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              August 31, 2003
                               -------------------------------------------------

       [ ] 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 [ ].

     As of October 1, 2003, 5,908,577 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 Balance Sheets as of August 31, 2003 and November 30, 2002          2

         Consolidated Statements of Operations for the three month and nine month
                  periods ended August 31, 2003 and 2002                                  3

         Consolidated Statements of Cash Flows for the nine months
                  ended August 31, 2003 and 2002                                          4

         Notes to Financial Statements                                                    5

Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                  11

Item 3.  Quantitative and Qualitative Disclosures about Market Risk                      20

Item 4.  Controls and Procedures                                                         20


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

Item  4. Submission of Matters to Vote of Security Holders                               20

Item  6. Exhibits and Reports on Form 8-K                                                20

         Certifications                                                                  21
</TABLE>





















                                       1
<PAGE>
Item 1.  Financial Statements
-----------------------------
<TABLE>
<CAPTION>
                        OBIE MEDIA CORPORATION
                      Consolidated Balance Sheets


                                     ASSETS

                                                           August 31,      November 30,
                                                              2003            2002
                                                          (Unaudited)
                                                         ------------    ------------
<S>                                                      <C>             <C>
CURRENT ASSETS:
 Cash                                                      $ 940,070      $1,815,886
 Accounts receivable, net                                  5,367,000       7,327,681
 Prepaids and other current assets                         5,725,770       4,990,859
 Deferred income taxes                                     1,742,204       1,732,395
                                                         ------------    ------------
      Total current assets                                13,775,044      15,866,821

 Property and equipment, net                              15,035,857      15,864,193
 Goodwill, net                                             5,448,552       5,448,552
 Other assets                                                821,290         947,322
                                                         ------------    ------------
                                                         $35,080,743     $38,126,888
                                                         ============    ============


          LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Current portion of long-term debt                       $15,509,881      $2,847,311
 Working capital revolver                                  3,790,483       2,980,483
 Accounts payable                                            220,590         283,075
 Accrued transit fees                                        501,818       1,102,519
 Accrued expenses                                            775,016         737,698
 Income taxes payable                                        113,881               0
 Unearned revenue                                            761,119         767,637
                                                         ------------    ------------
      Total current liabilities                           21,672,788       8,718,723

Deferred tax                                               1,586,930       1,573,729
Other liabilities                                             20,127
Long-term debt, net                                        3,636,733      17,707,306
                                                         ------------    ------------
        Total liabilities                                 26,916,578      27,999,758
                                                         ------------    ------------


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, 5,908,577 shares issued and outstanding     17,272,128      17,272,128
 Other comprehensive income (loss)                           (46,566)          5,350
 Accumulated deficit                                      (9,061,397)     (7,150,348)
                                                         ------------    ------------
  Total shareholders' equity                               8,164,165      10,127,130
                                                         ------------    ------------
                                                         $35,080,743     $38,126,888
                                                         ============    ============
</TABLE>
See accompanying notes

                                       2
<PAGE>
<TABLE>
<CAPTION>
                             OBIE MEDIA CORPORATION
                      Consolidated Statements of Operations
                                   (Unaudited)


                                                          Three Months Ended August    Nine Months Ended August
                                                          -------------------------    -------------------------
                                                              2003         2002            2003         2002
                                                          ------------ ------------    ------------ ------------
<S>                                                       <C>          <C>             <C>          <C>
REVENUES:
  Transit advertising                                     $ 9,506,089  $ 9,754,948     $25,453,336  $27,116,736
  Outdoor advertising                                       1,857,271    1,851,931       5,242,898    5,274,821
                                                          ------------ ------------    ------------ ------------
      Net revenue                                          11,363,360   11,606,879      30,696,234   32,391,557
                                                          ------------ ------------    ------------ ------------

OPERATING EXPENSES:
  Production and installation                               1,470,753    1,609,810       4,392,478    4,833,381
  Transit and outdoor occupancy                             5,289,138    4,800,044      13,459,925   13,357,770
  Selling                                                   1,941,640    2,015,934       5,766,680    6,809,874
  General and administrative                                1,930,299    1,868,087       5,449,891    5,787,606
  Depreciation and amortization                               450,572      547,696       1,369,516    1,642,582
                                                          ------------ ------------    ------------ ------------
             Total operating expenses                      11,082,402   10,841,571      30,438,490   32,431,213
                                                          ------------ ------------    ------------ ------------

      Operating income ( loss)                                280,958      765,308         257,744      (39,656)

