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

                                   Form 10-QSB

        [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended                  August 31, 1999
                               -------------------------------------------------

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

 For the transition period from ___________________to___________________________

                        Commission File Number 000-21623

                             OBIE MEDIA CORPORATION
--------------------------------------------------------------------------------
(Exact name of small business issuer 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)


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 11, 1999, 5,322,949 shares of the issuer's common stock were
outstanding.

     This  report  contains 13 pages.



<PAGE>




                             OBIE MEDIA CORPORATION
                           Consolidated Balance Sheets


                                     ASSETS

                                                 August 31,       November 30,
                                                   1999              1998
                                               --------------    --------------
CURRENT ASSETS:
  Cash                                          $   421,460       $   326,140
  Accounts receivable, net                        6,981,079         6,719,218
  Prepaids and other current assets               2,086,021         1,156,061
  Deferred income taxes                             758,832           758,832
                                               --------------    --------------
      Total current assets                       10,247,392         8,960,251

PROPERTY AND EQUIPMENT, NET                      11,005,842        10,493,174
GOODWILL, NET                                     7,295,534         7,696,394
OTHER ASSETS, NET                                   343,731           497,512
                                               --------------    --------------
                                                $28,892,499       $27,647,331
                                               ==============    ==============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt             $ 2,242,647       $ 1,511,276
  Line of credit                                    502,778         1,414,877
  Accounts payable                                  735,384           780,268
  Accrued expenses                                1,423,557         2,674,287
  Income taxes payable                              438,374           299,090
  Deferred revenue                                1,654,438         1,247,470
                                               --------------    --------------
      Total current liabilities                   6,997,178         7,927,268

DEFERRED INCOME TAXES                               783,502           783,502
LONG-TERM DEBT, LESS CURRENT PORTION              4,357,353        13,354,395
                                               --------------    --------------
     Total liabilities                           12,138,033        22,065,165
                                               --------------    --------------

MINORITY INTEREST IN SUBSIDIARY                      35,424            35,424

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, 5,322,949 and 4,315,728 shares
      issued and outstanding, respectively       16,607,905         6,851,053
  Options issued for common stock                   211,763           211,763
  Foreign currency translation                          584                 -
  Accumulated deficit                              (101,210)       (1,516,074)
                                               --------------    --------------
      Total shareholders' equity                 16,719,042         5,546,742
                                               --------------    --------------

                                                $28,892,499       $27,647,331
                                               ==============    ==============

See accompanying notes


<PAGE>



                             OBIE MEDIA CORPORATION
                        Consolidated Statements of Income

<TABLE>




                                        Three Months Ended August 31,       Nine Months Ended August 31,
                                       ------------------------------      ------------------------------
                                           1999            1998                1999            1998
                                       --------------  --------------      --------------  --------------
<S>                                     <C>              <C>                <C>             <C>
REVENUES:
  Transit advertising                   $ 9,187,179      $4,220,716         $23,761,395     $10,619,404
  Outdoor advertising                     1,569,939       1,494,239           4,383,332       4,252,092
                                       --------------  --------------      --------------  --------------
  Gross revenues                         10,757,118       5,714,955          28,144,727      14,871,496
  Less - Agency commissions              (1,117,276)       (609,988)         (2,775,011)     (1,409,004)
                                       --------------  --------------      --------------  --------------
      Net revenues                        9,639,842       5,104,967          25,369,716      13,462,492

OPERATING EXPENSES:
  Direct advertising expenses             6,970,318       3,293,890          18,266,418       8,556,792
  General and administrative              1,161,717         768,584           3,473,445       2,222,152
  Contract settlement                      (191,528)              -          (1,077,469)              -
  Start-up costs                            158,745          55,641             454,527          99,194
  Depreciation and amortization             363,686         227,898           1,086,582         581,578
                                       --------------  --------------      --------------  --------------
      Operating income                    1,176,904         758,954           3,166,213       2,002,776

OTHER (INCOME) EXPENSE:
  Interest expense                          284,880         158,468             846,765         479,342
  Minority interest in subsidiary                 -                                   -          42,569
                                       --------------  --------------      --------------  --------------
     Income before income taxes             892,024         600,486           2,319,448       1,480,865

