-for-10 stock splits declared by Obie
Media in October 1997, November 1998 and November 1999:

FISCAL 2003                   HIGH       LOW
         First Quarter      $  3.40    $  2.14
         Second Quarter        2.54       1.77
         Third Quarter         2.07       1.74
         Fourth Quarter        2.71       2.07

FISCAL 2002                   HIGH       LOW
         First Quarter      $  3.40    $  1.84
         Second Quarter        3.84       2.95
         Third Quarter         3.67       2.30
         Fourth Quarter        3.50       1.65


As of February 12, 2004, there were approximately 961 holders of record of
Obie's Common Stock. Management believes the number of beneficial owners is
substantially greater than the number of record holders because a large portion
of Obie's outstanding Common Stock is held of record in "street name."

The Company's Securities and Exchange Commission filings, including the annual
report on Form 10-K for the fiscal year ended November 30, 2003, may be obtained
without charge by accessing the Investor Relations section of the company's
website at http//www.obie.com, or by giving a request to Investor Relations via
the address, phone number or e-mail address below.

Quarterly information, as well as other current and historical information about
the Company is available immediately free of charge upon its release by
accessing the Investor Relations section of the Company's website or by making a
request to Investor Relations via the address, phone number or e-mail address
below.

Investor Relations
Obie Media Corporation
4211 W. 11th Ave.
Eugene, OR 97402
(541)686-8400 extension 7901
cediger@obie.com

DIVIDENDS

Obie has not paid cash dividends on its common stock during the last two fiscal
years and does not anticipate doing so in the foreseeable future. We plan to
retain any future earnings to finance operations. In addition, our credit
agreements limit our ability to pay dividends or make other distributions on
Obie's common stock.

ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
Statement of Operations Data                      Years ended November 30 (in thousands, except per share data)
                                                   2003           2002           2001          2000           1999
                                                   ----           ----           ----          ----           ----
<S>                                               <C>            <C>            <C>           <C>            <C>
Net sales                                         $43,117        $44,283        $42,892       $48,304        $36,460
<PAGE>

                                                   2003           2002           2001          2000           1999
                                                   ----           ----           ----          ----           ----

Production, occupancy and sales                    33,348         33,348         34,644        35,609         26,438
General and administrative                          7,324          7,892          9,191         6,882          4,677
Depreciation and amortization                       1,752          2,181          2,077         1,871          1,513
Start-up costs                                         --             --             --           116            668
Contract settlement                                    --             --             --            --        (1,077)
      Operating income (loss)                         693            862        (3,020)         3,826          4,241
Income (loss) from continuing operations           (2,143)          (862)       (3,434)         1,618          2,012
      Loss on discontinued operations                (764)        (1,154)       (3,814)            --             --

Net income (loss) available for common
  Shareholders                                    (2,907)        (2,017)        (7,248)         1,618          2,012

Basic net income (loss) per share:
    Income (loss) from continuing operations      $(0.36)        $(0.14)        $(0.58)         $0.27          $0.40
    Loss from discontinued operations             $(0.13)        $(0.20)        $(0.65)            --             --
    Net income (loss) per share                   $(0.49)        $(0.34)        $(1.23)         $0.27          $0.40

Diluted net income (loss) per share:
    Income (loss) from continuing operations      $(0.36)        $(0.14)        $(0.58)         $0.27          $0.39
    Loss from discontinued operations             $(0.13)        $(0.20)        $(0.65)            --             --
    Net income (loss) per share                   $(0.49)        $(0.34)        $(1.23)         $0.27          $0.39

EBITDA (1)                                          1,681          1,889        (5,849)         5,697          5,754


Balance sheet data:
Working capital                                    $4,927         $7,148         $4,415       $10,544         $2,958
Total assets                                       35,446         38,127         44,161        38,937         32,704
Total long-term debt, less current portion         17,247         17,707         13,881        13,695          4,919
Shareholders' equity                                7,179         10,127         12,149        19,225         17,365

Cash flow data:
Net cash provided by (used in) operations           1,488          1,091        (1,232)           799            251
Cash used in investing activities                     636          1,195          1,327         5,261          3,265
Cash provided by (used in) financing activities      (674)         1,521          2,316         5,064          2,724
</TABLE>

(1) The Company believes that EBITDA is widely used as one measure to evaluate
the financial performance of companies in the out-of-home advertising industry,
and therefore, is an appropriate supplemental measure regarding the operating
performance of our business. The Company believes that EBITDA can assist in
comparing out-of-home advertising company performance on a consistent basis
without regard to depreciation and amortization, which can vary significantly
depending on accounting methods used (particularly when acquisitions are
involved) or non-operating factors (such as historical cost basis). Accordingly,
this information has been disclosed to facilitate the comparative analysis of
our operating performance relative to other companies in the out-of-home
advertising industry. EBITDA (earnings before interest, taxes, depreciation and
amortization), a non-GAAP financial measure, is defined as operating income
before depreciation and amortization expense. EBITDA should not be considered in
isolation or as a substitute for net income (loss), cash provided by operating
activities or other income or cash flow data prepared in accordance with
generally accepted accounting principles, or as a measure of profitability or
liquidity. Following is a reconciliation of EBITDA to net income (loss):
<PAGE>
<TABLE>
<CAPTION>
                                               FISCAL YEARS ENDED NOVEMBER 30 (IN THOUSANDS)

                                              2003       2002       2001       2000     1999
                                              ----       ----       ----       ----     ----
<S>                                          <C>        <C>        <C>        <C>      <C>
   Reported  net income (loss)               $(2,907)   $(2,017)   $(7,248)   $1,618   $2,012
     Interest expense                           2,334      1,725      1,337    1,121      942
     Depreciation and amortization              1,752      2,181      2,077    1,871    1,513
     Provision (benefit) for income taxes         502               (2,015)    1,087    1,287
                                            ---------- ---------- ---------- -------- --------
   EBITDA                                      $1,681     $1,889   $(5,849)   $5,697   $5,754
                                            ========== ========== ========== ======== ========
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RECENT DEVELOPMENTS

As of November 30, 2003, Obie's outstanding debt balances with US Bank amounted
to $13.5 million on the term obligation and $3.9 million on the working capital
revolver. On January 14, 2004 Obie entered into a new long-term financing
arrangement with CapitalSource Finance LLC. The arrangement includes a $17.5
million term loan and a $6.0 million revolver with Obie Media Corporation, both
of which mature on November 30, 2008. The arrangement also includes a $2.5
million term loan to Obie Media Ltd., our wholly owned Canadian subsidiary,
which matures on January 31, 2009. The interest charged on the loans is the
greater of prime plus a margin that is dependant upon Obie's leverage ratio, or
9.5% on the term loans or 8.5% on the revolver. The margin in effect at the time
the financing closed was 5.5% on the term loans and 4.5% on the revolver. The
first date that this margin may be adjusted is the quarter ending February 28,
2004.

Funds from the term loan were used to (1) pay off the existing term loan with
the previous lender, (2) pay off the balance of the settlement obligation with
the Chicago Transit authority, and (3) pay off the promissory note related to
the purchase of the minority interest of O. B. Walls, Inc. in fiscal 2002. Funds
from the new revolver were used to pay off the existing revolver with the
previous lender and to fund closing costs and working capital needs.
Availability under the revolver amounted to approximately $1.5 million
subsequent to closing. The term loan principal payment amounts are $1.0 million
in fiscal 2004, $1.0 million in fiscal 2005, $2.0 million in fiscal 2006, $3.0
million in fiscal 2007, $11.1 million in fiscal 2008, with the balance due at
maturity. The revolver balance is due in full at maturity.

The loan agreement with CapitalSource Finance, LLC contains financial covenants
regarding (1) minimum rolling EBITDA, (2) maximum leverage ratios, (3)
fixed-charge coverage ratios, and (4) interest coverage ratios, all of which are
measured on a quarterly basis. The first measurement date will be as of February
29, 2004. The loan agreement also restricts the company's ability to pay
dividends. The loans are collateralized by substantially all of the assets of
the company.

A substantial portion of our loss for fiscal 2001 resulted from our payment of
minimum advertising revenues guaranteed to transit districts under our transit
district contracts. Beginning in the latter half of fiscal 2001 we became
increasingly concerned about these minimum revenue guarantees in the face of
declining advertising revenues in some transportation districts. Accordingly, we
began to seek to restructure or terminate certain of these arrangements in a way
that would limit Obie's exposure to these payments to an amount that would
reflect a more appropriate sharing of revenues under our advertising contracts.
Between August 31, 2001 and February 15, 2004, we have renegotiated 13 contracts
that have resulted in transit guarantee reductions of $1.7 million in fiscal
2001, $4.0 million in fiscal 2002 and $5.8 million in fiscal 2003. It cannot be
assured that we will be able to eliminate or further reduce this type of risk
and, if not, we may experience further adverse impacts on our operating
revenues, some or all of which may be material.
<PAGE>
During fiscal 2003 we extended our contract with the transit authority in
London, ONT Canada for an additional five years beginning in January 2004. The
first year guarantee of the extension period is approximately 37% less than the
guarantee for the final year of the original contract. We were also the
successful bidder in an RLI process in Ft. Lauderdale, Florida. We have been
awarded a new three year contract by that transit agency, commencing January 1 ,
2004. The first year guaranteed amount under the new contract is approximately
37% less than the guarantee during the final year of the original contract.

Also during 2003 we were selected as the successful bidder for transit
advertising in Pittsburgh, PA. We began operating in the market in July 2003
pending the execution of a definitive contract. We were unable to come to
agreement with the transit authority regarding a final contract and withdrew
from the market at the end of October 2003. The results of operations in this
market have been included in results of discontinued operations.

On December 5, 2001 the Company received notice from the Chicago Transit
Authority (CTA) that it was terminating the Company's transit advertising
agreement effective as of that date. The Company and the CTA had been disputing
settlement of 2001 transit fees in light of the nature of the early termination
and a shortage of advertising space made available to the Company, and the
parties entered into an agreement as of May 28, 2002 resolving all of the
outstanding issues.

The agreed upon fee for the 2001 contract year was settled with the CTA at $17
million, substantially less than the original contracted guaranteed payment of
$21.8 million. As of May 31, 2002, approximately $7.5 million had been paid to
the CTA, and an additional $1.5 million was paid on June 1, 2002. The balance
has been paid in substantially equal monthly payments of $116,080 beginning June
2002 through December 2003 with the remaining balance having been paid on
January 14, 2004 as noted above.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations
following are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates and judgements that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities.

We believe that the estimates, assumptions and judgements involved in the
accounting policies described below have the greatest potential impact on our
financial statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters, actual results
could differ from the estimates we use in applying the critical accounting
policies. Certain of these critical accounting policies affect working capital
account balances, including the reserve for uncollectible accounts receivable
and deferred income taxes. These policies require that we make estimates in the
preparation of our financial statements as of a given date. However, since our
business cycle is relatively short, actual results related to the estimates
relative to uncollectible accounts receivable are generally known within the six
month period following the financial statement date. Thus, these policies
generally affect only the timing of reported amounts across two to three
quarters. The estimate of deferred tax assets may affect reported amounts beyond
that time period.

RECOGNITION OF REVENUE

Revenue from advertising contracts is recognized ratably over the contract term,
and the estimated costs components of a contract (cost of the advertising space
and costs of producing and installing advertising copy) are deferred and matched
against the periodic recognition of revenue on essentially a straight-line
basis. This method also necessitates the recognition of an unearned revenue
liability for billings to customers for time periods beyond the end of the
current accounting cycle.
<PAGE>
DISCONTINUED OPERATIONS

Effective during its fiscal year ended November 30, 2002, we adopted Statements
of Financial Accounting Standards No. 144 and No. 146, "Accounting for the
Impairment of Long-Lived Assets" (SFAS No. 144) and "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS No. 146).

Pursuant to these pronouncements, we have classified as "Discontinued
Operations" the results of operations and any exit costs associated with transit
agreements that we determined were economically not viable, and where we plan to
or have already exited a market or intend not to be a competitive participant in
new contract awards for expiring agreements. Accordingly, the Company exited
these markets and has no ongoing advertising operations. These operations
qualify as components of an entity with separate financial reporting as
described in SFAS No. 144. The assets associated with the discontinued markets
were, in the aggregate, not material. The transit districts included in
Discontinued Operations are as follows

Fiscal 2003     Santa Cruz, CA; Bridgeport, CT; Chicago, IL; San Antonio, TX;
                Pittsburgh, PA;
Fiscal 2002     Santa Cruz, CA; Bridgport, CT; Chicago, IL; San Antonio, TX;
                Cincinnati, OH; Kitsap, WA; and Pickering, Whitby, Cambridge
                and St. Catharines, ONT, Canada
Fiscal 2001     Santa Cruz, CA; Bridgeport, CT; Chicago, IL; San Antonio, TX;
                Cincinnati, OH; Cleveland, OH; Kitsap, WA; and Pickering,
                Whitby, Cambridge and St. Catharines, ONT, Canada

The Company operated in the Pittsburgh market for a short period in fiscal 2003,
but left the market upon failure to reach contract terms with the transit
authority. The Chicago, Pickering, Whitby, Cambridge and St. Catharines
contracts were terminated during fiscal year 2002; the contract in San Antonio
was terminated in fiscal year 2003. The Company did not aggressively participate
in new contract bidding in Cincinnati which expired in fiscal 2002, or Kitsap,
which expired in fiscal 2003. The results of operations for these transit
districts for 2002 and 2001 have been reclassified to Discontinued Operations
for comparability purposes.