OTHER (INCOME) EXPENSE:
  Interest expense                                            625,239      558,990       1,752,997    1,191,033
                                                          ------------ ------------    ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
    BEFORE INCOME TAXES                                      (344,281)     206,318      (1,495,253)  (1,230,689)

INCOME TAX PROVISION (BENEFIT)                                (25,431)      60,316         109,100       60,316
                                                          ------------ ------------    ------------ ------------

INCOME (LOSS) FROM CONTINUING OPERATIONS                     (318,850)     146,002      (1,604,353)  (1,291,005)

DISCONTINUED OPERATIONS, NET OF INCOME TAXES                  (88,195)    (123,682)       (306,696)    (728,515)
                                                          ------------ ------------    ------------ ------------

NET INCOME (LOSS)                                         $  (407,045) $    22,320     $(1,911,049) $(2,019,520)
                                                          ============ ============    ============ ============


Earnings (loss) per share:
    Basic and diluted, from continuing operations             $ (0.05)      $ 0.02        $ (0.27)      $ (0.22)
    Basic and diluted, discontinued operations                $ (0.02)      $(0.02)       $ (0.05)      $ (0.12)
    Basic and diluted, on net income (loss)                   $ (0.07)      $ 0.00        $ (0.32)      $ (0.34)
</TABLE>

See accompanying notes

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


                                                                         Nine Months Ended August 31,
                                                                         ----------------------------
                                                                             2003             2002
                                                                         ------------    -------------
<S>                                                                      <C>             <C>
Cash Flows From Operating Activities:
   Net loss                                                              $(1,911,049)    $ (2,019,519)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation and amortization                                        1,242,061        1,599,278
      Changes in assets and liabilities:
         (Increase) decrease in:
             Accounts receivable                                           1,960,681        3,275,576
             Prepaid and other assets                                       (618,688)       1,106,087
         Increase (decrease) in:
             Acccounts payable                                               (62,485)        (711,058)
             Other liabilities                                              (442,820)      (3,892,307)
                                                                         ------------    -------------
        Net cash provided from (used in) operating activities                167,700         (641,943)
                                                                         ------------    -------------

Cash Flows From Investing Activities:
    Capital expenditures                                                    (413,725)        (748,285)
                                                                         ------------    -------------
        Net cash used in investing activities                               (413,725)        (748,285)
                                                                         ------------    -------------


Cash Flows From Financing Activities:
   Net borrowings on line of credit                                          810,000        2,718,366
   Borrowings of long-term debt                                               92,679        1,300,000
   Payments on long-term debt                                             (1,480,555)        (696,684)
   Other                                                                           0           (3,999)
                                                                         ------------    -------------
        Net cash (used in) provided from financing activities               (577,876)       3,317,683
                                                                         ------------    -------------

Effect of exchange rate changes on cash                                      (51,915)          (6,794)

Net (decrease) increase in cash                                             (875,816)       1,920,661
Cash, beginning of period                                                  1,815,886          404,473
                                                                         ------------    -------------
Cash, end of period                                                      $   940,070     $  2,325,134
                                                                         ============    =============
</TABLE>


See accompanying notes

                                       4
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED 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 August 31, 2003 and 2002,  and the results of operations  and cash
flows of the  Company  for the nine months  ended  August 31, 2003 and 2002,  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, 2002 Form 10-K. This quarterly report should be read
in conjunction with such annual report.


2.       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 additional $1.5 million was paid on June 1, 2002. The balance is
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 are without interest through May 2003, and
include a 5% interest charge  thereafter.  These periodic deferred payments have
been  valued  using a junior  unsecured  discount  rate of 15%,  resulting  in a
present value of approximately $5.4 million as of August 31, 2003.


3.       DEBT AGREEMENTS

         The  Company's  credit  arrangements  with  U.S.  Bank  include a $13.8
million term loan revolver and a $4.5 million  working  capital  revolver,  both
maturing on December 15, 2003, and are  collateralized  by substantially  all of
the assets of the Company.  The term loan  revolver  limits  decrease  quarterly
through the maturity date. The interest rates are at U.S. Bank's prime rate plus
3.75% for the term  revolver  and prime rate plus 3.25% for the working  capital
revolver.  At August 31, 2003 the  effective  rates were 7.75% and 7.25% for the
term loan and working capital  revolvers  respectively.  The amount  outstanding
under the term revolver was $13,500,000 and $3,790,483 under the working capital
revolver at August 31, 2003.  Because the Company's  debt  agreements  expire in
December 2003, all of the outstanding  debt has been classified as current.  The
Company expects to replace these credit arrangements with alternate arrangements
which  will  contain  terms  and  conditions  typical  for the  media  industry.
Management is actively engaged with discussions with other lenders.

