<PAGE>


                                    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 JUNE 30, 1997 or

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


                            COMMISSION FILE NUMBER 1-10981
                                           
                                           
                                           
                                           
                                SBS TECHNOLOGIES, INC.
                (Exact name of registrant as specified in its charter)
                                           
                                           
           New Mexico                                   85-0359415
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)


                               2400 Louisiana Blvd. NE
                              AFC Building 5, Suite 600
                            Albuquerque, New Mexico  87110
                                   (505)  875-0600
                                           
                                           
             Securities registered pursuant to Section 12(b) of the Act:
                                           
                                         None
                                           
             Securities registered pursuant to Section 12(g) of the Act:
                                           

                                 TITLE OF EACH CLASS
                                 ------------------- 
                              Common Stock, no par value 


<PAGE>

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

         Yes   X        No   
             ------         ------



Indicate by check mark if disclosure of delinquent filers pursuant 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.     (   )




The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sale price of the Common Stock on September
2, 1997 as reported on NASDAQ was approximately $110,375,605.  Shares of Common
Stock held by each officer and director and by each person who owns 5% or more
of the outstanding Common Stock have been excluded in that such persons may be
deemed to be affiliates.  This determination of affiliate status is not
necessarily a conclusive determination for other purposes.




As of September 2, 1997, Registrant had 5,467,428 shares of Common Stock
outstanding.




                         DOCUMENTS INCORPORATED BY REFERENCE
                                           
Parts of the following documents are incorporated by reference into Part III of
this Form 10-K Report:  (1) Definitive Proxy Statement for Registrant's 1997
Annual Meeting of Stockholders to be held November 11, 1997.

                                       2


<PAGE>


                                        PART I
                                           
ITEM 1.  BUSINESS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
"SELECTED FINANCIAL DATA" AND THE COMPANY'S FINANCIAL STATEMENTS AND NOTES
THERETO.  INFORMATION DISCUSSED HEREIN MAY INCLUDE FORWARD-LOOKING STATEMENTS
REGARDING FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE COMPANY, AND
ARE SUBJECT TO A NUMBER OF RISKS AND OTHER FACTORS WHICH COULD CAUSE THE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD LOOKING
STATEMENTS.  AMONG SUCH FACTORS ARE:  GENERAL BUSINESS AND ECONOMIC CONDITIONS;
CUSTOMER ACCEPTANCE OF AND DEMAND FOR THE COMPANY'S PRODUCTS; THE COMPANY'S
OVERALL ABILITY TO DESIGN, TEST AND INTRODUCE NEW PRODUCTS ON A TIMELY BASIS;
THE NATURE OF THE MARKETS ADDRESSED BY THE COMPANY'S PRODUCTS; AND OTHER RISK
FACTORS LISTED FROM TIME TO TIME IN DOCUMENTS FILED BY THE COMPANY WITH THE SEC.

INTRODUCTION

SBS Technologies, Inc. (the "Company") is a leading manufacturer of standard bus
embedded computer components that perform a broad range of central processing
unit ("CPU"), general purpose input/output ("I/O"), special purpose I/O
interface applications, and high performance interconnect hardware and 
software. The Company capitalizes on its design expertise and customer service
capabilities to enhance product quality and reduce time to market for OEM
customers.

The Company's objective is to become a leading supplier of board level
components to the standard bus embedded computer market.  The Company intends to
continue its growth through a combination of internal growth and acquisitions. 
Internal growth is achieved through expanding its existing product lines through
new product development and through increasing penetration of its existing
customer base.

Fiscal 1997 was  a year of progress in the continued development of the 
Company. The Company focused  on continually  enhancing and improving the 
products it delivers and its ability to satisfy customer needs.  During 
1997 the Company substantially broadened the range of product solutions 
provided and added significantly to the number of customers served.

Revenues for the fiscal year ended June 30, 1997 increased 68.7% from $31.3
million to $52.8 million.  The source of this revenue increase was twofold:
growth in the core businesses, and growth by the acquisition of two product
areas.  

The Company entered fiscal 1997 as a leader in several segments of the 
multi-billion dollar embedded computer market, with the continuing goal of 
expanding its  market presence.  In the computer mezzanine board I/O segment, 
the Company broadened its line of IndustryPacks-Registered Trademark- ("IPs") 
to over 100 variants.  During the year,  IP's became an open standard 
approved by the American National Standards Institute (ANSI) as an 
internationally recognized standard meeting the criteria for open system 
compatibility demanded by the industry.  More and more engineers have 
recognized the advantages of this I/O solution in time-to-market and design 
flexibility.  In the Avionics business, the Company's interface boards and 
bus analyzers remained the industry standard for quality and innovation with 
a broadening of the Company's customer base and participation on such 
programs as the X-33 [Reusable Launch Vehicle (RLV)], the International Space 
Station and the B-52 Life Extension Program. The Company repositioned  its 
telemetry product line toward the satellite test and control market in order 
to serve the rapidly expanding satellite market driven by both 
telecommunications and defense applications.

In August 1996, the Company expanded into the broader embedded computing 
market with the acquisition of Logical Design Group, Inc. ("LDG"), a 
manufacturer of Intel processor-based CPU boards.  This acquisition 
positioned the Company to take advantage of the growth in the use of both 
Intel processors and Microsoft software in the embedded computer market.

In November 1996, the Company acquired Bit 3 Computer Corporation ("Bit 3"), 
a leading developer and manufacturer of high performance bus interconnect 
hardware and software products for many of the 

                                        3

<PAGE>


most widely used computer architecture standards in the standard bus embedded 
computer market.  This acquisition takes advantage of the introduction into 
the embedded computing market of new bus standards such as PCI and 
CompactPCI, expands the Company's customer base and opens the bus expansion 
market to the Company.   In the quarter ended December 31, 1996, the Company 
took a one time $11.0 million in-process research and development charge to 
earnings associated with this acquisition.  

In June 1997, the Company divested  its Judgmental Use of Force Training
business.  The Company determined that this business was not consistent with the
Company's objective of becoming a leading supplier of board level components to
the standard bus embedded computer market.

Excluding the effect of the one time $11.0 million charge to earnings, net
income for the year would have increased 97.2% from $3.6 million to $7.1
million, and earnings per share would have increased 38.1% from $.97 to $1.34. 
Including this charge, net income was $461,685, or $0.09 per share.  

The Company was incorporated in New Mexico in November 1986 and began operations
in September 1987.  The Company's executive offices are located at 2400
Louisiana Boulevard, NE, AFC Building 5, Suite 600, Albuquerque, New Mexico
87110, and its telephone number is (505) 875-0600.  References to the "Company"
or "SBS" are to SBS Technologies, Inc. and its consolidated subsidiaries.  The
Company has four subsidiaries, Berg Systems International, Inc. ("BSI"),
GreenSpring Computers, Inc. ("GreenSpring"), Logical Design Group, Inc. ("LDG"),
and Bit 3 Computer Corporation ("Bit 3").  IndustryPack-Registered Trademark- is
a registered trademark of the Company.  All other trademarks or tradenames
referred to in this document are the property of their respective owners.

In fiscal 1998, the Company plans to rename its subsidiaries as follows:

NEW BUSINESS NAME                     FORMERLY KNOWN AS:
SBS Embedded Computers, Inc.          Logical Design Group, Inc.
SBS GreenSpring Modular I/O, Inc.     GreenSpring Computers, Inc.
SBS Bit 3 Operations, Inc.            Bit 3 Computer Corporation
SBS Berg Telemetry Systems, Inc.      Berg Systems International, Inc.

SBS' PRODUCTS

The Company's primary product lines are divided into two groups: general purpose
products including CPU products, general purpose I/O products and bus interface
products, and special purpose products including telemetry and avionics
interface products.

GENERAL PURPOSE PRODUCTS

CPU PRODUCTS.  The Company entered the standard bus embedded computer CPU 
board market with its acquisition of LDG in August 1996 (See "Management's 
Discussion & Analysis: Recent Acquisitions"). CPU boards contain the 
computational functionality of an embedded computer system. The Company 
produces CPU boards for the VME segment of the embedded computer market, the 
most widely accepted bus standard in the industry. The VME CPU board market 
can be segmented by processor type. The largest segment is made up of boards 
designed around the Motorola 680x0 series processors, upon which the VME 
standard was based. A growing segment is comprised of boards based on Intel 
80x86 and Pentium processors which provide access to the large base of 
Windows and Windows NT software available from the PC market. The CPU boards 
sold by LDG are based on Intel 80x86 and Pentium processors.  At present, the 
Company offers six Intel processor-based CPU boards ranging in price from 
approximately $2,500 to approximately $8,500.  In fiscal 1997, sales of these 
products comprised 11.5% of the Company's total sales.  As of September 2, 
1997, backlog orders were $.7 million.  All backlog orders are expected to be 
filled in the current fiscal year.   

GENERAL PURPOSE I/O PRODUCTS.  In April 1995, the Company purchased 
GreenSpring (See "Management's Discussion & Analysis: Recent Acquisitions"), a 
leading developer and producer of I/O modules known as IPs.  IPs are small 
mezzanine boards that plug onto an embedded computer board or a carrier board 
and provide specific types of I/O for embedded computer systems. The Company 
has continued to expand the market for IP products by broadening its  line of 
carrier cards  that can accommodate up to four IPs. The Company's offerings 
currently include VME, PCI, Compact PCI and ISA bus carrier cards. 
GreenSpring's product line of over 100 I/O products services a wide range of 
applications in the embedded computer market including analog I/O, bus 
interface functions, digital/parallel I/O, motion control, 
telecommunications/serial I/O, telecommunications products, video/graphics 
adapters and temperature measurement with prices ranging from approximately 
$350 to approximately $3,500.  In fiscal years 1997, 1996, and 1995, sales of 
these products comprised approximately 26%, 35% and 9%, respectively, of the 
Company's total sales.  As of 

                                       4

<PAGE>

September 2, 1997 and 1996, backlog orders were $14.2 and $2.5 million, 
respectively.  All backlog orders are expected to be filled in the current 
fiscal year.

BUS INTERFACE PRODUCTS. In November 1996, the Company purchased Bit 3 (See 
"Management's Discussion & Analysis: Recent Acquisitions"), a leading developer
and manufacturer of high performance bus interconnect hardware and software 
products.  Bit 3 was incorporated in 1980 and its management recognized early 
on that the rapid expansion of microprocessor-based industrial computers had 
resulted in the proliferation of a number of different computer architecture 
standards. Bit 3 identified a market for products that interface and network 
industrial computers designed around different computer architectures. In 
1983, Bit 3 introduced its first adapter product, an interface device to 
connect IBM PC equipment with Multibus architecture computers. Since then, 
Bit 3 has expanded its product line to include computer networking and 
interconnection hardware for many of the popular computer architecture 
standards used in the standard bus embedded computer market, including VME, 
PCI, CompactPCI, Sbus, ISA, EISA, Micro Channel, GIO, TURBOCHANNEL, Multibus 
and Qbus.  The development of Bit 3's new products is driven by the emergence 
of significant new standard bus specifications and applications. 

Bit 3 products are used in a wide variety of applications, including data 
acquisition, image and visualization processing, industrial process control, 
medical electronics, signal processing and system integration. Bit 3's 
typical customer uses bus adapter products because of the need for high 
speed, low-latency interconnections between computer platforms. This 
connectivity cannot be provided at the required performance levels by common 
local area networking solutions, such as Ethernet or Token Ring, nor can it 
in most cases be provided by higher speed protocols, such as ATM or FDDI. Bit 
3 currently provides interconnect products to a wide variety of commercial 
users.  In fiscal 1997, sales of these products comprised 17.1% of the 
Company's total sales.  As of September 2, 1997, backlog orders were $1.5 
million.  All backlog orders are expected to be filled in the current fiscal 
year.

SPECIAL PURPOSE PRODUCTS

TELEMETRY PRODUCTS.  In August 1992, the Company purchased BSI , a major 
supplier of telemetry interface equipment for the embedded computer market. 
Telemetry is the process used to send and receive digital data via radio 
waves. The Company's telemetry interface products allow computers to receive, 
interpret and process telemetry data. Telemetry is often used to transmit 
data from some object under test, such as an aircraft, to a receiving station 
while the test is underway. This allows engineers to monitor test performance 
in real time, often decreasing total test costs and enhancing test safety. 
Use of this technology has expanded to include continuous monitoring of 
remote sites and transmission of digital data from satellites to the earth. 
BSI pioneered the concept of using special purpose interface boards for 
telemetry ground station applications based on standard bus embedded 
computers. BSI has expanded its product offerings to include specialized 
equipment designed to receive and process satellite data. The Company's 
telemetry products serve a specialized market and include a significant 
software component. BSI sells approximately 30 products for the VME, PCI,  
and ISA bus telemetry markets at prices ranging from approximately $1,600 to 
approximately $41,000.  In fiscal years 1997, 1996 and 1995, sales of these 
products comprised approximately 12%, 21% and 34%, respectively, of the 
Company's total sales.  As of September 2, 1997 and 1996, backlog orders were 
$.9 million and $.7 million, respectively.  All backlog orders are expected 
to be filled within the current fiscal year. 

AVIONICS INTERFACE PRODUCTS.  The Company's avionics products interface an
embedded computer system with the MIL-STD-1553 avionics bus used in a wide
variety of military and space applications including aircraft, missiles, ground
vehicles, the International Space Station, the Space Shuttle and naval vessels.
Initial applications for the Company's products were support of system
development, system testing and simulation. Over the past several years, the
Company has expanded its product line to include ruggedized interface products
that are used in operational systems, and monitor and test systems that can be
used as diagnostic tools for operational systems. Like its telemetry products,
the Company's avionics products occupy a niche market and include a significant
software component. The Company offers approximately 20 avionics interface
boards at prices ranging from approximately $4,000 to approximately $20,000.  In
fiscal years 1997, 1996 and 1995, sales of this product comprised approximately
31%, 40% and 50%, respectively, of 


                                       5

<PAGE>


the Company's total sales.  As of September 2, 1997 and 1996, backlog orders 
were $2.0 and $1.9 million, respectively.  All backlog orders are expected to 
be filled within the current fiscal year. 

In June 1997, the Company sold its  Judgmental Use of Force product (see 
"Management's Discussion & Analysis: Sale of Judgmental Use Of Force 
Business").   This product utilized an embedded computer in a device to train 
police officers and military personnel in proper responses to crisis 
situations.  In fiscal years 1997, 1996 and 1995, sales of this product 
comprised approximately 3%, 4% and 4%, respectively, of the Company's total 
sales. 