Net revenues and the components of the net loss related to the discontinued
operations were as follows:

                                               Years ended November 30
                                         2003           2002            2001
                                         ----           ----            ----
Net revenues                             $506,212     $2,077,047    $21,448,426
Production and installation expenses    (118,744)      (321,853)    (2,024,700)
Occupancy expense                       (551,996)    (1,603,742)   (13,688,582)
Sales expense                           (198,884)      (802,210)    (3,262,431)
General and administrative expense      (400,628)      (503,311)    (1,018,815)
Chicago start-up expense                       --             --      (352,537)
Provision for contract losses                  --             --    (6,007,233)

                                      ------------ -------------- --------------
Loss from discontinued operations
   before income taxes                  (764,040)    (1,154,069)    (4,905,872)
Income tax benefit                             --             --      1,091,327

                                      ------------ -------------- --------------
Net loss from discontinued operations  $(764,040)   $(1,154,069)   $(3,814,545)
                                      ============ ============== ==============
<PAGE>
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE

We make ongoing estimates relating to the collectiblity of our accounts
receivable and maintain an allowance for estimated losses resulting from the
inability of our customers to make required payments. In determining the amount
of the allowance, we consider our historical level of credit losses, the aging
spread of accounts at the date the estimate is made, trends in the overall media
economy, and general business conditions. Since we cannot predict future changes
in the financial stability of our customers, actual future losses from
uncollectible accounts may differ from our estimates. If the financial condition
of our customers were to deteriorate, resulting in their inability to make
payments, a larger allowance might be required. In the event that a smaller or
larger allowance was appropriate, we would record a credit or charge to general
and administrative expense in the period in which we made such a determination.

INCOME TAXES

We record valuation allowances against our deferred tax assets, when necessary,
in accordance with SFAS No. 109, "Accounting for Income Taxes". Realization of
deferred tax assets (such as net operating loss carryforwards) is dependent on
future taxable earnings and is therefore, uncertain. At least quarterly, we
assess the likelihood that our deferred tax asset balance will be recovered from
future taxable income. To the extent that we believe recovery is unlikely, we
establish a valuation allowance against our deferred tax assets increasing our
income tax expense in the period such determination is made. An increase in the
valuation allowance would result in a charge to income tax expense. A decrease
in the valuation allowance would result in a reduction to income tax expense.

On an interim basis, we estimate what our effective tax rate will be for the
full fiscal year and record a quarterly income tax provision in accordance with
the anticipated annual rate. As the fiscal year progresses we continually refine
our estimate based upon actual events and earnings during the year. This
continual estimation process periodically results in a change to our expected
tax rate for the fiscal year. When this occurs, we adjust the income tax
provision during the quarter in which the change in estimate occurs so that the
year-to-date provision is in accordance with the annual anticipated rate.

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

Property, plant and equipment, including buildings, equipment, and computer
hardware and software is recorded at cost (including, in some cases, the cost of
internal labor) and is depreciated over estimated useful lives. Changes in
circumstances (such as technological advances or changes to our business
operations) can result in differences between the actual and estimated useful
lives. In those cases where we determine that the useful life of a long-lived
asset should be shortened, we increase depreciation expense over the remaining
estimated useful life to depreciate the asset to its salvage value.

On June 30, 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which eliminates the amortization of goodwill and other acquired
intangible assets with indefinite economic useful lives. SFAS No. 142 is
effective for fiscal years beginning after December 15, 2001. We adopted SFAS
No. 142 effective December 1, 2002.

As of November 30, 2003 we had net unamortized goodwill in the amount of $5.4
million. SFAS No. 142 requires that goodwill be tested annually for impairment
using a two-step process. The first step is to identify a potential impairment
and, in transition, this step must be measured as of the beginning of the fiscal
year. The second step of the goodwill impairment test measures the amount of
impairment loss (measured as of the beginning of the year of adoption), if any,
and must be completed by the end of the Company's fiscal year, which has been
done. The Company has determined that there has been no impairment to goodwill
during fiscal 2003. As a result of adopting SFAS No. 142 we no longer amortize
goodwill.

OTHER CONTINGENCIES

In the ordinary course of business, we are involved in legal proceedings
involving contractual, employment relationships and a variety of other matters.
We record contingent liabilities resulting from claims against us when it is
probable that a liability has
<PAGE>
been incurred and the amount of the loss is reasonably estimable. We disclose
contingent liabilities when there is a reasonable possibility that the ultimate
loss will exceed the recorded liability. Estimating probable losses requires
analysis of multiple factors, in some cases including judgements about the
potential actions of third party claimants and courts. Therefore, actual losses
in any future period are uncertain. Currently, we do not believe that any of our
pending legal proceedings or claims will have a material impact on our financial
position, results of operations, or cash flows. However, if actual or estimated
probable future losses exceed our recorded liability for such claims, we would
record additional charges as other expense during the period in which the actual
loss or change in estimate occurred.

OVERVIEW

Obie Media is an out-of-home advertising company that markets advertising space
primarily on transit vehicles and outdoor advertising displays (billboards and
wallscapes). As of November 30, 2003, Obie had 38 exclusive agreements with
transit districts in the United States and Canada to operate transit advertising
displays. Since Obie's IPO in November 1996, the number of vehicles on which we
have the right to operate transit advertising displays has increased from
approximately 1,200 to over 7,000. We also operate and generally own more than
1,100 advertising displays on billboards and walls primarily in Washington,
Oregon, Montana, Wyoming, California and Idaho.

On December 5, 2001, the Company received notice from the Chicago Transit
Authority (CTA) that it was terminating the Company's transit advertising
agreement effective as of that date. The Company and the CTA had been disputing
settlement of 2001transit fees in light of the nature of the early termination
and a shortage of advertising space made available to the Company, and the
parties entered into an agreement as of May 28, 2002 resolving all of the
outstanding issues.

The agreed upon fee for the 2001 contract year was settled with the CTA at $17
million, substantially less than the original guaranteed payment of $21.8
million. As of May 31, 2002, approximately $7.5 million had been paid to the
CTA, and an additional $1.5 million was paid on June 1, 2002. The balance is
payable in substantially equal monthly payments of $116,080 beginning June 2002
and ending May 2007, with an additional $1.0 million balloon payment due on
January 1, 2004. The monthly payments were without interest through May 2003,
and included a 5% interest charge thereafter. These periodic deferred payments
have been valued using a junior unsecured discount rate of 15%, resulting in a
present value of $6.1 million, which is included within long-term debt in our
balance sheet. The result is a present value of $15.1 million for the
settlement. The cost of the settlement is covered by previous accruals,
including an accrual which the Company established in the third quarter of
fiscal 2001. The balance of $5,084,167 owing on this obligation at November 30,
2003 was paid off in January of 2004 with proceeds of the Company's January 2004
new financing arrangement with CapitalSource Finance, LLC.

A substantial portion of our loss for fiscal 2001 resulted from our payment of
minimum advertising revenues guaranteed to transit districts under our transit
district contracts. Beginning in the latter half of fiscal 2001 we became
increasingly concerned about these minimum revenue guarantees in the face of
declining advertising revenues in some transportation districts. Accordingly, we
began to seek to restructure or terminate certain of these arrangements in a way
that would limit Obie's exposure to these payments to an amount that would
reflect a more appropriate sharing of revenues under our advertising contracts.
Between August 31, 2001 and February 15, 2004, we have renegotiated 13 contracts
that have resulted in transit guarantee reductions of $1.7 million in fiscal
2001, $4.0 million in fiscal 2002 and $5.8 million in fiscal 2003. It cannot be
assured that we will be able to eliminate or further reduce this type of risk
and, if not, we may experience further adverse impacts on our operating
revenues, some or all of which may be material.

In addition, during fiscal 2002, transit contract bids occurred in our transit
markets of Austin, Dallas and San Antonio, Texas, Kansas City, Cincinnati and
Santa Cruz and Sacramento, California. We were awarded new contracts in Kansas
City, Dallas and Sacramento as we were the high bidder for those contracts. In
the other markets mentioned above, except for Austin,
<PAGE>
among other things we had been experiencing significant operating losses due
primarily to the high minimum guaranteed payments to the transit authorities. In
our rebids of these markets we substantially reduced the amounts offered as
guaranteed payments, and as a result, the contracts were awarded to others. We
also terminated contracts in St. Catharines, Pickering Cambridge and Whitby, all
in the Canadian province of Ontario. Since we have exited these markets, the
results of operations of these markets, plus the results relative to the Chicago
market termination and settlement described above, have been classified as
results from discontinued operations in our statement of operations.

During fiscal 2003, we were selected to be the advertising provider for the
Pittsburgh transit market, and began operating in the market on July 1, 2003.
Subsequently, we were unable to reach agreement with the transit authority on
contract terms, and left the market effective October 31, 2003. The results of
operations of this market are also included in results from discontinued
operations.

Obie's operating results are affected by general economic conditions, as well as
trends in the advertising industry. Moreover, our historical growth has
primarily resulted from: (i) growth in our transit advertising business,
primarily resulting from new agreements with additional transit districts; (ii)
the acquisition of P & C on September 1, 1998; and (iii) the development and
acquisition of new outdoor displays. As a result of these factors, our operating
performance is not necessarily comparable on a period-to-period basis. We plan
to continue expanding through both internal growth and acquisitions.

OPERATING RESULTS

The following table presents certain items from Obie Media's consolidated
statements of income (and EBITDA) as a percentage of net revenues.

                                                     Years ended November 30,

                                                     2003      2002       2001
                                                     ----      ----       ----
Transit net advertising revenue                      83.9%     84.8%      84.3%
Outdoor net advertising revenue                      16.1      15.2       15.7
Net revenues                                        100.0     100.0      100.0
Operating expenses:
    Production, occupancy and selling                77.3      75.3       80.8
    General and administrative                       17.0      17.8       21.4
    Depreciation and amortization                     4.1       5.0        4.8
        Operating income (loss)                       1.6       1.9       (7.0)
Interest expense                                      5.4       3.9        3.1
        (Loss) from continuing operations            (3.8)     (1.9)     (10.2)
before income taxes

Provision for (benefit from) income taxes            (1.2)      0.0       (2.2)
        Loss from continuing operations              (5.0)     (1.9)      (8.0)
Results of discontinued operations                   (1.8)     (2.6)      (8.9)
        Net loss                                     (6.7)     (4.6)     (16.9)

EBITDA (1)                                            3.9%      4.3%     (13.6)%
<PAGE>
(1) The Company believes that EBITDA is widely used as one measure to evaluate
the financial performance of companies in the out-of-home advertising industry,
and therefore, is an appropriate supplemental measure regarding the operating
performance of our business. The Company believes that EBITDA can assist in
comparing out-of-home advertising company performance on a consistent basis
without regard to depreciation and amortization, which can vary significantly
depending on accounting methods used (particularly when acquisitions are
involved) or non-operating factors (such as historical cost basis). Accordingly,
this information has been disclosed to facilitate the comparative analysis of
our operating performance relative to other companies in the out-of-home
advertising industry. EBITDA (earnings before interest, taxes, depreciation and
amortization), a non-GAAP financial measure, is defined as operating income
before depreciation and amortization expense. EBITDA should not be considered in
isolation or as a substitute for net income (loss), cash provided by operating
activities or other income or cash flow data prepared in accordance with
generally accepted accounting principles, or as a measure of profitability or
liquidity.

COMPARISON OF YEARS ENDED NOVEMBER 30, 2003 AND 2002

RESULTS OF CONTINUING OPERATIONS

REVENUES. Obie's revenues are derived from sales of advertising on out-of-home
advertising displays, primarily on transit vehicles under transit district
agreements and on outdoor advertising displays we own or operate. Revenues are a
function of both the occupancy of these display spaces and the rates we can
charge. Net revenues for fiscal 2003 decreased $1.2 million, or 2.6%, from $44.3
million in fiscal 2002 to $43.1 million in fiscal 2003. Transit net revenues in
fiscal 2003 decreased $1.4 million, or 3.7% when compared to the same period of
fiscal 2002. This decrease was primarily due to continued weakness in this
sector of the out-of-home industry, particularly in the northeastern portion of
the United States. Outdoor net revenues for fiscal 2003 increased $210,000, or
3.1% when compared to fiscal 2002. This increase was due primarily to higher
billboard inventory utilization in fiscal 2003 as compared to fiscal 2002.

PRODUCTION AND INSTALLATION EXPENSES. These expenses relate primarily to the
production of transit advertising content and the installation of the content on
transit vehicles, benches and shelters. Also included is the cost of billboard
content and installation. Production and installation expenses decreased
$229,000, or 3.5% from $6.5 million in fiscal 2002 to $6.2 million in fiscal
2003. The majority of these expenses are related to transit advertising, and the
decrease mirrored the decrease in the transit revenues noted above.

TRANSIT AND OUTDOOR OCCUPANCY EXPENSES. These expenses include fees paid to
transit authorities and lease payments to landowners for billboard sites. Under
Obie Media's transit agreements, we typically guarantee to pay the transit
district the greater of a minimum stated amount or a percentage of the
advertising revenues generated by our use of the district's vehicles. Occupancy
expense for outdoor structures includes the cost of illuminating outdoor
displays and property taxes on the outdoor advertising structures. Transit and
outdoor occupancy expenses increased $1.1 million, or 5.9% from $18.3 million in
fiscal 2002 to $19.4 million in fiscal 2003. Of the increase, approximately
$113,000 is related to increases in billboard leases and related costs. In
addition, the Company experienced a $334,000 increase in transit fees of the
Company's Canadian transit operations and a $653,000 increase in United States
transit operations. These transit expense increases were primarily due to
increased guaranteed payments to transit authorities.