PROVISION FOR INCOME TAXES                  347,892         228,251             904,584         562,795
                                       --------------  --------------      --------------  --------------
NET INCOME                                 $544,132        $372,235          $1,414,864        $918,070
                                       ==============  ==============      ==============  ==============

Earnings per share:
    Basic                                     $0.12           $0.09               $0.32           $0.22
    Diluted                                   $0.12           $0.09               $0.32           $0.21
</TABLE>







See accompanying notes



<PAGE>



                             OBIE MEDIA CORPORATION
                      Consolidated Statements of Cash Flows






                                                   Nine Months Ended August 31,
                                                 -------------------------------
                                                       1999            1998
                                                 --------------  ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                       $1,414,864        $918,070
  Adjustments to reconcile net income to
    net cash provide by operating activities:
    Depreciation and amortization                   1,086,582         581,578
    Contract settlement                              (527,469)              -
    Minority interest in subsidiary                         -          42,569
    Changes in assets and liabilities              (1,546,965)       (470,418)
                                                 --------------  ---------------
    Net cash provided by operating activities         427,012       1,071,799
                                                 --------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                             (1,203,787)     (1,250,897)
  Other                                               (46,946)              -
                                                 --------------  ---------------
    Net cash used in investing activities          (1,250,733)     (1,250,897)
                                                 --------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from issuance of common stock       10,103,603          42,575
  Net borrowings (payments) on lines of credit       (912,099)        784,334
  Checks outstanding in excess of cash deposits             -          50,941
  Payments on long-term debt                       (8,265,671)       (636,276)
  Other                                                (7,376)         28,419
                                                 --------------  ---------------
    Net cash provided by financing activities         918,457         269,993
                                                 --------------  ---------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                   584               -
                                                 --------------  ---------------
NET INCREASE IN CASH                                   95,320          90,895
CASH, BEGINNING OF PERIOD                             326,140               -
                                                 --------------  ---------------
CASH, END OF PERIOD                                $  421,460      $   90,895
                                                 ==============  ===============

SUPPLEMENTAL DISCLOSURE:
    Issuance of stock to employee benefit plan     $   85,928      $   71,903
    Accrual of stock offering costs                   389,370               -
    Note issued to acquire advertising structures           -         698,000
    Interest capitalized                               11,727           9,000
    Income tax benefit of non-qualified stock
      option exercise                                       -          28,419

Cash Paid for Interest                                267,338         448,010

Cash Paid for Taxes                                   934,805               -



See accompanying notes




<PAGE>
                             OBIE MEDIA CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

         The  interim  financial  statements  have been  prepared  by Obie Media
Corporation  (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, 1999, and
the results of  operations  and cash flows of the Company for the three and nine
months ended August 31, 1999 and 1998, 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, 1998 Form 10-KSB.  This  quarterly  report should be
read in  conjunction  with such annual  report.  Operating  results for the nine
months ended August 31, 1999 are not necessarily  indicative of the results that
may be expected for any future period.

2.  Public Stock

         Offering On August 10,  1999,  we  completed  a public  offering of one
million shares of our common stock,  raising  approximately  $9,655,000,  net of
underwriter  discounts and  commissions of  approximately  $886,000 and offering
expenses of approximately $575,000,  including approximately $43,000 of expenses
previously deferred.  The net proceeds were used to repay previously outstanding
debt.

3.  Contract Settlement

         During the nine months ended August 31, 1999,  we provided  advertising
sales services to the Tri-County  Metropolitan  Transit District  ("Tri-Met") in
Portland,  Oregon under a contract which, by its terms,  was scheduled to expire
in June 2001. We originally began serving Tri-Met in January 1994, pursuant to a
five-year  agreement,  which was later extended for an additional two years. The
Federal Transit  Administration  ("FTA"),  which provides  substantial monies to
transit districts, has taken the position that transit advertising contracts may
not exceed  five  years in length.  At the  request of the FTA,  Tri-Met  and we
agreed  that our  agreement  with  Tri-Met  would  terminate  on June 30,  1999.
However,  Tri-Met subsequently informed us that our agreement would terminate on
July 30,  1999 or 10 days  after  notification  by Tri-Met of its award of a new
agreement,  whichever was later. In December 1998,  Tri-Met agreed pursuant to a
settlement  agreement to  compensate  us for early  termination  of the existing
contract.  Under the terms of the settlement  agreement,  we received a one-time
cash payment and related financial  benefits which resulted in a pre-tax gain of
approximately $886,000 during the first quarter of fiscal 1999. During the third
quarter of fiscal 1999,  Tri-Met  awarded us a new contract with an initial term
of three  years  followed by a two-year  renewal at the option of Tri-Met.  As a
result of obtaining the new contract,  certain  anticipated  expenses associated
with the transition to another provider were avoided, resulting in an additional
pre-tax gain of approximately $192,000.