CUSTOMERS AND APPLICATIONS

The Company's broad range of products support a wide range of applications. 
In fiscal 1997, 1996 and 1995, no one customer exceeded 10% of the Company's 
sales. The following table highlights some of the Company's representative  
customers and their applications utilizing the Company's products. 

<TABLE>
<CAPTION>

APPLICATION                               CUSTOMER                                COMPANY PRODUCT

COMMERCIAL AND INDUSTRIAL APPLICATIONS
<S>                                       <C>                                        <C>
Aircraft Simulation                       Flight Safety International                Interconnect
Aircraft Simulation                       CAE Electronics                            Interconnect
Airport Baggage Inspection                InVision Technologies                      Interconnect
Airport Ground Traffic Control            Norden/Westinghouse                        CPU
"C" Size Copier                           Xerox                                      I/O
Color Proof Copier                        Eastman Kodak                              I/O
Contact Lens Inspection                   Perceptics                                 Interconnect
Currency Inspection System                Currency Systems                           CPU
Document Scanner                          General Scanning                           I/O

OCR Mail Address Processing               Bell & Howell                              Interconnect
Semiconductor Handler                     Delta Design                               I/O
Turbine Control System                    GE Motors                                  CPU
Video Animation                           Sun Microsystems                           Interconnect

COMMUNICATIONS

Cellular Telephone Systems                ArgoSystems                                CPU
Commercial Satellite Testing              Loral Test & Information                   Telemetry
Communications Satellite Testing          TRW                                        Telemetry
GSP Testing                               Aerospatiale                               Telemetry
SS7 Telephone Protocol                    Undisclosed                                I/O
Telephone Protocol                        Undisclosed                                I/O
Telephone Switch Billing System           ACECOM                                     I/O

INDUSTRIAL AUTOMATION

Animatronics                              Walt Disney                                I/O
Automotive Brake Tester                   Burke Porter Machinery                     CPU
Automotive Test Stands                    W.M. Associates/ Digital Equipment Corp.   Interconnect
Automotive Wheel Alignment                Burke Porter Machinery                     CPU
Carpet Manufacturer Process Control       MOOG                                       I/O
Combustion Turbine Control                Westinghouse Electric Corp.                Interconnect
Packaging Machinery                       Triangle Package Machinery                 I/O
PLC Co-processor                          GE Fanuc                                   CPU
Programmable Logic Controller             Reliance Electric                          Interconnect
Real-time Control Systems                 Queue Systems, Inc./Digital Equipment Corp Interconnect
Robot Control                             Adept Technology                           I/O
Semiconductor Trim Equipment              Control Automation                         CPU
Surface Mount Board Assembly              Seiko Instruments                          Interconnect
</TABLE>


                                       6

<PAGE>

<TABLE>
<CAPTION>


MEDICAL DEVICES
<S>                                       <C>                                        <C>
Blood Analyzer                            IGEN                                       I/O
Blood Analyzer                            Helena Laboratories                        CPU
CT Beam Scanner                           Imatron                                    Interconnect
PET Imaging Systems                       UGM Medical Systems, Inc.                  Interconnect
Positron Emissions Topography             Positron Corporation                       Interconnect
Ventilators Display                       NellCor                                    I/O

MILITARY AND SPACE APPLICATIONS

Ariane V System Test and Simulation       Aerospatiale                               Avionics
Ariane V Test Support                     Lockheed Martin                            Telemetry
B-2 Flight Testing                        Northrop Grumman                           Telemetry
C-17 Aircraft Testing                     McDonnell Douglas                          Telemetry
Mission Planning & Debriefing             Lockheed-Sanders                           Interconnect
Satellite Imaging                         TRW                                        Telemetry
TAC-3                                     Hughes Data Systems                        Interconnect
TAC-4                                     Hewlett Packard                            Interconnect

TEST AND MEASUREMENT APPLICATIONS

Cyclotron Controller                      Univ. of Wisconsin                         I/O
Particle Collision and Detection System   CERN                                       I/O
Temperature Control                       Therm-O-Disk                               I/O
VLSI Tester                               LTX/Trillium                               Interconnect

TRANSPORTATION

Aircraft Flight Testing                   Cessna                                     Telemetry
Commercial Avionics System Test           Honeywell                                  Avionics
Commercial Avionics System Test           Rockwell International                     Avionics
Jet Engine Testing                        Pratt & Whitney                            Telemetry
Lane Controllers                          NYSTA                                      I/O
Maritime Systems                          NEC                                        Avionics
Personal Rapid Transit                    Raytheon                                   I/O
777 Aircraft Testing                      Boeing                                     Telemetry
Train Track Alignment System              Fairmont Tamper                            CPU
</TABLE>

SALES AND MARKETING

The Company markets its products both domestically and internationally. As of 
September 2, 1997, the Company had 32 employees, who typically hold 
engineering degrees, in sales, marketing and customer relations.  In 
addition, during the year ended June 30, 1997, the Company utilized over 43 
independent manufacturers' representatives and 35 international distributors. 
During fiscal 1998, the Company plans to realign its sales force into 
commercial and aerospace sales channels utilizing direct sales employees and 
minimizing the use of independent manufacturers' representatives. The 
aerospace sales force will be responsible for sales of the Company's avionics 
interface and telemetry products and the commercial sales force will be 
responsible for sales of the Company's CPU, I/O and interconnect products. 
Employee sales personnel are educated on each of the Company's product lines 
and refer opportunities to appropriate product line managers. Primary sales 
methods vary among the Company's product lines. The Company's avionics 
interface and telemetry products generally have the most complex applications 
and, as a result, leads are generally identified by field sales personnel or 
independent manufacturers' representatives and sales are closed by the sales 
employees. In the case of the Company's CPU and I/O products, historically a 
higher percentage of sales were either closed by independent manufacturers' 
representatives or the result of  catalog sales. Beginning with fiscal 1998, 
sales will be closed by the commercial sales force or will result from 
catalog sales. Sales of the Company's interconnect products primarily have  
resulted from catalog 

                                       7

<PAGE>


sales. Beginning with fiscal 1998 the commercial sales force 
will also be responsible for these sales.  In each of the Company's product 
lines, sales employees generally pursue "design in" applications where the 
Company's products are included as part of a system. 

The Company sells approximately 16% of its products outside the United States 
(See footnote 4 to the consolidated financial statements). It maintains sales 
offices in Albuquerque for its avionics interface products; in Raleigh, North 
Carolina, for its Intel processor-based CPU boards; in Menlo Park, 
California, for its I/O products; in Carlsbad, California, for its telemetry 
products; and, in Minneapolis, Minnesota for its interconnect products. The 
Company also maintains an international sales office in Glasgow, Scotland to 
support European sales of its avionics interface products. During fiscal 
1998, the Company plans to open additional sales locations. Sales and sales 
leads are generated through a range of activities performed by the Company 
including identification of participants in key defense-related programs, 
participation in numerous trade shows, direct mail catalogs, advertisements 
in leading trade publications and corporate and subsidiary web sites on the 
Internet. 

COMPANY RESEARCH AND DEVELOPMENT

The Company invests in research and development programs to develop new 
products in related markets and to integrate state of the art technology into 
existing products. As of September 2, 1997, the Company had approximately 72 
employees engaged in research and development activities. Of these employees, 
46 have technical degrees and 17 have advanced degrees. The Company seeks to 
combine special-purpose hardware, firmware and software in its products to 
provide its customers with the desired functionality. Approximately 60% of 
the Company's research and development efforts in fiscal year 1997 were 
software related. The Company's research and development expense was $4.4 
million, $2.8 million and $1.7 million in fiscal 1997, 1996 and 1995, 
respectively, corresponding to 8.4%, 9.1% and 10.4% of sales, respectively. 

LDG's current research and development activity is focused on evolutionary 
improvement of its existing product line. GreenSpring's efforts are directed 
towards broadening the scope of its market by developing new IPs and 
upgrading existing products to state of the art technology.  Examples include 
a new IP designed to provide high speed fiber optic shared memory for 
networked computer systems and an updated set of discrete and digital I/O IPs 
with increased performance and functionality. The development of Bit 3's new 
products is driven by the emergence of significant new bus specifications and 
applications.  For example, Bit 3 brought to market a family of PCI and 
Compact PCI expansion products.  BSI is continuing to upgrade its products' 
performance by increasing the operating bit rates, a key performance measure 
in the telemetry industry. BSI is also continuing to expand its offerings of 
high performance, CCSDS packet switching products for the satellite ground 
station market. The Company is also extending its avionics interface product 
line. For example, the Company has completed development of a new ruggedized 
avionics product for the operational system market.  There can be no 
assurance that the Company will be successful in developing and bringing to 
market any products as a result of its research and development efforts.

SUPPLIERS

The Company uses contract manufacturing to produce substantially all of its 
board-level products. The Company obtains parts from large electronics parts 
suppliers and printed circuit boards from printed circuit board manufacturers 
and provides these parts and boards as kits to contract manufacturing 
companies that fabricate the Company's products. Following manufacturing, the 
Company performs test, packaging and support functions for the Company's 
products. Dependence on a particular contract manufacturer is reduced by 
using multiple contract manufacturers for each of the Company's product 
lines. However, the Company may choose in the future to consolidate its 
contract manufacturing to gain economies of scale and to shift its inventory 
control to the contract manufacturer, in which case the Company would become 
increasingly dependent on a smaller number of manufacturers for the continued 
timely and efficient production of all of its inventory.

Many of the Company's products consist in part of state-of-the-art digital 
electronic components.  The Company is dependent upon third parties for the 
continuing supply of many of these components, some of which are obtained 
from a sole supplier such as Xylinx, Inc. or a limited number of suppliers 
and 

                                       8

<PAGE>


alternative sources which would be difficult to locate.  Moreover, suppliers 
may discontinue or upgrade some of the products incorporated into the 
Company's products, which could require the Company to redesign a product to 
incorporate newer or alternative technology.  Although the Company believes 
that it has arranged for an adequate supply of components to meet short-term 
requirements, the Company does not have contracts for the components which 
assure availability and price.  Lack of timely availability of components 
could cause delays in shipment of product and affect the Company's revenues 
during certain periods as well as lead to customer dissatisfaction.  Limited 
availability of components could also require the Company to pay premiums for 
parts to make shipment deadlines and thus affect the Company's profit margin, 
or cause the Company to increase its inventory of scarce parts and thus 
affect the Company's cash flow. There is no assurance that the Company will 
continue to be able to obtain all of the components it requires or that the 
price of certain components in short supply will not materially and adversely 
affect its business, financial condition or results of operations.

COMPETITION

The standard bus embedded computer industry is highly competitive and 
fragmented, and the Company's competitors differ depending on product type, 
company size, geographic market and application type. The Company faces 
competition in each of its product lines. The Company believes that because 
of the diverse nature of the Company's products and the fragmented nature of 
the embedded computer market, there is little overlap of competitors for each 
product line. Competitive factors across the Company's product lines include 
performance, customer support, product longevity, supplier stability, breadth 
of product offerings and reliability. Many of the Company's existing and 
potential competitors have financial, technological and marketing resources 
significantly greater than those of the Company and may have established 
relationships with customers or potential customers that afford them a 
competitive advantage. There can be no assurance that the Company will be 
able to compete effectively in its current or future markets or that 
competitive pressures will not adversely affect its business, financial 
condition or results of operations. 

In the Company's  CPU product line, the Company competes with a number of 
other suppliers of VME CPU boards. The Company's direct competitors include 
other companies that build VME CPU boards based on Intel microprocessor 
technology such as Force Computers, Inc. (a wholly owned subsidiary of  
Solectron Corporation), Performance Technologies, Inc., RadiSys Corporation, 
VME Microsystems, Inc. and XYCOM, Inc. Indirectly, however, the Company also 
competes with suppliers of VME CPU boards based on other microcomputer 
architectures such as Motorola 680x0, Sparc and PowerPC. 

In the generalized computer I/O product area served by GreenSpring and its IP 
product line, the Company has two classes of competition. The first class 
includes companies that compete directly by selling IP products. The second 
class includes companies that compete with I/O products using a different 
implementation to provide functionally equivalent products. The Company's 
competitors in each of these classes include Acromag, Inc., Systran, Inc. 
and VME Microsystems, Inc. 

In the telemetry market, the Company competes with other suppliers of open 
architecture telemetry solutions. It also indirectly competes with suppliers 
of traditional, closed architecture telemetry systems. The Company's 
competitors include Aydin Vector Division, L3 Communications, Inc., 
Terametrix, Inc. and Veda, Inc.

In the avionics interface market, the Company competes with a number of other 
companies that produce similar avionics interface products. The Company's 
competitors include Ballard Technologies, Inc., Data Devices Corporation, 
Systran, Inc., DY-4, Inc., Excalibur Technologies Corporation and 
Gesellschaft Fur Angewandte Informatik und Mikroelekernik, GmbH.

In the Company's interconnect and expansion unit product line, the Company 
competes with personal computer (PC) manufacturers that offer computer 
motherboards with multiple PCI slots and with companies that have similar 
product lines.  There is no significant direct competitor in this market.  

                                       9

<PAGE>


EMPLOYEES

As of September 2, 1997, the Company had approximately 231 employees at its 
five locations:  Albuquerque, New Mexico; Carlsbad, California;  Menlo Park, 
California; Raleigh, North Carolina; and Minneapolis, Minnesota.   Of these 
employees, 19 were in executive and administrative positions; 32 were in 
sales, marketing and customer relations; 72 were in research and development; 
36 were clerical, and 72 were employed in support of ongoing production.

ITEM 2.  FACILITIES

The Company leases office and manufacturing space in Albuquerque, New Mexico,
Carlsbad, California, Menlo Park, California, Raleigh, North Carolina and
Minneapolis, Minnesota. The Company's standard practice is to obtain all of its
facilities through operating leases. The Company  maintains an insurance plan
covering all its facilities and contents. 

The Albuquerque, New Mexico leased facility consists of 19,225 square feet 
located in a multi-floor office building which includes adequate assembly and 
test space for the Company's avionics interface product line, as well as 
serving as the Company's corporate headquarters. Management is currently 
negotiating for additional space within this facility, which is available if 
terms can be agreed upon. Currently the assembly and test operations utilize 
approximately 85% of the productive floor space. The lease term for the 
Albuquerque, New Mexico location is five years commencing July 1, 1995 with 
one additional five year option. 