SELLING EXPENSES. Sales expenses consist primarily of employment and
administrative expenses associated with our sales force. These expenses
decreased $845,000, or 9.9%, from $8.6 million in fiscal 2002 to $7.7 million in
fiscal 2003. The decrease was due primarily to an overall reduction in turn-over
of sales personnel in 2003 as compared to 2002.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses include
costs related to individual markets, as well as corporate expenses. Expenses
related to individual markets include expenses for the personnel and facilities
required to administer that market and neighboring markets. Corporate general
and administrative expenses represent personnel and
<PAGE>
facilities costs for Obie Media's executive offices and centralized staff
functions, which include accounting, marketing, human resources and technology
management.

General and administrative expenses decreased $568,000, or 7.2 %, from $7.9
million in fiscal 2002 to $7.3 million in fiscal 2003. The decrease was due
primarily to a reduction in bad debt expenses in fiscal 2003 as compared to
fiscal 2002.

DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
decreased $429,000, or 19.7%, from $2.2 million in fiscal 2002 to $1.8 million
in fiscal 2003. The decrease related primarily a reduction in amortization of
goodwill of approximately $516,000 coupled with an increase in prepaid loan fee
amortization of approximately $73,000 when comparing fiscal 2003 with 2002.

OPERATING INCOME. Due to the events and factors discussed above we experienced
operating income of $693,000 in fiscal 2003, compared to operating income of
$862,000 in fiscal 2002.

INTEREST EXPENSE. Interest expense increased $609,000, or 35.3%, from $1.7
million in fiscal 2002 to $2.3 million in fiscal 2003. Of the increase,
approximately $385,000 related to the amortization of the discount on the
Chicago Transit Authority settlement that applied for the full fiscal year in
2003 as opposed to one-half of fiscal 2002. The balance of the increase was
related to interest costs on our term loan and working capital revolver
arrangements with our primary lender.

We will expense the remaining unamortized discount related to the Chicago
Transit Authority in fiscal 2004, as that obligation was paid off in January
2004 from proceeds of our new financing arrangement. The amount of the write-off
will be approximately $700,000. In addition we will be writing off approximately
$251,000 in prepaid loan fees related to the previous lending arrangements.

PROVISION FOR INCOME TAXES. The Company accounted for all available loss
carryback refunds in the fiscal 2001 provision for income taxes. We have
substantial loss carryforwards, against which valuation allowances have been
provided. Since the operating loss carryforwards expire at certain times, we
have evaluated the likelihood of utilizing those carryforwards against future
taxable income in that time frame and have established a valuation allowance
accordingly. The other deferred tax asset items have no expiration date and are
expected to be fully realized.

The net loss before income taxes resulted in a tax benefit of $2.0 million for
fiscal 2001, the year in which carryback refunds were applied ($1.1 million of
the benefit was applied to discontinued operations). The difference between the
statutory United States federal income tax rate and the beneficial tax rate for
both fiscal 2002 and 2001 is due primarily to the deferred tax valuation reserve
for the net operating loss carryforwards. The difference between the statutory
United States federal income tax rate and our effective tax rate in fiscal 2003
is due to state taxes and foreign taxes related to our Canadian subsidiary, as
well as the application of the valuation reserve to the net operating loss
carryforwards.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we experienced a loss from continuing operations of $2.1 million in fiscal
2003 as compared to a loss of $862,000 in fiscal 2002.

RESULTS OF DISCONTINUED OPERATIONS

Most transit arrangements include a provision that a certain percentage of net
revenues be shared with the transit authorities (transit fees) on a revenue
sharing basis (a certain percentage to the transit authority, the balance
retained by Obie), but often with minimum payment requirements. Agreements that
contain large minimum transit fee payment guarantees significantly hinder our
ability to manage our operating expenses during weak economic periods. These
high minimum payment requirements have prompted us to either negotiate
modifications to those contracts, negotiate or effect early terminations to such
contracts, or to exit the market at the end of such contract terms.
<PAGE>
As discussed above, discontinued operations contain the operating results, net
of income taxes, for transit markets from which we have exited. Discontinued
operations for fiscal 2003 include costs relative to Chicago, San Antonio,
Bridgeport and Santa Cruz as well as results of operations from the Pittsburgh
market as described above. The discontinued operations for fiscal 2002 include
the operations of San Antonio, Santa Cruz, Chicago, Kitsap, Cincinnati, Ohio,
and the Ontario, Canada markets described above.

NET LOSS

Obie realized a net loss of $2.9 million during fiscal 2003, compared to a net
loss of $2.0 million in fiscal 2002. The difference in the losses for fiscal
2003 and fiscal 2002 have been noted above.

COMPARISON OF YEARS ENDED NOVEMBER 30, 2002 AND 2001

RESULTS OF CONTINUING OPERATIONS

REVENUES. Obie's revenues are derived from sales of advertising on out-of-home
advertising displays, primarily on transit vehicles under transit district
agreements and on outdoor advertising displays we own or operate. Revenues are a
function of both the occupancy of these display spaces and the rates we can
charge. We focus our sales efforts on maximizing occupancy levels while
maintaining rate integrity in our markets. Net revenues for fiscal 2002
increased $1.4 million, or 3.2%, from $42.9 million in fiscal 2001 to $44.3
million. In fiscal 2002 the entire increase related to net transit revenues as
outdoor net revenues were unchanged from fiscal 2001 to fiscal 2002.

PRODUCTION AND INSTALLATION EXPENSES. These expenses relate primarily to the
production of transit advertising content and the installation of the content on
transit vehicles, benches and shelters. Also included is the cost of billboard
content and installation. Production and installation expenses increased
$215,000, or 3.4% from $6.3 million in fiscal 2001 to $6.5 million in fiscal
2002. The increase was primarily related to increased production volume in
transit related production.

TRANSIT AND OUTDOOR OCCUPANCY EXPENSES. These expenses include fees paid to
transit authorities and lease payments to landowners for billboard sites. Under
Obie Media's transit agreements, we typically guarantee to pay the transit
district the greater of a minimum stated amount or a percentage of the
advertising revenues generated by our use of the district's vehicles. Occupancy
expense for outdoor structures includes the cost of illuminating outdoor
displays and property taxes on the outdoor advertising structures. Transit and
outdoor occupancy expenses decreased $1.9 million or 9.2% from $20.2 million in
fiscal 2001 to $18.3 million in fiscal 2002. The decrease is primarily as a
result of renegotiated transit fee arrangements mentioned above.

SELLING EXPENSES. Sales expenses consist primarily of employment and
administrative expenses associated with our sales force. These expenses
increased $352,000, or 4.3%, from $8.2 million in fiscal 2001 to $8.6 million in
fiscal 2002. The increase was due primarily to an enlarged sales force in
Vancouver, British Columbia in 2002, as compared to 2001 when the transit
district was on strike for five months and we operated with a reduced sales
force.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses include
costs related to individual markets, as well as corporate expenses. Expenses
related to individual markets include expenses for the personnel and facilities
required to administer that market and neighboring markets. Corporate general
and administrative expenses represent personnel and facilities costs for Obie
Media's executive offices and centralized staff functions, which include
accounting, marketing, human resources and technology management.

General and administrative expenses decreased $1.3 million, or 14.1 %, from $9.2
million in fiscal 2001 to $7.9 million in fiscal 2002. The decrease was due
primarily to a $1.1 million reduction in bad debt expense in fiscal 2002 as
compared to fiscal
<PAGE>
2001, and personnel reductions in marketing and the business office at the
corporate headquarters of approximately $200,000 in 2002 when compared to fiscal
2001.

DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
increased $104,000, or 5.0%, from $2.1 million in fiscal 2001 to $2.2 million in
fiscal 2002, primarily due to capital expenditures for outdoor advertising
displays as well as investment in digital production equipment as noted above.

OPERATING INCOME. Due to the events and factors discussed above we experienced
operating income of $862,000 in fiscal 2002, compared to an operating loss of
$3.0 million in fiscal 2001.

INTEREST EXPENSE. Interest expense increased $388,000, or 29.0%, from $1.3
million in fiscal 2001 to $1.7 million in fiscal 2002. The increase was due
primarily to the amortization of the discount on the Chicago Transit Authority
settlement.

PROVISION FOR INCOME TAXES. The Company accounted for all available loss
carryback refunds in the fiscal 2001 provision for income taxes. The Company has
substantial loss carryforwards, against which valuation allowances have been
provided. Since the operating loss carryforwards expire at certain times, we
have evaluated the likeliness of utilizing those carryforwards against future
taxable income in that time frame and have established a valuation allowance
accordingly. The other deferred tax asset items have no expiration date and are
expected to be fully realized.

The net loss before income taxes resulted in a tax benefit of $2.0 million for
fiscal 2001, the year in which carryback refunds were applied ($1.1 million of
the benefit was applied to discontinued operations). The difference between the
statutory United States federal income tax rate and the beneficial tax rate for
both fiscal 2002 and 2001 is due primarily to the deferred tax valuation reserve
for the net operating loss carryforwards.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we experienced a loss of $862,000 in fiscal 2002 as compared to a loss of
$3.4 million in fiscal 2001.

RESULTS OF DISCONTINUED OPERATIONS

Most transit arrangements include a provision that a certain percentage of net
revenues be shared with the transit authorities (transit fees) on a revenue
sharing basis (a certain percentage to the transit authority, the balance
retained by Obie), but often with minimum payment requirements. Agreements that
contain large minimum transit fee payment guarantees significantly hinder Obie's
ability to manage its operating expenses in weak economic environments. These
high minimum payment requirements have prompted the Company to either negotiate
modifications to those contracts, negotiate or effect early terminations to the
contracts, or to exit the market at the end of the contract term.

As discussed above, discontinued operations contain the operating results, net
of income taxes, for transit markets from which we have exited. The discontinued
operations for fiscal 2002 include the operations of Santa Cruz, San Antonio,
Cincinnati, Kitsap, Chicago and the Ontario, Canada markets described above.
Discontinued operations for fiscal 2001 also included the results of the
settlement related to the Chicago, Illinois market. The results of the Chicago
operation and settlement included in fiscal 2001 is the primary reason for the
$2.7 million reduction in the loss from discontinued operations from fiscal 2001
to fiscal 2002.

NET LOSS

Obie realized a net loss of $2.0 million during fiscal 2002, compared to a net
loss of $7.2 million in fiscal 2001. The difference in the losses for fiscal
2002 and fiscal 2001were primarily due to the decrease in the loss from
discontinued operations in fiscal 2002 when compared to fiscal 2001, and the
absence of an income tax benefit for the operating loss in fiscal 2002.
<PAGE>
SEASONALITY

Historically, Obie Media's revenues and operating results have fluctuated by
season. Typically, Obie's results of operations are strongest in the fourth
quarter and weakest in the first quarter of our fiscal year, which ends November
30. Obie's transit advertising operations are more seasonal than our outdoor
advertising operations as the outdoor advertising display space, unlike our
transit advertising display space, is and has been sold nearly exclusively by
means of 12-month contracts. This seasonality, together with fluctuations in
general and regional economic conditions and the timing and expenses related to
acquisitions, securing new transit agreements and other actions we have taken
and plan to continue to take to implement our growth strategy, have contributed
to fluctuations in our periodic operating results. These fluctuations likely
will continue. Accordingly, results of operations in any period may not be
indicative of the results to be expected for any future period.

LIQUIDITY AND CAPITAL RESOURCES

Obie Media has historically satisfied its working capital requirements with cash
from operations and revolving credit borrowings. Obie's working capital at
November 30, 2003 and 2002 was $4.9 million and $7.2 million, respectively. The
decrease in working capital is due primarily to (1) a decrease of ($1.6 million)
in accounts receivable, due primarily to the improved overall collection
results, (2) increased utilization by ($910,000) of the Company's working
capital line of credit, (3) a decrease of $1.1 million in the current portion of
long-term debt, and (4) an increase of ($800,000) in accrued expenses and
unearned revenue. Acquisitions and capital expenditures, primarily for the
construction of new outdoor advertising displays, digital printing equipment and
technology related assets, have been financed primarily with borrowed funds.

Obie Media's net cash provided by operating activities was $1.5 million during
fiscal 2003, as compared to net cash provided by operating activities of $1.1
million in fiscal 2002 and ($1.2) million in fiscal 2001 respectively. The
change between 2003 and 2002 was due primarily to a decrease in accounts
receivable and an increase in accounts payable and accrued expenses. The change
between 2002 and 2001 was due primarily to a decrease in accounts receivable and
refundable income taxes, and a decrease in accrued expenses.

Net cash used in investing activities was $636,000 during fiscal 2003, $1.2
million in fiscal 2003 and $1.3 million in fiscal 2002, respectively. The
decrease from fiscal 2002 to fiscal 2003 resulted primarily from a reduction of
$284,000 in capital expenditures in fiscal 2003 when compared to fiscal 2002,
and the cost of acquiring the minority interest in OB Walls, Inc. Capital
expenditures consist primarily of the cost of building and acquiring outdoor
advertising displays and the cost of digital printing equipment in both years.
While the total amounts are not significantly different when comparing 2002 to
2001, we acquired the minority interest of Obie Walls, Inc. for $300,000 in
fiscal 2002, and spent approximately $400,000 less in 2002 when compared to 2001
for billboard acquisitions and upgrades. We anticipate that our capital
expenditures will approximate $1.4 million in fiscal 2004.

Net cash used in financing activities was $674,000 in fiscal 2003 compared to
amounts provided from financing activities of $1.5 million and $2.3 million in
fiscal 2002 ands 2001, respectively. The decrease in fiscal 2003 was due to
lower borrowings on short and long term debt facilities and higher net payments
on long-term debt in 2003 when compared to 2002. The decrease in fiscal 2002
when compared to 2001 is due to proceeds from long term debt and net payments on
long term debt both being higher in fiscal 2002 than in 2001.