                                       5
<PAGE>
         The U.S. Bank loan agreements contain certain restrictive covenants and
required  ratios.  These include Fixed Charge  Coverage,  Interest  Coverage and
Leverage ratios and a minimum EBITDA level  covenant,  all of which are measured
quarterly.  On February 25, 2003 U.S.  Bank and Obie agreed to a revised  credit
facility  which  included a reduction  in the working  capital line of credit to
$4.5  million,  modifications  of  the  above  mentioned  financial  ratios  and
covenants,  and a reduction of principal  payment  requirements for fiscal 2003.
$710,000 was available under the working capital line of credit as of August 31,
2003.  The revised  agreement  extends the term of the credit  facility  through
December 15, 2003,  when both the term revolver and working  capital credit line
expire.  As of August 31,  2003,  the  Company  was not in  compliance  with the
revised covenants. The Company expects to replace these credit arrangements with
alternative arrangements which will contain terms and conditions typical for the
media  industry.  Management  is  actively  engaged  in  discussions  with other
lenders.


         The Company has an arrangement with Travelers Casualty & Surety Company
of America ("Travelers"), to bond the CTA settlement as well as to provide other
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
US Bank or any other replacement primary lender.


4.       ACCOUNTING FOR GOODWILL

         In accordance with SFAS No. 142, goodwill amortization was discontinued
as of November  30,  2002.  Goodwill at August 31,  2003 and  November  30, 2002
amounted  to  $5,448,552,   net  of  accumulated   amortization  of  $2,181,571.
Summarized  below are the  effects  on our net loss and per share data if we had
followed the amortization provisions of SFAS No. 142:

                                           For the nine months ended August 31,
                                              2003                  2002
                                           ------------          -------------
         Reported net loss                 ($1,911,049)          ($2,019,519)
         Addback goodwill amortization               -               376,784
                                           ------------          -------------
         Adjust net loss                   ($1,911,049)          ($1,642,735)
                                           ============          =============

         Basic and diluted loss per share:
         Reported net loss                      ($0.32)              ($0.34)
         Goodwill amortization                       -                 0.06
                                           ------------          -------------
         Adjusted net loss                      ($0.32)              ($0.28)
                                           ============          =============

                                       6
<PAGE>
5.       INCOME TAXES

         The provision for (benefit from) income taxes for the nine months ended
August 31, 2003 and 2002 differs from the amounts  computed by applying the U.S.
federal income tax rate of 34 percent to pretax income as follows:

                                                              Nine Months ended
                                                                  August 31,
                                                              -----------------
                                                              2003         2002
                                                              -----------------

         Statutory federal income tax rate                    (34.0%)    (34.0%)
         Increase in income taxes resulting from:
             State and local taxes, net of federal benefit    ( 3.6%)    ( 3.6%)
             Net operating loss valuation allowance            37.6%      37.6%
             Foreign income taxes                               7.3%       5.1%
                                                              ------------------
             Actual income tax rate                             7.3%       5.1%
                                                              ------------------

6.       EARNINGS PER SHARE

         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:

                                                      Nine Months Ended
                                                          August 31
                                                 2003                  2002
                                             ------------          ------------
Basic shares (weighted average)                5,908,577             5,908,577
Dilutive effect of stock options                       -                     -
                                             ------------          ------------
Diluted shares                                 5,908,577             5,908,577
                                             ------------          ------------

         At  August  31,  2003 and  2002 the  Company  had  options  outstanding
covering 654,908 and 713,982 shares respectively of the Company's  common.stock.
These  common  stock  equivalents  have not been  included in Earnings Per Share
calculations  since  they would  have been  antidilutive  for the three and nine
month periods ended August 31, 2003 and 2002.


7.       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 and nine
month periods ended August 31, 2003 and 2002.

                                       7
<PAGE>
8.       DISCONTINUED OPERATIONS

         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 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/or
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 2 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 results of operations for these transit districts for 2002
have been reclassified to Discontinued Operations for comparability purposes.

