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, 2001

                                       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 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:  $66,263,376

     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 a specified date within 60 days prior
to the date of filing:  $16,248,587  aggregate  market  value as of December 31,
2001, 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:  5,908,577 shares of Common
Stock, without par value, on February 15, 2002.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates information from the issuers definitive
proxy statement for the annual meeting of shareholders to be held on April 26,
2002.

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
otherwise indicated, the information contained in this Annual Report has been
restated to give retroactive effect to 11-for-10 stock splits declared in
October 1997, November 1998 and November 1999. 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, 2001, we had 41 exclusive
agreements with transit districts in the United States and Canada to operate
transit advertising displays. Subsequent to the date of this report, in December
2001, transit authorities canceled our contracts in Chicago and in St.
Catharines and Pickering, Ontario. The number of transit vehicles related to
these contracts totaled 3,115. For the purposes of forward-looking statements
regarding the number of transit contracts and vehicles available for
advertising, we have excluded these contracts.

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 8,000. We also operate and
generally own over 1,200 advertising displays on billboards and walls primarily
in Washington, Oregon, California, Montana, Wyoming and Idaho. Obie was formed
in 1987 as a subsidiary of Obie Industries Incorporated ("Obie Industries"), a
family-owned outdoor advertising business. To facilitate its IPO, 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. P & C had 19 agreements
with transit districts, including districts located in Hartford, New Haven, and
Stamford, Connecticut; Fort Lauderdale and West Palm Beach, Florida; Cincinnati
and Cleveland, Ohio; Richmond, Virginia; and Milwaukee, Wisconsin. 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 1993 and 2001,
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 2001, 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 1999, the OAAA
estimated that there were approximately 560,000 outdoor 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
thousands 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 1997
there were approximately 331 transit districts in the United States operating
more than 40,000 transit buses. The Canadian Urban Transit Association estimated
that approximately 11,548 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 "Direct
Advertising Expenses" and totaled in aggregate $34,031,882 in fiscal 2001.

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 strategy 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 our strategy:

*    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.

*    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.

*    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.

*    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.

*    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.
<PAGE>
*    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.

*    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 established national sales offices in
     Los Angeles, Chicago, New York City, San Francisco and Toronto, and we have
     a national sales presence in Dallas and a sales representation arrangement
     in Montreal. Management believes further growth and expansion into new
     markets will continue to increase our national sales.

*    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. In fiscal 2001, Obie hired 33
     additional local direct sales executives across many of our North American
     markets to help us compete better against other forms of local advertising
     media. Obie also offers comprehensive sales, marketing and creative
     services that make it easier for these potential customers to purchase
     out-of-home advertising.

*    Produce In-House the Vast Majority of the Product Generated Through Direct
     Local Sales. We seek to produce a significant amount of display content for
     our transit advertising customers which had previously been subcontracted
     to outside vendors.

Products and Markets

Obie  Media  offers  advertisers  a wide range of  out-of-home  advertising
products, including transit advertising and outdoor advertising displays. Obie's
product  mix  provides   advertisers  with  significant   flexibility  in  their
advertising  programs and allows it to cross-sell multiple products and leverage
its 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, 2001,  we had 41 exclusive  agreements
with  transit  districts  in the United  States  and  Canada to operate  transit
advertising  displays on over 8,000 transit vehicles,  excluding those contracts
with  districts in Chicago and Ontario that were canceled in December  2001. The
markets in which these remaining  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.
<PAGE>
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.  Transit  advertising  operators
often  must  post  performance  bonds or  letters  of  credit  to  secure  their
guarantees  under their  transit  agreements.  Obie Media's  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.  These  expenses  appear on Obie's  financial  statements
included  under  the  heading  "Direct  Advertising  Expenses"  and  totaled  in
aggregate  $34,031,882  million in fiscal 2001.  Obie also sells  advertising on
more than 700 transit  benches in Portland,  Oregon,  approximately  100 transit
shelters  in  Cincinnati,  and  more  than 300  benches  in Fort  Worth,  Texas.
Management believes these products complement Obie's other product offerings and
intends to attempt to secure additional  shelters,  dioramas and transit benches
in our markets.

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, 2001:
<PAGE>
<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)              1,136                  1998              2005
         Victoria and 27 smaller districts  NA                   380                    1998              2003
Ohio
         Cincinnati                         32                   385                    1981 (2)          2003
Texas
         Dallas                             7                    809                    1997              2002
         Austin                             58                   303                    1998              2002
         San Antonio                        37                   619                    2001              2006
Oregon
         Portland                           23                   726                    1994              2002
         Eugene and Springfield             122                  102                    1980 (1)          2005
         Salem                              NA                   54                     1994              2006
Missouri
         St. Louis                          22                   534                    1999              2004
         Kansas City                        30                   280                    1999              2002
Wisconsin
         Milwaukee                          33                   500                    1992 (2)          2006
         Madison                            84                   170                    1999              2004
         Racine                             NA                   23                     1997 (2)          2002
         Kenosha                            NA                   47                     1996 (2)          2003
Connecticut
         Hartford, New Haven and Stamford   27                   380                    1996 (2)          2004
         Danbury                            NA                   52                     1999              2004
         Bridgeport                         NA                   52                     1981 (2)          2003
         New Britain                        NA                   20                     1981 (2)          Year-to-year
         Waterbury                          NA                   41                     1981 (2)          Year-to-year
California
         Sacramento                         19                   246                    1994              2002
         Santa Cruz                         NA                   112                    1997              2002
         Stockton                           NA                   111                    1989              Year-to-year

Florida
         Ft. Lauderdale                     16                   202                    1998 (2)          2002
         West Palm Beach                    43                   139                    1998 (2)          2003
         Daytona Beach                      NA                   50                     1981 (2)          2004
         Tampa                              14                   150                    2001              2006
Indiana
         Indianapolis                       26                   141                    2001              2004
Ontario, Canada
         London                             NA                   170                    1999              2004
         Burlington                         NA                   46                     1999              2004
         Oshawa                             NA                   41                     1999              2004
         Cambridge                          NA                   27                     1999              2002
         Niagara Falls                      NA                   26                     1999              2004
         Whitby                             NA                   26                     1999              2002
 Washington
         Spokane                            77                   133                    1999              2004
         Jefferson County                   NA                   16                     1999              2002
         Yakima                             125                  22                     1999              2004
         Tri-Cities                         125                  60                     2001              2006
         Vancouver                          23                   101                    2001              2006
         Wenatchee                          NA                   20                     2001              2006
Total                                                            8,452
</TABLE>
<PAGE>
(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.

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

                                    Approximate
                                    Number of Vehicles
                  Number of         Covered Under
                  Agreements        Agreements
Fiscal            Scheduled to      Scheduled to
Year              Expire            Expire

2002              13                2,770
2003              6                 1,003
2004              12                1,765
2005              2                 1,238
2006              8                 1,504

Certain of our transit district  agreements  provide for additional  one-year to
five-year renewals beyond the specified  expiration date, either unilaterally by
the  transit  district  or by mutual  agreement  of Obie  Media and the  transit
district.  The table  above  represents  the  expiration  date in the  contract,
excluding possible extensions.

Transit Display 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 1,200 billboards
primarily in Washington, Oregon, California, Montana, Wyoming and Idaho. Many of
Obie's  billboards are  directional  bulletins,  which are large format displays
ranging  from 160 to 672 square feet in size.  Obie's  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.

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 28 building walls for wallscape  displays in Seattle and owns a
50%  interest  in a  corporation  that leases 16  building  walls for  wallscape
displays in Portland.  The  following  table gives the number of Obie's  outdoor
displays at November 30, 2001:
<PAGE>
Market                     Displays

Washington                 467
Oregon                     156
California                  87
Montana                    247
Wyoming, Idaho
and other                  259
Total                    1,216

Sales and Service.  In each of Obie's principal markets,  Obie Media maintains 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, 2001, Obie had 154 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.  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  significantly  on  meeting  or  exceeding  individual  targets.   Sales
representatives also participate in Obie's broad-based stock option plan.

Obie has significantly  expanded its national sales presence in recent years. To
complement our growth, we have established  national sales and marketing offices
in Los Angeles,  Chicago,  New York City,  San  Francisco  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.

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 improves 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  transit  products
primarily by means of year-long  contracts.  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.


Design and Production

Obie maintains its own design and production facilities in Eugene,  Oregon. Obie
offers 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 Obie's design and  production  capabilities  give it a
significant  competitive advantage in direct sales to advertisers,  particularly
those it targets who do not have an advertising agency, and brings new customers
to the out-of-home advertising medium.
<PAGE>
The design department works with these advertisers and with Obie's 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. Subsequent to November 30, 2001, we acquired a
third large-format digital production printer for approximately $250,000. These
purchases complement existing equipment used to produce transit and outdoor
advertising display content. This additional capacity will allow us to produce a
significant amount of product previously subcontracted to outside vendors.


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.  Customers  represented by advertising agencies accounted
for  approximately  47% of our gross  revenues  (excluding  Chicago  advertising
agency  business) in fiscal 2001 (61% in fiscal 2000).  Consistent with standard
industry practice, advertising agencies working with Obie Media 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.  Obie
Media's sales personnel,  including its national sales team, are trained to work
closely with advertising agencies to service the needs of these customers.


A key  component  of  Obie's  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 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 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.
<PAGE>
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 2001, Clear Channel  Communications,  Inc. agreed to acquire
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 depend 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 more small 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 1999, 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.


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 in
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.
<PAGE>
Management  believes  Obie's displays  conform to current laws and  regulations.
When leasing property for the installation of new outdoor advertising  displays,
Obie 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, Obie 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, 2001, Obie had 284 full-time and 11 part-time employees, of whom
154 were primarily engaged in sales and marketing, 27 were engaged in art design
and production, 46 were engaged in installation,  construction or maintenance of
transit or outdoor  advertising  displays,  and 68 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.   Management   believes  that  our
relationships with our employees are good.