The Carlsbad, California leased facility is a one story, approximately 12,000 
square foot building, located in a business park, consisting of approximately 
6,000 square feet of office space and 6,000 square feet of assembly and test 
areas for the Company's telemetry products. Management believes that this 
facility is capable of handling projected increases in production for the 
foreseeable future as the current capacity utilization of the manufacturing 
area is approximately 50%. The lease term for the Carlsbad, California 
location runs through July 2000 with an option to extend the term for an 
additional two years. 

The Company's general purpose I/O business is located in Menlo Park, 
California. The 16,394 square foot facility, which is leased for a four year 
term expiring May 2000, is a one story multi-tenanted building in a business 
park which consists of 6,000 square feet of office space and 10,394 square 
feet of assembly and test areas. Management believes that the facility will 
be sufficient to serve the general purpose I/O business needs through the 
term of the lease. 

The Company's CPU products business, located in Raleigh, North Carolina, 
leases a one story multi-tenanted facility consisting of approximately 4,000 
square feet of office space and approximately 7,000 square feet of assembly 
and test areas. The lease expires on November 30, 2002. Management believes 
that the facility is adequate at the Company's current level of business and 
that expansion space is available if required. 

The Company's interconnect business is located in an approximately 13,647 
square foot facility in Minneapolis, Minnesota leased for a one year term 
that expires October 1997. At the expiration of this lease, the Company plans 
to relocate this operation to a 39,597 square foot facility located in a 
business park in Eagen, Minnesota.  The Company is currently finalizing lease 
negotiations for this facility for a five year term.  Management believes 
that  this facility will sufficiently serve the needs of this operation 
through the term of the lease.

Before the sale of the Company's simulation business to Camber Corporation in 
April 1995, the Company had additional leased facilities in Albuquerque, New 
Mexico, Dallas and Houston, Texas.  In conjunction with this sale, the 
Company entered into sublease and lease assumption agreements with Camber 
Corporation, transferring the obligations under these leases.

                                       10

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

The Company has been named as a defendant in Virtual Systems Group, Inc. 
(VSG) v. SBS Technologies, Inc., filed on June 19, 1996 in the Second 
Judicial District Court, County of Bernalillo, State of New Mexico.  The 
plaintiff, a company engaged by SBS to market its Judgmental Use of Force 
Trainers, claims that the Company failed to fulfill all its obligations under 
an Agreement between the Company and VSG whereby VSG would market the 
Company's Judgmental Use of Force Trainers.  The Company is vigorously 
defending the lawsuit and has filed a counter suit alleging misrepresentation 
and failure to perform on the part of VSG, and on the advice of counsel, does 
not believe that the outcome of the litigation will have a material effect on 
the Company's financial condition or results of operations.

The Company is subject to various claims which arise in the ordinary course 
of its business.  In the opinion of management, the amount of ultimate 
liability with respect to these actions will not materially affect the 
financial position of the Company.
     

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.






                                       11

<PAGE>


                                       PART II
                                           
                                           
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
The following table sets forth the range of closing price of the Company's 
common stock as reported on the NASDAQ National Market System for each full 
fiscal quarter within the last two fiscal years:
    

                                             HIGH              LOW
                    
         1st Quarter 1996                  $ 9.00            $ 5.00
         2nd Quarter 1996                    8.94              7.13
         3rd Quarter 1996                   10.13              7.63
         4th Quarter 1996                   17.13              8.88
         1st Quarter 1997                   19.75             10.625
         2nd Quarter 1997                   39.00             19.00
         3rd Quarter 1997                   35.00             15.25
         4th Quarter 1997                   24.75             10.875
   
    
The Company's common stock is traded over the counter on the NASDAQ National 
Market System using the symbol SBSE.

Based on the Company's survey of brokerage houses, management believes that 
as of September 2, 1997, the number of common stockholders of record was 
approximately 206, at which date the closing market value of the Company's 
common stock was $21.375 per share.

The Company has not paid any cash dividends on its common stock.  
Management's current policy is to retain earnings for use in the Company's 
operations and for expansion of the Company's business.  The Company's bank 
line of credit also requires bank approval before the payment of any cash 
dividends.  No future dividend payments are expected.

                                      12

<PAGE> 


ITEM 6. SELECTED FINANCIAL DATA
 
The following selected financial data for the years ended June 30, 1993 
through June 30, 1997 have been derived from the Company's audited 
consolidated financial statements.  This information should be read in 
conjunction with "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and the audited consolidated financial statements 
and related notes thereto included elsewhere herein.                          


<TABLE>
<CAPTION>


                                                                                  YEAR ENDED JUNE 30
                                                    ------------------------------------------------------------------------
                                                         1997           1996           1995           1994           1993
                                                    ------------     ----------     ----------     ----------    -----------
<S>                                                 <C>              <C>            <C>            <C>           <C>
Sales - continuing operations                       $ 52,814,568     31,331,793     16,217,648     10,196,568      5,907,658
Income - continuing operations                      $    461,685      3,580,907      1,844,876        870,750        168,099
Income per common and common
     equivalent share - continuing operations       $       0.09           0.97           0.65           0.30           0.05
Income - continuing operations
  (Excluding $11.0 million in-process R&D charge)   $  7,061,685             --             --             --             --
Income per common and common 
     equivalent share - continuing operations
  (Excluding $11.0 million in-process R&D charge)        $  1.34             --             --             --             --
Total assets                                        $ 61,165,014     20,443,672     19,904,922     13,476,737     11,732,328
Long-term debt, excluding current installments      $  2,816,251      5,188,320      5,341,649        273,573        329,979
Total liabilities                                   $ 10,838,326     10,392,752     14,855,674      7,611,400      6,885,973
Total stockholders' equity                          $ 50,326,688     10,050,920      5,049,248      5,865,337      4,846,355

</TABLE>



Note:  The Company has not declared any dividends during the periods presented.
       No future dividend payments are expected.
    
       On November 18, 1996, the Company completed the purchase of Bit 3.  In
       connection with the acquisition of Bit 3, the Company recorded an $11.0
       million in-process R&D charge in the second quarter of fiscal 1997.  
    
       On August 19, 1996, the Company completed a pooling of interests
       transaction with LDG, the results of which are included in fiscal 1997 
       on a prospective basis.
    
       On April 28, 1995 the Company completed the purchase of GreenSpring.
    
       On April 26, 1995 the Company sold its flight simulation business to 
       Camber Corporation, which is reported as discontinued operations in the
       consolidated financial statements.  
    
       The Selected Financial Data are for continuing operations only.  The
       financial statements herein reflect the separation of continuing 
       operations from discontinued operations.


                                       13

<PAGE>

 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
        CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS OF SBS TECHNOLOGIES, INC. AND SUBSIDIARIES

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH 
"SELECTED FINANCIAL DATA" AND THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS 
AND NOTES THERETO. INFORMATION DISCUSSED HEREIN MAY INCLUDE FORWARD-LOOKING 
STATEMENTS REGARDING FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE 
COMPANY, AND ARE SUBJECT TO A NUMBER OF RISKS AND OTHER FACTORS WHICH COULD 
CAUSE THE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY 
FORWARD LOOKING STATEMENTS.  AMONG SUCH FACTORS ARE:  GENERAL BUSINESS AND 
ECONOMIC CONDITIONS; CUSTOMER ACCEPTANCE AND DEMAND FOR THE COMPANY'S 
PRODUCTS; THE COMPANY'S OVERALL ABILITY TO DESIGN, TEST AND INTRODUCE NEW 
PRODUCTS ON A TIMELY BASIS; THE NATURE OF THE MARKETS ADDRESSED BY THE 
COMPANY'S PRODUCTS; AND OTHER RISK FACTORS LISTED FROM TIME TO TIME IN 
DOCUMENTS FILED BY THE COMPANY WITH THE SEC. 

OVERVIEW

The Company is a leading manufacturer of standard bus embedded computer 
components that perform a broad range of CPU, general purpose I/O,  special 
purpose I/O interface applications, and high performance interconnect 
hardware and software. In 1988, the Company entered the embedded computer 
market with the development of its avionics interface board, which is used in 
ground-based avionics systems development and test applications. In 1992, the 
Company added a second embedded computer product line with the acquisition of 
BSI, a developer of telemetry interface circuit boards. In recent years, the 
Company has discontinued certain of its operations. From its inception in 
1986 until 1995, the Company provided flight simulators for a variety of 
military aircraft to U.S. and foreign entities. In April 1995, following a 
decline in the defense industry, the Company divested this business and 
recorded a related charge of $2.3 million. Additionally, from 1987 through 
the first half of fiscal 1996, the Company provided engineering services that 
generated minimal revenue and profit. The Company subsequently exited this 
business.  The Company marketed a Judgmental Use of Force Training System, 
used to train police and military personnel in the appropriate situational 
use of force, from 1993 through fiscal year 1997, when the Company sold this 
business as discussed in "Sale of Judgmental Use of Force Business" below.  
Since 1995, the Company has focused its efforts and investments in the 
embedded computer marketplace, expanding its product offerings and marketing 
with the acquisition of three embedded computer companies as discussed in 
"Recent Acquisitions" and "Public Stock Offering" below.   

RECENT ACQUISITIONS

On April 28, 1995, the Company acquired GreenSpring, based in Menlo Park, 
California, for $7.5 million. GreenSpring is engaged in the design, 
development, manufacturing and marketing of general purpose I/O products 
utilized in multiple segments of the standard bus embedded computer market. 
The acquisition was accounted for as a purchase. The Company recorded $5.8 
million in goodwill with $1.2 million expensed through June 30, 1997 and the 
remainder expected to be expensed through June 30, 2005, the estimated 
benefit period.  Had the acquisition taken place on July 1, 1994, the 
Company's reported net loss and net loss per common and common equivalent 
share for fiscal 1995 would have been decreased by approximately $804,000 and 
$0.28, respectively.  

On August 19, 1996, the Company completed a pooling of interests transaction 
with LDG based in Raleigh, North Carolina.  LDG manufactures Intel 
processor-based CPU boards for the standard bus embedded computer market. The 
financial results of LDG are not included in the Company's Consolidated 
Financial Statements for the periods prior to July 1, 1996 as historical 
results did not have a material effect on combined consolidated results of 
operations. For its fiscal year ended March 31, 1996,  LDG recorded sales of 
approximately $4.0 million and income from continuing operations of 
approximately $103,000. 


                                       14

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           
On November 18, 1996, the Company completed the purchase of Bit 3.  Bit 3 is a
Minneapolis-based manufacturer of computer networking and interconnection
hardware for many of the most widely used computer architecture standards in the
standard bus embedded computer market.  Under the terms of the purchase
agreement dated October 8, 1996 (the "Acquisition Agreement") among the Company
and the two shareholders of Bit 3 (the "Sellers"), the Company acquired all of
the outstanding capital stock of Bit 3 for a total purchase price of $24.0
million paid or to be paid from the proceeds from the public stock offering (see
"Public Stock Offering") and cash flow from the Company's operations.  Of this
total purchase price, $20.0 million was paid to the Sellers in cash upon closing
of the offering.  Of the balance of $4.0 million, $1.0 million was paid to the
Sellers on July 1, 1997 and $3.0 million will be paid to the Sellers on July 1,
1998, pursuant to secured promissory notes according to the terms of the
Acquisition Agreement.  The financial results of Bit 3 have been included in the
Company's Consolidated Financial Statements from November 18, 1996.  In
connection with the acquisition of Bit 3, the Company recorded an $11.0 million
earnings charge based on an assessment by the Company, in conjunction with an
independent valuation firm, of purchased technology of Bit 3.  The assessment
determined that $11.0 million of Bit 3's purchase price represented technology
that does not meet the accounting definitions of "completed technology", and
thus should be charged to earnings under generally accepted accounting
principles.  In addition, as a result of the acquisition, the Company recorded
$10.0 million of goodwill which is being amortized over a ten year period.

The following proforma consolidated results of operations have been prepared as
if the acquisition of Bit 3 had occurred at July 1, 1995 and 1996.

    (in thousands except per share amounts)
                                                         JUNE 30        JUNE 30
                                                           1997           1996
                                                         -------        -------

Sales . . . . . . . . . . . . . . . . . . . . . . . . $  58,949         45,519
Net income. . . . . . . . . . . . . . . . . . . . . .     1,626            385
Net income per common and common equivalent share . .      0.31           0.07
                                                      ---------         ------
                                                      ---------         ------

The pro forma information is presented for informational purposes only and is
not necessarily indicative of the results of operations that actually would have
been achieved had the acquisition been consummated as of that time, nor is it
intended to be a projection of future results.                                 

PUBLIC STOCK OFFERING

On November 18, 1996, the Company consummated a fully underwritten public 
offering of 1,500,000 shares of the Company's common stock at a price of 
$25.625 per share.  In addition, certain selling shareholders sold an 
additional 300,000 shares in the offering.  The proceeds of the sale of the 
300,000 additional shares did not benefit the Company; however, the Company 
did receive the exercise price of $4.80 per share from the exercise of 
warrants covering 100,000 of the shares.  The offering was managed by an 
underwriting group led by Cowen & Co. and SoundView Financial Group, Inc.  
The net proceeds to the Company from the public stock offering were used to 
fund the acquisition of Bit 3 (see "Recent Acquisitions" above), to repay 
long-term debt, and the balance will be used for general working capital 
requirements.


