U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q

        [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED              February 29, 2004
                               --------------------------------------------

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT

FOR THE TRANSITION PERIOD FROM                     TO
                               -------------------    ---------------------

                        Commission File Number 000-21623

                             OBIE MEDIA CORPORATION
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

         OREGON                                                 93-0966515
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                              Identification No.)


4211 West 11th Ave., Eugene, Oregon                  97402
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

        541-686-8400                                        FAX 541-345-4339
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

Indicate by check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 whether the issuer is an accelerated filer as defined in
amended SEC Rule 12-b2.

 Yes  [   ]    No  [ x ]



     As of April 1, 2004, 5,985,110 shares of the issuer's common stock were
outstanding.

<PAGE>
                             OBIE MEDIA CORPORATION
                                    FORM 10-Q
                                      INDEX


<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                         PAGE
-------------------------------                                                                        ----
<S>                                                                                                     <C>
ITEM 1.  Financial Statements

         Consolidated Condensed Balance Sheets as of February 29, 2004 and November 30, 2003            2

         Consolidated Condensed Statements of Operations for the three months
                   ended February 29, 2004 and 2003                                                     3

         Consolidated Condensed Statements of Cash Flows for the three months
                  ended February 29, 2004 and 2003                                                      4

         Notes to Consolidated Condensed Financial Statements                                           5

ITEM 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                                 10

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk                                     15

ITEM 4.  Controls and Procedures                                                                        15


PART II - OTHER INFORMATION
----------------------------

ITEM 4.  Submission of Matters to Vote of Security Holders                                              16

ITEM 6.  Exhibits and Reports on Form 8-K                                                               16

         Certifications                                                                                 17
</TABLE>




















                                        1
<PAGE>
                                                OBIE MEDIA CORPORATION
                                          Consolidated Condensed Balance Sheets

                                                       ASSETS
<TABLE>
<CAPTION>
                                                                      February 29,
                                                                         2004                November 30,
                                                                     (Unaudited)                2003
                                                                  ------------------     -------------------
<S>                                                                      <C>                   <C>
CURRENT ASSETS:
   Cash                                                                  $  712,938            $  1,943,169
   Accounts receivable, net                                               4,462,465               5,774,226
   Prepaids and other current assets                                      5,847,901               5,099,504
   Deferred income taxes                                                  1,541,745               1,543,750
                                                                  ------------------     -------------------
        Total current assets                                             12,565,049              14,360,649

   Property and equipment, net                                           14,572,955              14,886,619
   Goodwill, net                                                          5,448,552               5,448,552
   Other assets                                                           1,709,098                 749,936
                                                                  ------------------     -------------------
                                                                        $34,295,654           $  35,445,756
                                                                  ==================     ===================

                                   LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long-term debt                                    $ 1,000,000            $  1,723,695
   Working capital revolver                                               4,151,793               3,890,483
   Accounts payable                                                         396,914                 307,901
   Accrued transit fees                                                     594,146               1,148,124
   Accrued expenses                                                         882,564               1,220,754
   Income taxes payable                                                           -                 214,540
   Unearned revenue                                                       1,221,506                 928,051
                                                                  ------------------     -------------------
        Total current liabilities                                         8,246,923               9,433,548

Deferred tax liability                                                    1,583,468               1,586,631
Long-term debt, net                                                      18,914,404              17,246,748
                                                                  ------------------     -------------------
        Total liabilities                                                28,744,795              28,266,927
                                                                  ------------------     -------------------

Shareholders' equity:
   Preferred stock, without par value, 10,000,000 shares
    authorized, no shares issued or outstanding
   Common stock, without par value, 20,000,000 shares
    authorized, 5,985,110 and 5,913,602 shares issued
    and outstanding at February 29, 2004 and
    November 30, 2003 respectively                                       17,469,554              17,282,128
   Deferred stock based compensation                                      (117,763)                       -
   Other comprehensive income (loss)                                       (84,947)                (45,495)
   Accumulated deficit                                                 (11,715,985)            (10,057,804)
                                                                  ------------------     -------------------
    Total shareholders' equity                                            5,550,859               7,178,829
                                                                  ------------------     -------------------
                                                                       $ 34,295,654            $ 35,445,756
                                                                  ==================     ===================
</TABLE>
See accompanying notes