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  its  centralized  design  and
production  departments,  as  well  as its  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  $324,000  during  fiscal 2001,  $268,000  during  fiscal 2000 and
$180,000 during fiscal 1999. 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.  Obie's
site leases are  generally for a term of ten years,  with two five-year  renewal
options at Obie's  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 and Tampa,  Florida;  Hartford and New
Haven,  Connecticut;  Cincinnati,  Ohio; Dallas, San Antonio and Austin,  Texas;
Sacramento,  Stockton  and Santa Cruz,  California;  St.  Louis and Kansas City,
Missouri; Milwaukee and Madison, Wisconsin; Indianapolis,  Indiana; Billings and
Great Falls,  Montana;  Vancouver and Victoria,  British  Columbia;  and London,
Whitby, and Burlington,  Ontario. Obie also leases national sales offices in Los
Angeles, Chicago, New York City, San Francisco and Toronto. Total lease payments
for the forgoing  leases were $2.1 million,  $1.7 million,  and $1.3 million for
fiscal 2001, 2000 and 1999, respectively.
<PAGE>
ITEM 3.    LEGAL PROCEEDINGS

Heard  Communications,  Inc.,  doing  business  as Gateway  Outdoor  Advertising
("Gateway"),  the  former  operator  of  transit  advertising  displays  for the
Bi-State  Development  Agency  of the  Missouri-Illinois  Metropolitan  District
("Bi-State") in metropolitan St. Louis  (including St. Clair County,  Illinois),
has contested  both  judicially  and  administratively  Bi-State's  award of the
transit  advertising  agreement for St. Louis to Obie Media.  We began operating
under that agreement in July 1999. In the  administrative  action commenced July
2, 1999, Gateway alleges that the procurement  process that awarded the contract
to Obie Media was arbitrary and  capricious in part because  Gateway's  proposal
guaranteed  greater  minimum  revenue to Bi-State over the term of the contract.
Bi-State denied Gateway's protest by letter dated July 19, 1999. Gateway filed a
protest with  Bi-State's  Executive  Director  requesting  Obie's  contract with
Bi-State  be  terminated  and the  bidding for the  contract  be  reopened.  The
Executive Director denied Gateway's protest. Gateway then appealed the Executive
Director's decision to the Federal Transit Administration ("FTA"). The appeal to
the FTA was denied.

In the  judicial  proceeding  before the United  States  District  Court for the
Eastern  District of Missouri,  Case No.  4:99-CV-1054-CAS,  commenced  June 30,
1999,  Gateway  challenged the award of the St. Louis contract to Obie Media and
sought a declaratory  judgment and an injunction  prohibiting  Bi-State and Obie
from performing under the contract. Obie intervened in the proceeding as a party
defendant.  On August 25, 2000,  the Court  dismissed  the action for failure to
state a claim and for lack of subject matter jurisdiction.

On September 25, 2000,  Gateway filed a notice of appeal of the dismissal in the
United  States  Court of  Appeals  for the Eighth  Circuit.  The matter was been
briefed by the parties, argued and the appeal was denied. On September 18, 2000,
Gateway filed a petition in the Circuit Court of the County of St. Louis,  State
of Missouri,  challenging  the award of the contract to Obie Media and seeking a
preliminary and permanent  injunction,  including award of the remaining term of
the contract to Gateway and its bid preparation  costs.  Bi-State filed a motion
to dismiss and the Court dismissed the action on November 15, 2000, holding that
a  disappointed  bidder was not an  appropriate  party to bring the  action.  On
November  17,  2000,  Gateway  refiled  as a  taxpayer  and oral  arguments  are
scheduled for April 2002.

In  addition,  Obie is  defended in  litigation  in the  ordinary  course of its
business and in the aggregate such suits are not expected to be material.


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 2001.
<PAGE>
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
adjusted to give  retroactive  effect to 11-for-10 stock splits declared by Obie
Media in October 1997, November 1998 and November 1999:

Fiscal 2001                High     Low
         First Quarter     $11.50   $ 7.25
         Second Quarter      8.94     6.50
         Third Quarter       7.10     2.48
         Fourth Quarter      3.55     1.65

Fiscal 2000                High     Low
         First Quarter     $11.63   $ 7.31
         Second Quarter      9.38     7.31
         Third Quarter       9.00     7.69
         Fourth Quarter      9.00     5.50

As of February 12, 2002, there were approximately 91 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."


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,  Obie Media's
credit  agreements  may limit  Obie's  ability  to pay  dividends  or make other
distributions on Obie's common stock.
<PAGE>
ITEM 6.   Selected Financial Data
<TABLE>

IN THOUSANDS EXCEPT PER                                 Years Ended November 30
SHARE AMOUNTS                               2001       2000       1999       1998       1997
<S>                                        <C>        <C>        <C>        <C>        <C>

Statement of Operations Data
Gross Sales                                 $66,263    $51,326    $40,466    $25,218    $14,625
Net Sales                                    60,283     46,656     36,460     22,718     13,303
Direct Advertising Expenses                  49,562     33,961     26,438     14,793      8,005
General and Administrative                   10,210      6,882      4,677      3,628      2,242
Depreciation and Amortization                 2,077      1,871      1,513        935        664
Start-up Costs                                  353        116        668        106        237
Provision for Transit Contract Loses          6,007         -          -          -          -
Contract Settlement                              -          -      (1,077)        -          -
         Operating (loss) income             (7,927)     3,826      4,241      3,255      2,155

Net Income (Loss) Available for
Common Shareholders                          (7,248)     1,618      2,012      1,501      1,000

EBITDA (1)                                   (5,849)     5,697      5,754      4,190      2,819

Basic Net Income (Loss) per Share             (1.23)     $0.27      $0.40      $0.32      $0.21

Diluted Net Income (Loss) per Share           (1.23)     $0.27      $0.39      $0.32      $0.21

Balance Sheet Data
Working Capital                             $ 4,415    $10,544     $2,695     $1,033       $646
Total Assets                                 43,233     38,937     32,704     27,647     14,284
Long-term Debt, less Current Portion         13,881     13,695      4,919     13,354      5,695

Shareholders' Equity                        $12,149    $19,225    $17,365    $ 5,547    $ 3,796
</TABLE>

(1)  "EBITDA" (earnings before interest,  taxes, depreciation and amortization),
     a non GAAP financial measure,  is defined as operating income (loss) before
     depreciation  and  amortization   expense.   While  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,  management  believes  that it is
     widely used by some  investors  as one measure to  evaluate  the  financial
     performance  of  companies  in  the   out-of-home   advertising   industry.
     Accordingly,   this  information  has  been  disclosed  to  facilitate  the
     comparative  analysis  of Obie's  operating  performance  relative to other
     companies in the out-of-home advertising industry.

<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS


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, 2001,  Obie had 41  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 8,000.  We also operate and generally own more than
1,200  advertising  displays on billboards  and walls  primarily in  Washington,
Oregon, Montana, Wyoming, California and Idaho.


Obie's  gross  revenues  increased  from $51.3  million in fiscal  2000 to $66.3
million in fiscal 2001, a 29% increase.  Net income declined from a $1.6 million
profit in fiscal 2000 to a loss of $7.2 million in fiscal 2001.  EBITDA declined
from $5.7  million in fiscal  2000 to  negative  $5.8  million  during this same
period.

A substantial portion of our loss for fiscal 2001 results from our payment of
minimum advertising revenues guaranteed to transit districts under our transit
district contracts. Beginning in the latter half of Fiscal 2001 management began
to be increasingly concerned about these minimum revenue guarantees in the face
of declining advertising revenues in some transportation districts. Accordingly,
management 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, 2002, we have
renegotiated 9 of these contracts and were continuing to negotiate with transit
agencies to restructure an additional 7 contracts. The 9 renegotiated contracts
have resulted in occupancy expense reduction of $1.5 million in fiscal 2001,
$2.1 million in fiscal 2002, $1.5 million in fiscal 2003 and $900,000 in fiscal
2004. We anticipate additional savings for fiscal years 2002 through 2004 as we
conclude negotiations on the additional 7 contracts. We cannot assure you that
we will be able to eliminate or materially 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.

Obie's operating results are affected by general economic conditions, as well as
trends in the advertising  industry.  Based on industry sources, in recent years
outdoor  advertising  expenditures  in the United  States  have  increased  more
rapidly than total U.S. advertising  expenditures.  However,  this trend may not
continue and future outdoor  advertising  expenditures may grow more slowly than
expenditures for the advertising industry as a whole.