                                       15

                                           
<PAGE>
                                           

                        SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           

SALE OF JUDGMENTAL USE OF FORCE BUSINESS

On June 26, 1997, the Company sold substantially all of the assets of the 
Company's Judgmental Use Of Force Business to Fats, Inc. for $2.0 million.  
This business marketed a Judgmental Use Of Force Training System used to 
train police and military personnel in appropriate situational use of  force. 
The results of operations of this business were immaterial to the total 
operating results of the Company.  The sale of property, plant, and equipment 
(net) and inventory were recorded at $139,296 and $409,421, respectively.  
The Company recorded estimated future costs associated with the sale of 
$1,262,207 on the date of sale.  The balance of $793,677 is included in other 
current liabilities at June 30, 1997.  The Company recognized a gain on the 
sale of approximately $189,000.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>

                                                                       YEAR ENDED JUNE 30
                                                              ------------------------------------
                                                               1997           1996           1995
                                                              ------         ------         ------
<S>                                                           <C>            <C>            <C>   
Sales                                                          100.0%         100.0%         100.0%
Cost of Sales                                                   47.2           46.3           41.7
                                                              ------         ------         ------
   Gross Profit                                                 52.8           53.7           58.3
Selling, general and administrative  expense                    19.4           20.1           24.0
Research and development expense                                 8.4            9.1           10.4
Acquired in-process research and development charge             20.8             --             --
Amortization of intangible assets                                2.8            2.8            3.0
                                                              ------         ------         ------
   Operating income from continuing operations                   1.4           21.7           20.9
Interest income (expense) (net)                                  0.1           (2.7)          (1.2)
                                                              ------         ------         ------
   Income from continuing operations before income taxes         1.5           19.0           19.7
Income taxes                                                     0.6            7.6            8.4
                                                              ------         ------         ------
Income from continuing operations                                0.9%          11.4%          11.3%
                                                              ------         ------         ------
                                                              ------         ------         ------

</TABLE>


YEAR ENDED JUNE 30, 1997 COMPARED TO YEAR ENDED JUNE 30, 1996

SALES.  In fiscal 1997, sales increased 68.7%, or $21.5 million, from $31.3 
million in fiscal 1996, to $52.8 million.  Sales contributed by LDG, which was 
acquired effective August 9, 1996 and pooled effective July 1, 1996, and 
sales contributed by Bit 3, which was acquired on November 18, 1996, 
comprised 48.2% of this increase and 20.5% of this increase was attributable 
to the Company's other product lines.  The increases in sales for 1997 
resulted from increased sales of existing products, introduction of new 
products, and sales of new and existing products to new customers in all of 
the Company's product lines.  Sales of the Company's products are recorded at 
the time of shipment.  Throughout fiscal 1997, prices for the Company's 
products remained firm.

                                       16
<PAGE>

                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           

GROSS PROFIT.  In fiscal 1997, gross profit increased 66.1%, or $11.1 million,
from $16.8 million in fiscal 1996, to $27.9 million, as a result of increased
sales volume.  In fiscal 1997, gross margin decreased to 52.8% of sales from
53.7% in fiscal 1996, as a result of sales mix.  In fiscal 1997, although gross
margins of each of the Company's product lines remained relatively constant with
fiscal 1996, total sales were comprised of a higher percentage of commercial
products (i.e. general purpose I/O, CPU, and interconnect products), which
generally yield lower gross margins than the Company's avionics and telemetry
products.  Reductions in component material costs in each of the Company's
product lines partially offset the effect on gross margin of this shift in sales
mix. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  In fiscal 1997, selling, general
and administrative expense increased 61.9%, or $3.9 million from $6.3 million in
fiscal 1996, to $10.2 million, largely because of the increased staffing
resulting from the LDG and Bit 3 acquisitions and subsequent augmentation of
those staffs in an effort to increase productivity and efficiency, as well as
additional staffing and promotional costs related to the Company's avionics,
telemetry, and I/O product lines.  However, selling, general and administrative
expense decreased as a percentage of sales from 20.1% in fiscal 1996 to 19.4% in
fiscal 1997 as the increase in sales more than offset the increase in expense.

RESEARCH AND DEVELOPMENT EXPENSE.  In fiscal 1997, research and development
expense increased by 57.1%, or $1.6 million, from $2.8 million in fiscal 1996,
to $4.4 million.  The increase resulted primarily from the added expenditures
resulting from the LDG and Bit 3 acquisitions, as well as additional staffing
required for new product development in the avionics, telemetry, and I/O product
lines.  However, research and development expense decreased as a percentage of
sales from 9.1% in fiscal 1996, to 8.4% in fiscal 1997, as a result of sales
increasing at a faster rate than the expense.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT CHARGE.  In conjunction with the
acquisition of Bit 3 completed on November 18, 1996, the Company recorded an
$11.0 million earnings charge based on an assessment by the Company, in
conjunction with an independent valuation firm, of purchased technology of Bit
3.  The assessment determined that  $11.0 million of Bit 3's purchase price
represented technology that did not meet the accounting definitions of completed
technology, and thus should be charged to earnings under generally accepted
accounting principles.

AMORTIZATION OF INTANGIBLE ASSETS.  In fiscal 1997, amortization of intangible
assets increased 70.1%, or $620,000, from $884,000 in fiscal 1996, to $1.5
million as a result of goodwill amortization associated with the acquisition of
Bit 3.

INTEREST INCOME, NET OF INTEREST EXPENSE.  In fiscal 1997, interest income, net
of interest expense, was $14,000 compared to interest expense, net of income, of
$830,000 in fiscal 1996.  This change is attributable to the reduction of debt
incurred primarily to finance the acquisition of GreenSpring in April 1995, the
elimination of all bank debt effective November 22, 1996, by application of some
of the proceeds of the public stock offering, and earnings on surplus cash from
operations as well as earnings on cash received above the Company's immediate
requirements from the public offering, offset by imputed interest of $144,000 on
notes payable to the former owners of Bit 3.

INCOME TAXES.  For fiscal 1997 and fiscal 1996 income taxes represent an
effective income tax rate of 40.0%.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE.  For fiscal 1997, net income
per common and common equivalent share was $0.09 compared to $0.97 for fiscal
1996. This reduction is due to the $11.0 million charge to earnings associated
with the acquisition of Bit 3 in November 1996 and due to more shares
outstanding.   For fiscal 1997, net income per common and common equivalent
share excluding the charge to earnings would have been $1.34.  


                                      17


<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           
YEAR ENDED JUNE 30, 1996 COMPARED TO YEAR ENDED JUNE 30, 1995

SALES.  In fiscal 1996, sales increased 93.2%, or $15.1 million, from $16.2 
million in fiscal 1995, to $31.3 million. This increase reflects a full year 
of sales in fiscal 1996 for GreenSpring, whereas fiscal 1995 includes only 
two months of GreenSpring sales. As a result, $11.1 million in GreenSpring 
sales were reflected in fiscal 1996 compared to $1.5 million in fiscal 1995. 
In addition, sales of the Company's avionics and telemetry product lines 
increased by 37.5%, or $5.5 million, in fiscal 1996. The increases in sales 
in fiscal 1996 reflected increases in unit volume, new product introductions 
and the addition of new customers in all of the Company's product lines.  
Sales of the Company's products are recorded at the time of shipment.  
Throughout fiscal 1996, prices for the Company's products remained firm. 

GROSS PROFIT.  In fiscal 1996, gross profit increased 77.8%, or $7.4 million, 
from $9.5 million in fiscal 1995, to $16.8 million, as a result of increased 
sales volume. In fiscal 1996, gross margin decreased to 53.7% of sales from 
58.3% in fiscal 1995 as a result of a change in sales mix. While gross 
margins on the Company's avionics and telemetry products remained relatively 
constant in fiscal 1996, fiscal 1996 sales were comprised of a higher 
proportion of GreenSpring products, which generally yield lower gross margins 
than sales of the Company's other products. Reductions in component material 
costs in each of the Company's product lines partially offset the effect on 
gross margin of this shift in sales mix. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE.  In fiscal 1996, selling, 
general and administrative expense increased 61.7%, or $2.4 million, from 
$3.9 million in fiscal 1995, to $6.3 million. The increase resulted primarily 
from the addition of certain expenses of GreenSpring's operations, and 
additional staffing and promotional expenses related to the Company's 
avionics and telemetry product lines. However, selling, general and 
administrative expense decreased as a percentage of sales from 24.0% in 
fiscal 1995 to 20.1% in fiscal 1996, primarily due to a more rapid increase 
in sales than in  the expense.

RESEARCH AND DEVELOPMENT EXPENSE.  In fiscal 1996, research and development 
expense increased by 68.8%, or $1.2 million, from $1.7 million in fiscal 
1995, to $2.9 million, reflecting the costs of GreenSpring's operations and 
the additional staffing required for new product development in the avionics 
product line. However, research and development expense decreased as a 
percentage of sales from 10.4% in fiscal 1995 to 9.1% in fiscal 1996, 
primarily due to a more rapid increase in sales than in the expense. 

AMORTIZATION OF INTANGIBLE ASSETS.  In fiscal 1996, amortization of 
intangible assets increased 79.3%, or $391,000, from $493,000 in fiscal 1995, 
to $884,000, due to the increase in intangible assets related to the 
acquisition of GreenSpring. 

INTEREST EXPENSE, NET OF INTEREST INCOME.  In fiscal 1996, interest expense, 
net of interest income increased by 342%, or $642,000, from $188,000 in 
fiscal 1995, to $830,000, as a result of debt assumed late in fiscal 1995 as 
part of the acquisition of GreenSpring. 

INCOME TAXES.  In fiscal 1996, tax expense increased 75.9%, or $1.0 million, 
from $1.4 million in fiscal 1995, to $2.4 million, representing effective 
income tax rates of 40% and 42%, respectively. The lower effective tax rate 
in fiscal 1996 resulted primarily from the use of a foreign sales 
corporation. 

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE.  For fiscal 1996, net income
per common and common equivalent share from continuing operations was $.97
compared to $.65 from continuing operations for fiscal 1995.  For fiscal 1995,
net income per common and common equivalent share from discontinued operations,
resulting from the sale of the Company's simulation business to Camber
Corporation in April 1995, was $(1.10).


                                       18

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           
LIQUIDITY AND CAPITAL RESOURCES

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

Cash totaled $21.7 million at June 30, 1997, an increase of $20.6 million 
from June 30, 1996.  This increase is a result of cash flow provided by 
operations, as well as cash received above immediate requirements, from the 
Company's public stock offering  effective  on November 18, 1996 and closed 
on November 22, 1996 (see "Public Stock Offering").  Net cash provided by 
operating activities for the year ended June 30, 1997 was $10.2 million.  
Increased sales volume and demand for semiconductor parts during the year 
ended June 30, 1997 caused the Company to increase accounts receivable and 
inventory.  Liabilities were in line with the current level of business.  In 
addition, the exercise and subsequent sale of stock related to stock option 
plans reduced the Company's current tax liability.  Net cash used in 
investing activities for the year ended June 30, 1997 was $20.0 million.  
Proceeds of $2.0 million from the sale of the Judgmental Use of Force 
Business (see "Sale of Judgmental Use of Force Business") offset $20.5 
million used for the acquisition of Bit 3 (see "Recent Acquisitions") and  
$1.5 million used for the purchase of equipment .  Net cash provided by 
financing activities for the year ended June 30, 1997 was $30.3 million.  Net 
proceeds from the sale of common stock (see "Public Stock Offering") were 
$35.5 million, with additional cash received from the exercise of stock 
options and warrants of $1.9 million.  A portion of these funds, $6.9 
million, was used in November 1996 to pay down all existing debt, including 
interest due, with NationsBank of Texas, N.A. ("NationsBank") incurred in 
April 1995 primarily to finance the acquisition of GreenSpring.

In fiscal years ended June 30, 1996 and June 30, 1995, the Company generated 
$3.4 million and $1.1 million, respectively, of positive cash flow from 
operating activities.  In fiscal 1996, the positive cash flow from operating 
activities was partially used to pay down bank debt, to purchase equipment 
and to acquire the IndustryPack-Registered Trademark--compatible product line 
from Wavetron Microsystems, Inc. in January 1996.  In fiscal 1995, the 
positive cash flow from operating activities combined with bank borrowings 
provided the Company sufficient funds to acquire GreenSpring in April 1995, 
as well as to purchase required equipment.

On April 26, 1996 and November 15, 1996, the Company amended its bank financing
agreement with NationsBank, originally entered into in April 1995, to provide
the Company with a $6.8 million term loan and a $2.5 million revolving line of
credit.  The term loan was completely paid down from the proceeds of the public
stock offering.  The revolving line of credit matures on October 30, 1997.  For
the entire year ended June 30, 1997,  there were no borrowings drawn on the
revolving line of credit.  The interest rate  of the revolving line of credit is
NationsBank's prime rate or LIBOR plus 2.25% in 30, 60, or 90 day options.  The
amended financing agreement provides for a security interest by NationsBank in
the Company's receivables, inventories, and equipment, except those of LDG and
Bit 3, and imposes certain performance ratios on the Company.  The amendment
dated November 15, 1996 excludes the $11.0 million earnings charge associated
with the acquisition of Bit 3 from the performance ratios.  These ratios include
a current maturities ratio which requires that the Company's net earnings plus
depreciation and amortization expense for the preceding four quarters from time
of measurement compared to the Company's current portion of its long-term debt
will not be less than a ratio of 2 to 1; a senior funded debt to EBITDA ratio
which requires that the Company's total debt evidenced by promissory notes, loan
agreements, bonds or similar instruments, but excluding subordinated debt, will
not be greater than a ratio of 1.5 to l when compared to the Company's profit
before tax plus interest, depreciation, and amortization expense for the
preceding four quarters from time of measurement;  and a fixed charge coverage
ratio requiring that the Company's income before tax plus interest expense and
operating lease expense for the preceding four quarters from time of measurement
will not be less than a ratio of 2 to l when compared to the Company's interest
expense plus operating lease expense for the same preceding four quarters.  The
Company is also prohibited from disposing of or acquiring certain assets and
businesses without the consent of the lender.  At June 30, 1997,  the Company
was in compliance with all of the covenants of the amended financing agreement. 


                                       19

<PAGE>


                      SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                                           

Management believes that financial resources, including its internally generated
funds, available bank borrowings and the net proceeds from the public stock
offering, will be sufficient to finance the Company's current operations,
capital expenditures and certain acquisitions, for the next twelve months. 

For the three most recent fiscal years, there has been no impact from inflation
or changing prices to the Company's sales or income from continuing operations. 

NEW ACCOUNTING STANDARDS

In February 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards ("SFAS") 128, "Earnings Per Share."  SFAS 
128 establishes new standards for computing and presenting earnings per share 
("EPS").  Specifically, SFAS 128 replaces the currently required presentation 
of primary EPS with a presentation of basic EPS, requires dual presentation 
of basic and diluted EPS on the face of the income statement for all entities 
with complex capital structures, and requires a reconciliation of the 
numerator and denominator of the basic EPS computation to the numerator and 
denominator of the diluted EPS computation.  SFAS 128 is effective for 
financial statements issued for periods ending after December 15, 1997, and 
early application is not permitted.  Management believes the application of 
SFAS 128 will not have a material effect on the Company's future financial 
statements.