                                        2
<PAGE>
                                         OBIE MEDIA CORPORATION
                             Consolidated Condensed Statement of Operations
                                              (Unaudited)

<TABLE>
<CAPTION>
                                                                         Three Months Ended February
                                                                           2004               2003
                                                                    ----------------------------------
<S>                                                                    <C>                <C>
REVENUES:
  Transit advertising                                                  $ 8,018,497        $ 6,980,462
  Outdoor advertising                                                    1,960,026          1,674,329
                                                                    ----------------------------------
      Net revenue                                                        9,978,523          8,654,791

OPERATING EXPENSES:
  Production and installation                                            1,517,761          1,355,132
  Transit and outdoor occupancy                                          3,784,741          3,601,759
  Selling                                                                2,216,171          1,794,589
  General and administrative                                             2,110,938          1,832,142
  Depreciation and amortization                                            483,363            468,952
                                                                    ----------------------------------
             Total operating expenses                                   10,112,974          9,052,574

      Operating loss                                                     (134,451)          (397,783)

OTHER  EXPENSE:
  Interest expense                                                         548,574            543,998
  Loss on debt extinguishment                                                    -                  -
                                                                           961,411
LOSS FROM CONTINUING OPERATIONS                                     ----------------------------------
    BEFORE INCOME TAXES                                                (1,644,436)          (941,781)

INCOME TAX PROVISION (BENEFIT)                                                   -                  -


                                                                    ----------------------------------
LOSS FROM CONTINUING OPERATIONS                                        (1,644,436)          (941,781)

DISCONTINUED OPERATIONS, NET OF INCOME                                    (13,745)          (100,831)
TAXES
                                                                    ----------------------------------
          NET LOSS                                                   $ (1,658,181)      $ (1,042,612)
                                                                    ==================================

Earnings (loss) per share:
    Basic and diluted, from continuing operations                       $   (0.28)        $    (0.16)
    Basic and diluted, from discontinued operations                     $   (0.00)        $    (0.02)
    Basic and diluted, on net loss                                      $   (0.28)        $    (0.18)
</TABLE>

See accompanying notes

                                        3
<PAGE>
                                         OBIE MEDIA CORPORATION
                             Consolidated Condensed Statement of Cash Flows
                                              (Unaudited)

<TABLE>
<CAPTION>
                                                                         Three Months Ended February,
                                                                            2004              2003
                                                                     ------------------------------------
<S>                                                                        <C>             <C>
Cash Flows From Operating Activities:
   Net loss                                                                $ (1,658,181)   $ (1,042,612)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation and amortization                                              483,363         416,069
      Loss on debt extinguishment                                                961,411               -
      Compensation expense from restricted stock                                  32,117               -
      Changes in assets and liabilities:
         (Increase) decrease in:
             Accounts receivable                                               1,311,761       1,470,894
             Prepaid and other current assets                                  (778,474)       (477,072)
             Deferred income taxes                                                 2,005           4,861
         Increase (decrease) in:
             Accounts payable                                                     89,013         125,833
             Other liabilities                                                 (778,865)       (465,377)
                                                                     ------------------------------------
        Net cash (used in) operating activities                                (335,850)          32,596
                                                                     ------------------------------------

Cash Flows From Investing Activities:
    Capital expenditures                                                       (108,951)       (160,055)
                                                                     ------------------------------------
        Net cash (used in) investing activities                                (108,951)       (160,055)
                                                                     ------------------------------------


Cash Flows From Financing Activities:
   Net borrowings on line of credit                                              261,310               -
   Borrowings of long-term debt                                               20,038,614               -
   Payments on long-term debt                                               (19,804,470)       (807,296)
   Loan fees incurred with financing                                         (1,241,432)
                                                                     ------------------------------------
        Net cash (used in) financing activities                                (745,978)       (807,296)
                                                                     ------------------------------------

Effect of exchange rate changes on cash                                         (39,452)        (29,824)