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.
<PAGE>
Operating Results

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

                                                  Year Ended November 30
<S>                                              <C>      <C>      <C>
                                                 2001     2000     1999
Transit advertising revenue                      89.2%    86.9%    85.3%
Outdoor advertising revenue                      10.8     13.1     14.7
Gross revenue                                   100.0    100.0    100.0
Less agency commissions                           9.0      9.1      9.9
Net revenues                                     91.0     90.9     90.1
Operating expenses:
         Direct advertising expense              74.8     66.2     65.3
         General and administrative              15.4     13.4     11.6
         Start-up costs                           0.5      0.2      1.7
         Contract settlement                      -        -       (2.7)
         Provision for transit contract
           losses                                 9.1      -        -
EBITDA                                           (8.8)    11.1     14.2
Depreciation and amortization                     3.1      3.6      3.7
Operating income   (loss)                       (12.0)     7.5     10.5
Interest expense                                  2.0      2.2      2.3
Income (loss) before income taxes               (13.9)     5.3      8.2
Provision for (benefit from) income taxes        (3.0)     2.1      3.2
Net income (loss)                               (10.0)%    3.2%     5.0%

</TABLE>

Comparison of Years ended November 30, 2001 and 2000

Revenues. Obie's gross 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. Gross
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. Over the past several years,
our transit advertising operations have expanded more rapidly than our outdoor
advertising operations. Gross revenues for fiscal 2001 increased $14.9 million,
or 29.1%, from $51.3 million in fiscal 2000 to $66.2 million. This increase was
principally associated with the addition of new agreements with the transit
districts of Chicago, San Antonio, Tampa and Indianapolis. These increases were
partially offset by a general decline in national and local advertising. Transit
revenues increased $14.5 million, or 32.5%, from $44.6 million in fiscal 2000 to
$59.1 million in fiscal 2001, primarily due to these same factors. Outdoor
advertising revenues increased approximately $500,000, or 6.8%, from $6.7
million in fiscal 2000 to $7.2 million in fiscal 2001, primarily as a result of
revenues associated with price increases, improvements to existing billboards,
and an acquisition of additional billboards in Montana. Agency commissions
increased $1.3 million, or 28.1%, from $4.7 million in fiscal 2000 to $6.0
million in fiscal 2001, slightly less than the increase in gross revenues
overall.
<PAGE>
Net revenues represent gross revenues less agency  commissions.  Consistent with
standard  industry  practice,  advertising  agencies whose clients contract with
Obie typically retain 15% of the gross advertising revenues from those accounts.
Management  believes  Obie's  focus on direct  sales to  accounts  not served by
advertising  agencies has resulted in our expenses for agency  commissions  as a
percentage  of our  aggregate  gross  revenues  being  lower  than the  industry
average.  Customers  represented by advertising  agencies  currently account for
approximately  47% of our  gross  revenues.  For the  reasons  discussed  in the
paragraph  above,  net revenues  increased $13.6 million,  or 29.2%,  from $46.7
million in fiscal 2000 to $60.3  million in fiscal 2001.  During the fiscal year
ended  November  30, 2001 our  revenues  from transit  advertising  sales,  as a
percentage of gross  revenues,  increased  from 86.9% in fiscal 2000 to 89.2% in
fiscal  2001.  Increases  in gross  revenues  over the last two fiscal years are
primarily  the result of the  increased  number of transit  vehicles and outdoor
displays  on which we market  advertising  space and, to a lesser  extent,  rate
increases.

Direct Advertising  Expenses.  Direct advertising  expenses consist primarily of
occupancy,  production  and  installation,  and sales costs.  Occupancy  expense
primarily  consists of two elements:  (i) payments to transit  districts for the
right to sell advertising  displayed on their vehicles;  and (ii) lease payments
to owners of property on which our outdoor  advertising  structures are located.
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.  Sales
expenses consist primarily of employment and administrative  expenses associated
with our sales force.

Direct  advertising  expenses  increased  $15.6  million,  or 46.0%,  from $34.0
million  in fiscal  2000 to $49.6  million in fiscal  2001.  This  increase  was
primarily the result of increased  minimum  transit fees associated with the new
markets  described above and the impact of large minimum transit fee payments as
described in Recent Developments  above. Direct advertising  expenses increased,
as a percentage of gross revenues,  from 66.2% in fiscal 2000 to 74.8% in fiscal
2001,  primarily  due to the growth of the transit  advertising  business  where
costs,  especially occupancy costs, are higher as a percentage of revenue,  than
in the outdoor advertising business.

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.

General and administrative  expenses increased $3.3 million, or 48.5%, from $6.9
million in fiscal 2000 to $10.2  million in fiscal 2001.  The increase  resulted
primarily from increases in personnel and related costs associated with managing
the growth of Obie's transit business,  including the addition of new districts,
plus  additions  to  reserves  for  doubtful  accounts  receivable.  General and
administrative expenses, as a percentage of gross revenues, increased from 13.4%
in fiscal 2000 to 15.4% in fiscal 2001.

Start-Up Costs. Start-up costs are the costs Obie incurs in pursuing new transit
district  agreements and the costs of establishing a sales force and office in a
new market  prior to  beginning to operate  under a new  agreement.  These costs
consist primarily of travel expenses,  various  personnel costs,  legal fees and
the costs of preparing  proposals in response to transit  district  requests for
proposals.  The amount of start-up costs we incur in the future will vary,  both
in total  amount and as a percentage  of  revenues,  depending on the number and
complexity  of proposals  for new  districts  and our success in  obtaining  new
contracts.
<PAGE>
Start-up costs for fiscal 2001  increased  $237,000 from $116,000 in fiscal 2000
to $352,000.  The increase  during fiscal 2001 is a result of costs  incurred to
enter the new markets described above.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
increased  $207,000,  or 11.1%, from $1.9 million in fiscal 2000 to $2.1 million
in fiscal 2001,  primarily due to capital  expenditures for outdoor  advertising
displays as well as  investment  in computing  and other  equipment  for the new
markets described above.

Provision for Contract  Losses.  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
resulted in higher than acceptable direct  advertising  expense levels,  and are
primarily  responsible  for the  operating  losses  reported  for the year ended
November 30, 2001.

Obie is continuing to negotiate  modifications to certain of those contracts and
believes  it  will  be  substantially   successful  in  doing  so  (see  "Recent
Developments").  A $6.0 million provision for transit contract losses, including
a $5.2 million accrual for transit fees, has been recorded for fiscal year 2001.

Operating Income.  Due to the events and factors discussed above,  including the
provision for transit contract losses,  we experienced an operating loss of $7.9
million in fiscal 2001,  compared to operating  income of $3.8 million in fiscal
2000.

Interest  Expense.  Interest expense  increased  $216,000,  or 19.3%,  from $1.1
million in fiscal  2000 to $1.3  million in fiscal  2001,  primarily  due to the
increased  use of the  working  capital  credit  line and  additional  long-term
borrowings.

Provision for Income Taxes. The loss before income taxes resulted in a tax
benefit of $2.0 million for fiscal 2001, compared to a provision for income
taxes of $1.1 million during fiscal 2000. Obie's beneficial tax rate was 21.7%
for fiscal 2001. The difference between the statutory United States federal
income tax rate and the beneficial tax rate for fiscal 2001 is due primarily to
a deferred tax valuation reserve for net operating loss carryforwards. Obie's
effective tax rate for fiscal 2000 was 38.9%, higher than the statutory rate due
to provisions for foreign and state income taxes.

Net  Income.  Obie  realized  a net loss of $7.2  million  during  fiscal  2001,
compared to net income of $1.6 million in fiscal  2000.  This  difference  arose
primarily  because of a  declining  media  revenue  environment  resulting  from
shifting  economic  conditions,  on the one hand,  and the  requirement  to meet
minimum guarantee payments to transit districts, on the other hand.


Comparison of Years ended November 30, 2000 and 1999

Revenues.  Gross revenues increased $10.9 million,  or 26.8%, from $40.5 million
in fiscal 1999 to $51.3 million in fiscal 2000.  This  increase was  principally
due to having a whole year's  activities of transit  contracts  acquired in 1999
and increases in other previously acquired contracts. Transit revenues increased
$10.1 million,  or 29.2%,  from $34.5 million in fiscal 1999 to $44.6 million in
fiscal 2000,  primarily due to the above factors.  Outdoor advertising  revenues
increased  $769,000,  or 12.9%, from $5.9 million in fiscal 1999 to $6.7 million
in fiscal 2000.  Agency  commissions  increased  $700,000,  or 16.6%,  from $4.0
million  in fiscal  1999 to $4.7  million  in fiscal  2000,  primarily  due to a
general increase in overall business.  As a result of the foregoing reasons, net
revenues increased $10.2 million, or 28.0%, from $36.5 million in fiscal 1999 to
$46.7 million in fiscal 2000.
<PAGE>
Direct Advertising Expenses. Direct advertising expenses increased $7.5 million,
or 28.5%,  from $26.4  million in fiscal 1999 to $34.0  million in fiscal  2000.
This increase was primarily the result of activities  required to support Obie's
increased level of business.  Direct advertising expenses increased slightly, as
a  percentage  of gross  revenues,  from 65.3% in fiscal 1999 to 66.2% in fiscal
2000,  primarily due to the growth of the transit  advertising  business,  where
costs, especially occupancy costs, are higher as a percentage of revenue than in
the outdoor advertising business.

General  and  Administrative  Expenses.   General  and  administrative  expenses
increased  $2.2  million,  or 47.2%,  from $4.7  million in fiscal  1999 to $6.9
million in fiscal 2000. The increase resulted  primarily from increased costs of
administering  new transit  districts and districts which operated for less than
all of fiscal 1999.  General and  administrative  expenses,  as a percentage  of
gross revenues, increased from 11.6% in fiscal 1999 to 13.4% in fiscal 2000.

Contract Settlement.  During 1999, Obie Media recognized a non-recurring pre-tax
gain of $1.1 million associated with its contract settlement with Tri-Met. Until
June 30, 1999, Obie had a contract to provide  advertising sales services to the
Tri-County Metropolitan Transit District (Tri-Met) in Portland, Oregon which, by
its terms, was scheduled to expire in June 2001. Obie originally began servicing
Tri-Met  in  January  1994  pursuant  to a  five-year  agreement  that was later
extended for an additional two years. The Federal Transit  Administration (FTA),
which provides  substantial monies to transit districts,  has taken the position
that transit  advertising  contracts may not exceed five years in length. At the
request of the FTA,  Tri-Met and Obie agreed that Obie's then effective  Tri-Met
agreement  would terminate on June 30, 1999. In December 1998, Obie entered into
an  agreement  with  Tri-Met  whereby  Tri-Met  agreed  to  compensate  Obie for
terminating  the  existing  contract  early.  The total  amount of the  contract
settlement  was $1.1  million,  and that  amount  is  included  as an  offset in
operating  expenses  in Obie's  consolidated  statements  of income for the year
ended  November 30, 1999.  Management  does not expect a recurrence  of this one
time revenue item. (See Note 11 to Obie's Consolidated Financial Statements).