As of November 30, 2003, we had a $4.5 million operating line of credit with US
Bank. The interest rate was US Bank's prime rate plus 3.75% (7.75% at November
30, 2003) with collateral of receivables, equipment, inventory and contract
rights. The outstanding balance of this line of credit was $3,890,483 at
November 30, 2003. We also had a term loan with US Bank at prime plus 4.25%
(8.25% at November 30, 2003) collateralized by substantially all of the
Company's assets.
<PAGE>
On January 14, 2004, we entered into a new long-term financing arrangement with
CapitalSource Finance LLC. The arrangements with Obie Media Corporation includes
a $17.5 million term loan and a $6.0 million revolver both of which mature on
November 30, 2008. In addition, there is a $2.5 million term loan with Obie
Media Ltd. (the Company's Canadian subsidiary) which matures on January 31,
2009.

The interest charged on the loans is the greater of prime plus a margin that is
dependant upon Obie's leverage ratio, or 9.5% on the term loans or 8.5% on the
revolver. The margin in effect at the time the financing closed was 5.5% on the
term loans and 4.5% on the revolver. The first date that this margin may be
adjusted is the quarter ending February 28, 2004.

Funds from the term loans were used to (1) pay off the existing term loan with
the previous lender, (2) pay off the balance of the settlement obligation with
the Chicago Transit authority, and (3) pay off the promissory note related to
the purchase of the minority interest of O. B. Walls, Inc. Funds from use of the
revolver were used to pay off the existing revolver with the previous lender and
to fund closing costs and working capital needs. Availability under the revolver
amounted to approximately $1.5 million subsequent to closing.

This new financing arrangement with CapitalSource Finance, LLC allowed us to
consolidate debt obligations, provide $1.5 million additional revolver
availability, and restructure principal payment obligations to better fit the
growth and cash flow needs of the Company. The term loan principal payment
amounts are $1.0 million in fiscal 2004, $1.0 million in fiscal 2005, $2.0
million in fiscal 2006, $3.0 million in fiscal 2007, $11.1 million in fiscal
2008, with the balance due at maturity. The revolver balance is due in full at
maturity.

The loan agreement with CapitalSource Finance LLC contains financial covenants
regarding (1) minimum rolling EBITDA, (2) maximum leverage ratios, (3)
fixed-charge coverage ratios, and (4) interest coverage ratios, all of which are
measured on a quarterly basis. The first measurement date will be as of February
29, 2004. The loan agreement also restricts the Company's ability to pay
dividends. The loans are collateralized by substantially all of the assets of
the company.

We expect to continue pursuing a policy of measured growth through obtaining new
transit district agreements, acquiring out-of-home advertising companies or
assets and constructing new outdoor advertising displays. We intend to finance
our future expansion activities using a combination of internal and external
sources. Management believes that internally generated funds and funds available
for borrowing under Obie's bank credit facilities will be sufficient to satisfy
all debt service obligations, to finance existing operations, including
anticipated capital expenditures but excluding possible acquisitions, through
fiscal 2004. Future acquisitions by Obie Media, if any, may require additional
debt or equity financing.

If operations are not consistent with management's plans due to risks and
uncertainties, including failure to conclude favorable negotiations on pending
transactions with existing transit agency partners, or to successfully
assimilate expanded operations, inability to generate sufficient advertising
revenues to meet contractual guarantees, potential for cancellation or
interruptions of contracts with governmental agencies, a further decline in the
demand for advertising in the markets in which we conduct business, slower than
expected acceptance of our display products, there can be no assurance that the
amounts from these financial resources will be sufficient for such purposes. In
any of the above events or for other reasons, we may be required to seek
alternative financing arrangements. There is no assurance that such sources of
financing will be available, if required, or if available, within terms
acceptable to the company.

LONG-TERM FINANCIAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

Our significant long-term contractual obligations as of November 30, 2003 are as
follows:
<PAGE>
<TABLE>
<CAPTION>
                                 Cash payments during the fiscal years ended November 30 (in thousands)
                                 ----------------------------------------------------------------------


Description of Commitment       2004      2005      2006      2007       2008      Thereafter     Total
-------------------------       ----      ----      ----      ----       ----      ----------     -----
<S>                           <C>       <C>        <C>       <C>        <C>        <C>           <C>
Transit guaranteed            $15,216   $12,982    $3,737    $  628     $  721     $     --      $33,284
minimum payments

Building and land leases        2,434     1,874     1,334       695        428         1,011       7,776

CapitalSource Finance LLC       1,000     1,000     2,000     3,000     11,100         1,900      20,000
term debt
</TABLE>

OTHER COMMITMENTS

As of November 30, 2003 the Company had outstanding performance bonds of
approximately $7.2 million and letters of credit of approximately $200,000
provided to certain transit agencies in support of guaranteed payments.

MARKET RISK

Because our debt bears interest at variable rates, we may be exposed to future
interest rate changes on our debt. Management does not believe that a
hypothetical 10 percent change in end of period interest rates would have a
material effect on Obie's cash flow.

THE EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS.

On June 30, 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 (SFAS No. 142), "Goodwill and Other Intangible Assets," which eliminates
the amortization of goodwill and other acquired intangible assets with
indefinite economic useful lives. SFAS No. 142 is effective for fiscal years
beginning after December 15, 2001. Obie adopted SFAS No. 142 effective December
1, 2002.

As of November 30, 2003, Obie had net unamortized goodwill in the amount of $5.4
million. SFAS No. 142 requires that goodwill be tested annually for impairment
using a two-step process. The first step is to identify a potential impairment
and, in transition, this step must be measured as of the beginning of the fiscal
year. The second step of the goodwill impairment test measures the amount of
impairment loss (measured as of the beginning of the year of adoption), if any,
and must be completed by the end of the Company's fiscal year, which as been
done. The Company has determined that there has been no impairment to goodwill
during fiscal 2003. As a result of adopting SFAS No. 142 we will no longer
amortize goodwill.

On October 3, 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets". SFAS No. 144 supercedes Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". SFAS No. 144 applies to all long-lived assets
(including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business". SFAS No. 144 develops one
accounting model for long-lived assets that are to be disposed of by sale. SFAS
No. 144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book value or fair value less the cost to sell. SFAS
No.144 is effective for fiscal years beginning after December 15, 2001, however,
earlier adoption is permitted. The Company
<PAGE>
early adopted the provisions of SFAS No. 144 in fiscal 2002 and has recorded the
results of operations from transit markets that it has exited as discontinued
operations.

On June 28, 2002, the FASB adopted Statement of Financial Accounting Standards
No. 146 (SFAS No. 146), "Accounting for Exit or Disposal Activities", effective
for exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. SFAS No. 146 addresses significant issues
regarding the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including restructuring activities
that are currently accounted for pursuant to the guidance that the Emerging
Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". The Company
early adopted the provisions of SFAS No. 146 in fiscal 2002 and has recorded
exit costs relating to contract terminations resulting from its exit of certain
transit markets in accordance with the provisions of SFAS No. 146. These costs
have been recorded as a component of discontinued operations in accordance with
SFAS No. 144.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, (SFAS No. 148), "Accounting for Stock-Based Compensation - Transition
and Disclosure - an amendment of FAS 123." SFAS No. 148 amends Statement of
Financial Accounting Standards No. 123, ("SFAS No. 123") "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures about the method
of accounting for stock-based employee compensation and the effect of the method
used on reported results. Finally, SFAS No.148 amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The amendments to the transition and disclosure
provisions is effective for fiscal years ending after December 15, 2002. The
amendment to Opinion 28 is effective for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. We
adopted the disclosure provisions of SFAS No. 148 during the second quarter of
fiscal 2003.

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" . FIN 45, which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for the financial statements of interim or annual
reports ending after December 15, 2002. The Company has adopted the disclosure
requirements of FIN 45. The adoption of the disclosure requirements of FIN 45
did not have a material effect on the Company s financial position or results of
operations.

In May 2003, the Emerging Issues Task Force issued EITF 00-21 ("EITF 00-21"),
"Accounting for Revenue Arrangements with Multiple Deliverables." EITF 00-21
addresses the accounting by a vendor for arrangements under which it will
perform multiple revenue-generating activities. The EITF applies to all
contractual arrangements under which a vendor will perform multiple
revenue-generating activities. A delivered item should be considered a separate
unit of accounting if the delivered item has stand-alone value to the customer,
if the fair value of the undelivered item can be determined reliably, and, in
the case of a general or specific refund right, if the delivery of the
undelivered item is probable and substantially controlled by the vendor. EITF
00-21 provides that either the relative-fair value method or the residual method
be used to allocate the consideration into separate units of accounting if there
is objective and reliable evidence of fair value of both items or the
undelivered item. EITF 00-21 is applicable to all revenue arrangements entered
into in fiscal periods beginning after June 15, 2003, however early adoption is
permitted. EITF 00-21 did not have an impact on the Company's operations.
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS

The financial statements and supplementary data required by this item are
included on pages F-1 to F-16 of this Annual Report. Unaudited quarterly data
for each of the eight quarterly periods in the years ended November 30, 2003 and
2002 is as follows:


In thousands, except per share data:

                                      1st          2nd        3rd        4th
                                    Quarter      Quarter    Quarter    Quarter
---------------------------------- ----------- ---------- ---------- ----------
2003:
Net revenues                           $8,698    $10,635    $11,363     12,421
Operating income (loss)                 (386)        363        281        435
Loss from discontinued operations       (113)      (106)       (88)      (457)
Net  loss                             (1,043)      (461)      (407)      (996)


Basic/diluted income (loss) per share:
     Continuing operations            $(0.16)    $(0.06)    $(0.05)    ($0.09)
     Discontinued operations          $(0.02)    $(0.02)    $(0.02)    $(0.08)
     Net (loss)                       $(0.18)    $(0.08)    $(0.07)    $(0.17)

---------------------------------- ----------- ---------- ---------- ----------

<TABLE>
<CAPTION>
                                         1ST QUARTER             2ND QUARTER             3RD QUARTER             4TH QUARTER
                                       As                      As                      As                      As
                                   Previously      As      Previously      As      Previously      As      Previously      As
                                    Reported    Restated    Reported    Restated    Reported    Restated    Reported    Restated
                                   ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
2002:
<S>                                   <C>          <C>        <C>         <C>         <C>         <C>         <C>         <C>
Net revenues                          $ 9,774      $9,628     $11,013     $10,884     $11,607     $11,520     $12,365     $12,251
Operating income (loss)                 (916)       (965)         110          84         765         772         992         971
Income (loss) from                      (289)       (240)       (315)       (289)       (124)       (131)       (515)       (494)
discontinued operations
Net income (loss)                     (1,521)     (1,521)       (521)       (521)          22          22           3           3
Basic/diluted income (loss) per
share:
     Continuing operations            $(0.21)     $(0.22)     $(0.04)     $(0.04)       $0.02       $0.02       $0.09       $0.08
     Discontinued operations          $(0.05)     $(0.04)     $(0.05)     $(0.05)     $(0.02)     $(0.02)     $(0.09)     $(0.08)
     Net income (loss)                $(0.26)     $(0.26)     $(0.09)     $(0.09)       $0.00       $0.00       $0.00       $0.00
</TABLE>

See footnote 1. To the consolidated financial statements regarding discontinued
operations which is the cause of the above restatements.
<PAGE>
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There has been no change in the Company's auditors, and there are no
disagreements with the auditors on accounting or financial disclosure matters.

ITEM 9A.  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in timely alerting
them to material information required to be included in this Annual Report on
Form 10-K. There have been no significant changes in our internal controls or in
other factors which could significantly affect internal controls during the
fourth quarter of fiscal 2003.

PART 3.

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Information with respect to directors and executive officers is included under
"Election of Directors" and "Executive Officers" in Obie's definitive proxy
statement for its 2004 Annual Meeting of Shareholders to be filed not later than
120 days after the end of the fiscal year covered by this Annual Report, and
when so filed such information is incorporated herein by reference.

Information with respect to Section 16(a) of the Securities Exchange Act is
included under "Compliance with Section 16(a) of the Securities Exchange Act" in
Obie's definitive proxy statement for its 2004 Annual Meeting of Shareholders to
be filed not later than 120 days after the end of the fiscal year covered by
this Annual Report, and when so filed such information is incorporated herein by
reference.

Information with respect to the Obie's audit committee and audit committee
financial experts is included under "Audit Committee" in Obie's definitive proxy
statement for its 2004 Annual Meeting of Shareholders to be filed not later than
120 days after the end of the fiscal year covered by this Annual Report, and
when so filed such information is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

Information with respect to executive compensation is included under "Executive
Compensation" in Obie's definitive proxy statement for its 2004 Annual Meeting
of Shareholders to be filed not later than 120 days after the end of the fiscal
year covered by this Annual Report, and when so filed such information is
incorporated herein by reference.
<PAGE>
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to security ownership of certain beneficial owners and
management is included under "Principal Shareholders and Management Ownership"
in Obie's definitive proxy statement for its 2004 Annual Meeting of Shareholders
to be filed not later than 120 days after the end of the fiscal year covered by
this Annual Report, and when so filed such information is incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information with respect to certain relationships and related party transactions
is included under "Certain Transactions" in Obie's definitive proxy statement
for its 2004 Annual Meeting of Shareholders to be filed not later than 120 days
after the end of the fiscal year covered by this Annual Report, and when so
filed such information is incorporated herein by reference.

ITEM 14.  OUTSIDE AUDITOR FEES

Information with respect to outside auditor fees is included under "Independent
Public Accountants" in Obie's definitive proxy statement for its 2004 Annual
Meeting of Shareholders to be filed not later than 120 days after the end of the
fiscal year covered by this Annual Report, and when so filed such information is
incorporated herein by reference.