Net (decrease) in cash                                                       (1,230,231)       (964,579)
Cash, beginning of period                                                      1,943,169       1,815,886
                                                                     ------------------------------------
Cash, end of period                                                            $ 712,938       $ 851,307
                                                                     ====================================
</TABLE>

See accompanying notes




                                        4
<PAGE>
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION

         The interim financial statements have been prepared by Obie Media
Corporation ("Obie", "Obie Media" or the "Company") without audit. In the
opinion of management, the accompanying unaudited financial statements contain
all adjustments necessary to present fairly the financial position of the
Company as of February 29, 2004 and 2003, and the results of operations and cash
flows of the Company for the three months ended February 29, 2004 and 2003, as
applicable. The condensed consolidated financial statements include the accounts
of the Company and its subsidiaries, and all significant intercompany accounts
and transactions have been eliminated in consolidation.

         Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted as permitted by rules and regulations
of the Securities and Exchange Commission. The organization and business of the
Company, accounting policies followed by the Company and other information are
contained in the notes to the Company's financial statements filed as part of
the Company's November 30, 2003 Form 10-K. This quarterly report should be read
in conjunction with such annual report.

2.          STOCK OPTIONS

STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NO. 123 AND NO. 148

         The Company measures compensation expense for its stock-based employee
compensation plans using the intrinsic value method under Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" , (APB 25), and
provides pro forma disclosures of net income (loss) and net income (loss) per
common share as if the fair value method had been applied in measuring
compensation expense in accordance with Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation", (SFAS 123).

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

         As required by SFAS 123, the Company computed the value of options
granted during the three months ended February 28, 2003 using the Black-Scholes
option pricing model for pro forma disclosure purposes. There were no options
granted during the three months ended February 29, 2004. The weighted average
assumptions used for stock option grants for the three months ended

                                        5
<PAGE>
February 28, 2003 were risk-free interest rate of 4.9% , expected dividend
yields of 0%, expected lives of 6.0 years and expected volatility of 81.48%.

         Options are assumed to be exercised upon vesting for purposes of this
valuation. Adjustments are made for options forfeited as they occur. For the
three months ended February 28, 2003 the total value of the options granted was
approximately $5,000 which would be amortized on a straight-line basis over the
vesting periods of the options.

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

                           Three Months Ended February 29 and 28
                          (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                               2004               2003
                                                                               ----               ----

<S>                                                                               <C>               <C>
  Net loss as reported                                                            $(1,658)          $(1,043)


  Deduct total stock-based compensation expense determined under fair
  value based method for all awards, net of related tax effects                       (41)              (61)

                                                                         ------------------ -----------------
  Pro-forma net loss                                                              $(1,699)          $(1,104)
                                                                         ================== =================

  NET LOSS PER SHARE
  Basic and diluted:
  As reported                                                                       $(.28)           $(0.18)
  Pro forma                                                                         $(.29)           $(0.19)
</TABLE>

         The effects of applying SFAS No. 123 for providing pro forma disclosure
for the three months ended February 29, 2004 and February 28, 2003 are not
likely to be representative of the effects on reported net (loss) and net (loss)
per share for future years since options vest over several years and additional
awards are made each year.

         The Company entered into restricted stock agreements with five
executives in November 2003 in exchange for certain of their stock options. The
restricted stock agreements were approved by the Company's board of directors.
Under the terms of the agreements, 71,508 shares of restricted stock were
exchanged for 143,008 stock options. The restricted stock vests over three and
one-half years. The fair value of the restricted stock on the date of grant
amounted to $187,351, of which $32,117 was recorded as compensation expense
during the three months ended February 2004. Unamortized compensation expense at
February 29, 2004 totaled $117,763 and has been recorded as Deferred Stock Based
Compensation in the balance sheet. The restricted stock shares were issued in
December 2003.