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

                                               Nine months ended August 31,
                                                  2003             2002
                                               ------------    ------------
Net revenues                                   $   258,308     $ 1,142,944

Production and Installation Expenses               (53,350)       (216,793)
Occupancy Expense                                 (168,710)       (868,622)
Sales Expense                                      (53,576)       (612,767)
General and administrative Expense                (289,368)       (173,227)
                                               ------------    ------------
Income (loss) from discontinued operations
   before income taxes                            (306,696)       (728,515)
Income tax benefit                                       -               -
                                               ------------    ------------
Net loss from discontinued operations          $  (306,696)   $   (728,515)
                                               ============   =============

















                                       8
<PAGE>
9.       STOCK OPTIONS

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

         During 1995, the Financial  Accounting  Standards Board issued SFAS No.
123,  which defines a fair value based method of accounting  for employee  stock
options and similar equity instruments and encourages all entities to adopt that
method of accounting for all their employee stock compensation  plans.  However,
it allows an entity to  continue  to measure  compensation  cost for those plans
using the method of accounting  prescribed by APB No. 25.  Entities  electing to
continue  to use the  accounting  treatment  in APB No.  25 must  make pro forma
disclosures of net income and, if presented,  earnings per share, as if the fair
value based method of accounting defined in SFAS No. 123 had been adopted.

         The Company adopted the applicable provisions of SFAS No. 148 effective
March 1,  2003.  SFAS  No.  148,  among  other  things,  extends  the pro  forma
disclosures  required by APB No. 25 to interim periods  beginning after December
15,  2002.  Accordingly  the  Company has  included  the  information  following
regarding its employee stock option plan.

         The Company has  elected to account  for its  stock-based  compensation
plans  under APB No.  25;  however,  the  Company  has  computed,  for pro forma
disclosure  purposes the value of all options  granted during the three and nine
month  periods  ended  August 31, 2003 and 2002 using the  Black-Scholes  option
pricing model as prescribed by SFAS No. 123 using the following weighted average
assumptions for grants for all periods presented:

                  Risk-free interest rate             4.9%
                  Expected dividend yield               0%
                  Expected lives                   6 years
                  Expected volatility               81.48%

         Using the Black-Scholes methodology, the total value of options granted
during the three month and nine month periods ending August 31, 2003 and 2002 is
as follows:

       Three Months Ended August 31,            Nine Months Ended August 31,
      2003                     2002            2003                    2002
    ---------------------------------        --------------------------------

    $ 7,236                 $ 56,363         $ 20,636              $ 319,903

         These  amounts would be amortized on a pro forma basis over the vesting
period of the options  (typically  five years).  The weighted  average per share
value of options  granted during the three months ended August 31, 2003 and 2002
and nine months ended August 31, 2003 and 2002 was $1.44, $2.39, $1.65 and $2.28
respectively.

         If the Company had accounted for its stock-based  compensation plans in
accordance  with SFAS No.  123,  the  Company's  net loss and net loss per share
would approximate the pro forma disclosures below:







                                       9
<PAGE>
                                       Three Months Ended August 31,
                                       -----------------------------
                                       2003                      2002
                            -------------------------   -----------------------
                               As                          As
                            Reported      Pro Forma     Reported     Pro Forma
                            -----------   -----------   --------     ----------
Net Income (loss)           $ (407,045)   $ (487,334)   $ 22,320     $ (92,044)
Basic net income (loss)
   per share                $     (.07)   $     (.08)   $    .00     $    (.02)
Diluted net income (loss)
   per share                $     (.07)   $     (.08)   $    .00     $    (.02)
<TABLE>
<CAPTION>
                                                Nine Months Ended August 31,
                                                ----------------------------
                                             2003                           2002
                                    --------------------------------------------------------
                                    As                                  As
                                    Reported      Pro Forma        Reported      Pro Forma
                                    --------------------------------------------------------
<S>                              <C>            <C>             <C>            <C>
Net loss                         ($1,911,049)   ($2,151,916)    ($2,019,520)   ($2,378,643)
Basic net loss
   per share                            $.32           $.36            $.34           $.40
Diluted net loss  per share             $.32           $.36            $.34           $.40
</TABLE>


10.      NEW ACCOUNTING PRONOUNCEMENTS

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


         On June 28, 2002,  the FASB adopted  Statement of Financial  Accounting
Standards  No.  146  ("SFAS  No.  146"),   "Accounting   for  Exit  or  Disposal
Activities",  effective for exit or disposal activities that are initiated after
December  31, 2002,  with early  application  encouraged.  SFAS No. 46 addresses
significant  issues  regarding the  recognition,  measurement,  and reporting of
costs  that  are  associated  with  exit  and  disposal  activities,   including
restructuring  activities  that are  currently  accounted  for  pursuant  to the
guidance  that the  Emerging  Issues Task Force  ("EITF")  has set forth in EITF
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other  Costs to Exit an  Activity  (including  Certain  Costs  Incurred in a
Restructuring)".