ITEM 15.  FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      1. Financial Statements: See "Index to Consolidated Financial
Statements" on page F-1 of this Annual Report on Form 10-K

         2. Financial Statement Schedule II: Valuation and Qualifying Accounts:

<TABLE>
<CAPTION>
                                                          Additions
                                       Balance at   charged/(recoveries)                    Balance at
                                      beginning of      to costs and                          end of
                                         period           expenses          Deductions        period
                                    --------------- -------------------- --------------- ---------------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Year ended November 30,
<C>                                     <C>                 <C>           <C>               <C>
2003                                    $1,938,537             $538,442      $1,884,816        $592,163
2002                                     1,944,921            2,307,350       2,313,734       1,938,537
2001                                       598,403            2,129,342         782,824       1,944,921

DEFERRED TAX VALUATION ALLOWANCE
2003                                    $1,560,683            1,105,336                       2,666,019
2002                                     1,096,660              464,023                       1,560,683
2001                                             -            1,096,660                       1,096,660
</TABLE>

<PAGE>
PART IV

ITEM 16.  EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) Financial Statements. The Financial Statements are listed in the Index to
Consolidated Financial Statements on page F-1 of this Annual Report.
(a)(2) Exhibits:

         Exhibit Description

3.1     Restated Articles of Incorporation, as amended (1)
3.2     Restated Bylaws, as amended (1)
4.1     See Articles 3, 4 and 8 of Exhibit 3.1 and Articles 1, 2, 5, 6 and 7 of
        Exhibit 3.2
10.1*   Restated 1996 Stock Incentive Plan (4)
10.2    Form of Indemnification Agreement between Obie and its directors (4)
10.3    Form of Indemnification Agreement between Obie and its officers (4)
10.4    Lease between Obie Industries Incorporated and Obie, dated November 12,
        1996 (1)
10.5    Amendment, dated July 15, 1997, to lease agreement between Obie
        Industries Incorporated and Obie (2)
10.6    Restated and Amended Loan Agreement, dated as of September 1, 1998,
        among Obie, Obie Media Limited, Philbin & Coine, Inc., and U.S. Bank
        National Association, and related documents (4)
10.7    Amendment to Loan Agreement, dated January 3, 2000 (7)
10.8    Stock Purchase Agreement among Registrant and Philbin & Coine, Inc. and
        Wayne P. Schur dated August 25, 1998 (3)
10.9*   Employment Agreement, dated September 1, 1998, between Obie and Wayne P.
        Schur (4)
10.10*  Amendment to Wayne P. Schur employment agreement (7)
10.11*  Non-Qualified Stock Option Agreement, dated September 1, 1998, between
        Obie and Wayne P. Schur(4)
10.12   Settlement Offer Letter dated September 25, 1998 from Tri-County
        Metropolitan Transportation District of Oregon to Registrant, signed by
        the Registrant indicating acceptance (5)
Portions of the Definitive Proxy Statement for the 2001 Annual Meeting of
        Shareholders to be held on April 27, 2001 (6)
21.1    List of subsidiaries (4)
23.1    Consent of PricewaterhouseCoopers LLP, Independent Accountants
31.1    Certification by Gary F. Livesay pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002
31.2    Certification by Brian B. Obie pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002
32.1    Certification by Gary F. Livesay pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002
32.1    Certification by Brian B. Obie pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002
*Management Contract or Compensatory Plan or Arrangement.
(1) Incorporated herein by reference from Obie's Registration Statement on Form
SB-2 (Registration No. 333-5728-LA), declared effective on November 21, 1996.
(2) Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
year ended November 30, 1997 filed February 27, 1998.
(3) Incorporated by reference to Obie's Form 8-K filed September 14, 1998.
(4) Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
year ended November 30, 1998 filed March 1, 1999.
(5) Incorporated by reference to Obie's Registration Statement on Form S-1
(Registration No. 333-79367), declared effective on August 10, 1999.
(6) To be filed with the Securities and Exchange Commission within 120 days
after the end of the fiscal year covered by this report.
(7) Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
year ended November 30, 2001 filed February 27, 2002.
<PAGE>
Upon written request to Brian B. Obie, CEO and President of Obie Media
Corporation, 4211 West 11th Avenue, Eugene, OR 97402, shareholders will be
furnished a copy of any exhibit, upon payment of $.25 per page, which represents
Obie's reasonable expense in furnishing the exhibit requested.

(b)  Reports on Form 8-K.    Obie Media furnished the following reports on Form
                             8-K during fiscal 2003:
     April 7, 2003           Announcing operating results for the quarter ended
                             February 28, 2003
     May 22, 2003            Announcing that the company has moved from the
                             NASDAQ National listing service to the SmallCap
                             listing service
     July 14, 2003           Announcing operating results for the quarter ended
                             May 31, 2003
     October 16, 2003        Announcing operating results for the quarter ended
                             August 31, 2003
     October 31, 2003        Announcing the company was exiting the Pittsburgh
                             transit market

     The Company also filed a Form 8-K on January 14, 2004 announcing the
     consumation of new financing arrangements.


SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


OBIE MEDIA CORPORATION

Dated:   March 15, 2004         By /s/ BRIAN B. OBIE
                                Brian B. Obie, Chairman, President
                                and Chief Executive Officer


In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

                                PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:

Dated:   March 15, 2004         By /s/ BRIAN B. OBIE
                                Brian B. Obie, Chairman, President
                                and Chief Executive Officer

                                PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:

Dated:   March 15, 2004         By /s/ GARY F. LIVESAY
                                Gary F. Livesay, Chief Financial Officer

                                DIRECTORS:

Dated:   March 15, 2004         By /s/ DELORES M. MORD
                                Delores M. Mord, Director
<PAGE>

Dated:   March 15, 2004         By /s/ RANDALL C. PAPE
                                Randall C. Pape, Director

Dated:   March 15, 2004         By /s/ STEPHEN A. WENDELL
                                Stephen A. Wendell, Director

Dated:   March 15, 2004         By /s/ RICHARD C. WILLIAMS
                                Richard C. Williams, Director




















































<PAGE>
OBIE MEDIA CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Auditors                                             F-2

Consolidated Balance Sheet as of November 30, 2003 and 2002                F-3

Consolidated Statement of Operations for the years ended
          November 30, 2003, 2002 and 2001                                 F-5

Consolidated Statement of Changes on Shareholders' Equity
          for the years ended November 30, 2003, 2002 and 2001             F-7

Consolidated Statement of Cash Flows for the years ended
          November 30, 2003, 2002 and 2001                                 F-8

Notes to Consolidated Financial Statements                                 F-10










































<PAGE>
Report of Independent Auditors

To the Board of Directors and Shareholders of
Obie Media Corporation:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, changes in shareholders' equity, and of
cash flows present fairly, in all material respects, the financial position of
Obie Media Corporation and its subsidiaries at November 30, 2003 and November
30, 2002, and the results of their operations and their cash flows for each of
the three years in the period ended November 30, 2003 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule included in Item
15(a) presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," on December 1, 2002. As discussed in
Note 1 to the consolidated financial statements, the Company adopted the
provisions of Statements of Financial Accounting Standards No. 144 and No. 146,
"Accounting for the Impairment of Long-lived Assets," and "Accounting for Costs
Associated with Exit or Disposal Activities," on December 1, 2001

March 12, 2004
Portland, Oregon





















                                       F-2


<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 2003 AND 2002
<TABLE>
<CAPTION>

                                                                              2003           2002
                                                                          ------------------------------
ASSETS
CURRENT ASSETS
<S>                                                                          <C>             <C>
          Cash                                                               $1,943,169      $1,815,886
          Accounts receivable, net of allowance for doubtful accounts
              of $592,163 and $1,938,537, respectively                        5,774,226       7,327,681
          Refundable income taxes                                                               121,055
          Prepaid expenses and other current assets                           5,099,504       4,869,804
          Deferred income taxes                                               1,543,750       1,732,395
                                                                          ------------------------------
                     TOTAL CURRENT          ASSETS                           14,360,649      15,866,821
                                                                          ------------------------------

PROPERTY AND EQUIPMENT, NET                                                  14,886,619      15,864,193

OTHER ASSETS
          Goodwill                                                            5,448,552       5,448,552
          Other assets, net                                                     749,936         947,322

                                                                          ------------------------------
                     TOTAL ASSETS                                           $35,445,756     $38,126,888
                                                                          ==============================
</TABLE>



                                       F-3
Continued
























<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 2003 AND 2002
(CONTINUED)
<TABLE>
<CAPTION>
                                                                      2003           2002
                                                                 -------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
<S>                                                                  <C>             <C>
          Current portion of long-term debt                          $1,723,695      $2,847,311
          Line of credit                                              3,890,483       2,980,483
          Accounts payable                                              307,901         283,075
          Accrued transit fees                                        1,148,124       1,102,519
          Accrued expenses                                            1,220,754         737,698
          Income taxes payable                                          214,540               -
          Unearned revenue                                              928,051         767,637
                                                                 -------------------------------
                     Total current liabilities                        9,433,548       8,718,723

DEFERRED INCOME TAXES                                                 1,586,631       1,573,729

LONG TERM DEBT, LESS CURRENT PORTION                                 17,246,748      17,707,306
                                                                 -------------------------------
                                                                     28,266,927      27,999,758
                                                                 -------------------------------

COMMITMENTS  AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY
          Preferred stock, without par value, 10,000,000 shares
            authorized, no shares issued and outstanding
          Common stock, without par value, 20,000,000 shares
             authorized, 5,913,602 and 5,908,577 shares issued
             and outstanding, respectively                           17,282,128      17,272,128
          Other comprehensive income                                   (45,495)           5,350
          Accumulated deficit                                      (10,057,804)     (7,150,348)
                                                                 -------------------------------
                     Total shareholders' equity                       7,178,829      10,127,130
                                                                 -------------------------------
                     TOTAL LIABILITIES AND
                     SHAREHOLDERS' EQUITY                           $35,445,756     $38,126,888
                                                                 ===============================
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                       F-4










<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED NOVEMBER 30, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
                                                     2003           2002           2001
                                                ----------------------------------------------
REVENUES:
<S>                                                <C>             <C>             <C>
       Outdoor advertising                         $ 6,945,164     $6,735,537      $6,732,336
       Transit advertising                          36,172,176     37,547,635      36,160,064
                                                ----------------------------------------------
                     Net revenues                   43,117,340     44,283,172      42,892,400

OPERATING EXPENSES:
       Production and installation                   6,247,029      6,476,412       6,261,254
       Occupancy                                    19,374,636     18,299,548      20,163,299
       Sales                                         7,726,752      8,571,638       8,219,734
       General and administrative                    7,323,877      7,891,548       9,191,412
       Depreciation and amortization                 1,752,421      2,181,490       2,077,365

                                                ----------------------------------------------
                     Operating income (loss)           692,625        862,536     (3,020,664)

INTEREST EXPENSE                                     2,333,805      1,724,994       1,337,136
                                                ----------------------------------------------

 LOSS FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                             (1,641,180)      (862,458)     (4,357,800)

PROVISION FOR (BENEFIT FROM) INCOME TAXES             502,236                       (923,957)


                                                ----------------------------------------------
 LOSS FROM CONTINUING OPERATIONS                   (2,143,416)      (862,458)     (3,433,843)
                                                ----------------------------------------------

DISCONTINUED OPERATIONS (NOTE 1)
   LOSS FROM DISCONTINUED OPERATIONS                 (764,040)    (1,154,069)     (4,905,872)
   INCOME TAX  BENEFIT                                       -                    (1,091,327)

                                                ----------------------------------------------
   LOSS ON DISCONTINUED OPERATIONS                   (764,040)    (1,154,069)     (3,814,545)
                                                ----------------------------------------------
                                                ----------------------------------------------
NET  LOSS                                         $(2,907,456)   $(2,016,527)    $(7,248,388)
                                                ==============================================
</TABLE>
                                       F-5
Continued










<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED NOVEMBER 30, 2003, 2002 AND 2001
(CONTINUED)
<TABLE>
<CAPTION>
                                                     2003           2002           2001
                                                ----------------------------------------------
<S>                                                  <C>            <C>            <C>
BASIC NET LOSS PER SHARE:
   LOSS FROM CONTINUING OPERATIONS                   $  (0.36)      $  (0.14)      $   (0.58)
   LOSS FROM DISCONTINUED OPERATIONS                    (0.13)         (0.20)          (0.65)

                                                ----------------------------------------------
NET LOSS PER SHARE                                   $  (0.49)      $  (0.34)      $   (1.23)
                                                ==============================================

DILUTED LOSS PER SHARE:
   LOSS FROM CONTINUING OPERATIONS                   $  (0.36)      $  (0.14)      $   (0.58)
   LOSS FROM DISCONTINUED OPERATIONS                    (0.13)         (0.20)          (0.65)

                                                ----------------------------------------------
NET LOSS PER SHARE                                   $  (0.49)      $  (0.34)      $   (1.23)
                                                ==============================================
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements

                                       F-6































<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED NOVEMBER 30, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
                                                                                         CUMULATIVE       RETAINED
                                                                                           OTHER          EARNINGS
                                               COMMON STOCK                 NOTE       COMPREHENSIVE   (ACCUMULATED)
                                          SHARES         AMOUNT          RECEIVABLE    INCOME (LOSS)     (DEFICIT)         TOTAL
                                       --------------------------------------------------------------------------------------------
<S>                                        <C>           <C>              <C>               <C>          <C>           <C>
BALANCE, November 30, 2000                 5,896,232     $17,172,128      $(59,895)         $(2,203)     $2,114,567    $19,224,597
Issuance of common stock for
  benefit plan and option exercises           12,345         100,000                                                       100,000
Collection of note receivable                                                59,895                                         59,895
Foreign currency translation                                                                  13,231                        13,231
Net loss                                                                                                (7,248,388)     (7,248,388)

                                       --------------------------------------------------------------------------------------------
BALANCE, November 30, 2001                 5,908,577      17,272,128                          11,028    (5,133,821)     12,149,335

Foreign currency translation                                                                 (5,678)                        (5,678)
Net loss                                                                                                (2,016,527)     (2,016,527)

                                       --------------------------------------------------------------------------------------------
BALANCE, November 30, 2002                 5,908,577      17,272,128             $0            5,350    (7,150,348)     10,127,130

Issuance of common stock for consulting
  services                                     5,025          10,000                                                        10,000
Foreign currency translation                                                                (50,845)                       (50,845)
Net loss                                                                                                (2,907,456)     (2,907,456)

                                       --------------------------------------------------------------------------------------------
BALANCE, November 30,2003                  5,913,602     $17,282,128             $0        $(45,495)  $(10,057,804)     $7,178,829
                                       ============================================================================================
</TABLE>


    The accompany notes are an integral part of these consolidated financial
                                   statements.