Start-Up Costs. Start-up costs decreased $553,000,  from $668,000 in fiscal 1999
to $116,000 in fiscal 2000. The larger 1999 amounts were primarily due to Obie's
increased  response to requests  for proposal  for transit  district  contracts,
bidding on a greater number of large district contracts,  and the costs incurred
in retaining the Portland contract.

Depreciation and Amortization  Expenses.  Depreciation and amortization expenses
increased  $358,000,  or 23.6%, from $1.5 million in fiscal 1999 to $1.9 million
in fiscal 2000,  primarily due to Obie's investment in equipment in new markets,
upgrading  of  computer  capabilities  and adding  outdoor  displays in existing
operations and through acquisitions.

Operating Income. Due to the above factors,  operating income decreased $415,000
or 9.8%, from $4.2 million in fiscal 1999 to $3.8 million in fiscal 2000.

Interest Expense. Interest expense increased $179,000 or 19.0%, from $940,000 in
fiscal 1999 to $1.1 million in fiscal 2000,  primarily  due to the increased use
of the working capital credit line and additional long-term borrowings.

Provision for Income Taxes.  Provision for income taxes decreased  $199,000,  or
15.5%,  from $1.3  million  for  fiscal  1999 to $1.1  million  in fiscal  2000,
primarily due to the 18.0% decrease in income before income taxes. The effective
rate of income taxes as compared to taxable  income was 40.2% in 2000 and 39.0 %
in 1999.

Net Income. As a result of the foregoing factors, net income decreased $394,000,
or 19.6%, from $2.0 million for fiscal 1999 to $1.6 million for 2000.
<PAGE>
Recent Developments

Management is currently seeking to restructure our business  strategy  regarding
transit fee  arrangements and guarantees with transit  authorities.  Most of our
transit arrangements require us to share a certain percentage of our net transit
fee revenues with the transit  authorities (a certain  percentage to the transit
authorities,  the balance retained by Obie). Many of these arrangements  provide
that we must guarantee a minimum payment to the transit district irrespective of
our revenue  levels.  Agreements  that contain large minimum transit fee payment
guarantees  significantly hamper our ability to manage operating expenses during
weak  economic  and/or  advertising  environments.  These high  minimum  payment
requirements have resulted in higher than historical direct advertising  expense
levels as a  percentage  of  revenues,  and are  primarily  responsible  for our
operating losses during fiscal 2001.

We are currently negotiating to modify these guaranteed minimum fee arrangements
with  many  of our  transit  districts,  and  management  believes  we  will  be
substantially  successful in doing so. In  appropriate  circumstances,  where we
cannot  restructure  our  existing  agreements  we may  seek  to  terminate  our
contracts with those  districts.  In recognition of these issues,  we recorded a
$6.0 million  provision for transit  contract  losses,  including a $5.2 million
accrual for renegotiated transit fees, for fiscal 2001.

As  February  15,  2002  contracts  accounting  for 23.3% of 2001 gross  transit
revenues  (excluding  $22.2  million  related to the Chicago  contract) had been
renegotiated, and contracts accounting for another 14.6% were under negotiation.
In  addition,  contracts  accounting  for  fiscal  15.1% of 2001  gross  transit
revenues will expire in March 2002 and will be subject to a re-bidding process.

On December 5, 2001, Obie was notified by the Chicago Transit  Authority ("CTA")
that the CTA was unilaterally  terminating their advertising contract,  claiming
that Obie was in default of certain contractual provisions.  Obie was originally
awarded  the  contract  in  December  2000  to  be  the  exclusive  provider  of
advertising  on CTA's  1,875  buses,  1,190  rapid  transit  cars,  and 140 rail
stations.

Management  believes we were in material  compliance with all aspects of the CTA
contract  and that Obie never  received  prior  notice of  default  from the CTA
before  termination,  as  required  under the  contract.  Obie  contends  that a
restructuring  of the CTA  contract  was  appropriate  because  (a) a decline in
national  advertising and the attendant  decline in CTA advertising  during 2001
made the arrangement less favorable than both parties had expected,  and (b) CTA
made  significantly  less  advertising  space  available  to Obie  than  CTA had
originally held out in the Request for Proposal it issued in the Fall of 2000.

We are vigorously  seeking to redress CTA's  termination and are working closely
with  counsel  to  resolve  the  matter  favorably.  However,  there  can  be no
assurances  that the matter can be resolved in a manner  acceptable to Obie, and
that  should a  resolution  be  unattainable,  management  plans to  pursue  its
available legal remedies.

In the third quarter of fiscal 2001 Obie  reported a $6.0 million  provision for
transit  contract  losses .  Management  believes  that  this  loss  accrual  is
sufficient to accommodate the resulting contract adjustments described above.

In February 2001 Obie and U.S. Bank agreed on a new financing  arrangement.  The
arrangement  includes a $16 million term loan revolver and a $6 million  working
capital  revolver.  Interest rates on each, at Obie's  option,  are based upon a
range of basis points above either the London Inter-Bank Offered Rate (LIBOR) or
U.S. Bank's prime rate, the range to be determined based upon certain  financial
ratio  standards.  Obie used the term loan  revolver to  refinance  all existing
debt,  including the then outstanding line of credit. The term revolver does not
require any principal payments until third quarter of fiscal 2002.
<PAGE>
As of November 30, 2001 we were not in compliance  with our operating  covenants
in our existing credit  facility that relate to certain  financial  ratios,  and
U.S.  Bank had granted us a waiver of that  noncompliance.  On February 14, 2002
U.S. Bank and Obie agreed to a revised credit  facility which included  modified
financial ratio covenants.  The revised agreement extends the term of the credit
facility through  February 2003. The credit facility  requires the execution and
delivery  of  definitive   transaction   documentation   and  Obie's  continuing
compliance with the revised covenants.

In the second quarter of fiscal 2001 we acquired a second  large-format  digital
production printer for approximately $400,000.  Subsequent to November 30, 2001,
we purchased a third  large-format  digital production printer for approximately
$250,000.  These purchases complement existing equipment used to produce transit
and outdoor advertising display content.  This additional capacity will allow us
to produce a significant amount of product  previously  subcontracted to outside
vendors.

Resignation of Director. Effective September 2, 2001, Wayne P. Schur resigned as
a director and officer of Obie Media  Corporation and its subsidiary,  Philbin &
Coine, Inc. Mr. Schur was the President and sole or principal shareholder of P &
C Media from 1981 to 1998 prior to its acquisition by Obie Media.


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. Management believes the seasonality of our revenues
and operating results will increase if transit  advertising  operations continue
to  expand  more  rapidly  than  our  outdoor   advertising   operations.   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, 2000 and 2001 was $10.5 million and $4.4 million, respectively. The
decrease in working  capital is due primarily to the recording of a $5.2 million
accrual for transit  contract  losses and an increase in the  utilization of our
working  capital  credit  line  to fund  operations.  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 used in  operating  activities  was $1.2  million  during
fiscal 2001 as compared to net cash provided by operating activities of $799,000
in fiscal 2000. The change  between  periods was due primarily to an increase in
accounts receivable and refundable income taxes.
<PAGE>
Net cash used in  investing  activities  was $5.3  million  and $1.3  million in
fiscal 2000 and 2001, respectively. The decrease from fiscal 2000 to fiscal 2001
resulted primarily from our using  approximately $4.8 million in 2000 for direct
billboard  acquisitions  compared to significantly smaller acquisitions in 2001.
Capital  expenditures  totaled  $5.2 million and $1.3 million in fiscal 2000 and
2001, respectively. Capital expenditures consist primarily of the cost of
building and acquiring outdoor  advertising  displays,  and in 2001 included the
cost of the digital printing  equipment  described above. We anticipate that our
capital expenditures will approximate $1.5 million in fiscal 2002.

Net cash provided by financing  activities  was $5.1 million and $2.3 million in
fiscal 2000 and 2001,  respectively.  The increase was  primarily  the result of
borrowings  used to finance  increases in accounts  receivable  associated  with
sales in the transit markets added during the year.

Effective  February 19, 2001 Obie entered into a new financing  arrangement with
U.S. Bank. The new  arrangement  provides for a $16.0 million term line maturing
in August of 2007, and a $6.0 million working  capital line of credit  available
for general  purposes.  These credit facilities are secured by substantially all
of the  assets  of Obie and its  subsidiaries.  Obie used the term  revolver  to
refinance all its then-existing debt, including the previously  outstanding line
of credit. The term revolver does not require any principal payments until third
quarter of fiscal 2002. At November 30, 2001, available borrowing capacity under
the line of credit,  based on collateralized  accounts,  was $4.3 million. As of
November 30, 2001 we were not in compliance with our operating  covenants in our
existing credit facility that relate to certain financial ratios,  and U.S. Bank
has granted us a waiver of that non  compliance.  On February 14, 2002 U.S. Bank
and Obie agreed to a revised credit facility which included  modified  financial
ratio covenants.  The revised  agreement extends the term of the credit facility
through  February 2003. The credit facility  requires the execution and delivery
of definitive transaction documentation and Obie's continued compliance with the
revised  covenants.  Management  can provide no  assurances  that U.S. Bank will
continue  to  renew  our  credit  arrangements  as  they  expire.  (See  "Recent
Developments" above.)

At November 30, 2001 Obie Media had outstanding  borrowings of $14.2 million, of
which $13.9  million was pursuant to a long-term  credit  agreement and $325,000
was pursuant to the agreement to acquire P & C.