3.           CONTRACT TERMINATION

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

         The agreed upon fee for the 2001 contract year has been settled at $17
million, substantially less than the original contracted guaranteed payment of
$21.8 million. As of May 31, 2002, approximately $7.5 million had been paid to
the CTA, and an

                                        6
<PAGE>
additional $1.5 million was paid on June 1, 2002. The balance was to be payable
in substantially equal monthly payments of $116,080 beginning June 1, 2002 and
ending May 1, 2007, with an additional $1.0 million balloon payment due January
1, 2004. The monthly payments were to be without interest through May 2003, and
included a 5% interest charge thereafter. This obligation was paid in full in
January 2004 from funds provided by new financing arrangements described in Note
4 below.

4.       DEBT AGREEMENTS

         On January 14, 2004 the Company entered into a new long-term financing
agreement with CapitalSource Finance, LLC. The arrangement includes a $17.5
million term loan and a $6.0 million revolver to the parent company, both of
which mature on November 30, 2008. The arrangement also includes a $2.5 million
term loan to Obie Media Ltd., the Company's Canadian subsidiary which expires on
January 31, 2009. Funds from the term loans were used to (1) pay off the
existing term loan with U.S. Bank, (2) pay off the balance of the settlement
obligation with the Chicago Transit Authority, and (3) pay off the promissory
note related to the purchase of the minority interest of O.B. Walls, Inc. The
new revolver was used to pay off the outstanding balance on the operating line
of credit due to U.S. Bank. The interest charged on the loans is the greater of
prime plus a margin that is dependant upon Obie's leverage ratio, or 9.5% on the
term loans or 8.5% on the revolver. The margin in effect at the time the
financing closed was 5.5% on the term loans and 4.5% on the revolver. The first
date that this margin may be adjusted is the quarter ending February 29, 2004.
The rate was not adjusted at February 29, 2004 and remained consistent with the
existing rate. This transaction resulted in a write off of the discount on the
obligation with the Chicago Transit Authority in the amount of $709,817 and
write off of prepaid loan costs in the amount of $251,594. These amounts have
been shown as loss on debt extinguishment in the Consolidated Statement of
Operations.

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

         The Company has an arrangement with Travelers Casualty & Surety Company
of America ("Travelers"), to provide bonds required by the Company. The Company
and Travelers have entered into a security agreement whereby Travelers maintains
a second secured position on certain of the Company's assets, subordinate to the
security arrangements with CapitalSource Finance LLC or any other replacement
primary lender.

5.       ACCOUNTING FOR GOODWILL

         In accordance with SFAS No. 142, goodwill amortization was discontinued
as of November 30, 2002. We will complete our annual impairment analysis during
the quarter ending May 31, 2004. Goodwill at February 29, 2004 and November 30,
2003 amounted to $5,448,552, net of accumulated amortization of $2,181,571.

6.       INCOME TAXES

         The Company has net operating loss carryforwards of approximately $9.2
million. A valuation allowance has been provided for the tax benefit of the
operating loss carryforward and other deferred tax items. This results in no
income tax provision for the quarters ended February 2004 and 2003.

7.       EARNINGS PER SHARE

                                        7
<PAGE>
         Basic earnings per share (EPS) is calculated using the weighted average
number of common shares outstanding for the period and diluted EPS is calculated
using the weighted average number of common shares and dilutive common
equivalent shares outstanding. The following is a reconciliation of the basic
and diluted shares used in the per share calculation:

                       Three Months Ended
                       February 29 and 28,
                                                 2004               2003
                                                 ----               ----

     Basic Shares (weighted average)          5,927,904          5,908,577
     Dilutive effect of stock options
                                                      -                  -

                                           ----------------- -------------------
     Diluted shares (weighted average)        5,927,904          5,908,577
                                           ================= ===================

         At February 29, 2004 and February 28, 2003 the Company had options
outstanding covering 509,670 and 670,181 shares respectively of the Company's
common stock that were not considered in the dilutive EPS since they would have
been antidilutive for the three months ended February 2004 and 2003.

8.       COMPREHENSIVE INCOME

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" (SFAS
No. 130). This statement establishes standards for reporting and displaying
comprehensive income and its components in a full set of general-purpose
financial statements. The objective of SFAS No. 130 is to report a measure of
all changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners. Comprehensive
income did not materially differ from reported net loss for the three month
periods ended February 2004 and 2003.