                                       F-7


















<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 2003, 2002 AND 2001
<TABLE>
<CAPTION>
                                                                            2003            2002            2001
                                                                        ----------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITES:
<S>                                                                      <C>              <C>            <C>
Net income loss                                                          $(2,907,456)     $(2,016,527)   $(7,248,388)
Adjustments to reconciled net loss to net cash provided
  by (used in) operating activities:
          Depreciation and amortization                                     1,752,421        2,181,490      2,077,365
          Provision for transit contract losses                                                             6,007,233
          Deferred income taxes                                               201,547          161,573    (1,261,373)
          Common stock issued for consulting services                          10,000
          Loss on sale of assets                                               10,809
          Change in assets and liabilities:
                (Increase) decrease in:
                     Accounts receivable                                    1,553,455        4,500,873    (2,554,872)
                     Refundable income taxes                                  121,055        1,759,986    (1,881,041)
                     Prepaid expenses and other assets                      (181,964)          115,993        286,843
                Increase (decrease) in:
                     Accounts payable                                          24,827        (919,058)        187,954
                     Accrued expenses                                         528,657      (3,956,853)      3,433,240
                     Unearned revenue                                         160,414        (450,451)       (67,277)
                     Income taxes payable                                     214,540        (286,197)      (211,307)
                                                                        ----------------------------------------------
            NET CASH PROVIDED BY (USED IN )OPERATING ACTIVITIES             1,488,305        1,090,829    (1,231,623)
                                                                        ----------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITES:
Capital acquisitions                                                        (658,654)        (894,755)    (1,324,931)
Proceeds from sale of assets                                                   22,650
Other investing activities                                                                                    (2,525)
Purchase of minority interest in subsidiary                                                  (300,000)
                                                                        ----------------------------------------------
            NET CASH USED IN INVESTING ACTIVITIES                           (636,004)      (1,194,755)    (1,327,456)
                                                                        ----------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit                                              910,000        1,283,366      1,697,117
Proceeds from long-term debt                                                  159,174        1,525,000        697,876
Proceeds from common stock note receivable                                                                     59,895
Payments on long-term debt                                                (1,743,347)      (1,287,349)      (139,200)
                                                                        ----------------------------------------------
            NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES             (674,173)        1,521,017      2,315,688
                                                                        ----------------------------------------------
</TABLE>

                                       F-8
Continued







<PAGE>
OBIE MEDIA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 2003, 2002 AND 2001
(CONTINUED)
<TABLE>
<CAPTION>
                                                                            2003            2002            2001
                                                                        ----------------------------------------------

<S>                                                                          <C>               <C>             <C>
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                      (50,845)          (5,678)         13,231
                                                                        ----------------------------------------------

NET INCREASE (DECREASE) IN CASH                                               127,283        1,411,413      (230,160)
CASH, BEGINNING OF PERIOD                                                   1,815,886          404,473        634,633
                                                                        ----------------------------------------------

CASH, END OF PERIOD                                                        $1,943,169       $1,815,886       $404,473
                                                                        ==============================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Issuance of stock to consultant                                               $10,000
Issuance of restricted stock to executives                                     37,471
Issuance of stock to employee benefit plan                                                                   $100,000
Issuance (reduction) of note payable for business acquisition                                 $225,000      (232,888)
Issuance of note payable for Chicago Transit Authority settlement                            6,095,348
Costs associated with financing activities                                                     240,000

CASH PAID FOR INTEREST                                                      2,197,211        1,687,022      1,336,029

CASH PAID FOR TAXES                                                            38,135           69,084      1,315,626
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                       F-9























<PAGE>
OBIE MEDIA CORPORATION

Notes to Consolidated Financial Statements
November 30, 2003, 2002 and 2001


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPANY

Obie Media Corporation (the Company) is a full service out-of-home advertising
company which markets advertising space primarily on transit vehicles and
outdoor advertising displays (billboards and wallscapes). At November 30, 2003,
the Company had 38 exclusive agreements with transit districts in the United
States and Canada to operate transit advertising displays. These transit
districts are located in, among other advertising markets: Dallas; Portland,
Oregon; Sacramento; Hartford; Ft. Lauderdale, St. Louis and Vancouver, British
Columbia. The Company also operates and generally owns advertising displays on
billboards and walls primarily located in Washington, Oregon, California,
Montana, Wyoming and Idaho.

BASIS OF PRESENTATION

The consolidated financial statements include the Company, its wholly owned
subsidiaries, Obie Media Limited, OB Walls, Inc. and Select Media, Inc. All
significant inter-company accounts and transactions between the Company and its
subsidiaries have been eliminated in consolidation.

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company's foreign subsidiary, Obie Media
Limited, are translated into United States dollars using exchange rates at the
balance sheet date for assets and liabilities, and average exchange rates for
the period for revenues and expenses. The effect of the foreign currency
translation was insignificant for the years ended November 30, 2003, 2002 and
2001.

USE OF ESTIMATES

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

REVENUE RECOGNITION

The Company has contracts to provide advertising to its customers. Advertising
revenue is recognized ratably over the period the advertising is displayed.
Payments received and amounts billed for advertising revenue in advance of
display are deferred. Costs incurred for the production and installation of
displays for advertising, which are paid for by the customer ratably over the
term of the advertising contract, are deferred and recognized as expense as the
related revenue is recognized over the life of the respective contracts.
<PAGE>
CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash and accounts receivable. The Company
places its cash with high credit quality financial institutions. Concentrations
of credit risk with respect to accounts receivable are not significant due to
the large number of customers, and their dispersion across different industries
and geographic areas.

At November 30, 2003, the Company had agreements with 38 transit districts.
Customers advertising on transit vehicles owned by the eight largest transit
districts, of Dallas, Portland, Oregon, Vancouver, British Columbia, St. Louis,
Sacramento, Ft. Lauderdale, Hartford and Palm Beach represented approximately
50.0 percent of the Company's total net revenues from continuing operations for
the year ended November 30, 2003. No single advertising customer represented 10
percent or more of the Company's revenues for any of the periods presented in
the accompanying financial statements.

Transit agreements range from one to five years and are subject to renewal
either at the discretion of the transit district or upon the mutual agreement of
the Company and the transit district. Generally, these agreements require the
Company to pay the transit district the greater of a percentage of the related
advertising revenues, net of the advertising production charges, or a guaranteed
minimum amount (Note 9).

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash, accounts receivable,
accounts payable, accrued expenses and debt instruments. At November 30, 2003
and 2002, the fair value of the Company's financial instruments are estimated to
be equal to their reported carrying value. The carrying value of long-term debt
approximates fair value. The resulting estimates of fair value require
subjective judgments and are approximations. Changes in the methodologies and
assumptions could significantly affect the estimates.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided on the
straight-line method over the estimated useful lives. Additions and
improvements, including interest incurred during construction, are capitalized.
Normal repairs and maintenance are expensed as incurred. The cost and
accumulated depreciation of assets sold or otherwise retired are removed from
the accounts and the resulting gain or loss is recognized. Property and
equipment are periodically evaluated for impairment when facts and circumstances
indicate the value of such assets may be impaired.

GOODWILL AND OTHER ASSETS

The Company ceased the amortization of goodwill effective December 1, 2002 in
order to comply with the provisions of SFAS 142. SFAS No. 142 further requires
goodwill to be tested for impairment annually and under certain circumstances
written down when impaired, rather than being amortized as previous standards
required. To comply with this provision of SFAS 142, the Company completed a
comprehensive goodwill impairment analysis during the six months ended May 31,
2003. Based upon the analysis, the Company has concluded that as of December 1,
2002 and May 31, 2003, there was no goodwill impairment. The Company updated its
goodwill impairment analysis through November 30, 2003 and concluded that as of
November 30, 2003, there was no goodwill impairment. The Company may be
required, under certain circumstances, to update its impairment analysis and may
incur losses on its acquired goodwill.

The following table summarizes the impact of SFAS 142 on net loss and net loss
per share had SFAS 142 been in effect for the years ended November 30, 2002, and
2001:
<PAGE>
<TABLE>
<CAPTION>
                                          Years ended November 30,
                                (in thousands except for per share data)

                                                      2003       2002         2001
                                                      ----       ----         ----

<S>                                                 <C>        <C>         <C>
Net loss as reported                                $(2,907)   $(2,017)    $(7,248)
Add amortization of goodwill                                        502         504
Income tax effect
Adjusted net loss                                    (2,907)    (1,515)     (6,744)

Adjusted net loss per share, basic and diluted       $(0.49)    $(0.26)     $(1.14)
Net loss per share as reported, basic and diluted    $(0.49)    $(0.34)     $(1.23)
</TABLE>


Pursuant to Statement of Financial Accounting Standards (SFAS) No. 142,
"Goodwill and Other Intangible Assets", the Company will no longer amortizes
goodwill effective December 1, 2002. The Company will test goodwill annually for
impairment as required by SFAS No. 142.

Other long-lived assets are periodically evaluated when facts and circumstances
indicate that the value of such assets may be impaired.

Other assets include loan costs, which are stated at cost and amortized over the
life of the loan.

INCOME TAXES

The Company uses the liability method to record deferred tax assets and
liabilities that are based on the difference between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. These
temporary differences result from the use of different accounting methods for
financial statement and tax reporting purposes. The measurement of deferred tax
assets is reduced by a valuation allowance, if necessary, by the amount of any
tax benefits that, based upon available evidence, are not expected to be
realized.

EARNINGS PER SHARE

Basic earnings per share (EPS) and diluted EPS are computed using the methods
prescribed by Statement of Financial Accounting Standards (SFAS) No.
128,"Earnings per Share." Basic EPS is calculated using the weighted average
number of common shares outstanding for the period and diluted EPS is calculated
using the weighted average number of common shares and potentially dilutive
shares outstanding during the period if the effect is dilutive. Potentially
dilutive shares outstanding during the years ended November 30, 2003, 2002 and
2001, respectively, were excluded from the computation of diluted EPS as they
would be antidilutive.








<PAGE>
Following is a reconciliation of basic EPS and diluted EPS:
<TABLE>
<CAPTION>
                                                YEAR ENDED NOVEMBER 30, 2003
                                                ----------------------------
                                                                         PER SHARE
                                              (LOSS)          SHARES       AMOUNT
                                          ---------------- ------------- -----------
<S>                                          <C>              <C>           <C>
Basic EPS-
Loss attributable to common shareholders:
From continuing operations                   $(2,143,416)     5,910,584     $(0.36)
From discontinued operations                    (764,040)     5,910,584      (0.13)
                                          ---------------- ------------- -----------
                                              (2,907,456)     5,910,584      (0.49)
Effect of dilutive Securities-
Stock options                                    -              -            -
                                          ---------------- ------------- -----------
Diluted EPS-
Loss attributable to common shareholders     $(2,907,456)    5,910,584      $(0.49)
                                          ================ ============= ===========

                                                YEAR ENDED NOVEMBER 30, 2002
                                                                         PER SHARE
                                              (LOSS)          SHARES       AMOUNT
                                          ---------------- ------------- -----------
Basic EPS-
Loss attributable to common shareholders:
From continuing operations                     $(862,458)     5,908,577     $(0.14)
From discontinued operations                  (1,154,069)     5,908,577      (0.20)
                                          ---------------- ------------- -----------
                                              (2,016,527)     5,908,577      (0.34)
Effect of dilutive Securities-
Stock options                                    -              -            -
                                          ---------------- ------------- -----------
Diluted EPS-

Loss attributable to common shareholders     $(2,016,527)     5,908,577   $(0.34)
                                          ================ ============= ===========

                                                YEAR ENDED NOVEMBER 30, 2001
                                                                         PER SHARE
                                              (LOSS)          SHARES       AMOUNT
                                          ---------------- ------------- -----------
Basic EPS-
Loss attributable to common shareholders:
From continuing operations                   $(3,433,843)     5,904,146     $(0.58)
From discontinued operations                  (3,814,545)     5,904,146      (0.65)
                                          ---------------- ------------- -----------
                                              (7,248,388)     5,904,146      (1.23)
Effect of dilutive Securities-
Stock options                                    -              -            -
                                          ---------------- ------------- -----------
Diluted EPS-
Loss attributable to common shareholders     $(7,248,388)     5,904,146     $(1.23)
                                          ================ ============= ===========
</TABLE>
<PAGE>
At November 30, 2003, 2002 and 2001, the Company had 518,298, 670,181 and
673,736 stock options outstanding, respectively, of the Company's common stock
that were not considered in the respective diluted EPS calculations since they
would have been antidilutive.

COMPREHENSIVE INCOME

The objective of reporting comprehensive income is to report a measure of all
changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners. Comprehensive
loss totaled $(2,958,301), $(2,022,205) and $(7,235,157) for the years ended
November 30, 2003, 2002 and 2001, respectively.

DISCONTINUED OPERATIONS

Effective during its fiscal year ending November 30, 2002, the Company adopted
Statements of Financial Accounting Standards No. 144 and No. 146 "Accounting for
the Impairment of Long-Lived Assets" (SFAS No. 144) and "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS No. 146).