4.  Long Term Borrowings

         The Company's Term Loan Agreement contains certain covenants  including
maintenance of a cash flow leverage  ratio and cash flow  coverage.  The Company
was in compliance with these covenants as of August 31, 1999.

<PAGE>
5.  Earnings Per Share

         Basic  earnings  per share is computed  based on the  weighted  average
number of common shares  outstanding  during the applicable  period, and diluted
earnings  per share is  computed  using the  weighted  average  number of common
shares  and  dilutive  common  equivalent  shares  outstanding.  All  share  and
per-share  information  has  been  adjusted  to give  retroactive  effect  to an
11-for-10  stock split  which  occurred in November  1998.  The  following  is a
reconciliation   of  the  basic  and  diluted   shares  used  in  the  per-share
calculations:

                                   Three Months Ended      Nine Months Ended
                                       August 31,             August 31,
                                   ------------------      -----------------
                                    1999        1998        1999        1998
                                 ----------  ----------  ----------  ----------
Basic shares (weighted average)   4,542,730   4,253,919   4,394,759   4,245,361
Dilutive effect of stock options     42,275      82,606      82,105      74,991
                                 ----------  ----------  ----------  ----------
Diluted shares                    4,585,005   4,336,525   4,476,864   4,320,352
                                 ==========  ==========  ==========  ==========

6.  Newly Issued Financial Accounting Pronouncements

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standard  No. 130  "Reporting  Comprehensive
Income"  ("SFAS 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 130 is to report a measure
of all changes in equity of an  enterprise  that result  from  transactions  and
other economic  events of the period other than  transactions  with owners.  The
Company adopted SFAS 130 during the first quarter of fiscal 1999.  Comprehensive
income did not  differ  materially  from  currently  reported  net income in the
periods presented.

         Effective in its fiscal year ending November 30, 1999, the Company will
be required to adopt SFAS No. 131  "Disclosures  about Segments of an Enterprise
and Related  Information."  SFAS No. 131 changes current practice under SFAS No.
14 by establishing a new framework on which to base segment reporting  (referred
to as the "management"  approach) and also requires interim reporting of segment
information.  Management  does not expect  that the impact of  adoption  of this
pronouncement will be material to the Company's financial position or results of
operations.

         In June 1998, the FASB issued SFAS No. 133  "Accounting  for Derivative
Instruments and Hedging Activities," which establishes  accounting and reporting
standards for all derivative  instruments.  SFAS No. 133 was to be effective for
fiscal years  beginning  after June 15, 1999. In June 1999, the FASB issued SFAS
No. 137 as an amendment to SFAS No. 133 and deferred the effective  date of SFAS
No. 133 to fiscal years beginning after June 15, 2000. The Company currently has
no derivative instruments and, therefore,  the adoption of SFAS 133 will have no
impact on the Company's financial position or results of operations.





<PAGE>
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.  The Company's actual results
could differ materially from the forward-looking statements.  Factors that could
cause or contribute  to such  differences  include:  a decline in the demand for
advertising   in  the  areas  where  the  Company   conducts  its  business;   a
deterioration  of  business  conditions  generally  in such  areas;  slower that
expected  acceptance of the Company's  innovative display products;  competitive
factors,  including  increased  competition  and  price  pressures;  changes  in
regulatory  or  other  external  factors;   failure  to  successfully   conclude
negotiations  on pending  transactions or to  successfully  assimilate  expanded
operations,  inability  to generate  advertising  revenues  to meet  contractual
guarantees,  and  cancellation or  interruption  of contracts with  governmental
agencies,  as well as those  factors  listed from time to time in the  Company's
filings with the SEC,  including,  but not limited to, the factors  discussed in
Exhibit 99.1 filed in connection with the Company's Annual Report on Form 10-KSB
for the year ended  November  30,  1998 and the  factors  discussed  in the Risk
Factors section of the Company's Registration Statement on Form S-1, as amended,
filed  with the SEC on  August  11,  1999,  which  are  incorporated  herein  by
reference.