In June 1997, the Financial Accounting Standards Board issued SFAS 130, 
"Reporting Comprehensive Income."  SFAS 130 establishes standards for 
reporting and display of comprehensive income and its components (revenues, 
expenses, gains, and losses) in a full set of general purpose financial 
statements. Specifically, SFAS 130 requires that all items that meet the 
definition of components of comprehensive income be reported in a financial 
statement for the period in which they are recognized.  However, SFAS 130 
does not specify when to recognize or how to measure the items that make up 
comprehensive income.  SFAS 130 is effective for fiscal years beginning after 
December 15, 1997, and early application is permitted.  Management believes 
the application of SFAS 130 will not have a material effect on the Company's 
future financial  statements.

In June 1997, the Financial Accounting Standards Board issued SFAS 131, 
"Financial Reporting for Segments of  Business Enterprise."  SFAS 131 
supersedes the "industry segment" concept of SFAS 14 with a "management 
approach" concept as the basis for identifying reportable segments.  SFAS 131 
is effective for fiscal years beginning after December 15, 1997, and early 
application is permitted.  Management believes the application of SFAS 131 
will not have a material effect on the Company's future financial statements. 
 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 

                                       20


<PAGE>










                             INDEPENDENT AUDITORS' REPORT
                                           
                                           
                                           
                                           
The Board of Directors and Stockholders
SBS Technologies, Inc.:


We have audited the accompanying consolidated balance sheets of SBS 
Technologies, Inc. and subsidiaries as of June 30, 1997 and 1996, and the 
related consolidated statements of operations, changes in stockholders' 
equity, and cash flows for each of the years in the three-year period ended 
June 30, 1997.  These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to express 
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the consolidated financial 
statements are free of material misstatement.  An audit includes examining, 
on a test basis, evidence supporting the amounts and disclosures in the 
consolidated 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 consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of SBS 
Technologies, Inc. and subsidiaries as of June 30, 1997 and 1996, and the 
results of their operations and their cash flows for each of the years in the 
three-year period ended June 30, 1997 in conformity with generally accepted 
accounting principles.

                                        /S/ KPMG Peat Marwick LLP



Albuquerque, New Mexico
August 6, 1997





                                       21
<PAGE>



                  SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        June 30
                                                             ---------------------------
                   ASSETS                                        1997            1996
                   ------                                    ------------    ------------
<S>                                                          <C>             <C>
Current assets:          
    Cash and cash equivalents                                $ 21,661,671       1,130,030
    Receivables, net (notes 5, 6 and 7)                         9,244,269       6,421,224
    Inventories (notes 6 and 7)                                 7,705,470       5,160,962
    Deferred income taxes (note 8)                              1,327,000         317,100
    Prepaid expenses                                              232,283         303,846
    Other current assets                                          128,560         104,249
                                                             ------------    ------------
              Total current assets                             40,299,253      13,437,411
                                                             ------------    ------------
                                                                
Property and equipment, at cost (notes 6 and 7)                 4,729,259       2,389,289
    Less accumulated depreciation                               2,247,408       1,041,719
                                                             ------------    ------------
              Net property and equipment                        2,481,851       1,347,570
                                                             ------------    ------------
                                                                
Intangible assets, net                                         14,099,254       5,571,135
                                                                
Deferred income taxes (note 8)                                  4,253,000          55,900
                                                                
Other assets                                                       31,656          31,656
                                                             ------------    ------------
                                                                
              Total assets                                   $ 61,165,014      20,443,672
                                                             ------------    ------------
                                                             ------------    ------------
                                                      
              LIABILITIES AND STOCKHOLDERS' EQUITY    
              ------------------------------------

Current liabilities:                                            
    Current portion of long-term debt (note 7)               $     13,316       1,458,976
    Notes payable to related parties (note 7)                   1,000,000            -   
    Accounts payable                                            1,541,846       1,243,748
    Accrued representative commissions                            449,699         353,278
    Accrued salaries                                            1,868,623       1,077,121
    Accrued compensated absences                                  560,061         340,342
    Income taxes (note 8)                                       1,095,162         223,381
    Other current liabilities (note 3)                          1,493,368         507,586
                                                             ------------    ------------
              Total current liabilities                         8,022,075       5,204,432
                                                      
Long-term liabilities:
    Long-term debt, excluding current installments (note 7)          -          5,188,320
    Notes payable to related parties (note 7)                   2,816,251            -
                                                             ------------    ------------
              Total long-term liabilities                       2,816,251       5,188,320
                                                             ------------    ------------
              Total liabilities                                10,838,326      10,392,752
                                                             ------------    ------------

Stockholders' equity:
    Common stock, no par value; 30,000,000 shares authorized,
         5,405,378 and 3,178,133 issued and outstanding 
         at June 30, 1997 and 1996, respectively               43,889,754       4,690,786
    Common stock warrants (note 10)                               111,286         180,000
    Retained earnings                                           6,325,648       5,180,134
                                                             ------------    ------------
              Total stockholders' equity                       50,326,688      10,050,920
                                                             ------------    ------------

              Total liabilities and stockholders' equity     $ 61,165,014      20,443,672
                                                             ------------    ------------
                                                             ------------    ------------
</TABLE>

          See accompanying notes to consolidated financial statements


                                        22
<PAGE>

                  SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                            Year Ended June 30
                                               ------------------------------------------
                                                   1997           1996           1995
                                               ------------   ------------   ------------
<S>                                            <C>            <C>            <C>
Sales                                          $ 52,814,568     31,331,793     16,217,648
                                                                                         
Cost of sales                                    24,910,271     14,510,106      6,756,560
                                               ------------   ------------   ------------
    Gross Profit                                 27,904,297     16,821,687      9,461,088
                                                                                         
Selling, general and administrative expense      10,223,374      6,292,954      3,891,408
                                                                                         
Research and development expense                  4,422,152      2,846,300      1,686,590
                                                                                         
Acquired in-process research and                                                         
    development charge                           11,000,000           -              -   
                                                                                         
Amortization of intangible assets                 1,504,524        884,438        493,409
                                               ------------   ------------   ------------
    Operating income from continuing operations     754,247      6,797,995      3,389,681
                                               ------------   ------------   ------------
                                                                                         
Interest income                                     523,115          9,210          3,315
                                                                                         
Interest expense                                   (508,677)      (839,028)      (191,120)
                                               ------------   ------------   ------------
                                                     14,438       (829,818)      (187,805)
                                               ------------   ------------   ------------
                                                                                                   
Income from continuing operations
    before income taxes                             768,685      5,968,177      3,201,876
                                                                                         
Income taxes (note 8)                               307,000      2,387,270      1,357,000
                                               ------------   ------------   ------------
    Income from continuing operations               461,685      3,580,907      1,844,876
                                                                                         
Discontinued operations (net of tax benefit                                              
    of $1,160,000)                                     -              -        (1,781,235)
                                                                                         
Loss on disposal of discontinued operations                                              
     (net of tax benefit of $896,000)                  -              -        (1,354,000)
                                               ------------   ------------   ------------
    Loss from discontinued operations                  -              -        (3,135,235)
                                               ------------   ------------   ------------
                                                                                         
Net income (loss)                              $    461,685      3,580,907     (1,290,359)
                                               ------------   ------------   ------------
                                               ------------   ------------   ------------
                                                                                         
Income (loss) per common and                                                             
    common equivalent share:                                                             
    Continuing operations                      $       0.09           0.97           0.65
    Discontinued operations                            0.00           0.00          (1.10)
                                               ------------   ------------   ------------
Net income (loss) per common and                       
    common equivalent share                    $       0.09           0.97          (0.45)
                                               ------------   ------------   ------------
                                               ------------   ------------   ------------
</TABLE>
           See accompanying notes to consolidated financial statements


                                        23
<PAGE>

                    SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                Common                                           Total 
                                                stock                Common                      stock- 
                                        ------------------------     stock       Retained       holders'
                                         Shares         Amount      warrants     earnings       equity 
                                        ---------   ------------   ---------    -----------  ------------
<S>                                     <C>         <C>            <C>          <C>          <C>
Balance at June 30, 1994                2,810,426   $  2,975,751   $   -        $ 2,889,586  $  5,865,337
                                                                                                         
Exercise of stock options                   8,228         18,020       -              -            18,020
Common stock issued under                                                                               
    employee stock bonus plan              75,000        381,250       -              -           381,250
Warrants issued for business                     
    acquisition (note 2)                    -              -          75,000          -            75,000
Net loss                                    -              -           -         (1,290,359)   (1,290,359)
                                        ---------   ------------   ---------    -----------  ------------
                                                                                                         
Balance at June 30, 1995                2,893,654      3,375,021      75,000      1,599,227     5,049,248
                                                                                                         
Exercise of stock options and warrants    284,479      1,315,765     (20,000)         -         1,295,765
Warrants issued for business                     
    acquisition (note 2)                    -              -         125,000          -           125,000
Net income                                  -              -           -          3,580,907     3,580,907
                                        ---------   ------------   ---------    -----------  ------------
                                                                                                         
Balance at June 30, 1996                3,178,133      4,690,786     180,000      5,180,134    10,050,920
                                                                                                         
Exercise of stock options and warrants    527,245      1,960,780     (68,714)         -         1,892,066
Income tax benefit from stock                    
    options exercised                       -          1,645,740       -              -         1,645,740
Acquisition of Logical Design                                                                            
    Group Inc. (note 2)                   200,000         68,000       -            683,829       751,829
Common stock issued in                           
    public offering                     1,500,000     35,524,448       -              -        35,524,448
Net income                                  -              -           -            461,685       461,685
                                        ---------   ------------   ---------    -----------  ------------
                                                                                                         
Balance at June 30, 1997                5,405,378   $ 43,889,754   $ 111,286    $ 6,325,648  $ 50,326,688
                                        ---------   ------------   ---------    -----------  ------------
                                        ---------   ------------   ---------    -----------  ------------

</TABLE>

          See accompanying notes to consolidated financial statements


                                        24
<PAGE>
         
                    SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                               Year Ended June 30
                                                                   ------------------------------------------
                                                                       1997           1996           1995
                                                                   ------------   ------------   ------------
<S>                                                                <C>            <C>            <C>
Cash flows from operating activities:                                          
    Net income                                                     $    461,685      3,580,907     (1,290,359)
                                                                   ------------   ------------   ------------
                                                                                              
    Adjustments to reconcile net income to net                                 
         cash provided by operating activities:
              Depreciation                                              705,160       316,494         384,057
              Amortization of intangible assets                       1,504,524       884,438         536,328
              Bad debt expense                                          223,004        56,933             -
              Loss (gain) on disposition of assets                     (189,579)       44,218             -
              Imputed interest                                          144,072           -               -
              Acquired in-process research and development charge    11,000,000           -               -
              Deferred income taxes                                  (5,141,037)      (13,000)       (360,000)
              Loss from sale of discontinued operations                     -             -         2,250,000
              Stock issued under employee stock bonus plan                  -             -           399,270
                                                                                              
              Changes in assets and liabilities:                                              
                   Receivables                                         (888,824)      673,406       3,314,458
                   Inventories                                         (541,340)   (1,192,938)     (1,101,607)
                   Prepaids and other assets                            260,367       144,862        (476,828)
                   Accounts payable                                    (143,036)     (635,049)      1,172,798
                   Accrued representative commissions                    79,181        27,810         218,669
                   Accrued salaries                                     683,403       562,603         277,433
                   Accrued compensated absences                          65,584        58,270        (155,833)
                   Income taxes                                       2,519,073      (127,532)     (1,500,209)
                   Other current liabilities                           (555,158)     (943,359)     (2,559,768)
                                                                   ------------   -----------   -------------
                     Net adjustments                                  9,725,394      (142,844)      2,398,768
                                                                   ------------   -----------   -------------
                                                                                            
                     Net cash provided by operating activities       10,187,079     3,438,063       1,108,409
                                                                   ------------   -----------   -------------
          
Cash flows from investing activities:                                          
    Business acquisitions (note 2)                                  (20,511,319)     (317,746)     (5,196,815)
    Acquisition of property and equipment                            (1,451,643)     (764,191)       (426,769)
    Proceeds from businesses divested                                          
         and asset sales (note 3)                                     2,000,000           -               -
    Proceeds from sale of discontinued                                          
         operations (note 12)                                               -             -           400,300
                                                                   ------------   -----------   -------------

         Net cash used by investing activities                      (19,962,962)   (1,081,937)     (5,223,284)
                                                                   ------------   -----------   -------------
</TABLE>



                                        25
<PAGE>


                    SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                               Year Ended June 30
                                                                   -----------------------------------------
                                                                       1997            1996           1995
                                                                   ------------   -------------   ----------
<S>                                                                <C>            <C>             <C>
Cash flows from financing activities:                                          
    Proceeds from notes payable to bank                                     -        4,095,000     6,950,437
    Payments on notes payable to bank                                       -       (4,717,383)   (7,690,517)
    Proceeds from long-term borrowings                                      -              -       7,000,000
    Payments on long-term borrowings and capitalized leases          (7,108,990)    (3,332,390)   (1,344,567)
    Net proceeds from refinancing long-term borrowings                        -        549,108           -
    Proceeds from exercise of stock options and warrants              1,892,066      1,295,765           -
    Net proceeds from sale of common stock                           35,524,448            -             -
                                                                   ------------   ------------   -----------
         
    Net cash provided (used) by financing activities                 30,307,524     (2,109,900)    4,915,353
                                                                   ------------   ------------   -----------
         
Net increase in cash and cash equivalents                            20,531,641        246,226       800,478
         
Cash and cash equivalents at beginning of period                      1,130,030        883,804        83,326
                                                                   ------------   ------------   -----------
         
Cash and cash equivalents at end of period                         $ 21,661,671      1,130,030       883,804
                                                                   ------------   ------------   -----------
                                                                   ------------   ------------   -----------
                 
Supplemental disclosure of cash flow information:                              
         
    Interest paid                                                  $    275,415        875,736       497,002
    Income taxes paid                                                 2,922,519      2,431,749       700,000
         
    Noncash financing and investing activities:
         
         Acquisition of GreenSpring Computers, Inc. (note 2):
         
              Common stock warrants issued                         $        -         125,000         75,000
              Long-term debt issued                                         -             -        1,000,000
                                                                   ------------   ------------   -----------
         
                                                                   $        -          125,000     1,075,000
                                                                   ------------   ------------   -----------
                                                                   ------------   ------------   -----------
         
         
         Assets acquired through capital leases                       $  70,733            -             -
         Income tax benefit from stock options exercised           $  1,645,740            -             -
                                                                   ------------   ------------   -----------
                                                                   ------------   ------------   -----------
         
</TABLE>
         See accompanying notes to consolidated financial statements



                                        26
<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                           
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a)  GENERAL
    
         The consolidated financial statements include the accounts of SBS
         Technologies, Inc. and its wholly owned subsidiaries.  All significant
         intercompany accounts and transactions have been eliminated.
    