                                       10
<PAGE>
The Company early adopted the  provisions of SFAS No. 146 in Fiscal 2002 and has
recorded exit costs relating to contract terminations resulting from its exit of
certain transit markets in accordance with the provisions of SFAS No. 146. These
costs have been recorded as a component of discontinued operations in accordance
with SFAS No. 144.


11.      RECLASSIFICATIONS

         Certain  amounts  previously   reported  in  the  Company's   financial
statements as of May 31, 2002 have been  reclassified  to conform to the current
fiscal year presentation.


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.
                                       11
<PAGE>
         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

         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.  Results of operations for these transit
districts  for 2002  have  been  reclassified  to  Discontinued  Operations  for
comparability purposes.

RESERVE 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.   Historically,   losses  from
uncollectible  accounts  have not exceeded our  reserves  except that  writeoffs
exceeded  reserves by  approximately  $525,000 in fiscal  2002.  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.
                                       12
<PAGE>
         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 completed our first phase impairment analysis during
the quarter  ended  February  28,  2003 and found no  instances  of  impairment.
Goodwill at August 31, 2003 and November 30, 2002 amounted to $5,448,552, net of
accumulated amortization of $2,181,571.

OTHER CONTINGENCIES

         In  the  ordinary  course  of  business,   we  are  involved  in  legal
proceedings  involving  contractual,  employment  relationships and a variety of
other matters. We record contingent liabilities resulting from claims against us
when it is probable  that a liability  has 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

         In July of 2003,  the  Company  was  awarded  the  contract  to provide
transit  advertising for the Pittsburgh  (Allegheny  County) transit system. The
system  has  approximately  900  transit  vehicles   available  for  advertising
displays.  The contract is three years in length with options for an  additional
two years of renewals. Also during the third quarter of 2003 we were awarded new
five year  contracts  in the markets of Palm Beach,  FL and London,  ON,  Canada
where we were the predecessor contract provider.

                                       13
<PAGE>
         Effective February 19, 2001, Obie entered into a financing  arrangement
with U.S. Bank. The arrangement  provided for a $16.0 million term line maturing
in August of 2007, and a $6.0 million working  capital line of credit  available
for general  purposes.  These credit facilities are secured by substantially all
of the  assets  of Obie and its  subsidiaries.  Obie used the term  revolver  to
refinance all of its then-existing  debt,  including the previously  outstanding
line of credit.

         On February 25,  2003,  U.S.  Bank and Obie agreed to a revised  credit
facility  which  included a reduction  in the working  capital line of credit to
$4.5 million,  modified financial ratio covenants, and reduced principal payment
requirements  during  fiscal  2003.  At August  31,  2003,  available  borrowing
capacity  under the line of credit,  based  upon  collateralized  accounts,  was
$710,000.  The revised agreement extends the term of the credit facility through
December 15, 2003,  when both the term revolver and working  capital credit line
expire.  The credit  facility  requires  Obie's  continued  compliance  with the
revised  covenants.  Because the debt agreements expire in December 2003, all of
the  outstanding  debt has been  classified as current.  The Company  expects to
replace these credit arrangements with alternate arrangements which will contain
terms and  conditions  typical for the media  industry.  Management  is actively
engaged with discussions with other lenders.

         Effective  December 1, 2002,  we formed a new wholly owned  subsidiary,
Select Media, Inc. under which our national sales organization operates.


COMPARISON OF THE THREE MONTHS ENDED AUGUST 31, 2003 AND 2002

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.  We focus our sales efforts on maximizing  occupancy levels in
our markets.  Net revenues for the three  months ended  August,  2003  decreased
$244,000,  or 2.1%,  to $11.4  million in 2003 from $11.6  million  for the same
period in fiscal 2002.  Transit net revenues  decreased  $249,000,  or 2.6% , to
$9.5 million for the three month  period in fiscal  2003,  from $9.8 million for
the same period of fiscal 2002.  The decrease is  reflective  of the  continuing
weaknesses  in the  advertising  economy  principally  in our  northeastern  and
midwestern  United States markets.  Outdoor net revenues  remained  unchanged at
$1.8 million in the three month periods in fiscal 2003 and fiscal 2002.

PRODUCTION AND  INSTALLATION  EXPENSES.  These expenses relate  primarily to the
production of transit advertising content and the installation of the content on
transit vehicles,  benches and shelters.  Also included is the cost of billboard
content  and  installation.   Production  and  installation  expenses  decreased
approximately  $139,000,  or 8.6%,  to $1.5  million  in  fiscal  2003 from $1.6
million in fiscal 2002. The Company's production and installation activities are
primarily related to the transit advertising part of our business, and decreased
to 15.5% of net transit  sales in the three month period in 2003,  when compared
to 16.5% in the same period of 2002.  The  decrease  reflects  lower  production
income (and related costs) when compared to total transit sales.