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  2002,  and to  fund  transit  contract  loss  accrual  payments.  Future
acquisitions  by Obie  Media,  if any,  may  require  additional  debt or equity
financing.

Market Risk

We may be exposed to future  interest rate changes on our debt.  Management does
not believe  that a  hypothetical  10 per cent change in end of period  interest
rates would have a material effect on Obie's cash flow.
<PAGE>
The Effect of New Accounting Pronouncements.

In June 2000 the FASB issued  Statement of Financial  Accounting  Standards  N0.
138,  "Accounting  for  Certain  Derivative   Instruments  and  Certain  Hedging
Activities - an amendment of FASB No. 133" ("SFAS 138").  In June 1999, the FASB
issued  Statement of Financial  Accounting  Standards N0. 137 - "Accounting  for
Derivative  Instruments  and Hedging  Activities"  ("SFAS 137").  SFAS 137 is an
amendment to Statement of Financial  Accounting  Standards No. 133,  "Accounting
for Derivative  Instruments and Hedging Activities".  SFAS 133 and 138 establish
accounting and reporting standards for all derivative instruments.  SFAS 133 and
138 are effective for fiscal years  beginning  after June 15, 2000. Obie adopted
SFAS 133 and 138 for its fiscal year beginning  December 1, 2000.  Obie does not
currently  have any  derivative  instruments  nor does it participate in hedging
activities,  and  therefore  the  adoption of these  standards  did not have any
impact on its financial statements or results of operations.

On June 30,  2001,  the FASB issued  SFAS 142,  "Goodwill  and Other  Intangible
Assets,"  which  eliminates  the  amortization  of goodwill  and other  acquired
intangible  assets with indefinite  economic useful lives. SFAS 142 is effective
for fiscal years  beginning  after  December 15, 2001.  Obie will adopt SFAS 142
effective December 1, 2002.


As of December 31, 2001, Obie had net unamortized goodwill in the amount of $5.7
million. Management expects amortization expense to be approximately $500,000 in
fiscal 2002. SFAS 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. However, a company has six months from the date of adoption to complete
this first step. Obie expects to complete that first step of the goodwill
impairment testing during the first quarter of the year ending November 30, 2003
(fiscal year 2003). 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. Any impairment loss resulting from the transitional impairment tests will
be reflected as the cumulative effect of a change in accounting principle in the
first quarter of fiscal year 2003. The Company has not yet determined what
effect these impairment tests will have on the Company's earnings and financial
position.


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, 2001 and
2000 is as follows:
<TABLE>
<CAPTION>
In thousands, except per share data         1st Quarter       2nd Quarter       3rd Quarter      4th Quarter
<S>                                        <C>               <C>               <C>              <C>
2001
Net revenues                                $11,724           $15,923           $18,737          $13,899
Operating income (loss)                      (1,066)              (24)           (7,260)             423
Net (loss)                                     (801)             (249)           (5,961)            (237)
Basic net (loss) income per share             (0.14)            (0.04)            (1.01)            (.04)
Diluted net (loss) income per share           (0.14)            (0.04)            (1.01)            (.04)

2000
Net revenues                                $ 8,546           $11,329           $13,026          $13,755
Operating income                                 64               954             1,325            1,483
Net (loss) income                               (93)              404               634              673
Basic net (loss) income per share             (0.02)             0.07              0.11             0.11
Diluted net (loss) income per share           (0.02)             0.07              0.11             0.11
</TABLE>
<PAGE>
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

On October 25, 2001 and effective for the third quarter of the fiscal year,  the
Company, at the recommendation of its audit committee,  replaced Arthur Andersen
LLP as the Company's  auditors with  PricewaterhouseCoopers  LLP. The change was
made in order to consolidate  auditing and taxation services with one accounting
firm.

Arthur  Andersen  LLP's  reports on the  Company's  November  30,  2000 and 1999
financial statements did not contain an adverse opinion, a disclaimer of opinion
nor modified as to  uncertainty,  audit scope or accounting  principles.  During
those periods and through and  including the second  quarter of fiscal year 2001
there were no disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.


PART III

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 2002 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 2002 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 2002 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 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 2002 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 2002 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>
PART IV


ITEM 14.  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
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
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)
20.1     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 Pricewaterhouse Coopers, Independent Public Accountants, for
         the year ending November 30, 2001
23.2     Consent of Arthur Andersen, Independent Public Accountants, for the
         years ending November 30, 2000 and 1999

*Management Contract or Compensatory Plan or Arrangement.
(1)      Incorporated 'erein 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.

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.
<PAGE>
(b)      Reports on Form 8-K. Obie Media filed one report on Form 8-K during the
         2001 fiscal year. That report was filed on October 25, 2001 announcing
         a change in its auditors. On December 6, 2001 the Company also filed a
         Form 8-K announcing the termination of its advertising contract with
         the Chicago Transit Authority.

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:  February 27, 2002          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:   February 27, 2002           By/s/ Brian B. Obie
                                     Brian B. Obie, Chairman, President
                                     and Chief Executive Officer

                                     PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:

Dated:   February 27, 2002           By/s/ Gary F. Livesay
                                     Gary F. Livesay, Chief Financial Officer

                                     DIRECTORS:

Dated:   February 27, 2002           By/s/ Delores M. Mord
                                     Delores M. Mord, Director

Dated:   February 27, 2002           By/s/ Randall C. Pape'
                                     Randall C. Pape', Director

Dated:   February 27, 2002           By/s/ Stephen A. Wendell
                                     Stephen A. Wendell, Director

Dated:   February 27, 2002           By/s/ Richard C. Williams
                                     Richard C. Williams, Director

EXHIBIT INDEX

Exhibit*
23.1     Consent of Pricewaterhouse Coopers, Independent Public Accountants, for
         the year ending November 30, 2001

23.2     Consent of Arthur Andersen, Independent Public Accountants, for the
         years ending November 30, 2000 and 1999

*        See Item 14(a)(2) of this Annual Report for a list of all exhibits,
         including those incorporated by reference.
<PAGE>
OBIE MEDIA CORPORATION

Index to Consolidated Financial Statements


Reports of Independent Accountants                                       F-2

Consolidated Balance Sheets as of November 30, 2001 and 2000             F-3

Consolidated Statement of Operations for the years ended
           November 30, 2001, 2000 and 1999                              F-4

Consolidated Statement of Changes in Shareholders' Equity
           for the years ended November 30, 2001, 2000 and 1999          F-5

Consolidated Statement of Cash Flows for the years ended
           November 30, 2001, 2000 and 1999                              F-6

Notes to Consolidated Financial Statements                               F-7


<PAGE>
Report of Independent Accountants

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

In our opinion, the accompanying  consolidated balance sheets as of November 30,
2001  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, 2001,  and the results of their  operations and their cash flows
for the year then  ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.  These  financial  statements  are the
responsibility of the Company's management;  our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
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
audit provides a reasonable basis for our opinion.  The financial  statements of
the  Company as of  November  30,  2000 and for the each of the two years in the
period  ended  November  30,  2000 and 1999 were  audited  by other  independent
accountants  whose report  dated  February  19, 2001  expressed  an  unqualified
opinion on those statements.


/s/PRICEWATERHOUSE COOPERS LLP
Pricewaterhouse Coopers LLP


February 15, 2002



                                       F-2
<PAGE>
Report of Independent Public Accountants

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

We have audited the accompanying consolidated balance sheets of Obie Media
Corporation (an Oregon corporation) and subsidiaries as of November 30, 2000,
and the related consolidated statements of income, shareholders' equity and cash
flows for each of the two years in the period ended November 30, 2000. These
financial statements 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 in accordance with auditing standards generally accepted
in the United States. Those standards 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. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Obie Media Corporation and
subsidiaries as of November 30, 2000, and the results of their operations and
their cash flows for each of the two years in the period ended November 30, 2000
in conformity with accounting principles generally accepted in the United
States.


                                                         /s/ Arthur Andersen LLP


Portland, Oregon
February 19, 2001




                                      F-2a
<PAGE>
<TABLE>
<CAPTION>
OBIE MEDIA CORPORATION

Consolidated Balance Sheets
As of November 30, 2001 and 2000

<S>                                                                                       <C>                <C>
                                                                                          2001               2000
ASSETS
           CURRENT ASSETS
                    Cash                                                                  $404,473          $634,633
                    Accounts receivable, net of allowance for doubtful accounts
                      of $1,944,921 and $598,403 respectively                           11,828,554         9,273,682
                    Refundable income taxes                                              1,881,041                 -
                    Prepaid expenses and other current assets                            4,227,021         4,837,954
                    Deferred income taxes                                                1,781,671           419,258
                                                                                        20,122,760        15,165,527

           PROPERTY AND EQUIPMENT, net                                                  16,603,760        16,770,943



           OTHER ASSETS
                    Goodwill, net                                                        5,683,805         6,423,335
                    Other assets, net                                                      822,548           577,066
                                                                                       $43,232,873       $38,936,871

LIABILITIES AND SHAREHOLDERS' EQUITY
           CURRENT LIABILITES
                    Current portion of long-term debt                                     $340,418          $200,888
                    Line of credit                                                       1,697,117                 -
                    Accounts payable                                                     1,202,133         1,014,179
                    Accrued transit fees                                                10,295,314         1,071,254
                    Accrued expenses                                                       668,740           552,327
                    Income taxes payable                                                   286,197           497,504
                    Unearned revenue                                                     1,218,088         1,285,365
                                  Total current liabilities                             15,708,007         4,621,517

           DEFERRED INCOME TAXES                                                         1,461,432         1,360,392

           LONG TERM DEBT, less current portion                                         13,881,200        13,694,941
                                                                                        31,050,639        19,676,850