Pursuant to SFAS No. 144, the Company has classified as "Discontinued
Operations" the results of operations and any exit costs associated with expired
or terminated transit district agreements that were economically not viable and
where the Company plans to or has already exited the market or intends not to be
competitive participant in new contract awards for expiring agreements.
Accordingly, the Company exited these markets and has no ongoing advertising
operations. These operations qualify as components of an entity with separate
financial reporting as described in SFAS No. 144. The assets associated with the
discontinued markets are, in the aggregate, not material. Following is a summary
of results of operations charged to discontinued operations:

Fiscal 2003     Santa Cruz, CA; Bridgeport, CT; Chicago, IL; San Antonio, TX;
                Pittsburgh, PA;
Fiscal 2002     Santa Cruz, CA; Bridgeport, CT; Chicago, IL; San Antonio, TX;
                Cincinnati, OH; Kitsap, WA; and Pickering, Whitby, Cambridge
                and St. Catharines, ONT, Canada
Fiscal 2001     Santa Cruz, CA; Bridgeport, CT; Chicago, IL; San Antonio, TX;
                Cincinnati, OH; Cleveland, OH; Kitsap, WA; and Pickering,
                Whitby, Cambridge and St. Catharines, ONT, Canada

Net revenues and the components of net loss related to the discontinued
operations were as follows:

                                               YEARS ENDED NOVEMBER 30

                                            2003         2002        2001
                                            ----         ----        ----

Net revenues                              $506,212    $2,077,050  $21,448,426
                                     =============== ============ ============

Loss from discontinued operations
   before income taxes                    (764,040)   (1,154,069)  (4,905,872)
Income tax benefit                                                 (1,091,327)
                                     --------------- ------------ ------------
Net loss from discontinued                $(764,040) $(1,154,069) $(3,814,545)
                                     =============== ============ ============
   Operations


STOCK-BASED COMPENSATION

The Company measures compensation expense for its stock-based employee
compensation plans using the intrinsic value method under Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" , (APB 25), and
provides pro forma disclosures of net income (loss) and net income (loss) per
common share as if the fair value method had
<PAGE>
been applied in measuring compensation expense in accordance with Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation", (SFAS 123). Equity instruments are not granted to non-employees,
other than directors, as defined in the respective plan agreements.

As required by SFAS 123, the Company computed the value of options granted
during 2003, 2002, and 2001 using the Black-Scholes option pricing model for pro
forma disclosure purposes. The weighted average assumptions used for stock
option grants for 2003, 2002 and 2001 were risk-free interest rates of 3.3%,
4.9%, and 5.2%, respectively, expected dividend yields of 0%, expected lives of
6.0 years and expected volatility of 84.6%, 81.5%, and 71.5%, respectively.

Options are assumed to be exercised upon vesting for purposes of this valuation.
Adjustments are made for options forfeited as they occur. For the years ended
November 30, 2003, 2002, and 2001, the total value of the options granted was
approximately $20,636, $357,879, and $567,565, respectively, which would be
amortized on a straight-line basis over the vesting periods of the options.

Had Obie accounted for these plans in accordance with SFAS 123, the Company`s
net (loss) income and pro forma net (loss) income per share would have been
reported as follows:

                                                  Years ended November 30,
                                        (In thousands, except per share amounts)

                                                2003         2002         2001
                                                ----         ----         ----

Net loss as reported                          $(2,907)    $(2,017)      $(7,248)


Deduct total stock-based compensation expense    (245)       (484)         (518)
determined under fair value based method for
all awards, net of related tax effects

Pro-forma net loss                            $(3,152)    $(2,501)      $(7,766)

NET LOSS PER SHARE
Basic and diluted:
As reported                                    $(0.49)     $(0.34)       $(1.23)
Pro forma                                      $(0.53)     $(0.42)       $(1.32)


The effects of applying SFAS No. 123 for providing pro forma disclosure for
2003, 2002, and 2001 are not likely to be representative of the effects on
reported net (loss) income and net (loss) income per share for future years
since options vest over several years and additional awards are made each year.














<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS

On October 3, 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 supercedes Statement of Financial Accounting Standards No.
121 (SFAS No. 121), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 144 applies to all long-lived
assets (including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business". SFAS No. 144 develops one
accounting model for long-lived assets that are to be disposed of by sale. SFAS
No. 144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book value or fair value less the cost to sell. SFAS
No. 144 is effective for fiscal years beginning after December 15, 2001,
however, earlier adoption is permitted. The Company early adopted the provisions
of SFAS No. 144 in fiscal 2002 and has recorded the results of operations from
transit markets that it has exited as discontinued operations.

On June 28, 2002, the FASB adopted Statement of Financial Accounting Standards
No. 146 (SFAS No. 146), "Accounting for Exit or Disposal Activities," effective
for exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. SFAS No. 146 addresses significant issues
regarding the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including restructuring activities
that are currently accounted for pursuant to the guidance that the Emerging
Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". The Company
early adopted the provisions of SFAS No. 146 in fiscal 2002 and has recorded
exit costs relating to contract terminations resulting from its exit of certain
transit markets in accordance with the provisions of SFAS No. 146. These costs
have been recorded as a component of discontinued operations in accordance with
SFAS No. 144.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, (SFAS No. 148), "Accounting for Stock-Based Compensation - Transition
and Disclosure - an amendment of FAS 123." SFAS No. 148 amends Statement of
Financial Accounting Standards No. 123, (SFAS No. 123) "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures about the method
of accounting for stock-based employee compensation and the effect of the method
used on reported results. Finally, SFAS No.148 amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The amendments to the transition and disclosure
provisions is effective for fiscal years ending after December 15, 2002. The
amendment to Opinion 28 is effective for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. We
adopted the disclosure provisions of SFAS No. 148 during our quarter ended May
31, 2003.

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" . FIN 45, which elaborates on the
disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for the financial statements of interim or annual
reports ending after December 15, 2002. The Company has adopted the disclosure
requirements of FIN 45. The adoption of the disclosure requirements of FIN 45
did not have a material effect on the Company s financial position or results of
operations.

RECLASSIFICATIONS

         Certain amounts previously reported in the 2002 and 2001 financial
statements have been reclassified to conform to the 2003 financial statement
classifications which had no impact on our net loss or shareholders' equity.
<PAGE>
2.       DEBT FINANCING ARRANGEMENTS AND LIQUIDITY

The Company has experienced a net loss of $2,907,456 during the year ended
November 30, 2003 but had positive cash flow from operations of $1,488,305.
Despite the unfavorable loss, the Company has been able to fulfill its needs for
working capital and capital expenditures. Company borrowings at November 30,
2003 were $22.9 million on an asset base of $35.4 million. As of November 30,
2003, the Company had a $4,500,000 operating line of credit with U.S. Bank. The
interest rate is U.S. Bank's prime rate plus 3.75% (7.75% at November 30, 2003)
with collateral of receivables, equipment, inventory, and contract rights. The
outstanding balance on this line of credit was $3,890,483 at November 30, 2003.
The Company also had a term loan with U.S. Bank at prime plus 4.25% (8.25% at
November 30, 2003) collateralized by substantially all of the Company's assets.

On January 14, 2004, we entered into a new long-term financing arrangement with
CapitalSource Finance LLC. The arrangements with the Company includes a $17.5
million term loan and a $6.0 million revolver both of which mature on November
30, 2008. In addition, the arrangement includes a $2.5 million term loan with
Obie Media Ltd. (the Company's Canadian subsidiary) which matures on January 31,
2009.

The interest charged on the loans is the greater of prime plus a margin that is
dependant upon Obie's leverage ratio, or 9.5% on the term loans or 8.5% on the
revolver. The margin in effect at the time the financing closed was 5.5% on the
term loans and 4.5% on the revolver. The first date that this margin may be
adjusted is the quarter ending February 28, 2004.

In January 2004, funds from the term loans were used to (1) pay off the existing
term loan with the previous lender, (2) pay off the balance of the settlement
obligation with the Chicago Transit authority, and (3) pay off the promissory
note related to the purchase of the minority interest of O. B. Walls, Inc. Funds
from use of the revolver were used to pay off the existing revolver with the
previous lender and to fund closing costs and working capital needs.
Availability under the revolver amounted to approximately $1.5 million
subsequent to closing.

This new financing arrangement with CapitalSource Finance, LLC allowed us to
consolidate debt obligations, provide $1.5 million additional revolver
availability, and restructure principal payment obligations to better fit the
growth and cash flow needs of the Company. The term loan principal payment
amounts are $1.0 million in fiscal 2004, $1.0 million in fiscal 2005, $2.0
million in fiscal 2006, $3.0 million in fiscal 2007, $11.1 million in fiscal
2008, with the balance due at maturity. The revolver balance is due in full at
maturity.

The loan agreement with CapitalSource Finance, LLC contains financial covenants
regarding (1) minimum rolling EBITDA, (2) maximum leverage ratios, (3)
fixed-charge coverage ratios, and (4) interest coverage ratios, all of which are
measured on a quarterly basis. The first measurement date will be as of February
29, 2004. The loan agreement also restricts the Company's ability to pay
dividends. The loans are collateralized by substantially all of the assets of
the Company.

The Company believes that its prospective needs for working capital and capital
expenditures will be met from cash flows generated by operations and borrowings
pursuant to the bank line of credit. If operations are not consistent with
management's plan due to risks and uncertainties including failure to conclude
favorable negotiations on pending transactions with existing transit agency
partners or to successfully assimilate expanded operations, inability to
generate sufficient advertising revenues to meet contractual guarantees,
potential for cancellation or interruption of contracts with government
agencies, a further decline in the demand for advertising in markets where the
Company conducts business, slower than expected acceptance of the Company's
display products, increased competition and price pressures, and changes in
regulatory or other external factors, then there can be no assurance that the
amounts from these financial sources will be sufficient for such purposes. In
any of the above events or for other reasons, the Company may be required to
seek alternative financing arrangements. There is no
<PAGE>
assurance that such sources of financing will be available if required, or if
available, with be on terms satisfactory to the Company.

3.       CONTRACT TERMINATION

         On December 5, 2001 the Company received notice from the Chicago
Transit Authority (CTA) that it was terminating the Company's transit
advertising agreement effective as of that date. The Company and the CTA had
been disputing settlement of 2001 transit fees in light of the nature of the
early termination and a shortage of advertising space made available to the
Company, and the parties entered into an agreement effective May 28, 2002
resolving all of the outstanding issues.

         The agreed upon fee for the 2001 contract year was settled on May 28,
2002 at $17 million, substantially less than the original contracted guaranteed
payment of $21.8 million. As of May 31, 2002, approximately $7.5 million had
been paid to the CTA, and an additional $1.5 million was paid on June 1, 2002.
The balance is payable in substantially equal monthly payments of $116,080
beginning June 2002 and ending May 2007, with an additional $1.0 million balloon
payment due in January 2004. The monthly payments are without interest through
May 2003, and include a 5% interest charge thereafter. The entire unpaid balance
of this obligation was paid off on January 15, 2004 with the proceeds from the
financing with CapitalSource Finance LLC discussed in Note 6. These periodic
deferred payments have been valued using a junior unsecured discount rate of
15%, resulting in a present value of $6.1 million, which is included within
long-term debt in the accompanying balance sheet at November 30, 2003. The
result is a present value of $15.1 million for the settlement. The cost of the
settlement is covered by previous accruals, including an accrual which the
Company established in the third quarter of fiscal 2001. The remaining
settlement obligation as of November 30, 2003 was paid off in full on January
14, 2004 from proceeds of the Company's new debt arrangement as described in
Note 6.

4.         PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

                                                      NOVEMBER 30,
                                                  2003            2002
                                                  ----            ----

Prepaid leases                                   $423,821         $439,632
Transit advertising production costs            2,390,774        2,378,529
Transit fees                                    1,610,835        1,449,686
Other                                             674,074          601,957

                                           --------------- ----------------
                                               $5,099,504       $4,869,804
                                           =============== ================












<PAGE>
5.        PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

                                            NOVEMBER 30,
                                            ------------
                                        2003            2002       ASSET LIVES
                                        ----            ----       -----------

Outdoor advertising structures       $18,698,103     $18,420,326     20 years
Other equipment and leaseholds         7,240,185       6,907,458    5-20 years
                                  --------------- ---------------
                                      25,938,288      25,327,784
Less: accumulated depreciation        11,051,669       9,463,591
                                  --------------- ---------------
                                     $14,886,619     $15,864,193
                                  =============== ===============


6.        FINANCING ARRANGEMENTS

Long-term debt consists of the following:


                                            NOVEMBER 30,
                                            ------------
                                        2003            2002
                                        ----            ----

Term loan with U.S. Bank National
Association (U.S. Bank), with
quarterly reducing availability,
interest at prime rate plus 4.25%
and 3.0% respectively (8.25% and
7.5% at November 30, 2003 and 2002,
respectively); the loan is
collateralized by substantially all
of the Company's assets             $13,500,000      $14,400,000

Note payable to former shareholder
of P&C Media in monthly
installments of $20,300 without
interest due, March, 2003                                 81,200

Various notes payable with
collateral of vehicles, due 2004 to
2008                                    136,526

Note payable to former shareholder
of OB Walls, with monthly payments
of $5,284 including interest at 6%,
due November 2006; collateral of OB
Walls stock                             173,695          225,000








<PAGE>
                                        2003            2002
                                        ----            ----

Note payable to Chicago Transit
Authority relating to settlement of
contract termination; monthly
payments of $116,080 through May
2007, plus and additional interest
factor beginning in June 2003, with
a balloon payment of $1,000,000 due
January, 2004; the entire
obligation has been discounted
using a 15% discount rate             5,160,222        5,848,417
                                   --------------- --------------
                                     18,970,443       20,554,617
Less current portion                  1,723,695        2,847,311
                                   --------------- --------------
                                    $17,246,748      $17,707,306
                                   =============== ==============

As of November 30, 2003 the Company had a $4,500,000 operating line of credit
with U.S. Bank. The interest rate is at U.S. Bank's prime rate plus 3.75% (7.75%
at November 30, 2003) with collateral of receivables, equipment, inventory and
contract rights. The outstanding balance on this line of credit at November 30,
2003 and 2002 was $3,890,483 and $2,980,483 respectively.