9.       DISCONTINUED OPERATIONS

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

         Pursuant to these pronouncements, the Company has classified as
"Discontinued Operations" the results of operations and any exit costs
associated with transit agreements that were economically not viable, and where
the Company plans to or has already either exited the market or intends not to
be a competitive participant in new contract awards for expiring agreements.
Accordingly, the Company exited these markets and has no ongoing advertising
operations. These operations qualify as components of an entity with separate
financial reporting as described in SFAS No. 144. The assets associated with the
discontinued markets are, in the aggregate, not material. The U.S. transit
districts included in Discontinued Operations are: Chicago, San Antonio,
Cincinnati, Kitsap, Santa Cruz and Bridgeport. The Canadian transit districts
included are: Pickering, Whitby, Cambridge and St. Catharines. The Chicago (see
Note 3 above), Pickering, Whitby, Cambridge and St. Catharines contracts were
terminated during fiscal year 2002; the contract in San Antonio was terminated
in December 2002. The Company did not aggressively participate in new contract
awards in Cincinnati, Kitsap, Santa Cruz or Bridgeport, which contracts expired
either during fiscal 2002 or early in fiscal 2003. The results of operations for
these transit districts for 2003 have been reclassified to Discontinued
Operations for comparability purposes.

                                        8
<PAGE>

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

<TABLE>
<CAPTION>
                                                                      Three months ended February 29 and 28,
                                                                            2004                   2003
                                                                            ----                   ----

<S>                                                                        <C>                   <C>
      Net revenues                                                         $6,468                $245,056

      Production and installation expenses                                 (4,714)                (35,689)
      Occupancy expense                                                    (1,969)               (121,879)
      Sales expense                                                        (2,847)                (43,954)
      General and administrative expense                                  (10,683)               (144,365)

                                                                    ---------------------- ---------------------
      (Loss) from discontinued operations before income taxes                (13,745)            (100,831)
      Income tax expense
                                                                    ---------------------- ---------------------
      Net (loss) from discontinued operations                              $(13,745)            $(100,831)
                                                                    ====================== =====================
</TABLE>

10.              NEW ACCOUNTING PRONOUNCEMENTS

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

11.      RECLASSIFICATIONS

         Certain amounts previously reported in the Company's financial
statements as of February 28, 2003 have been reclassified to conform to the
current fiscal year presentation. These reclassifications had no effect on
previously reported net income or shareholders' equity.

12.  CONTINGENCIES

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

                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

         Within the context of these critical accounting policies, we are not
currently aware of any reasonably likely events or circumstances which would
result in materially different amounts being reported.

RECOGNITION OF REVENUE

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

DISCONTINUED OPERATIONS

                                       10
<PAGE>
         Effective during its fiscal year ending November 30, 2002, the Company
adopted Statements of Financial Accounting Standards No. 144 "Accounting for the
Impairment of Long-Lived Assets" (SFAS No. 144) and No. 146 "Accounting for
Costs Associated with Exit or Disposal Activities" (SFAS No. 146).

         Pursuant to these pronouncements, the Company has classified as "
Discontinued Operations" the results of operations and any exit costs associated
with transit district contracts that were exited. As a result the Company has no
further involvement with these markets. The U.S. transit districts included in
Discontinued Operations are: Chicago, San Antonio, Cincinnati, Kitsap, Santa
Cruz and Bridgeport. The Canadian transit districts included are: Pickering,
Whitby, Cambridge and St. Catharines.

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE

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

INCOME TAXES

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

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

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

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

         In accordance with SFAS No. 142, goodwill amortization was discontinued
as of November 30, 2002. We conducted an impairment analysis as of November 30,
2003 and found no instances of impairment. Goodwill at February 29, 2004 and
November 30, 2003 amounted to $5,448,552, net of accumulated amortization of
$2,181,571.