New Transit Contracts


         During the nine  months  ended  August  31,  1999,  we began  operating
transit advertising displays on more than 1,500 additional vehicles.  During the
first quarter of fiscal 1999, we began operating  transit  advertising  displays
for three new transit districts:  Madison,  Wisconsin,  Spokane,  Washington and
London, Ontario (representing a total of approximately 500 vehicles). During the
second quarter of fiscal 1999, we began operating transit  advertising  displays
for three new transit districts, as well as Gray Line of Victoria, (representing
a total of approximately 175 vehicles). During the third quarter of fiscal 1999,
we began operating transit advertising displays for eight new transit districts.
In June 1999, we added Cambridge and Burlington,  Ontario  (representing a total
of  approximately 70 vehicles).  In July 1999, we added St. Louis,  Missouri and
Danbury,   Connecticut,  as  well  as  Oshawa,  Whitby  and  Pickering,  Ontario
(representing a total of approximately  800 vehicles).  In August 1999, we added
Jefferson, Washington (covering approximately 15 vehicles).

         In August  1999,  we were  awarded  contracts  to  provide  advertising
services in Kansas City, Missouri (covering approximately 280 vehicles) and Fort
Worth, Texas (covering  approximately 380 benches). We expect to begin operating
these  contracts in September  and October  1999,  respectively.  Also in August
1999,  we  were  awarded  a  renewal  contract  in  Portland,  Oregon  (covering
approximately  720 vehicles) and were notified by Norfolk and Roanoke,  Virginia
that,  effective  October 1, 1999, they would begin using their own employees to
manage  advertising  sales and would no longer be  contracting  with Obie  Media
(representing a loss of approximately 200 vehicles).

Comparison of the Nine Months Ended August 31, 1999 and 1998

         Gross revenues increased $13.3 million,  or 89.3%, to $28.1 million for
the nine months ended August 31, 1999 from $14.9  million for the same period in
fiscal 1998. This increase was principally due to transit  advertising  revenues
associated  with the  operations  of P & C Media ("P & C") (which we acquired in
September  1998),  as well as the addition of new districts,  including  British
Columbia (which we began  operating in August 1998) and Austin,  Texas (which we
began operating in June 1998).  Transit  revenues  increased  $13.1 million,  or
123.8%,  to $23.8  million for the nine months  ended August 31, 1999 from $10.6
million  for the same  period  in  fiscal  1998.  Outdoor  advertising  revenues
increased  to $4.4  million for the nine months  ended August 31, 1999 from $4.3
million for the same period in fiscal 1998.  Agency  commissions  increased $1.4
million,  or 96.9%,  to $2.8  million for the nine months  ended August 31, 1999
from $1.4 million for the same period in fiscal 1998.  As a percentage  of gross
revenues,  agency commissions increased to 9.9% for the nine months ended August
31, 1999 from 9.5% for the same period in fiscal  1998.  The  increase in agency
commissions,  in both dollar  amounts and as a percentage  of gross revenues, is
primarily due to the large  proportion of agency  business in markets not served
in the 1998 period. As a result of the foregoing reasons, net revenues increased
$11.9 million,  or 88.4%,  to $25.4 million for the nine months ended August 31,
1999 from $13.5 million for the same period in fiscal 1998.


<PAGE>
         Direct advertising expenses increased $9.7 million, or 113.5%, to $18.3
million for the nine months ended August 31, 1999 from $8.6 million for the same
period in fiscal 1998.  This  increase was  primarily  the result of  activities
required to support an increased level of business.  Direct advertising expenses
increased,  as a  percentage  of gross  revenues,  from 57.5% for the first nine
months of fiscal 1998 to 64.9% for the same period in fiscal 1999, primarily due
to  the  faster  growth  of  the  transit  advertising  business,  where  costs,
especially occupancy costs, are higher than in the outdoor advertising business.