           MINORITY INTEREST IN SUBSIDIARY                                                  32,899            35,424

           COMMITMENTS (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 share
                      authorized, 5,908,577 and 5,896,232 shares issued
                      and outstanding, respectively                                     17,272,128        17,172,128
                    Note receivable on stock options                                                         (59,895)
                    Foreign currency translation                                            11,028            (2,203)
                    Retained earnings(accumulated                                       (5,133,821)        2,114,567
                    deficit)
                                  Total shareholders' equity                            12,149,335        19,224,597
                                                                                       $43,232,873       $38,936,871
</TABLE>

The  accompanying  notes  are an  integral  part of these  consolidated  balance
sheets.
                                       F-3
<PAGE>
<TABLE>
<CAPTION>

OBIE MEDIA CORPORATION

Consolidated Statements of Operations
For the Years Ended November 30, 2001, 2000 and 1999

                                                                                   2001             2000             1999


<S>                                                                            <C>              <C>             <C>
           REVENUES:
                    Outdoor advertising                                        $7,168,932       $6,710,996      $5,942,294
                    Transit advertising                                        59,094,444       44,614,802      34,523,332
                        Gross revenues                                         66,263,376       51,325,798      40,465,626
                    Less agency commission                                    (5,980,355)      (4,669,561)     (4,005,600)
                                  Net revenues                                 60,283,021       46,656,237      36,460,026

           OPERATING EXPENSES:
                    Direct advertising expenses                                49,562,195       33,961,087      26,438,100
                    General and administrative                                 10,210,227        6,882,450       4,676,977
                    Depreciation and amortization                               2,077,365        1,870,630       1,512,890
                    Start-up costs                                                352,537          115,632         668,200
                    Contract Settlement                                                                        (1,077,469)
                    Provision for transit contract losses                       6,007,233
                                  Operating income (loss)                     (7,926,536)        3,826,438       4,241,328

           INTEREST EXPENSE                                                     1,337,136        1,120,976         942,316

           INCOME (LOSS) BEFORE INCOME TAXES                                  (9,263,672)        2,705,462       3,299,012

           PROVISION FOR (BENEFIT FROM) INCOME TAXES                          (2,015,284)        1,087,218       1,286,615

           NET INCOME (LOSS)                                                  (7,248,388)        1,618,244       2,012,397

           BASIC NET INCOME (LOSS) PER SHARE                                      ($1.23)            $0.27           $0.40

           DILUTED NET INCOME (LOSS) PER SHARE                                    ($1.23)            $0.27           $0.39
</TABLE>

The accompanying notes are an integral part of these consolidated statements

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
OBIE MEDIA CORPORATION

Consolidated Statements of Changes in Shareholders' Equity
For the Years Ended November 30, 2001, 2000 and 1999

                                                                                         Cumulative     Retained
                                                                                            Other       Earnings
                                                       Common Stock            Note      Comprehensive(Accumulated
                                                    Shares       Amount     Receivable      Loss        Deficit)        Total

<S>                                                 <C>         <C>          <C>          <C>          <C>             <C>
BALANCE, November 30, 1998                           4,747,833  $7,062,816                             ($1,516,074)    $5,546,742
Issuance of common stock for
  benefit plan and option exercises                      7,434     102,149                                                102,149
Issuance of common stock for
  public offering, net of expenses                   1,100,000   9,704,745                                              9,704,745
Purchase of fractional shares                             (23)       (297)                                                  (297)
Foreign currency translation                                                                   (993)                        (993)
Net income                                                                                                2,012,397     2,012,397

BALANCE, November 30, 1999                           5,855,244  16,869,413           0         (993)        496,323    17,364,743
Issuance of common stock for
  benefit plan and option exercises                     41,060     250,880     (59,895)                                   190,985
Additional expenses of public offering                             (1,837)                                                 (1,837)
Purchase of fractional shares                             (72)       (763)                                                   (763)
Foreign currency translation                                                                 (1,210)                       (1,210)
Income tax benefit of nonqualified
  stock option exercise                                             54,435                                                 54,435
Net income                                                                                              1,618,244       1,618,244

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                                          12,345     100,000                                                100,000
Collection of note receivable                                                   59,895                                     59,895
Foreign currency translation                                                                 13,231                        13,231
Net income (loss)                                                                                      (7,248,388)     (7,248,388)

BALANCE, November 30, 2001                           5,908,577 $17,272,128          $0      $11,028   ($5,133,821)    $12,149,335
</TABLE>

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

                                       F-5
<PAGE>
<TABLE>
<CAPTION>
OBIE MEDIA CORPORATION

Consolidated Statements of Cash Flows
For the Years Ended November 30, 2001, 2000 and 1999

                                                                                     2001           2000            1999

<S>                                                                              <C>               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITES:
           Net income (loss)                                                      ($7,248,388)      $1,618,244     $2,012,397
           Adjustments to reconciled net income to net cash provided
             by (used in) operating activities:
                    Depreciation and amortization                                    2,077,365       1,870,630      1,512,890
                    Contract Settlement                                                      -               0      (527,469)
                    Provision for transit contract losses                            6,007,233
                    Deferred income taxes                                          (1,261,373)         905,154         11,310
                    Income tax benefit of nonqualified stock option exercises                0          54,435
                    Change in assets and liabilities:
                          (Increase) decrease in:
                                         Accounts receivable                       (2,554,872)     (1,255,233)    (1,841,815)
                                         Refundable income taxes                   (1,881,041)
                                         Prepaid expenses and other assets             286,843     (2,462,717)      (967,558)
                          Increase (decrease) in:
                                         Accounts payable                             187,954           14,285        219,626
                                         Accrued expenses                            3,433,240       (370,616)      (522,778)
                                         Unearned revenues                            (67,277)         371,105        209,374
                                         Income taxes payable                        (211,307)          53,588        144,826
                      Net cash provided by (used in )operating activities          (1,231,623)         798,875        250,803

CASH FLOWS FROM INVESTING ACTIVITES:
           Capital acquisitions, net                                               (1,324,931)     (5,230,048)    (3,196,166)
           Other investing activities                                                  (2,525)        (30,769)       (69,219)
                      Net cash used in investing activities                        (1,327,456)     (5,260,817)    (3,265,385)

CASH FLOWS FROM FINANCING ACTIVITIES:
           Proceeds from issuance of common stock offering                                   0               0     11,000,000
           Costs to issued common stock                                                      0         (1,837)    (1,077,243)
           Proceeds from issuance of common stock options                                    0          99,825         16,221
           Net borrowings on line of credit                                          1,697,117       2,705,717      1,090,657
           Proceeds from long-term debt                                                697,876       4,000,000
           Net payments on long-term debt                                            (139,200)     (1,739,381)    (8,298,600)
           Payments of debt issuance costs                                                   0               0        (7,079)
           Proceeds from common stock note receivable                                   59,895           (763)          (297)
                      Net cash provided by financing activities                      2,315,688       5,063,561      2,723,659

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                 13,231         (1,210)          (993)

NET INCREASE (DECREASE) IN CASH                                                      (230,160)         600,409      (291,916)

CASH, beginning of period                                                              634,633          34,224        326,140

CASH, end of period                                                                   $404,473        $634,633        $34,224

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
           Issuance of stock to employee benefit plan                                 $100,000         $91,160        $85,928
           Note payable issued to acquire outdoor advertising structures                     -               -         96,000
           Issuance (reduction) of note payable for business acquisition             (232,888)       (339,112)              -
           Issuance of common stock for note receivable                                      -          59,895              -
           Costs associated with financing activities                                        -               -        175,000
           Interest capitalized                                                              -          12,895         14,886

CASH PAID FOR INTEREST                                                               1,336,029       1,042,172        921,998

CASH PAID FOR TAXES                                                                  1,315,626          74,305      1,130,479
</TABLE>

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

                                       F-6
<PAGE>
Obie Media Corporation

Notes to Consolidated Financial Statements
November 30, 2001,2000 and 1999


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, 2001,
the Company had 41 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; Cincinnati, 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 and Idaho. On August 16, 1999, the Company completed
a secondary offering of 1,100,000 shares of its common stock, raising
$9,702,908, net of expenses of $1,297,092. The net proceeds were used primarily
to reduce previously outstanding debt.

Basis of Presentation

The consolidated financial statements include the Company, its wholly owned
subsidiary, Obie Media Limited, and its 50% owned subsidiary, OB Walls, Inc. All
significant intercompany 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, 2001, 2000 and
1999.

Use of Estimates

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States 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 future 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 and are specifically
recoverable in the event the related contract is canceled, 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, 2001, the Company had agreements with 41 transit districts.
Customers advertising on transit vehicles owned by the seven largest transit
districts, excluding Chicago, of Dallas; Portland, Oregon; British Columbia; St.
Louis; Sacramento; Cincinnati and Hartford represented approximately 58.8
percent of the Company's total net revenues for the year ended November 30,
2001. The net revenues from the Chicago Transit Authority contract amounted to
$19.0 million, approximately 31.7% of the Company's net revenue for the year
ended November 30, 2001. This contract was cancelled effective November 30, 2001
(See note 3). 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(Notes 8 and 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, 2001
and 2000, 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.

Goodwill and Other Long-Lived Assets

On September 1, 1998 the Company acquired all of the outstanding stock of
Philbin & Coine, Inc., a New York corporation doing business as P & C Media (P &
C). Goodwill resulting from the P&C acquisition is being amortized over 15 years
using the straight-line method and is net of accumulated amortization of
$1,679,192 and $1,172,550 at November 30, 2001 and 2000, respectively. Goodwill
and other long-lived assets are periodically evaluated when facts and
circumstances indicate that the value of such assets may be impaired.
Evaluations are based on undiscounted projected earnings. If the valuation
indicates that undiscounted earnings are insufficient to recover the recorded
assets, then the projected earnings are discounted to determine the revised
carrying value and a write-down for the difference is recorded.
<PAGE>
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.