OTHER CONTINGENCIES

                                       11
<PAGE>
         In the ordinary course of business, we are involved in legal
proceedings involving contractual, employment relationships and a variety of
other matters. We record contingent liabilities resulting from claims against us
when it is probable that a liability has been incurred and the amount of the
loss is reasonably estimable. We disclose contingent liabilities when there is a
reasonable possibility that the ultimate loss will exceed the recorded
liability. Estimating probable losses requires analysis of multiple factors, in
some cases including judgements about the potential actions of third party
claimants and courts. Therefore, actual losses in any future period are
inherently uncertain. Currently, we do not believe that any of our pending legal
proceedings or claims will have a material impact on our financial position or
results of operations. However, if actual or estimated probable future losses
exceed our recorded liability for such claims, we would record additional
charges as other expense during the period in which the actual loss or change in
estimate occurred.

RECENT DEVELOPMENTS

         On January 14, 2004 Obie entered into a new long-term financing
arrangement with CapitalSource Finance LLC. The arrangement includes a $17.5
million term loan and a $6.0 million revolver with Obie Media Corporation, both
of which mature on November 30, 2008. The arrangement also includes a $2.5
million term loan to Obie Media Ltd., our wholly owned Canadian subsidiary,
which matures on January 31, 2009. The interest charged on the loans is the
greater of prime plus a margin that is dependant upon Obie's leverage ratio, or
9.5% on the term loans or 8.5% on the revolver as of February 29, 2004. The
margin in effect at the time the financing closed was 5.5% on the term loans and
4.5% on the revolver. The first date that this margin may be adjusted was the
quarter ending February 29, 2004. The rates were not adjusted at that time.

         Funds from the term loan were used to (1) pay off the existing term
loan with the previous lender, (2) pay off the balance of the settlement
obligation with the Chicago Transit Authority, and (3) pay off the promissory
note related to the purchase of the minority interest of O. B. Walls, Inc. in
fiscal 2002. Funds from the new revolver were used to pay off the existing
revolver with the previous lender and to fund closing costs and working capital
needs. Availability under the revolver amounted to approximately $1.8 million as
of February 29, 2004. The term loan principal payment amounts are $1.0 million
in fiscal 2004, $1.0 million in fiscal 2005, $2.0 million in fiscal 2006, $3.0
million in fiscal 2007, $11.1 million in fiscal 2008, with the balance due at
maturity. The revolver balance is due in full at maturity.

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


COMPARISON OF THE THREE MONTHS ENDED FEBRUARY 2004 AND 2003

RESULTS OF CONTINUING OPERATIONS

REVENUES. Obie's revenues are derived from providing advertising space on
out-of-home advertising displays, primarily on transit vehicles under transit
district agreements and on outdoor advertising displays we own or operate.
Revenues are also derived from the sale of design and installation services and
the production of advertising display content. Net revenues for the three months
ended February 29, 2004 increased $1.3 million, or 15.3%, to $10.0 million in
2004 from $8.7 million for the same period in fiscal 2003. Transit net revenues
increased $1.0 million, or 14.9%, to $8.0 million for the three month period in
fiscal 2004, from $7.0 million for the same period of fiscal 2003. The increase
reflects our continuing success in selling annual incentive contracts to our
customers. Outdoor net revenues increased $286,000, or 17.1% to $2.0 million for
the three months ended February 2004 compared to $1.7 million for the same
period of fiscal 2003. This increase was due primarily to higher occupancy rates
of the billboard plant.

PRODUCTION AND INSTALLATION EXPENSES. These expenses relate primarily to the
production of transit advertising content and the installation of the content on
transit vehicles, benches and shelters. Also included is the cost of billboard
content and installation. Production and installation expenses increased
$163,000, or 12.0%, to $1.5 million in fiscal 2004 from $1.4 million in fiscal
2003.

                                       12
<PAGE>
The Company's production and installation activities are primarily related to
the transit advertising part of our business, and decreased, as a percentage of
net revenues, to 18.9% of net transit sales in the three month period in 2004,
when compared to 19.4% in the same period of 2003 due to volume efficiencies.