         General and administrative  expenses increased $1.3 million,  or 56.3%,
to $3.5  million for the nine months ended August 31, 1999 from $2.2 million for
the same  period  in fiscal  1998.  The  increase  resulted  primarily  from the
increased  costs of  administering  new transit  district  contracts,  including
contracts  obtained in  connection  with the  acquisition  of P & C. General and
administrative  expenses, as a percentage of gross revenues,  decreased to 12.3%
for the nine  months  ended  August 31,  1999 from 14.9% for the same  period in
fiscal 1998.

         During  the  nine  months  ended  August  31,  1999,  we  recognized  a
non-recurring pre-tax gain of $1,077,000 associated with our contract settlement
with Tri-Met (see Note 3 to our consolidated financial statements).

         In anticipation of the termination of our transit  district  agreement,
Tri-Met  solicited  proposals for the operation of the Portland transit district
by means of a competitive bidding process. In September 1999, we began operating
under a new contract.

         Start-up  costs  increased to $455,000 for the nine months ended August
31, 1999 from $99,000 for the same period in fiscal 1998,  primarily  due to our
increased  number of responses to requests for  proposals  for transit  district
contracts,  including  the Tri-Met  proposal  mentioned  above.  Start-up  costs
include  expenses  incurred in new markets prior to the time the Company  begins
its  sales  operations,  as well as costs  incurred  in  competing  for  transit
district contracts. These costs vary depending on the number and size of transit
districts that become  available for proposal  during the period and our success
in obtaining new contracts.

         Depreciation and amortization expenses increased $505,000, or 86.8%, to
$1.1  million for the nine months  ended  August 31, 1999 from  $582,000 for the
same  period in fiscal  1998,  primarily  due to the  amortization  of  goodwill
associated with the P & C acquisition as well as our investments in equipment in
new markets and our upgrading of computer  capabilities in our existing markets.
We are  amortizing  goodwill of $7.8  million from the P&C  acquisition  over 15
years using the straight-line method of amortization.

         Due to the above factors,  operating income increased $1.2 million,  or
58.1%,  to $3.2  million  for the nine  months  ended  August 31, 1999 from $2.0
million for the same period in fiscal 1998.

         Interest expense increased $367,000, or 76.7%, to $847,000 for the nine
months ended  August 31, 1999 from  $479,000 for the same period in fiscal 1998,
primarily due to the indebtedness incurred in connection with the acquisition of
P & C. In August 1999, we completed a public  offering of our common stock,  the
proceeds  of which  were  used to retire  debt  (see Note 2 to our  consolidated
financial  statements).  Accordingly,  we expect interest expense to decrease in
future periods.

         Provision for income taxes  increased  $342,000,  or 60.7%, to $905,000
for the nine months ended  August 31, 1999 from  $563,000 for the same period in
fiscal 1998.  The  increase in the  provision  for income  taxes is greater,  in
percentage  terms,  than the  increase  in  income  before  income  taxes due to
increased operations in higher tax rate jurisdictions, including Canada.

         As a result of the foregoing factors, net income increased $497,000, or
54.1%,  to $1.4 million for the nine months ended August 31, 1999 from  $918,000
for the same period in fiscal 1998.
<PAGE>
Comparison of the Three Months Ended August  31, 1999 and 1998

         Gross revenues  increased $5.0 million,  or 88.2%, to $10.8 million for
the three  months ended August 31, 1999 from $5.7 million for the same period in
fiscal 1998. This increase was principally due to transit  advertising  revenues
associated  with the  operations  of P&C Media,  as well as the  addition of new
districts,  including  British  Columbia  and Austin,  Texas.  Transit  revenues
increased  $5.0 million,  or 117.7%,  to $9.2 million for the three months ended
August 31, 1999 from $4.2  million for the same period in fiscal  1998.  Outdoor
advertising revenues increased to $1.6 million for the three months ended August
31,  1999  from  $1.5  million  for the  same  period  in  fiscal  1998.  Agency
commissions  increased $507,000,  or 83.2%, to $1.1 million for the three months
ended  August  31,  1999 from  $610,000  for the same  period  in  fiscal  1998,
primarily because of the large proportion of agency business in our new markets.

         As a result of the  foregoing  reasons,  net  revenues  increased  $4.5
million,  or 88.8%,  to $9.6  million for the three months ended August 31, 1999
from $5.1 million for the same period in fiscal 1998.