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  $489,000, or 10.0%, to $5.3
million in the fiscal  quarter  ended in 2003  compared  to $4.8  million in the
third quarter of fiscal 2002.  Approximately $67,000 of the increase was related
to  increased  billboard  lease  costs.  The balance  was related to  contracted
increases in transit fee costs.

SELLING   EXPENSES.   Sales  expenses   consist   primarily  of  employment  and
administrative   expenses  associated  with  our  sales  force.  These  expenses
decreased $74,000, or 3.7%, to $1.9 million for the three month period in fiscal
2003,  from $2.0  million in the same period in fiscal  2002.  The  reduction is
related primarily to increased  realization of cost containment measures enacted
throughout the prior year.

                                       14
<PAGE>
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 were unchanged at $1.9 million for the third
quarters of both 2003 and 2002.

DEPRECIATION AND AMORTIZATION  EXPENSES.  Depreciation and amortization expenses
decreased  approximately  $97,000,  or 17.7%,  to  $451,000  in  fiscal  2003 as
compared to $548,000 for the same period in fiscal 2002. The decrease is related
almost  entirely to the fact that effective at the beginning of fiscal year 2003
we have adopted the provisions of SFAS No. 142 and no longer amortize goodwill.

OPERATING  INCOME.  Due to the events and factors  discussed  above we generated
operating  income of  $281,000 in the three month  period  ending May 30,  2003,
compared to $765,000 in the same period of fiscal 2002.

INTEREST EXPENSE.  Interest expense increased $66,000, or 11.9%, to $625,000 for
the three month period in fiscal 2003 from $559,000 for the comparable period of
fiscal 2002.  The increase was due primarily to a quarterly  loan  extension fee
paid to US Bank during the fiscal 2003 period.

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

The difference  between the statutory  United States federal income tax rate and
the beneficial tax rate for the third fiscal quarter of 2002 is due primarily to
the deferred tax valuation reserve for the net operating loss carryforwards. The
provision for income taxes of $25,000 in the comparable  period of 2003 reflects
income tax liabilities of the Company's Canadian subsidiary.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we  generated a loss of $319,000 in the three month period in fiscal 2003,
as compared to income of $146,000 for the same period in fiscal 2002.

RESULTS OF DISCONTINUED OPERATIONS

Most transit  arrangements  include a provision that a certain percentage of net
revenues  be shared  with the transit  authorities  (transit  fees) on a revenue
sharing  basis (a certain  percentage  to the  transit  authority,  the  balance
retained by Obie), but often with minimum payment requirements.  Agreements that
contain large minimum transit fee payment  guarantees,  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 three month  period of both fiscal 2003 and 2002 include the
operations  of  San  Antonio,  Texas,   Cincinnati,   Ohio  (transit),   Kitsap,
Washington,  Santa Cruz,  California,  Bridgeport,  Connecticut and the Ontario,
Canada markets described above.

                                       15
<PAGE>
NET LOSS

Due to the  items and  factors  discussed  above,  Obie  realized  a net loss of
$407,000  during the three months ending  August 31 of fiscal 2003,  compared to
net income of $22,000 in the same period of fiscal 2002.


COMPARISON OF THE NINE MONTHS ENDED AUGUST 31, 2003 AND 2002

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.  We focus our sales efforts on
maximizing  occupancy  levels in our  markets.  Net revenues for the nine months
ended August, 2003 decreased $1.7 million or 5.2%, to $30.7 million in 2003 from
$32.4 million for the same period in fiscal 2002. Transit net revenues decreased
$1.7  million,  or 6.1%,  to $25.5  million for the nine month  period in fiscal
2003,  from $27.1  million for the same period of fiscal  2002.  The decrease is
reflective of the continuing  weaknesses in the advertising  economy principally
in our northeastern and midwestern  United States markets.  Outdoor net revenues
were  relatively  unchanged  at $5.3  million in the nine  month  period of both
years.

PRODUCTION AND  INSTALLATION  EXPENSES.  These expenses relate  primarily to the
production of transit advertising content and the installation of the content on
transit vehicles,  benches and shelters.  Also included is the cost of billboard
content  and  installation.   Production  and  installation  expenses  decreased
approximately  $441,000,  or 9.1%,  to $4.4  million  in  fiscal  2003 from $4.8
million in fiscal 2002. The Company's production and installation activities are
primarily related to the transit advertising part of our business, and decreased
to 17.3% of net transit sales in the nine month period in 2003, when compared to
17.8% in the same period of 2002. The decrease  reflects lower production income
(and related costs) when compared to total transit sales.