TRANSIT AND OUTDOOR OCCUPANCY EXPENSES. These expenses include fees paid to
transit authorities and lease payments to landowners for billboard sites. Under
Obie Media's transit agreements, we typically guarantee to pay the transit
district the greater of a minimum stated amount or a percentage of the
advertising revenues generated by our use of the district's vehicles. Occupancy
expense for outdoor structures includes the cost of illuminating outdoor
displays and property taxes on the outdoor advertising structures. Transit and
outdoor occupancy expenses increased approximately $183,000, or 5.1%, to $3.8
million in the fiscal quarter ended in 2004 compared to $3.6 million in the
first quarter of fiscal 2003. The increase was related primarily to contracted
increases in transit agency fees. These expenses, as a percentage of net
revenues, decreased to 37.9% in the first quarter of fiscal 2004 as compared to
41.6% of net revenues in the same period of fiscal 2003, the result of continued
cost containment efforts in this area.

SELLING EXPENSES. Sales expenses consist primarily of employment and
administrative expenses associated with our sales force. These expenses
increased $422,000, or 23.5%, to $2.2 million for the three month period in
fiscal 2004, from $1.8 million in the same period in fiscal 2003. The increase
is related primarily to the cost of sales incentive programs designed to promote
the sale of annual incentive contracts to our customers.

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

General and administrative expenses increased $279,000, or 15.2% to $2.1 million
for the three months ended February 2004 as compared to $1.8 million in the same
period of fiscal 2003. The increase was related primarily to additional costs in
the corporate marketing department in support of the annual incentive contract
sales mentioned above.

DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
increased $14,000, or 3.1 %, to $483,000 in fiscal 2004 as compared to $469,000
for the same period in fiscal 2003. The increase was due to increased
depreciation expense relative to properties acquired during fiscal 2003.

OPERATING INCOME. Due to the events and factors discussed above we generated an
operating loss of $134,000 in the three month period ending February 29, 2004
compared to an operating loss of $398,000 in the same period of fiscal 2003.

INTEREST EXPENSE. Interest expense increased $5,000, or .8%, to $549,000 for the
three month period in fiscal 2004 from $544,000 for the comparable period of
fiscal 2003. The increase was due primarily to increased interest rates on the
Company's new financing arrangements with CapitalSource Finance, LLC.

LOSS ON DEBT EXTINGUISHMENT. The Company experienced a loss on debt
extinguishment resulting from the pay-off of its old debt in the first quarter
of fiscal 2004 with the proceeds from its new financing arrangements with
CapitalSource Finance, LLC. The loss is comprised of charges of approximately
$709,000 relating to the write-off of unamortized discount on the Chicago
Transit Authority settlement payoff, and approximately $252,000 relating to
unamortized prepaid loan costs on the previous debt arrangements.

PROVISION FOR INCOME TAXES. The Company accounted for all available loss
carryback refunds in the fiscal 2001 provision for income taxes. The Company has
substantial loss carryforwards, against which valuation allowances have been
provided. Since the operating loss carryforwards expire at certain times, we
have evaluated the likeliness of utilizing those carryforwards against future
taxable income in that time frame and have established a valuation allowance
accordingly.

                                       13
<PAGE>
INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we generated a loss from continuing operations of $1.6 million in the
first three month period in fiscal 2004, as compared to loss of $942,000 for the
same period in fiscal 2003.

RESULTS OF DISCONTINUED OPERATIONS

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

As discussed above, discontinued operations contain the operating results, net
of income taxes, for transit markets from which we have exited. The discontinued
operations for the first three month period of both fiscal 2004 and 2003 include
the operations of San Antonio, Texas; Cincinnati; Kitsap, Washington; Santa
Cruz, California; Bridgeport, Connecticut; and the Ontario, Canada markets
described more fully in the footnotes of the condensed consolidated financial
statements.

NET LOSS

Due to the items and factors discussed above, Obie realized a net loss of $1.7
million during the three months ending February 29, 2004, compared to a net loss
of $1.0 million in the same period of fiscal 2003.

LIQUIDITY AND CAPITAL RESOURCES

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

         The interest charged on the loans is the greater of prime plus a margin
that is dependant upon Obie's leverage ratio, or 9.5% on the term loans and 8.5%
on the revolver. The margin in effect at the time the financing closed was 5.5%
on the term loans and 4.5% on the revolver. The first date that this margin may
be adjusted was the quarter ending February 29, 2004. The rates were not
adjusted at that time.