On January 14, 2004 the Company entered into a new long-term financing agreement
with CapitalSource Finance, LLC. The arrangement includes a $17.5 million term
loan and a $6.0 million revolver to the parent company, both of which mature on
November 30, 2008. The arrangement also includes a $2.5 million term loan to
Obie Media Ltd., the Company's Canadian subsidiary which expires on January 31,
2009. Funds from the term loans were used to (1) pay off the existing term loan
with U.S. Bank, (2) pay off the balance of the settlement obligation with the
Chicago Transit Authority, and (3) pay off the promissory note related to the
purchase of the minority interest of O.B. Walls, Inc. The new revolver was used
to pay off the outstanding balance on the operating line of credit due to U.S.
Bank.

The aggregate principal payments due on the above debt subsequent to November
30, 2003, are presented below based on the terms of our new financing with
CapitalSource Finance LLC that closed on January 14, 2004:

                  Fiscal Year Ending
                    November 30,

          2004                      $1,723,695
          2005                       1,040,000
          2006                       2,040,000
          2007                       3,040,000
          2008                      11,100,000











<PAGE>
7.       INCOME TAXES

The provision for income taxes for the years ended November 30, 2003, 2002 and
2001 was comprised of the following:

                                                    NOVEMBER 30,
                                                    ------------
                                           2003         2002           2001
                                           ----         ----           ----

Provision for income taxes (benefit)
     Current                             $307,739     $(161,455)     $(753,911)
     Deferred                             194,497        161,455    (1,261,373)

                                        ---------- -------------- --------------
       Total provision (benefit)         $502,236          -       $(2,015,284)
                                        ========== ============== ==============


The tax effects of temporary differences that give rise to deferred tax assets
and liabilities are as follows:

                                                      NOVEMBER 30,
                                                      ------------
                                                 2003              2002
                                                 ----              ----
Current deferred tax assets:
   Deferred revenue                             $370,678           $351,603
   Allowance for doubtful accounts               217,378            636,526
   Accrued expenses and other                    116,099            106,803
   Net operating loss carryforward             3,505,614          2,198,146
   Valuation allowance                        (2,666,019)        (1,560,683)
                                           ------------------ ---------------

     Total current deferred tax assets        $1,543,750         $1,732,395
                                           ================== ===============

Non-current deferred tax liabilities:
   Property and equipment                     $1,586,631         $1,573,729
                                           ================== ===============


The valuation allowance is related to net operating loss carryforwards of
$9,160,046 which expire in 2023. Income tax expense for the years ended November
30, 2003, 2002 and 2001 differs from the amounts computed by applying the U.S.
federal income tax rate of 34 percent to pretax income, as follows:

                                                      YEAR ENDED NOVEMBER 30,
                                                      -----------------------
                                                      2003      2002     2001
                                                      ----      ----     ----

Statutory federal tax rate                           (34.0%)   34.0%     34.0%
Changes in income taxes resulting from
   Foreign taxes                                      11.9
   State and local taxes, net of federal tax benefit              3.5     1.8
   Net operating loss valuation allowance             47.8     (32.5)    (8.9)
   Other differences, net                             (4.8)      (5.0)   (5.2)
                                                    --------- --------- -------
      Actual income tax rate                         20.9%        0.0%   21.7%
                                                    ========= ========= =======
<PAGE>
8.     SHAREHOLDERS' EQUITY

The Company's Restated Articles of Incorporation authorize the issuance of up to
20,000,000 shares of common stock and 10,000,000 shares of preferred stock
issuable in a series (Preferred Stock).

PREFERRED STOCK

The Board of Directors is authorized, without further shareholder authorization,
to issue Preferred Stock in one or more series and to fix the terms and
provisions of each series, including dividend rights and preferences, conversion
rights, voting rights, redemption rights and rights on liquidation, including
preferences over common stock.

COMMON STOCK

Holders of common stock are entitled to one vote per share on all matters
requiring shareholder vote. Holders of common stock are entitled to receive
dividends when and as declared by the Board of Directors out of any funds
lawfully available therefor, and, in the event of liquidation or distribution of
assets, are entitled to participate ratably in the distribution of such assets
remaining after payment of liabilities, in each case subject to any preferential
rights granted to any series of Preferred Stock that may then be outstanding.

STOCK OPTIONS

On September 1, 1998, the Company granted non statutory stock options to the
former shareholder of P&C, as part of the acquisition of P&C (Note 1),
exercisable for 151,250 shares of the Company's common stock. Additionally, as
part of the acquisition, the Company granted non statutory stock options to the
legal counsel of the P&C shareholder exercisable for 12,100 shares of the
Company's common stock. Of the 163,350 stock options granted, 24,200 were
exercisable on the date of grant at an exercise price of $7.20 per share, and
were included in the purchase price for the acquisition of P&C. The remaining
139,150 options granted to the former shareholder of P&C became fully vested in
September 2001 in conjunction with his resignation from the Company.

In addition, on October 2, 1996 (amended April 21, 2000), the Company's Board of
Directors and shareholders adopted the 1996 Stock Incentive Plan (the Plan),
which provides for the issuance of 399,300 shares of common stock pursuant to
Incentive Stock Options (ISOs), Nonqualified Stock Options (NSOs), stock bonuses
and stock sales to employees, directors and consultants of the Company. During
the year ended November 30, 2000, the Company reserved an additional 150,000
shares of the Company's common stock for the issuance of stock options under the
Plan, and an additional 100,000 shares in the year ended November 30, 2001. ISOs
may be issued only to employees of the Company and will have a maximum term of
ten years from the date of grant. NSO's have a maximum life of 15 years. The
exercise price for ISO's may not be less than 100% of the fair market value of
the common stock at the time of the grant, and the aggregate fair market value
(as determined at the time of the grant) of shares issuable upon the exercise of
ISOs for the first time in any one calendar year may not exceed $100,000. In the
case of ISOs granted to holders of more than 10% of the voting power of the
Company, the exercise price may not be less than 110% of the fair market value
of the common stock at the time of the grant, and the term of the option may not
exceed five years. NSOs may be granted at not less than 85% of the fair market
value of the common stock at the date of grant. Options become exercisable in
whole or in part from time to time as determined by the Board of Directors'
Compensation Committee, which administers the Plan. Activity under the Plan is
summarized as follows:
<PAGE>
                                                                    WEIGHTED
                                       SHARES         SHARES        AVERAGE
                                     AVAILABLE     SUBJECT TO       EXERCISE
                                     FOR GRANT        OPTION         PRICE

Balances, November 30, 2000           104,598         427,486        $9.15
   Additional shares provided         100,000
   Options granted                   (118,833)        118,833         7.08
   Options cancelled                   49,243         (49,243)        9.91
                                    ------------- --------------- -------------
Balances, November 30, 2001           135,008         497,076         8.59
   Options granted                   (172,289)        172,289         3.78
   Options cancelled                  162,534        (162,534)        8.62
                                    ------------- --------------- -------------
Balances, November 30, 2002           125,253         506,831         6.95
   Options granted                    (15,568)         15,568         2.47
   Options cancelled                  172,476        (172,476)        7.22
                                    ------------- --------------- -------------
Balances, November 30, 2003           282,161         349,923        $6.62
                                    ============= =============== =============

The following table summarizes information about stock options outstanding at
November 30, 2003. Options on 349,923 shares were granted under the Company's
stock option plan, and options on an additional 168,375 shares were other option
grants.

<TABLE>
<CAPTION>
---------------------- --------------------- -------------------- -------------------- -------------------- ---------------------
                                              WEIGHTED AVERAGE
                                                  REMAINING                             NUMBER EXERCISABLE
  RANGE OF EXERCISE     NUMBER OUTSTANDING       CONTRACTUAL       WEIGHTED AVERAGE      AT NOVEMBER 30,      WEIGHTED AVERAGE
       PRICES           NOVEMBER 30, 2003        LIFE-YEARS         EXERCISE PRICE            2003             EXERCISE PRICE
---------------------- --------------------- -------------------- -------------------- -------------------- ---------------------
<S>                                 <C>                    <C>                  <C>                  <C>                   <C>
        $1.99 - $3.31               122,870                13.55                $3.01                7,800                 $3.09
          3.31 - 4.64                 3,993                13.40                 3.55                  798                  3.55
          4.64 - 5.96                49,247                 7.96                 5.00               49,247                  5.00
          5.96 - 7.28               157,878                 5.63                 7.11              141,947                  7.18
          7.28 - 8.61                73,017                 9.76                 8.22               39,104                  8.29
          8.61 - 9.93                68,272                 8.31                 8.94               68,146                  8.94
         9.93 - 11.26                10,800                10.96                10.87                7,140                 10.85
        11.26 - 12.58                19,269                11.72                11.49               10,621                 11.49
        12.58 - 13.90                   115                 9.58                12.60                  115                 12.60
      $13.90 - $15.23                12,837                10.59                15.06               12,102                 15.07

                       --------------------- -------------------- -------------------- -------------------- ---------------------
                                    518,298                 9.19                $6.75              337,020                 $7.74
                       ===================== ==================== ==================== ==================== =====================
</TABLE>

During 2003, the Company issued 5,025 shares of stock to a consultant and
recorded $10,000 of compensation expense.

The Company entered into restricted stock agreements with five executives in
November 2003 in exchange for certain of their stock options. The restricted
stock agreements were approved by the Company's board of directors. Under the
terms of the agreements, 71,508 shares of restricted stock were exchanged for
143,008 stock options. The restricted stock vests over five years. The fair
value of the restricted stock on the date of grant amounted to $187,351, of
which $37,471 was recorded as
<PAGE>
compensation expense in fiscal year 2003. There were no stock option grants to
the executives during the six month period prior to the exchange. The restricted
stock shares were issued in December 2003.

9.       COMMITMENTS, CONTINGENCIES AND CERTAIN RELATED-PARTY TRANSACTIONS

TRANSIT AGREEMENTS

Certain transit agreements require the Company to remit to the transit district
the greater of a percentage of the related advertising revenues or a guaranteed
minimum amount. At November 30, 2003 future guaranteed minimum payments under
the transit agreements are as follows:

                               FISCAL YEAR ENDING
                                  NOVEMBER 30,
                                  ------------
                                      2004                $15,216,000
                                      2005                 12,982,000
                                      2006                  3,737,000
                                      2007                    628,000
                                      2008                    721,000


OPERATING LEASES

The Company rents office and production space from affiliates. Such rents
totaled $343,668, $328,541 and $324,246 for the years ended November 30, 2003,
2002 and 2001, respectively.

The Company leases parcels of property beneath outdoor advertising structures.
These leases are generally for a term of up to ten years, with two five-year
renewal options at the Company's discretion. The Company also leases facilities
for sales, service and installation for its operating offices. Total rent
expense pursuant to these leases was $2,600,000, $2,700,000 and $2,100,000 for
the years ended November 30, 2003, 2002 and 2001, respectively.


At November 30, 2003, future minimum lease payments for all operating leases
described above are as follows:

                              FISCAL YEAR ENDING
                                 NOVEMBER 30,
                                 ------------
                                     2004                 $2,434,000
                                     2005                  1,874,000
                                     2006                  1,334,000
                                     2007                    695,000
                                     2008                    428,000
                                  Thereafter               1,011,000

OTHER COMMITMENTS

As of November 30, 2003 the Company had outstanding performance bonds of
approximately $7.2 million and letters of credit of approximately $200,000
provided to certain transit agencies in support of guaranteed payments.
<PAGE>
CONTINGENCIES

From time to time the Company is subject to legal proceedings and claims in the
ordinary course of business, The Company is not currently aware of any legal
proceedings or claims that will have a material adverse effect on the Company's
financial position, or results of operations or cash flows.

10.      EMPLOYEE BENEFIT PLAN

Substantially all of the Company's employees who have met vesting requirements
participate in a defined contribution benefit plan that provides for
discretionary annual contributions by the Company. During the years ended
November 30, 2003 and 2002 the Company has made no accrual for contributions to
the Plan. For the year ended November 30, 2001, the Company accrued $100,000 as
a contribution which was paid with 12,345 shares of the Company's common stock
and the balance in cash.

11.      GEOGRAPHIC INFORMATION

For geographic information, net revenues from continuing operations are
allocated between the United States of America and Canada, depending on whether
the advertising contracts are to customers within the United States or located
outside the United States. Long-lived assets outside the United States of
America were immaterial for all periods presented.

                                 YEAR ENDED NOVEMBER 30,
                          2003            2002             2001
                          ----            ----             ----

     Canada            $10,856,882      $8,395,681      $5,904,701
     United States      32,260,458      35,887,491      36,987,699
                     --------------- --------------- ---------------
                       $43,117,340     $44,283,172     $42,892,400
                     =============== =============== ===============

12.           ACQUISITIONS

In November 2002, the Company acquired all of the minority shareholder's
interest in its 50% owned joint venture, Obie Walls, LLC. Total consideration
paid was $300,000 and consisted of $75,000 cash and a $225,000 note payable. The
Company applied purchase accounting to record the acquisition of the minority
shareholder's 50% interest. As a result, the Company recorded $267,126 of
goodwill. The balance owing on the note payable was paid in full on January 15,
2004 from proceeds from the new financing arrangement described in Note 6.