         SBS Technologies, Inc. and subsidiaries (the "Company") is a leading
         manufacturer of standard bus embedded computer components that perform
         a broad range of central processing unit, general-purpose input/output
         and special-purpose input/output interface applications, and high
         performance interconnect hardware and software.  The Company has
         operations in New Mexico, Minnesota, North Carolina and California.  
    
    (b)  SALES RECOGNITION
    
         Sales are recognized when goods are shipped to the customer.

    (c)  CASH AND CASH EQUIVALENTS
         
         Temporary investments with original maturities of ninety days or less
         are classified as cash and cash equivalents.
         
    (d)  INVENTORIES

         Inventories are valued at average cost which does not exceed market.
    
                                                              JUNE 30 
                                                    ------------------------
                                                        1997          1996
                                                    ------------   ---------

                    Raw materials                   $  3,211,502   2,254,788
                    Work in process                    2,953,140   1,546,800
                    Finished goods                     1,540,828   1,359,374
                                                    ------------   ---------

                                                    $  7,705,470   5,160,962
                                                    ------------   ---------
                                                    ------------   ---------

    (e)  PROPERTY AND EQUIPMENT

         Property and equipment consists of the following:

                                                              JUNE 30        
                                                    -------------------------
                                                        1997          1996 
                                                    ------------    ---------
                    Computers                       $  1,862,814    1,194,888
                    Software                             946,608      411,839
                    Furniture and equipment            1,919,837      782,562
                                                    ------------    ---------
                                                    $  4,729,259    2,389,289
                                                    ------------    ---------
                                                    ------------    ---------

         Depreciation of property and equipment is provided over the estimated
         useful lives (three to twelve years) of the respective assets using
         straight-line and accelerated methods.


                                       27

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    (f)  INTANGIBLE ASSETS

         Intangible assets are stated at cost and consist of the following:

                                                              JUNE 30       
                                                    -------------------------
                                                        1997          1996 
                                                    ------------    ---------

                    Noncompete covenants            $  1,540,000    1,540,000
                    Goodwill                          16,584,314    6,551,671
                                                    ------------    ---------
                                                      18,124,314    8,091,671
                    Less accumulated amortization     (4,025,060)  (2,520,536)
                                                    ------------    ---------
                                                    $ 14,099,254    5,571,135
                                                    ------------    ---------
                                                    ------------    ---------

         Noncompete covenants are amortized over the life of the covenants
         using the straight-line method.  Goodwill is amortized over the
         estimated useful lives (three to ten years) of the respective assets
         using the straight-line method.   The Company assesses the
         recoverability of goodwill by determining whether the amortization of
         the goodwill balance over its remaining life can be recovered through
         projected undiscounted future results.  Impairment would be 
         recognized in operating results if a permanent diminution in value 
         were to occur. 
    
    
    (g)  INCOME TAXES
    
         The Company accounts for income taxes under the asset and liability
         method.  Deferred income taxes are recognized for the tax consequences
         of differences between the financial statement carrying amounts and
         the tax bases of existing assets and liabilities by applying enacted
         statutory tax rates applicable to future years.  The affect on
         deferred taxes of a change in tax rates is recognized in income in the
         period that includes the change.
    
    (h)  EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE

         Earnings per common and common equivalent share are based on the
         weighted average shares of common stock and, if dilutive, common
         equivalent shares (options and warrants) outstanding during the
         period.
    
         The numbers of shares used in the earnings per share computations are
         as follows:

<TABLE>
<CAPTION>

                                                                   YEAR ENDED JUNE 30 
                                                         ------------------------------------
                                                            1997         1996         1995
                                                         ---------    ---------    ----------
    <S>                                                <C>            <C>          <C>
    Weighted average shares of common
      stock outstanding during the year                  4,535,746    3,017,575    2,810,426
    Common equivalent shares - assumed
      exercise of options and warrants                     744,475    1,377,923       48,514
    Shares assumed to be repurchased with
      proceeds from exercise subject to 20% of
      average shares outstanding maximum                      -        (603,515)        - 
                                                         ---------    ---------     ---------
    Total common and common                                                              
      equivalent shares                                  5,280,221    3,791,983     2,858,940
                                                         ---------    ---------     ---------
                                                         ---------    ---------     ---------

</TABLE>


                                       28

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    (i)  FINANCIAL INSTRUMENTS

         SFAS 107, "Disclosures about Fair Values of Financial
         Instruments," requires the fair value of financial instruments be
         disclosed.  The Company's financial instruments are accounts
         receivable, accounts payable, and long-term variable rate debt. 
         The carrying amounts of accounts receivable, accounts payable,
         and long-term variable rate debt, because of their nature,
         approximate fair value.
         
    (j)  RECLASSIFICATIONS

         Certain amounts in the 1996 and 1995 financial statements have been
         reclassified to conform with the 1997 presentation.

    (k)  USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles 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.
          
    (l)  STOCK OPTION PLANS
         
         Prior to July 1, 1996, the Company accounted for its stock option
         plans in accordance with the provisions of Accounting Principles Board
         ("APB") Opinion 25, "Accounting for Stock Issued to Employees," and
         related interpretations.  As such, compensation expense would be
         recorded on the date of grant only if the current market price of the
         underlying stock exceeded the exercise price.  On July 1, 1996, the
         Company adopted SFAS 123, "Accounting for Stock-Based Compensation,"
         which permits entities to recognize as expense over the vesting period
         the fair value of all stock-based awards on the date of grant. 
         Alternatively, SFAS 123 also allows entities to continue to apply the
         provisions of APB Opinion 25 and provide pro forma net income and pro
         forma earnings per share disclosures for employee stock option grants
         made in 1996 and future years as if the fair-value-based method
         defined in SFAS 123 had been applied.  The Company has elected to
         continue to apply the provisions of APB Opinion 25 and provide the pro
         forma disclosure provisions of SFAS 123.

    (m)  IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

         The Company adopted the provisions of SFAS 121, "Accounting for the
         Impairment of Long-Lived Assets and for Long-Lived Assets to Be 
         Disposed Of," on July 1, 1996.  This Statement requires that 
         long-lived assets and certain identifiable intangibles be reviewed 
         for impairment whenever events or changes in circumstances indicate 
         that the carrying amount of an asset may not be recoverable.  
         Recoverability of assets to be held and used is measured by a 
         comparison of the carrying amount of an asset to future net cash 
         flows expected to be generated by the asset.  If such assets are 
         considered to be impaired, the impairment to be recognized is measured 
         by the amount by which the carrying amount of the assets exceed the 
         fair value of the assets.  Assets to be disposed of are reported at 
         the lower of the carrying amount or fair value less costs to sell.  
         Adoption of this Statement did not have a material impact on the 
         Company's financial position, results of operations, or liquidity.


                                       29

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           

    (n)  NEW ACCOUNTING STANDARDS
         
         In February 1997, the Financial Accounting Standards Board issued SFAS
         128, "Earnings Per Share."  SFAS 128 establishes new standards for
         computing and presenting earnings per share ("EPS").  Specifically,
         SFAS 128 replaces the currently required presentation of primary EPS
         with a presentation of basic EPS, requires dual presentation of basic
         and diluted EPS on the face of the income statement for all entities
         with complex capital structures, and requires a reconciliation of the
         numerator and denominator of the basic EPS computation to the
         financial statements issued for periods ending after December 15,
         1997, and early application is not permitted.  Management believes the
         application of SFAS 128 will not have a material effect on the
         Company's future financial statements.  
   
         In June 1997, the Financial Accounting Standards Board issued SFAS
         130, "Reporting Comprehensive Income."  SFAS 130 establishes standards
         for reporting and display of comprehensive income and its components
         (revenues, expenses, gains, and losses) in a full set of general
         purpose financial statements.  Specifically, SFAS 130 requires that
         all items that meet the definition of components of comprehensive
         income be reported in a financial statement for the period in which
         they are recognized.  However, SFAS 130 does not specify when to
         recognize or how to measure the items that make up comprehensive
         income.  SFAS 130 is effective for fiscal years beginning after
         December 15, 1997, and early application is permitted.  Management
         believes the application of SFAS 130 will not have a material effect
         on the Company's future financial statements.
         
         In June 1997, the Financial Accounting Standards Board issued SFAS
         131, "Financial Reporting for Segments of a Business Enterprise." 
         SFAS 131 supersedes the "industry segment" concept of SFAS 14 with a
         "management approach" concept as the basis for identifying reportable
         segments.  SFAS 131 is effective for fiscal years beginning after
         December 15, 1997, and early application is permitted.  Management
         believes the application of SFAS 131 will not have a material effect
         on the Company's future financial statements.
         
         
(2) BUSINESS ACQUISITIONS

    On November 18, 1996, the Company completed the purchase of Bit 3. 
    Bit 3 is a Minneapolis-based developer and manufacturer of high
    performance bus interconnect hardware and software products.  The
    Company acquired all of the outstanding capital stock of Bit 3 for a
    total purchase price of $24.0 million.  The initial cash payment to
    the two shareholders of Bit 3 (the "Sellers") of $20.0 million was
    funded by an offering of SBS common stock.  Subsequent cash payments
    of $1.0 million and $3.0 million will be paid to the Sellers on July
    1, 1997, and July 1, 1998, respectively.  In connection with the
    acquisition, the Company made an assessment, in conjunction with an
    independent valuation firm, of purchased technology of Bit 3.  The
    assessment determined that $11.0 million of Bit 3's purchase price
    represented technology that does not meet the accounting definitions
    of "completed technology," and thus was charged to earnings under
    generally accepted accounting principles.  The acquisition was
    accounted for using the purchase method of accounting, and
    accordingly, Bit 3's results of operations have been included in the
    consolidated financial statements since the date of acquisition. 
    Goodwill is being amortized over 10 years.


                                       30

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    Assets acquired and liabilities assumed in the acquisition are as follows:
    
                   Cash and equivalents                   $     22,138
                   Accounts receivable                       1,715,946
                   Inventory                                 1,591,448
                   Prepaid and other assets                    207,086
                   Property and equipment (net)                200,570
                   Deferred tax asset                           39,463
                   Goodwill                                 10,032,643
                   Accounts payable                           (184,150)   
                   Accrued salaries                            (88,099)
                   Accrued compensated absences                (87,700)
                   Other accrued liabilities                  (242,358)
                                                           -----------
                                                            13,206,987
                   In-process research and development      11,000,000
                                                           -----------
                                                           $24,206,987   
                                                           -----------
                                                           -----------

    The purchase price was paid as follows:
    
                   Cash                                    $20,000,000
                   Notes payable issued                      4,000,000
                   Discount of notes payable                  (327,821) 
                   Acquisition costs                           534,808
                                                           -----------
                                                           $24,206,987
                                                           -----------
                                                           -----------

The following proforma consolidated results of operations have been prepared as
if the acquisition of Bit 3 had occurred at July 1, 1995, and 1996.


    (in thousands except per share amounts)
                                                 June 30        June 30
                                                   1997           1996      
                                                --------        -------
    Sales . . . . . . . . . . . . . . . . .     $ 58,949         45,519
    Net income  . . . . . . . . . . . . . .        1,626            385
    Net income per common and common 
      equivalent share  . . . . . . . . . .         0.31           0.07
                                                --------        -------
                                                --------        -------

The pro forma information is presented for informational purposes only and is 
not necessarily indicative of the results of operations that actually would 
have been achieved had the acquisition been consummated as of that time, nor 
is it intended to be a projection of future results.                       
    

                                       31


<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           

On August 19, 1996, the Company acquired LDG, a Raleigh, North Carolina-based 
designer and manufacturer of Intel processor-based CPU boards for the 
standard bus embedded computer market.  The acquisition qualified as a 
pooling of interests for accounting purposes and constituted a tax-free 
reorganization for federal income tax purposes.  Under the terms of the 
agreement, LDG shareholders exchanged all outstanding shares of LDG stock for 
200,000 shares of the Company's stock.

Assets, liabilities, and equity assumed in the acquisition are as follows:

              Cash and equivalents                    $   1,351
              Accounts receivable                       441,279
              Inventory                                 821,141
              Deferred income tax                        26,500
              Prepaid and other assets                    6,029
              Property and equipment                    864,610
              Accumulated depreciation                 (609,322)
              Income taxes                                1,552
              Accounts payable                         (256,984)
              Accrued representative commissions        (17,240)
              Accrued salaries                          (20,000)
              Accrued compensated absences              (66,435)
              Debt                                     (404,277)
              Other current liabilities                 (36,375)
              Common stock                              (68,000)     
              Retained earnings                        (683,829)

    The financial position and results of operations of the Company and
    LDG are combined in fiscal 1997 on a prospective basis.  LDG's
    historical results do not have a material effect on combined financial
    position or results of operations.
    
    On January 10, 1996, the Company's wholly owned subsidiary,
    GreenSpring, completed an asset purchase of the
    IndustryPack-Registered Trademark--compatible product line from
    Wavetron Microsystems, Inc.  The purchase price, including
    capitalizable expenses, was $236,626.  In conjunction with the
    acquisition, goodwill of $172,559 was recorded and is being amortized
    over five years.  The reported net income and net income per common
    and common equivalent share for the reported periods would not have
    been materially different from that reported had the acquisition taken
    place at the beginning of the respective fiscal year.
     
    On April 28, 1995, the Company acquired GreenSpring, a corporation
    based in Menlo Park, California, for $7,450,000.  GreenSpring is
    engaged in the design, development, marketing and manufacturing of
    general purpose I/O products utilized in multiple segments of the
    standard bus embedded computer market.  The acquisition was accounted
    for using the purchase method of accounting, and goodwill is being
    amortized over 10 years.
        

                                       32

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    Assets acquired and liabilities assumed in the acquisition are as follows:
    
              Cash and equivalents                    $ 1,053,185
              Accounts receivable                       1,725,641
              Inventory                                 1,216,904
              Other assets                                 39,908
              Property and equipment                      129,695
              Goodwill and other intangible assets      5,752,440
              Accounts payable                         (2,467,773)
                                                      -----------
                                                      $ 7,450,000
                                                      -----------
                                                      -----------

    The purchase price was paid as follows:
    
              Notes payable issued                    $ 1,000,000
              Warrants issued                             200,000
              Cash                                      6,250,000
                                                      -----------
                                                      $ 7,450,000
                                                      -----------
                                                      -----------
     
    Had the acquisition taken place on July 1, 1994, the reported net
    loss and net loss per common and common equivalent share for the year
    ended June 30, 1995 would have been decreased by approximately
    $804,000 and $0.28, respectively.
     