         Direct advertising  expenses increased $3.7 million, or 111.6%, to $7.0
million for the three  months  ended  August 31, 1999 from $3.3  million for the
same period in fiscal 1998. This increase was primarily the result of activities
required to support an increased level of business.  Direct advertising expenses
increased,  as a  percentage  of gross  revenues,  to 64.8% for the three months
ended August 31, 1998 from 57.6% for the same period in fiscal  1999,  primarily
due to the faster  growth of the  transit  advertising  business,  where  costs,
especially occupancy costs, are higher than in the outdoor advertising business.

         General and administrative  expenses increased  $393,000,  or 51.2%, to
$1.2 million for the three  months  ended August 31, 1999 from  $768,000 for the
same period in fiscal 1998. The increase  resulted  primarily from the increased
costs of  administering  new transit  district  contracts,  including  contracts
obtained in connection with the acquisition of P & C. General and administrative
expenses,  as a percentage of gross  revenues,  decreased to 10.8% for the three
months ended August 31, 1999 from 13.4% for the same period in fiscal 1998.

         During  the three  months  ended  August  31,  1999,  we  recognized  a
non-recurring  pre-tax gain of $192,000  associated with our contract settlement
with Tri-Met (see Note 3 to our consolidated financial statements).

         Start-up costs  increased to $159,000 for the three months ended August
31, 1999 from $56,000 for the same period in fiscal 1998,  primarily  due to our
increased  response to requests for  proposals for transit  district  contracts,
including the new Tri-Met contract.

         Depreciation and amortization expenses increased $136,000, or 59.6%, to
$364,000 for the three  months ended August 31, 1999 from  $228,000 for the same
period in fiscal 1998,  primarily due to the amortization of goodwill associated
with  the P & C  acquisition  as well as our  investments  in  equipment  in new
markets and our upgrading of computer capabilities in our existing markets.

         Due to the above  factors,  operating  income  increased  $418,000,  or
55.1%,  to $1.2 million for the three months ended August 31, 1999 from $759,000
for the same period in fiscal 1998.

         Interest  expense  increased  $126,000,  or 79.8%,  to $285,000 for the
three months  ended August 31, 1999 from  $158,000 for the same period in fiscal
1998,  primarily  due  to the  indebtedness  incurred  in  connection  with  the
acquisition  of P & C. In August  1999,  we  completed a public  offering of our
common stock,  the proceeds of which were used to retire debt (see Note 2 to our
consolidated financial statements).  Accordingly,  we expect interest expense to
decrease in future periods.

         Provision for income taxes  increased  $120,000,  or 52.4%, to $348,000
for the three months ended August 31, 1999 from  $228,000 for the same period in
fiscal 1998.

         As a result of the foregoing factors, net income increased $172,000, or
46.2%,  to $544,000 for the three months ended August 31, 1999 from $372,000 for
the same period in fiscal 1998.
<PAGE>
Liquidity and Capital Resources

         We have  historically  satisfied our working capital  requirements with
cash from  operations and revolving  credit  borrowings.  Our working capital at
August  31,  1999 and  November  30,  1998 was $3.3  million  and $1.0  million,
respectively.  The increase in working  capital is  primarily  the result of our
stock offering,  which was completed in August,  1999. The net proceeds from the
offering  were used to  reduce  our debt,  including  borrowings  on our line of
credit.

         Net cash provided by operating  activities was $427,000 during the nine
months ended August 31, 1999 compared to $1.1 million  during the same period in
fiscal 1998. The decrease from the first nine months of fiscal 1998 to the first
nine months of fiscal 1999 was primarily due to  reductions in  liabilities  for
transit  district fees which were partially  offset by increases in deferred
revenue.

         Net cash used in investing  activities  was $1.3 million during each of
the nine  months  ended  August  31,  1999 and  1998.  These  expenditures  were
principally  related  to the  cost of  building  outdoor  advertising  displays,
upgrading our computer  capabilities and capital expenditures related to opening
new offices.

         Net cash  provided by  financing  activities  was $918,000 and $270,000
during the nine months ended August 31, 1999 and 1998,  respectively.  In August
1999, we completed an offering of 1,000,000 shares of our common stock at $11.00
per share,  the net  proceeds of $9.7  million  from the  offering  were used to
retire debt. As of August 31, 1999,  we had  borrowings on our line of credit of
$503,000 and available borrowing capacity,  based on collateralized accounts, of
$3.4 million.