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 dilutive common
equivalent shares outstanding. Such amounts have been retroactively adjusted to
reflect the 11-for-10 stock split which occurred in November 1999 (Note 8).

Following is a reconciliation of basic EPS and diluted EPS:

                                                Year Ended November 30, 2001
                                            -----------------------------------
                                                                      Per Share
                                             (Loss)       Shares      Amount
                                            ----------   ---------    ---------
Basic EPS-
   Income available to common shareholders $(7,248,388)  5,904,146      ($1.23)
Effect of dilutive Securities-
   Stock options                                     -
                                            ----------   ---------
Diluted EPS-
   Income available to common shareholders $(7,248,388)  5,904,146      ($1.23)
                                             =========   =========

                                                Year Ended November 30, 2000
                                            -----------------------------------
                                                                      Per Share
                                               Income       Shares      Amount
                                            ----------   ---------    ---------
Basic EPS-
   Income available to common shareholders  $1,618,244   5,884,666      $0.27
Effect of dilutive Securities-
   Stock options                                     -      41,256
                                            ----------   ---------
Diluted EPS-
   Income available to common shareholders  $1,618,244   5,925,922      $0.27
                                             =========   =========

                                                Year Ended November 30, 1999
                                            -----------------------------------
                                                                      Per Share
                                               Income       Shares      Amount
                                            ----------   ---------    ---------
Basic EPS-
   Income available to common shareholders  $2,012,397   5,089,486      $0.40
Effect of dilutive securities-
   Stock options                                     -      91,504
                                            ----------   ---------
Diluted EPS-
   Income available to common shareholders  $2,012,397   5,180,990      $0.39
                                            ==========   =========
<PAGE>
At November 30, 2001, 2000 and 1999, the Company had options covering 673,736,
174,833 and 75,593 shares, 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

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income"
(SFAS130). This statement establishes standards for reporting and displaying
comprehensive income and its components in a full set of general-purpose
financial statements. The objective of SFAS 130 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. The Company
adopted SFAS 130 during the first quarter of fiscal 1999. Comprehensive income
does not materially differ from currently reported net income in the periods
presented.

Segment Reporting

Effective in its fiscal year ending November 30, 1999, the Company adopted
Statement of Financial Accounting Standards No. 131 "Disclosures about Segments
of an Enterprise and Related Information" (SFAS 131). SFAS 131 changes current
practice under SFAS 14 by establishing a new framework on which to base segment
reporting (referred to as the "management" approach) and also requires interim
reporting of segment information. Based upon definitions contained within SFAS
131, the Company has determined that it operates in one segment.

New Accounting Pronouncements

In June 2000 the FASB issued Statement of Financial Accounting Standards No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an amendment of FASB 133" ("SFAS 138"). In June 1999 the FASB
issued Statement of Financial Accounting Standards No. 137 - "Accounting for
Derivative Instruments and Hedging Activities" - ("SFAS 137"). SFAS 137 is an
amendment to Statement of Financial Accounting Standards No. 133, "Accounting
for Derivatives and Hedging Activities". SFAS 133 and 138 establish accounting
and reporting standards for all derivative instruments. SFAS 133 and 138 are
effective for fiscal years beginning after June 30, 2000. The Company adopted
SFAS 133, 137 and 138 for its fiscal year beginning December 1, 2000. The
Company does not currently have any derivative instruments nor does it
participate in hedging activities, and therefore the adoption of these standards
did not have any impact on its financial statements or results of operations.

On June 30, 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible
Assets", which eliminates the amortization of goodwill and other acquired
intangible assets with indefinite economic useful lives. SFAS 142 requires an
annual impairment test of goodwill and other intangible assets that are not
subject to amortization. SFAS 142 is effective for fiscal years beginning after
December 15, 2001. The impact of adopting SFAS is not yet determinable, but may
be material.

Reclassifications

Certain amounts previously reported in the 2000 and 1999 financial statements
have been reclassified to conform to the 2001 financial statement
classifications which had no impact on net income or shareholders'equity.
<PAGE>
2.       PROVISION FOR TRANSIT CONTRACT LOSSES

The Company is in the process of restructuring its business model regarding
transit fee arrangements with transit authorities. 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 the Company), but
often with minimum payment requirements. Agreements that contain large minimum
transit fee payment guarantees significantly hinder the Company's ability to
manage its operating expenses in weak economic environments. These high minimum
payment requirements have resulted in higher than acceptable direct advertising
expense levels, and are primarily responsible for the operating losses reported
for the year ended November 30, 2001.

The Company is currently negotiating modifications to those contracts and
believes it will be substantially successful in doing so. A $6.0 million
provision for transit contract losses, including a $5.2 million accrual for
transit fees has been recorded for fiscal year 2001.

As of February 15, 2002, contracts accounting for (excluding Chicago) 23.3% of
2001 gross transit revenues have been successfully renegotiated, and contracts
accounting for 14.6% of those gross revenues are under negotiation. In addition,
contracts accounting for 15.1% of those revenues will expire in March 2002 and
will be subject to a rebidding process.

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 are in the process
of negotiating a settlement for fiscal 2001 transit fees in light of the nature
of the early termination and a shortage of advertising space made available to
the Company during fiscal 2001. The Company believes that amounts accrued,
including the transit loss accrual, will be sufficient to cover the settlement
with the CTA.


4.  PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

                                                         November 30,
                                                 ----------------------------
                                                      2001           2000
                                                 -------------  -------------
           Prepaid commissions                   $           -  $   1,174,303
           Prepaid leases                              488,154        468,249
           Transit advertising production costs      2,645,093      1,811,217
           Other                                     1,093,774      1,384,185
                                                 -------------  -------------
                                                 $   4,227,021  $   4,837,954
                                                 =============  =============
5. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consist of the following:
                                                      November 30,
                                             ------------------------------
                                                  2001            2000       Asset Lives
                                             --------------  --------------  ----------
<S>                                          <C>             <C>                <C>
         Outdoor advertising structures      $   18,016,711  $   17,409,636     20 years
         Other equipment and leaseholds           6,467,524       5,749,667   5-20 years
                                             --------------  --------------
                                                 24,484,235      23,159,303
            Less- Accumulated depreciation        7,880,475       6,388,360
                                             --------------  --------------
                                             $   16,603,760  $   16,770,943
                                             ==============  ==============
</TABLE>
<PAGE>
6. FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>
Long-term debt consists of the following:
                                                                                  November 30,
                                                                            ----------------------
                                                                               2001        2000
                                                                            ----------  ----------
<S>                                                                         <C>         <C>
Term loan with U.S. Bank National Association (U.S. Bank), with quarterly
   reducing availability, interest at prime rate plus 3% (7.75%
   at November 30, 2001); maximum available of $15,600,000 as of
   November 30, 2001; the loan is collateralized by substantially
   all of the Company's assets                                              $13,892,818 $13,194,941
Note payable to former shareholder of P&C in certain monthly
   installment payments without interest due March, 2003                        324,800     660,888
Note payable plus interest at 8%,                                                 4,000      40,000
                                                                             ----------   ---------
                                                                             14,221,618  13,895,829
         Less- Current portion                                                  340,418     200,888
                                                                             ----------   ---------
                                                                            $13,881,200 $13,694,941
                                                                             ==========  ==========
</TABLE>

The Company also has a $6,000,000 operating line of credit with U.S. Bank. The
interest rate is at U.S. Bank's prime rate plus 3% (7.75% percent at November
30, 2001) and the line is collateralized by receivables, equipment, inventory
and contract rights. The outstanding balance on this line of credit at November
30, 2001 was $1,697,117. The outstanding balance at November 30, 2000 of
$5,211,251 has been reclassified into the term loan in accordance with
refinancing arrangements consummated subsequent to that date.

The aggregate principal payments due on the above debt subsequent to November
30, 2001, are:

       Fiscal Year Ending
         November 30,
       ------------------

             2002                   340,418
             2003                 2,481,200
             2004                 2,600,000
             2005                 3,200,000
             2006                 3,200,000
          Thereafter              2,400,000
                                -----------
                                $14,221,618
                                ===========

The US Bank loan agreements contain certain restrictive covenants and required
ratios. As of November 30, 2001 the Company was out of compliance with certain
of the ratios, and has received a waiver of such violations from the bank. On
February 14, 2002 US Bank and Obie agreed to a revised credit facility which
included modified financial ratio covenants. The credit facility requires the
execution and delivery of definitive transaction documentation and the Company's
continuing compliance with the revised covenants.
<PAGE>
7.  INCOME TAXES

The provision for income taxes for the years ended November 30, 2001, 2000 and
1999 was comprised of the following:

                                                      November 30,
                                        --------------------------------------
                                            2001          2000         1999
                                        ------------   ----------   ----------
Provision for income taxes (benefit)
   Current                              $  (753,911)   $  182,064   $1,275,305
   Deferred                              (1,261,373)      905,154       11,310
                                        ------------   ----------   ----------
      Total provision (benefit)         $(2,015,284)   $1,087,218   $1,286,615
                                        ============   ==========   ==========

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

Current deferred tax assets:
   Deferred revenue                     $   784,421    $1,129,329   $  851,800
   Allowance for doubtful accounts          735,504       239,361      115,142
   Accrued expenses and other               261,756        92,576       59,244
                                        ------------   ----------   ----------
      Total current deferred tax assets   1,781,681     1,461,266    1,026,186

Non-current deferred tax assets:
   Net operating loss carryforward        1,096,677
   Valuation allowance                   (1,096,677)
                                        ------------   ----------   ----------
      Total non-current deferred tax assets       0             0            0
                                        ------------   ----------   ----------

Current deferred tax liabilities:
   Prepaid fees and other                (1,042,008)      (66,759)
   Valuation allowance
                                        ------------   ----------   ----------
      Net current deferred tax assets   $ 1,781,681    $  419,258   $  959,427
                                        ===========    ==========   ==========
Non-current deferred tax liabilities:
   Property and equipment               $ 1,461,432    $1,360,392   $  995,407
                                        ===========    ==========   ==========

The valuation allowance is related to net operating loss carryovers of
$2,428,989 which expire in 2021. Income tax expense for the years ended November
30, 2001, 2000 and 1999 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,
                                                          -------------------
                                                          2001   2000    1999
                                                          ----   ----    ----
Statutory federal income tax rate                         34.0%  34.0%   34.0%
Increase in income taxes resulting from-
 State and local taxes, net of federal income tax benefit  1.8    4.4     4.0
 Net Operating Loss Valuation Allowance                   (8.9)    -       -
 Other differences, net                                   (5.2)   1.8     1.0
                                                          ----   ----    ----
                Actual income tax rate                    21.7%  40.2%   39.0%
                                                          =====  ====    =====
<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 series (Preferred Stock).