     
(3) SALE OF JUDGMENTAL USE OF FORCE BUSINESS

    On June 26, 1997, the Company sold substantially all of the assets of
    the Company's Judgmental Use Of Force Business to Fats, Inc., for $2.0
    million.  This business marketed a Judgmental Use Of Force Training
    System used to train police and military personnel in appropriate
    situational use of  force.  The results of operations of this business
    were immaterial to the total operating results of the Company.  The
    sale of property, plant, and equipment (net) and inventory were
    recorded at $139,296 and $409,421, respectively.  The Company recorded
    estimated future costs associated with the sale of $1,262,207 on the
    date of sale.  The balance of $793,677 is included in other current
    liabilities at June 30, 1997.  The Company recognized a gain on the
    sale of approximately $189,000.


(4) SIGNIFICANT CUSTOMERS AND FOREIGN SALES

    In fiscal 1997, 1996 and 1995, no one customer exceeded 10% of the
    Company's sales.  All of the Company's operations are conducted in the
    United States.  International sales are denominated in U.S. dollars. 
    During the years ended June 30, 1997, 1996 and 1995, export sales from
    continuing operations, with minimal attendant risk, all of which were to
    unaffiliated customers, were approximately $8.6 million, $5.1 million and
    $1.6 million, respectively.  Export sales from discontinued operations in
    1995 were $2.4 million.  Export sales from continuing operations were made
    primarily in the following foreign markets:
                                                                                
                                                                       
                                       33

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
      
                                        1997           1996           1995
          --------------            -----------    -----------    -----------
                                    Sales     %    Sales     %    Sales     %
          Foreign Market             (000's)        (000's)        (000's)   
          --------------            -----------    -----------    -----------

    United Kingdom                  $1,100  12.8   1,000  19.6      --     --
    Germany                            800   9.3     800  15.7      --     --
    Korea                            1,000  11.6     500   9.8      --     --
    France                             700   8.1     400   7.8      600   37.5
    Japan                            1,300  15.1     400   7.8      --     --
    Canada                           1,400  16.3     600  11.8      600   37.5
    Belgium                             50   0.6     300   5.9      --     --
    All Others                       2,250  26.2   1,100  21.6      400   25.0
                                    ------ -----   ----- -----   ------  -----
    Total                           $8,600 100.0   5,100 100.0    1,600  100.0
                                    ------ -----   ----- -----   ------  -----
                                    ------ -----   ----- -----   ------  -----
    Sales from
     continuing operations         $52,800  16.3  31,300  16.3   16,200    9.9
                                   -------  ----  ------  ----   ------  -----
                                   -------  ----  ------  ----   ------  -----
                                                                               
                                                                               
(5) RECEIVABLES
                                                                              
    Receivables, net consisted of the following:

                                                           JUNE 30   
                                                 --------------------------
                                                     1997           1996
                                                 -----------      ---------
                                                                            
    Accounts receivable                          $ 9,033,935      5,527,620
    Contract receivables:
         Amounts billed                              268,913        721,803
         Recoverable costs and accrued profit
          on progress completed - not billed         242,416        242,038
                                                 -----------      ---------
                                                     511,329        963,841

                                                   9,545,264      6,491,461
                                                 -----------      ---------

    Less:  allowance for doubtful accounts          (300,995)       (70,237)
                                                 -----------      ---------
                                                 $ 9,244,269      6,421,224
                                                 -----------      ---------
                                                 -----------      ---------
                      
    Recoverable costs and accrued profit not billed are comprised
    principally of amounts of revenue recognized on contracts for which
    billings had not been presented to the contract owners since the
    amounts were not billable at the balance sheet date, because progress
    billings are restricted by the contract to a percentage of costs
    incurred until the contracts are closed.
    

                                       34

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
(6) FINANCING

    The Company has an available bank line of credit of $2,500,000, which
    matures October 1997.  Interest is payable monthly at LIBOR plus 2.25
    percent or the bank's prime lending rate.  The bank's prime lending
    rate at June 30, 1997 was 8.50 percent.  During the year ended June
    30, 1996, the Company refinanced through long-term borrowings
    $2,337,537 previously outstanding on the line of credit.  The Company
    had no amounts drawn on this line of credit at June 30, 1997.  The
    line of credit provides for security interests in the Company's
    receivables, inventories and equipment, except those of LDG and Bit 3. 
    Management anticipates that the line of credit will be renewed at
    maturity in the normal course of business.
    
(7) LONG-TERM DEBT

    Long-term debt consisted of the following:
<TABLE>
<CAPTION>

                                                                 JUNE 30
                                                          ----------------------
                                                              1997       1996
                                                          ----------  ----------
    <S>                                                   <C>         <C>
    Note payable to bank, $5,000,000 at LIBOR plus
         2.5% (8% at June 30, 1996), $1,525,000 at prime
         plus .25% (8.5% at June 30, 1996), secured by 
         receivables, inventories and equipment,
         due in monthly installments of $112,500           $   --      6,525,000
    Notes payable to former shareholders of Bit 3, 
         including imputed interest at 6.46% through
         June 30, 1997, secured by all Company assets,
         due July 1, 1998                                   2,816,251      --
    Notes payable to former shareholders of Bit 3,
         including imputed interest at 6.46% through 
         June 30, 1997, secured by all Company assets,
         due July 1, 1997                                   1,000,000      --
    Note payable, non-interest-bearing,
         payable in monthly installments through
         August 1997                                           13,316     113,316
    8.24% note due in monthly installments of $2,215
         including interest through August 1996                 --          4,385
    8.14% note due in monthly installments of
         $2,321 including interest through 
         August 1996                                            --          4,595
                                                            ---------   ---------
                                                            3,829,567   6,647,296
    Less current installments                              (1,013,316) (1,458,976)
                                                            ---------   ---------
                                                           $2,816,251   5,188,320
                                                            ---------   ---------
                                                            ---------   ---------
</TABLE>

    Principal maturities of long-term debt as of June 30, 1997 are as follows:

                                            1998           $1,013,316
                                            1999            2,816,251
                                                           ----------
                                                           $3,829,567
                                                           ---------- 
                                                           ----------


                                       35

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           

    (8) INCOME TAXES

        Income tax expense (benefit) is comprised of the following:
    
                                                 YEAR ENDED JUNE 30 
                                        ----------------------------------
                                             1997      1996       1995 
                                        ------------  --------- ----------
         Current:
           U.S. Federal                 $  4,432,000  1,916,770  1,211,000 
           State                           1,082,000    483,500    352,000 
    
         Deferred:
           U.S. Federal                   (4,204,000)   (11,000)  (145,000) 
           State                          (1,003,000)    (2,000)   (61,000) 
              
        Income tax before 
         discontinued operations             307,000  2,387,270  1,357,000 
    
        Income tax expense (benefit) from:
           Discontinued operations             --         --    (1,160,000)
           Loss on disposal                    --         --      (896,000)
                                        ------------  --------- ----------
        Total income tax expense         $   307,000  2,387,270   (699,000)
                                        ------------  --------- ----------
                                        ------------  --------- ----------

    
    Income tax expense was provided for at an effective rate of 40.0,
    40.0 and 42.4 percent in 1997, 1996 and 1995, respectively.  The
    actual tax expense differs from the "expected" tax expense (computed
    by applying the U.S. Federal corporate tax rate of 34 percent to
    income from continuing operations before income taxes) as follows:

                                                      YEAR ENDED JUNE 30 
                                             ----------------------------------
                                                   1997      1996       1995 
                                             ------------  --------- ----------
    
    Computed "expected" tax expense           $   261,350  2,029,180  1,089,000
    State income tax, net of federal income
      tax benefit                                  51,050    319,112    212,000
    Goodwill amortization                           --        21,508     66,000
    Nondeductible merger expenses                  62,800      --         -- 
    Dividend from foreign sales corporation      (102,000)   (45,000)     --
    Other                                          33,800     62,470    (10,000)
                                              -----------  ---------  ---------
                                              $   307,000  2,387,270  1,357,000 
                                              -----------  ---------  ---------
                                              -----------  ---------  ---------


                                       36

<PAGE>

         
                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    The significant components of deferred income tax assets are as follows:
     
                                                       YEAR ENDED JUNE 30
                                                   -------------------------
                                                      1997           1996
                                                   ----------     ----------
    
    Vacation and severance accruals                $  179,200        136,136 
    Inventory capitalization                          519,100        198,792
    Acquired in-process R&D charge                  4,217,700           - 
    Accrued expenses                                  277,900           -
    Amortization                                      234,900           -
    Allowance for uncollectible accounts              120,400           -
    Other                                              30,800         38,072 
                                                   ----------        -------
                                                   $5,580,000        373,000 
                                                   ----------        -------
                                                   ----------        -------

    In assessing the realizability of deferred tax assets, management
    considers whether it is more likely than not that some portion or all
    of the deferred tax assets will not be realized.  The ultimate
    realization of deferred tax assets is dependent upon the generation of
    future taxable income during the periods in which those temporary
    differences become deductible.  Management considers the scheduled
    reversal of deferred tax liabilities, projected future taxable income,
    and tax planning strategies in making this assessment.  Based on the
    Company's historical taxable transactions, the timing of the reversal
    of existing temporary differences, and the evaluation of tax planning
    strategies, management believes it is more likely than not that the
    Company's future taxable income will be sufficient to realize the
    benefit of the deferred tax assets existing at June 30, 1997. 
    Accordingly, management has no allowance for deferred tax assets at
    June 30, 1997 or 1996.
     

(9) LEASES

    The Company leases its main facilities in Albuquerque, New Mexico,
    Carlsbad, California, Menlo Park, California, Minneapolis, Minnesota,
    and Raleigh, North Carolina, under noncancelable operating leases
    which expire at various dates through the year 2000.  The Company also
    leases various items of equipment under noncancelable operating leases
    which expire at various dates through the year 2002.
    
                                  BUILDINGS        EQUIPMENT
            YEAR ENDING            MINIMUM          MINIMUM
              JUNE 30          LEASE PAYMENTS   LEASE PAYMENTS      TOTAL
            -----------        --------------   --------------   -----------

              1998               $  754,900         48,540          803,440
              1999                  650,605         48,540          699,145
              2000                  635,754         48,540          684,294
              2001                  108,789         14,087          122,876
              2002                  100,546           --            100,546
                               --------------    -------------   -----------
                                 $2,250,594        159,707        2,410,301
                               --------------    -------------   -----------
                               --------------    -------------   -----------

    Total rental expense for operating leases for the years ended June
    30, 1997, 1996, and 1995 was $886,965, $521,885 and $511,150,
    respectively.


                                       37

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           

(10) STOCK OPTION PLANS AND WARRANTS

    (a) 1992, 1993, 1995, 1996 AND 1997 INCENTIVE STOCK OPTION PLANS
    
        The Company has 1992, 1993, 1995, 1996 and 1997 Incentive Stock Option
        Plans ("Plans") whereby a total of 1,400,000 shares of its common
        stock are reserved for discretionary grant of options by the Board to
        officers and employees who are not directors.  The Plans all terminate
        ten years after inception, from the years 2001 to 2006.
    
        The options are intended to qualify as "incentive stock options"
        within the meaning of Section 422A of the Internal Revenue Code (the
        "Code").  The option plan generally permits options to be granted (i)
        only to employees or officers and not to directors as such; (ii) for a
        period of up to ten years; and (iii) at prices not less than fair
        market value at the date of grant.  Under the Code, holders of more
        than 10 percent of the Company's stock cannot be granted options with
        a duration of more than five years or exercisable at a price less than
        110 percent of the fair market value on the date of grant.  Options
        granted under the plan may be exercised as provided by the
        administering committee or Board of Directors of the Company.  All of
        these options are exercisable at the quoted market value of the
        Company's stock in effect on the respective dates of the grants.
    
    (b) 1993 DIRECTOR AND OFFICER STOCK OPTION PLAN

        The Company has a 1993 Director and Officer Stock Option
        Plan whereby a total of 2,000,000 shares of its common stock
        are reserved for grant of options to all Directors of the
        Company who are not employees and all Executive Officers of
        the Company.  Directors who are not employees of the Company
        receive automatic grants on the anniversary date of their
        service as a Director of the Company.  Executive Officers
        receive grants subject to the discretion of the Board.  All
        options are granted at a price equal to fair market value. 
        The options become exercisable in one to three years from
        the date of grant and terminate twelve months from the date
        the optionee ceases to be a member of the Board of Directors
        or in five years, whichever occurs first.
         
    (c) 1996 EMPLOYEE STOCK PURCHASE PLAN
         
        The 1996 Employee Stock Purchase Plan was adopted by the Board of
        Directors on January 21, 1996 and was subsequently approved at
        the November 1996 Annual Shareholders' Meeting. The Plan provides
        for the grant of options to eligible employees on January 21,
        1996, 1997 and 1998.  Individual grants are issued for a
        percentage of the employee's annual base salary, (as determined
        each year by the Board of Directors, up to 10%), divided by the
        fair market value of one share of the Company's stock on the date
        of grant.  Options are eligible to be exercised beginning 18
        months after the date of grant for a period of nine months at
        which time they will expire.
         
      
                                       38


<PAGE>

                        SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
    (d) WARRANTS     
         
        In connection with the acquisition of GreenSpring, warrants to 
        purchase 400,000 shares of common stock at $4.50 were issued to the 
        former shareholders and option holders of GreenSpring.  Of these 
        warrants, 150,000 were exercisable immediately upon closing and the 
        remaining 250,000 warrants vested during fiscal year 1996.  At June 
        30, 1997, 143,132 warrants had been exercised and 34,297 were 
        forfeited under the net issuance method.  Of the balance, 139,238 
        were exercisable at June 30, 1997 with the remaining exercisable at 
        June 30, 1998.
         
        In connection with the 1992 Initial Public Offering, warrants to 
        purchase 100,000 common shares at $4.80 per share were issued to the 
        underwriter.  All of the warrants issued vested in January 1993 and 
        were exercised in fiscal year 1997.
         