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  $102,000,  or .8%, to $13.5
million  for the nine month  period of fiscal  2003,  from $13.4  million in the
comparable period of fiscal 2002. Billboard lease costs increased  approximately
$182,000  during the nine month  period  ended in 2003 as  compared  to the same
period in fiscal 2002; transit fees decreased to account for the difference.

SELLING   EXPENSES.   Sales  expenses   consist   primarily  of  employment  and
administrative   expenses  associated  with  our  sales  force.  These  expenses
decreased $1.0 million,  or 15.3%,  to $5.8 million for the nine month period in
fiscal 2003 from $6.8 million in the same period in fiscal 2002.  The  reduction
is related primarily to increased  realization of cost containment measures that
were not present in the entire nine months of fiscal 2002.

                                       16
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses include
costs related to individual  markets,  as well as corporate  expenses.  Expenses
related to individual  markets include expenses for the personnel and facilities
required to administer that market and neighboring  markets.  Corporate  general
and administrative  expenses  represent  personnel and facilities costs for Obie
Media's   executive  offices  and  centralized  staff  functions  which  include
accounting, marketing, human resources and technology management.

General and administrative  expenses decreased  approximately $338,000, or 5.8%,
to $5.4 million in the nine month period of fiscal 2003 from $5.8 million in the
same  period of  fiscal  2002.  The  decrease  was due  primarily  to  personnel
reductions  in  marketing,  human  resources  and  the  business  office  at the
corporate headquarters that were implemented in the final two quarters of fiscal
2002.  These  reductions  impacted  the first and second  quarters  of 2003 to a
greater extent than in the third quarter.

DEPRECIATION AND AMORTIZATION  EXPENSES.  Depreciation and amortization expenses
decreased  approximately  $273,000,  or 16.6%, to $1.4 million in fiscal 2003 as
compared to $1.6  million for the same period in fiscal  2002.  The  decrease is
related  almost  entirely to the fact that  effective at the beginning of fiscal
year 2003 we have adopted the provisions of SFAS No. 142 and no longer  amortize
goodwill.

OPERATING  INCOME.  Due to the events and factors  discussed  above we generated
operating  income of $258,000 in the nine month period  ending  August 31, 2003,
compared to a loss of $40,000 in the same period of fiscal 2002.

INTEREST EXPENSE. Interest expense increased $562,000, or 47.2%, to $1.8 million
for the nine month  period in fiscal 2003 from $1.2  million for the  comparable
period of fiscal 2002.  $50,000 of the increase was due to a loan  extension fee
paid to US Bank in the third  quarter of 2003 with no  comparable  charge in the
same period of fiscal 2002.  The  remaining  increase  was due  primarily to the
amortization of the discount on the Chicago Transit Authority  settlement in the
nine month period of fiscal  2003,  of which there was  comparable  amortization
only in the third quarter of fiscal 2002.

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

The difference  between the statutory  United States federal income tax rate and
the  beneficial  tax rate for fiscal 2002 is due  primarily  to the deferred tax
valuation  reserve for the net operating loss  carryforwards.  The provision for
income  taxes of  $109,000  in the  fiscal  period of 2003  reflects  income tax
liabilities of the Company's Canadian subsidiary.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we  experienced  a loss of $1.6 million in the nine month period in fiscal
2003, as compared to a loss of $1.3 million for the same period in fiscal 2002.

                                       17
<PAGE>
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 six month  period of both fiscal  2003 and 2002  include the
operations  of  San  Antonio,  Texas,   Cincinnati,   Ohio  (transit),   Kitsap,
Washington,  Santa Cruz,  California,  Bridgeport,  Connecticut and the Ontario,
Canada markets described above.


NET LOSS

Due to the items and factors  discussed above,  Obie realized a net loss of $1.9
million  during the first nine months of fiscal 2003,  compared to a net loss of
$2.0 million in the same period of fiscal 2002.