In October 1999, the Company declared an 11-for-10 stock split for shareholders
of record on November 21, 1999.

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. 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 for    Subject to      Exercise
                                     Grant          Options        Price
                                 ----------       ----------      --------
BALANCES, November 30, 1998         175,516          210,075         6.77
   Adjustment for stock split        17,551
   Options granted                 (106,281)         106,281        12.27
   Options canceled                  38,358          (38,358)       11.45
   Options exercised                      -           (1,629)        6.01
                                 ----------       ----------
BALANCES, November 30, 1999         125,144          276,369         8.24
   Additional shares provided       150,000                -            -
   Adjustment for stock split        12,515
   Options granted                 (241,490)         241,490         9.29
   Options canceled                  58,429          (58,429)        9.42
   Options exercised                      -          (31,944)        5.00
                                 ----------       ----------
BALANCES, November 30, 2000         104,598          427,486         9.15
   Additional shares provided       100,000                -            -
   Options granted                 (118,833)         118,833         7.08
   Options canceled                  49,243          (49,243)        9.91
                                 ----------       ----------
BALANCES, November 30, 2001         135,008          497,076         8.59
                                 ==========       ==========

Statement of Financial Accounting Standards No. 123

During 1995, the Financial Accounting Standards Board issued SFAS 123, which
defines a fair value based method of accounting for employee stock options and
similar equity instruments and encourages all entities to adopt that method of
accounting for all of their employee stock compensation plans. However, it also
allows an entity to continue to measure compensation cost for those plans using
the method of accounting prescribed by APB 25. Entities electing to continue to
use the accounting treatment in APB 25 must make pro forma disclosures of net
income and, if presented, earnings per share, as if the fair value based method
of accounting defined in SFAS 123 had been adopted.

The Company has elected to account for its stock-based compensation plans under
APB 25; however, the Company has computed, for pro forma disclosure purposes the
value of all options granted during the years ended November 30, 2001, 2000 and
1999 using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following weighted average assumptions for grants:

                                        Year Ended November 30,
                                   ----------------------------------
                                    2001          2000         1999
                                   -------       -------      -------
Risk-free interest rate               5.2%         6.25%        5.50%
Expected dividend yield                 0%            0%           0%
Expected lives                     6 years       6 years      6 years
Expected volatility                 71.51%        66.43%       72.00%

Using the Black-Scholes methodology, the total value of options granted during
the years ended November 30, 2001, 2000 and 1999 was $567,565, $1,470,878, and
$895,367, respectively, which would be amortized on a pro forma basis over the
vesting period of the options (typically five years). The weighted average per
share fair value of options granted during the years ended November 30, 2001,
2000 and 1999 was $4.78, $6.09, and $8.42, respectively. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net income (loss) and net income (loss) per share would
approximate the proforma disclosures below:
<PAGE>
<TABLE>
<CAPTION>
                                              Year Ended November 30,
                    ---------------------------------------------------------------------------
                               2001                    2000                     1999
                    ------------------------  ------------------------  -----------------------
                         As                      As                         As
                      Reported   Pro Forma    Reported     Pro Forma     Reported    Pro Forma
                    -----------  -----------  -----------  -----------  -----------  -----------
<S>                 <C>          <C>          <C>          <C>          <C>          <C>
Net income (loss)   $(7,248,388) $(7,882,465) $1,618,244   $1,295,509   $2,012,397   $1,765,246

Basic net income        $(1.23)        $(1.33)      $0.27       $0.22       $0.40       $0.34
  (loss) per share

Diluted net income      $(1.23)        $(1.33)      $0.27       $0.22       $0.40       $0.34
  (loss) per share
</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. SFAS 123 does not apply to awards prior to January 1, 1995
and additional awards are anticipated in future years.

The following table summarizes information about stock options outstanding at
November 30, 2001. Options on 497,096 shares were granted under the Company's
stock option plan, and options on an additional 176,660 shares were other
option grants.

                   Options Outstanding                Options Exercisable
--------------------------------------------------- -------------------------
                                Weighted
                   Number       Average    Weighted     Number       Weighted
   Range of    Outstanding at  Remaining   Average  Exercisable at    Average
   Exercise     November 30,  Contractual  Exercise  November 30,    Exercise
    Prices          2001      Life - Years  Price        2001          Price

$ 5.00 -  5.68      124,827        5.9     $  5.22        93,704      $  5.13
  6.01 -  7.20      183,130       11.5        7.03       144,948         7.16
  8.00 -  8.47      116,771       10.8        8.20         6,252         8.08
  8.68 - 10.97      161,336        8.3        9.39        34,409         9.43
 11.48 - 12.60       51,510        8.9       11.52             -            -
 14.89               36,162        7.8       14.89             -            -
--------------   ----------      ------    --------  -----------    ---------
$ 5.00 - 14.89      673,736        9.1     $  8.18       225,653      $  6.66
 ============       =======        ===     =======    ===========      =======


9.     COMMITMENTS 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, 2001 future guaranteed minimum payments under
the transit agreements are as follows:
       Fiscal Year Ending
          November 30,
       ------------------
              2002                  19,370,530
              2003                  17,328,771
              2004                  13,874,548
              2005                   6,351,386
              2006                   1,387,740
<PAGE>
Operating Leases

The Company rents office and production space from affiliates. Such rents
totaled $324,246, $268,262 and $180,311 for the years ended November 30, 2001,
2000 and 1999, 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 $2,088,505, $1,665,334 and $1,338,141 for
the years ended November 30, 2001, 2000 and 1999, respectively.

At November 30, 2001, future minimum lease payments for all operating leases
described above are as follows:

       Fiscal Year Ending
          November 30,
       ------------------

             2002                   $2,183,171
             2003                    1,730,288
             2004                    1,549,217
             2005                    1,400,013
             2006                    1,160,077
          Thereafter                   806,500


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, 2001, 2000 and 1999, the Company accrued $100,000, $0 and $100,000
respectively, as a contribution to the plan. In 2001, the Company paid the 2001
contribution through a contribution of 12,345 shares of its common stock to the
Plan and the balance in cash. In 1999, the Company paid the 1998 accrued
contribution through a contribution of 5,643 shares of its common stock to the
Plan and the balance in cash.


11.    GEOGRAPHIC INFORMATION

For geographic information, net revenues are allocated between the United States
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 were immaterial for all periods presented.

                                    Years Ended November 30,
                         ----------------------------------------------
                              2001            2000            1999
                         --------------  --------------  --------------
     Canada              $    6,169,939  $    7,778,061  $    5,275,211
     United States           54,113,082      38,878,176      31,184,815
                         --------------  --------------  --------------
                         $   60,283,021  $   46,656,237  $   36,460,026
                         ==============  ==============  ==============
<PAGE>
12.    CONTRACT SETTLEMENT

The Company had a contract to provide advertising sales services to the
Tri-County Metropolitan Transit District (Tri-Met) in Portland, Oregon, which,
by its terms, was scheduled to expire in June 2001. The Company originally began
serving Tri-Met in January 1994, pursuant to a five-year agreement, which was
later extended for an additional two years. The Federal Transit Administration
(FTA), which provides substantial monies to transit districts, has taken the
position that transit advertising contracts may not exceed five years in length.
At the request of the FTA, Tri-Met and the Company agreed that the Company's
agreement with Tri-Met was to terminate on June 30, 1999 and in December 1998
entered into an agreement to compensate the Company for early termination of the
existing contract. The total amount of the contract settlement was $1,077,469
and is included as an offset in operating expenses in the accompanying
consolidated statement of operations for the year ended November 30, 1999.

In anticipation of the termination of the Company's transit district agreement,
Tri-Met solicited proposals for the operation of the Portland transit district.
In September 1999, the Company began a new contract with Tri-Met.

13.      DEBT FINANCING ARRANGEMENTS AND LIQUIDITY

The Company experienced a net loss of $7,248,388 and negative cash flow from
operations of $1,231,623 during the year ended November 30, 2001. Despite the
unfavorable loss, the Company has been able to fulfill its needs for working
capital and capital expenditures, due in part to its ability to maintain
adequate financing arrangements. The Company's line of credit becomes due on
February 3, 2003. Company borrowings at November 30, 2001 were $15,918,735 on an
asset base of $43,232,873. The Company expects that operations will continue for
2002 with the realization of assets, and discharge of liabilities in the
ordinary course of business. 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, there is no assurance that the
amounts from these sources will be sufficient for such purposes. In that event,
or for other reasons, the Company 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, will be on terms satisfactory to the
Company.