         Funds from the term loans were used to (1) pay off the existing term
loan with the previous lender, (2) pay off the balance of the settlement
obligation with the Chicago Transit Authority, and (3) pay off the promissory
note related to the purchase of the minority interest of O. B. Walls, Inc. Funds
from use of the revolver were used to pay off the existing revolver with the
previous lender and to fund closing costs and working capital needs.
Availability under the revolver amounted to approximately $1.8 million as of
February 29, 2004.

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

         The loan agreement with CapitalSource Finance LLC contains financial
covenants regarding (1) minimum rolling EBITDA, (2) maximum leverage ratios, (3)
fixed-charge coverage ratios, and (4) interest coverage ratios, all of which are
measured

                                       14
<PAGE>
on a quarterly basis. The Company was in compliance with all covenants as of
February 29, 2004. The loan agreement also restricts the Company's ability to
pay dividends. The loans are collateralized by substantially all of the assets
of the Company.

         The Company has historically satisfied our working capital requirements
with cash from operations and revolving credit borrowings. Our working capital
at February 29, 2004 was $4.3 million as compared to $4.9 million at November
30, 2003. The decrease was due primarily to funding the loan fees related to the
new financing arrangements.

         Acquisitions and capital expenditures, primarily for the construction
of new outdoor advertising displays, digital printing equipment and technology
related assets have been financed primarily with borrowed funds. At February 29,
2004, Obie had outstanding borrowings of $24.1 million, of which $23.9 million
was pursuant to credit agreements with CapitalSource Finance LLC, and $200,000
in other notes. The Company's indebtedness is collateralized by substantially
all of its assets. At February 29, 2004, available borrowing capacity under the
line of credit was approximately $1.8 million.

         Net cash used in investing activities was $109,000 and $160,000 during
the three month periods ended February 2004 and 2003, respectively. The amounts
spent used in both years where for equipment purchases, primarily automobiles
and computing equipment.

         Net cash used in financing activities was $746,000 for the three month
period ended February 29, 2004, as compared to $807,000 in the same period of
fiscal 2003. The difference between the two periods is related to the effects of
the new financing arrangements that were consumated in the first quarter of
fiscal 2004.

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

SEASONALITY

         Obie's revenues and operating results historically have fluctuated by
season, generally following the advertising trends in our major transit markets.
Typically, results of operations are strongest in the fourth quarter and weakest
in the first quarter of our fiscal year which ends on November 30. Transit
advertising operations are more seasonal than outdoor advertising operations as
the Company's outdoor advertising display space, unlike its transit advertising
display space, is and has been sold largely by means of 12-month contracts. The
Company believes that the seasonality of revenues and operating results will
increase if transit advertising operations continue to expand more rapidly than
outdoor advertising operations. This seasonality, together with fluctuations in
general and regional economic conditions and the timing and expenses related to
acquisitions, the obtaining of new transit agreements and other actions that
have been taken to implement the Company's growth strategy, have contributed to
fluctuations in periodic operating results. These fluctuations likely will
continue. Accordingly, results of operations in any period may not be indicative
of the results to be expected for any future period.

ITEM 3. QUANTATATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company has not entered into derivative financial instruments.

                                       15
<PAGE>
ITEM 4.  CONTROLS AND PROCEDURES

         Under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, the Company has evaluated the effectiveness of the design and operation
of its disclosure controls and procedures pursuant to applicable rules under the
Securities Exchange Act of 1934, as amended, within 90 days of the date of this
report. Based on that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that these disclosure controls and
procedures are effective. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of their evaluation.

PART II - OTHER INFORMATION


ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

         No matters were submitted to security holders for vote during the three
months ended February 29, 2004.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

        31   Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
             2002
        32   Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
             2002










Signature

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                             Obie Media Corporation



 Date April 14, 2004         By: /s/ GARY F. LIVESAY *
                                     Gary F. Livesay
                                     Vice President - Chief Financial Officer

                             * Signing on behalf of the registrant as principal
                               financial and accounting officer


                                       16