LIQUIDITY AND CAPITAL RESOURCES

         The  Company's  credit  arrangements  with  U.S.  Bank  include a $13.5
million term loan revolver and a $4.5 million  working  capital  revolver,  both
maturing on December  15,  2003,  and are  secured by  substantially  all of the
assets of the Company.  The term loan revolver limits decrease quarterly through
the maturity date.  The interest rates are at U.S.  Bank's prime rate plus 3.75%
for the term  revolver  and  prime  rate  plus  3.25%  for the  working  capital
revolver.  At August 31, 2003 the  effective  rates were 7.75% and 7.25% for the
term  loan  and  working  capital   revolvers   respectively.   $13,500,000  was
outstanding  under the term revolver and  $3,790,483  under the working  capital
revolver at August 31, 2003.  Because the Company's  debt  agreements  expire in
December 2003, all of the outstanding  debt has been classified as current.  The
Company  expects  to  replace  these  credit   arrangements   with   alternative
arrangements  which will  contain  terms and  conditions  typical  for the media
industry. Management is actively engaged in discussions with other lenders.

         The U.S. Bank loan agreements contain certain restrictive covenants and
required  ratios.  These include Fixed Charge  Coverage,  Interest  Coverage and
Leverage ratios and a minimum EBITDA level  covenant,  all of which are measured
quarterly.  On February 25, 2003 U.S.  Bank and Obie agreed to a revised  credit
facility  which  included a reduction  in the working  capital line of credit to
$4.5  million,  modifications  of  the  above  mentioned  financial  ratios  and
covenants, and a reduction of principal payment requirements for fiscal 2003. At
August 31, 2003, available borrowing capacity under the line of credit, based on
collateralized  accounts,  was  approximately  $710,000.  The revised  agreement
extends the term of the credit facility through December 15, 2003, when both the
term revolver and working capital credit line expire.  As of August 31, 2003 the
Company was not in compliance with the revised covenants.

                                       18
<PAGE>
         The Company has historically satisfied our working capital requirements
with cash from operations and revolving credit  borrowings.  Our working capital
at August 31, 2003 was a negative  $7.9  million as compared to a positive  $7.2
million at November 30, 2002.  This  decrease is due  primarily to the fact that
the bank debt  classified as long-term at November 30, 2002 has

been  classified  as current  at August  31,  2003,  pending  completion  of the
refinancing process.  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
August 31, 2003,  Obie had  outstanding  borrowings of $23.0  million,  of which
$17.3  million  was  pursuant  to credit  agreements  with U.S.  Bank,  $190,000
pursuant to the  agreement  to acquire the  minority  interest in O. B. Walls in
2002,  and $5.4  million  relative  to the  settlement  of the  Chicago  Transit
Authority  dispute and  $100,000 in other notes The  Company's  indebtedness  is
collateralized by substantially all of its assets. At August 31, 2003, available
borrowing capacity under the line of credit,  based on collateralized  accounts,
was approximately $710,000.

         Obie's net cash provided from operating  activities was $168,000 during
the nine months ended August 31, 2003, as compared to net cash used in operating
activities of $642,000 for the same period in fiscal 2002.  The  difference  was
due  primarily to higher  transit fee  payments  during the nine month period of
2002 (other liabilities) as compared to the same period of 2003 .

         Net cash used in investing  activities was $414,000 and $748,000 during
the nine month periods ended August 31, 2003 and 2002, respectively. The amounts
spent on billboard upgrades and on other equipment was approximately the same in
both fiscal year periods.  However,  in the nine month period of fiscal 2002, we
also  purchased  our  third  large  format  digital  production  printer,  which
accounted for the majority of the difference.

         Net cash used in financing  activities  was $578,000 for the nine month
period ended August 31, 2003,  as compared to net cash  provided of $3.3 million
in the same period of fiscal  2002.  The decrease  was  primarily  the result of
reduced  utilization  ($1.9  million) of the working  capital credit line during
fiscal 2003, no term debt borrowed in 2003 as compared to $1.3 million  borrowed
in fiscal 2002, and term debt payments in fiscal 2003 exceeding  those in fiscal
2002 by approximately $784,000.

         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 bank credit  facilities  will be sufficient to satisfy all
debt service obligations, to finance existing operations,  including anticipated
capital expenditures, but excluding possible acquisitions,  through fiscal 2003.
However,  as discussed above, the Company's current financing is due on December
15, 2003.  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

                                       19
<PAGE>
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.

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 August 31, 2003.

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

(b)  The Company filed a Form 8-K on April 10, 2003 reporting that it had issued
     a press release on April 7, 2003 reporting  earnings for the fiscal quarter
     ended  February 28, 2003. The Company also filed a Form 8-K on May 22, 2003
     reporting  that the  Company's  stock  listing  on NASDAQ  had moved to the
     SmallCap  Listing  service.  On July  14,  2003  the  Company  filed an 8-K
     reporting  that it had  issued  a press  release  on  that  date  reporting
     earnings for the fiscal quarter ending May 31, 2003.

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 October 15, 2003           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

                                       20