        Information regarding the Company's stock option plans and warrants 
        is summarized below:

<TABLE>
<CAPTION>
                           1991      ALL      1993     1996
                           NSOP     ISOPs      D&O     ESPP    WARRANTS      TOTAL
                         -------  --------- --------  -------   ----------  ----------
                         -------  --------- --------  -------   ----------  ----------
<S>                      <C>       <C>       <C>      <C>      <C>         <C>
OUTSTANDING AT 6/30/94   26,512    736,296   30,000     --       100,000     892,808
 
   Granted                --       135,000   10,000     --       400,000     545,000
   Exercised              8,228      --       --        --         --          8,228
   Cancelled              --       211,772    --        --         --        211,772
                         -------  --------- --------  -------   ----------  ----------
OUTSTANDING AT 6/30/95   18,284    659,524   40,000     --        500,000   1,217,808

   Granted                --       360,000  118,500    44,171       --        522,671
   Exercised             18,284    234,334    5,000     --         26,861     284,479
   Cancelled              --        36,716    --          672      13,139      50,527
                         -------  --------- --------  -------   ----------  ----------
OUTSTANDING AT 6/30/96    --       748,474  153,500    43,499     460,000   1,405,473

   Granted                --       399,997  170,000    25,510       --        595,507
   Exercised              --       294,474   16,500     --        216,271     527,245
   Cancelled              --        56,663    --       10,154      21,158      87,975
                         -------  --------- --------  -------   ----------  ----------
OUTSTANDING AT 6/30/97    --       797,334  307,000    58,855     222,571   1,385,760
                         -------  --------- --------  -------   ----------  ----------
                         -------  --------- --------  -------   ----------  ----------
EXERCISABLE AT 6/30/95   18,284    346,191    --        --        250,000     614,475
EXERCISABLE AT 6/30/96    --       478,474  115,000     --        293,334     886,808
EXERCISABLE AT 6/30/97    --       217,333  108,500     --        139,238     465,071
                         -------  --------- --------  -------   ----------  ----------
                         -------  --------- --------  -------   ----------  ----------
AVAILABLE FOR GRANT       --        73,858  146,740   241,145       --        461,743
 AT 6/30/97  
                         -------  --------- --------  -------   ----------  ----------
                         -------  --------- --------  -------   ----------  ----------
</TABLE>

Weighted average option exercise price information for the years  1997, 1996,
and 1995 follows:
 
                                   1997      1997        1995
                                 -------    ------      ------
Outstanding at July 1            $  6.27      4.62       4.70
Granted during the year:
    Price = Fair Value             22.28     11.25       4.55
    Price > Fair Value               --       5.50        --
Exercised during the year           4.74      4.65       2.19
Cancelled during the year           9.37      4.53       4.78
Outstanding at June 30             13.53      6.27       4.62
Exercisable at June 30              6.71      4.83       4.67

                                       39

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                           
Significant option groups outstanding and exercisable at June 30, 1997
and related weighted average price and life information follows:

<TABLE>
<CAPTION>

                                              Weighted      Weighted
                                               Average       Average                   Weighted
                                Number        Remaining     Exercise     Number        Average
Range of Exercise Prices     Outstanding     Contractual      Price    Exercisable  Exercise Price
                                                Life
------------------------    ------------     -----------    --------   -----------  ---------------
<S>                         <C>              <C>            <C>        <C>          <C>           
$  4.13  -  $  5.50           488,621           7.44        $   4.80      405,288      $   4.86
$  5.63  -  $  16.50          467,311           8.04        $  11.85       19,783      $   5.75
$  18.25 -  $  34.00          429,828           7.29        $  25.29       40,000      $  25.88
------------------------    ------------     -----------    --------   -----------  ---------------
$  4.13  -  $  34.00        1,385,760           7.59        $  13.53      465,071      $   6.71
------------------------    ------------     -----------    --------   -----------  ---------------

</TABLE>

The per share weighted-average fair value of stock options granted at a price 
greater than fair value during 1997 and 1996 was $0 and $1.63, respectively, 
on the date of grant.  The per share weighted-average fair value of stock 
options granted at a price equal to fair value during 1997 and 1996 was 
$11.49 and $5.99, respectively, on the date of grant.  The fair value of 
options at date of grant was estimated using the Black-Scholes Model with the 
following weighted-average assumptions:
    
                                        1997        1996
                                      -------     -------
    Expected life (years)               2.26        2.58
    Risk free interest rate            06.05%      06.25%
    Volatility                         63.30%      63.30%
    Dividend yield                       --          --
         
         
The Company applies APB Opinion 25 accounting for its plans and
accordingly, no compensation cost has been recognized for its stock
options in the financial statements.  Had the Company determined
compensation cost based on fair value at grant date for its stock
options under SFAS 123, the Company's net income and EPS would have
been reduced to the pro forma amounts indicated below:

                                         1997          1996
                                     ----------     ---------
    Net income, as reported          $  461,685     3,580,907
    Net income (loss), pro forma     (1,694,626)    3,110,685
    EPS, as reported                 $     0.09          0.97
    EPS, pro forma                        (0.30)         0.90
         
Pro forma net income reflects only options granted in 1997 and 1996. 
Therefore, the full impact of calculating compensation cost for stock options 
under SFAS 123 is not reflected in pro forma net income amounts presented 
above because compensation cost is reflected over the options' vesting 
periods and compensation cost for options granted prior to July 1, 1995 is 
not considered.  


                                       40

<PAGE>


                       SBS TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


(11) RETIREMENT PLAN

    The Company maintains a retirement plan under Section 401(k) of the
    Internal Revenue Code for all employees of the Company.  The plan
    provides for employees to selectively defer a percentage of their
    wages, which the Company matches at a predetermined rate not to exceed
    4 percent of the employee's wages.  The plan also provides for
    additional contributions at the discretion of the Board of Directors. 
    Total Company contributions to the plan during the years ended
    June 30, 1997, 1996 and 1995 were $342,029, $185,387 and $251,493,
    respectively.
                                             
    Bit 3 and LDG maintained retirement plans under Section 401(k) of the
    Internal Revenue Code for all of their employees.  Subsequent to the
    Company's acquisition of Bit 3 and LDG, these plans were terminated
    and merged into the Company's plan.
                                             
    In addition, LDG maintained a profit sharing plan qualified under
    Section 401(a) of the Internal Revenue Code for all of their
    employees.  Subsequent to the Company's acquisition of LDG, this plan
    was terminated and plan participants had the option to take a
    distribution from the plan or rollover their balances into the
    Company's 401(k) plan.  
                                            
(12)  DISCONTINUED OPERATIONS
                                           
    On April 26, 1995, the Company sold its flight simulation business
    for $400,300.  Included in the sale were net assets of approximately
    $1,225,000.  The purchaser has agreed to complete simulation contracts
    in progress at the time of the sale on a time and material and fixed
    price basis.  The Company is responsible for completion of these
    contracts, until novation of the contracts by the customer, to the
    purchaser of the simulation operations.  As of June 30, 1997, the
    majority of these contracts have been substantially completed.
                                             
    The disposition of the flight simulation business has been accounted
    for as a discontinued operation.  Revenues of the discontinued
    operations were approximately $8,700,000 in 1995.
                                            
(13) CONTINGENCIES
                                            
    The Company has been named as a defendant in a lawsuit filed on June
    19, 1996.  The Company is vigorously defending the lawsuit and has
    filed a counter suit.  Management does not believe that the outcome of
    the litigation will have a material affect on the Company's financial
    condition or results of operations.
                                             
    The Company is subject to various claims which arise in the ordinary
    course of its business.  In the opinion of management, the amount of
    ultimate liability with respect to these actions will not materially
    affect the financial position of the Company.


                                       41

<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 

None.
 
 

                                       PART III
                                           

Certain information required by Part III is incorporated by reference to the
Company's definitive proxy statement pursuant to Regulation 14A (the "Proxy
Statement") for its annual meeting to be held November 11, 1997.
 
 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 
         OF THE REGISTRANT
 
The information required by this item is incorporated by reference to the
Company's Proxy Statement under the section entitled "Directors and Executive
Officers".
 
ITEM 11. EXECUTIVE COMPENSATION
 
The information required by this item is incorporated by reference to the
Company's Proxy Statement under the section entitled "Compensation of Executive
Officers".
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
         AND MANAGEMENT
 
The information required by this item is incorporated by reference to the
corresponding section of the Company's Proxy Statement.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
The information required by this item is incorporated by reference to the
Company's Proxy Statement under the section entitled "Directors and Executive
Officers".
 
 
                                       42

<PAGE>


                                    PART IV
                                           
                                           
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
(a)  Exhibits.  The Exhibits listed on the accompanying Index to Exhibits at 
     the end of this Report are filed as part of, or incorporated by 
     reference into, this Report.

(b)  Financial Statement Schedules.  The schedules are omitted inasmuch as the
     required information is not present or not present in amounts sufficient 
     to require submission of the respective schedules, or the information is 
     included in the financial statements, including the notes thereto.

(c)  Reports on Form 8-K during the fourth quarter.

     None.






                                       43


<PAGE>

                                   SIGNATURES
                                           
                                           
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                            SBS TECHNOLOGIES, INC.



                                            By:  /S/ Christopher J. Amenson
                                                 Christopher J. Amenson
                                                 Chairman of the Board and
                                                 Chief Executive Officer


Date:  September 26, 1997







                                       44

<PAGE>

                                SBS Technologies, Inc.
                                           
                              Annual Report on Form 10-K
                           Fiscal Year Ended June 30, 1997
                                           
                                  Index to Exhibits
                                           
<TABLE>
<CAPTION>
Exhibit
  No.                      DESCRIPTION                                                 PAGE
-------                    -----------                                                 ----
<S>           <C>                                                                      <C>
3.i(4)        Articles of Incorporation, as amended on June 28, 1995                    - -
3.ii(4)       By-laws, as amended on May 8, 1995                                        - -
4.a(5)        Article VI of the Articles of Incorporation, as amended, as 
                included in the Articles of Incorporation of SBS Technologies, Inc.     - -
4.b(5)        Articles I, II of the Bylaws of SBS Engineering, Inc., as amended         - -
4.c(5)        Form of certificate evidencing Common Stock                               - -
10.a(6)       Employment agreement between Registrant and 
                Dr. Andrew C. Cruce, dated October 1, 1993,
                as amended                                                              - -
10.b(6)       Employment agreement between Registrant and
                Scott A. Alexander, dated October 1, 1993,
                as amended
10.c(7)       1997 Employee Incentive Stock Option Plan                                 - -
10.d(6)       Employment agreement between Registrant and
                Christopher J. Amenson, dated April 24, 1992,
                as amended                                                              - -
10.e(1)       1991 Key Employee Stock Option Plan                                       - -
10.f(1)(7)    1992 Incentive Stock Option Plan                                          - -
10.g(1)       Stock Bonus Plan                                                          - -
10.h(2)(7)    1993 Incentive Stock Option Plan                                          - -
10.i(2)(7)    1993 Director and Officer Stock Option Plan
10.j          Employment Agreement between Registrant and Stephen D. Cooper 
              dated May 13, 1997                              Filed herewith electronically
10.k          First Amendment to Amended and Restated Credit Agreement 
                and Related Loan Documents between Registrant and NationsBank 
                of Texas, N.A. dated November 15, 1996        Filed herewith electronically
10.l(8)       Stock Purchase Agreement between Bit 3 Computer Corporation
                and Registrant dated October 8, 1996                                    - -
10.m          Asset Purchase between Fats, Inc. and Registrant
                dated June 26, 1997                           Filed herewith electronically
10.q(3)       Asset Purchase Agreement dated April 26, 1995 between registrant
                and Camber Corporation.                                                 - -
10.r(3)       Purchase Agreement dated April 28, 1995 between Registrant and GreenSpring
                Computers, Inc. et al                                                   - -
10.s(3)       Credit Agreement dated April 28, 1995 with NationsBank of Texas, N.A.     - -
10.t(3)       Lease dated May 25, 1995 between Registrant and PARS Asset
                Management Company                                                      - -
10.v(6)(7)    1996 Employee Stock Purchase Plan, adopted January 21, 1996               - -
10.w(6)       Amended and Restated Term Loan and Revolver
                Credit Facility from NationsBank of Texas, N.A.
                dated April 26, 1996.                                                   - -
10.x(6)       Lease dated March 5, 1996, between Registrant and
                Bohannon Trust Partnership II.                                          - -
10.y(6)       Pooling Agreement dated August 19, 1996 between
                Registrant and Logical Design Group, Inc. et al                         - -
10.z          Management Incentive Plan                       Filed herewith electronically

</TABLE>



                                        45
<PAGE>

<TABLE>
<CAPTION>

<S>           <C>                                                                      <C>
11(6)         Statement Re:  Computation of Per-Share Income                            
21            Subsidiaries of the registrant                  Filed herewith electronically
23            Consent of KPMG Peat Marwick LLP                Filed herewith electronically
25            Power of attorney                               Filed herewith electronically
27            Financial Data Schedules                        Filed herewith electronically

</TABLE>

(1)      Incorporated by reference to the exhibit filed with the Registrant's 
         Registration Statement on Form S-18 (No 33-43256-D), originally filed 
         October 8, 1991, which Registration Statement became effective 
         January 9, 1992.
(2)      Incorporated by reference to Exhibits "A" & "B" of the Registrant's
         Proxy Statement for its annual meeting held November 10, 1992.
(3)      Incorporated by reference to Exhibits 10.q, 10.r, 10.s and 10.t of the
         Registrant's Annual Report on Form 10-K for the fiscal year ended 
         June 30, 1995.
(4)      Incorporated by reference to Exhibits 3.1 and 3.2 of the Registrant's
         Quarterly Report on Form 10-Q for the quarter ended December 31, 1995.
(5)      Incorporated by reference to Exhibits 4.1, 4.2 and 4.3 of Registrant's
         Registration Statement on Form S-3 originally filed on January 5, 1996 
         and Amendment No. 1 filed on March 14, 1996.
(6)      Incorporated by reference to Exhibits 10.a, 10.b, 10.d, 10.v, 10.w,
         10.x, 10.y, and 11 of the Registrants Annual Report on Form 10-K for 
         the fiscal year ended June 30, 1996.
(7)      Incorporated by reference to the Registrant's Registration Statement
         on Form S-8 originally filed on March 10, 1997 and Amendment No.1 
         filed on April 4, 1997.
(8)      Incorporated by reference from the Registrant's Registration Statement
         on Form S-2 dated October 9, 1996 Amendment No.1 dated October 22, 
         1996 and Amendment No.2 dated November 14, 1996. 


                                        46