         We expect to pursue a policy of continued growth through  obtaining new
transit district  agreements,  acquiring  out-of-home  advertising  companies or
assets and constructing new outdoor advertising  displays.  We intend to finance
our future  expansion  activities  using a combination  of internal and external
sources.  We believe that  internally  generated  funds and funds  available for
borrowing  under our bank credit  facilities  will be  sufficient to satisfy all
debt  service  obligations  and to finance our  existing  operations,  including
anticipated capital expenditures,  but excluding possible acquisitions,  for the
next twelve months.  We may require  additional debt or equity  financing in the
event of future  acquisitions,  if any, or if we obtain  significant new transit
advertising agreements.

Seasonality

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

Market Risk

         We have not entered into derivative  financial  instruments.  We may be
exposed to future  interest  rate changes on our debt.  We do not believe that a
hypothetical  10 % change in interest rates would have a material  effect on our
cash flows.
<PAGE>
Year 2000 Compliance

         The Year 2000 problem is the result of the inability of some  computers
and computer  software programs to accurately  recognize,  for dates after 1999,
dates  which are  often  expressed  as a  two-digit  number.  The  inability  to
accurately recognize date information could adversely affect computer operations
and  calculations or cause computer  systems and  computer-dependent  mechanical
systems not to operate at all.

         We  have  completed  the  assessment  of  our  internal  technical  and
non-technical  systems to ascertain whether they are Year 2000 compliant.  After
conducting  certain tests, we have identified one information system that is not
Year 2000  compliant.  We have  obtained  a  replacement  system  and are in the
process of converting our data for use in the new system.  The total replacement
and  conversion  cost is not  expected to exceed  $30,000.  We believe  that our
information  processing systems used in financial  reporting and record-keeping,
and our  incidental  software  systems,  are Year 2000  compliant or can be made
compliant  on  a  timely  basis  without  material  cost.  We  have  phased  out
substantially all of our personal  computer  workstations that are not Year 2000
compliant.  All of our  information  processing  systems used in  designing  and
producing artwork have been determined to be year 2000 compliant.  Our telephone
and voice-mail  systems were upgraded to Year 2000 compliant versions at minimal
costs to us. We believe the remainder of our  non-technical  systems  (primarily
small copiers and facsimile  machines at our sales offices) can be replaced,  if
necessary, on a timely basis without material cost.

         We have  engaged the  services of a  full-time  information  processing
manager to, among other duties,  assist in identifying any Year 2000 issues that
may arise in our technical and non-technical systems and implement any necessary
modifications.  We have  completed our Year 2000  assessment of our key internal
technical  systems  and  do not  believe  that  such  systems  require  material
modification. We intend to be Year 2000 compliant by November 30, 1999.

         We have only generally  assessed our  relationships  with third parties
whose  inability to achieve  timely Year 2000  compliance  could have a material
adverse effect on our financial condition or results of operations.  These third
parties are primarily transit districts,  advertising agencies,  vendors, banks,
utilities  and  freight  companies  whose  failure to achieve  timely  Year 2000
compliance  could  delay  customer  orders for our  services,  delay  receipt of
payments by customers  for services  rendered and disrupt  other  aspects of our
operations.  We expect to continue  to evaluate  Year 2000 issues with regard to
our material  relationships  with third parties  through  1999.  Certain of such
third  parties are subject to  stringent  regulations  which  mandate  that they
achieve  timely  Year  2000  compliance.   In  addition,  we  believe  that  our
diversified  customer  and  supplier  base  should  prevent  one or a few of our
vendors' or customers'  failure to be Year 2000 compliant from having a material
adverse effect on our financial condition or results of operations.

         We have yet to  determine  the  total  estimated  cost of our Year 2000
compliance  program.  Expenditures  through  August 31, 1999 were  approximately
$20,000. We do not expect that Year 2000 compliance will have a material adverse
effect on us. We believe that a reasonably  likely worst case scenario as to the
effect  on us of the Year 2000  compliance  issue is that  several  of our large
customers fail to become Year 2000  compliant,  thus delaying their  advertising
orders and reducing our revenues.

         We have not developed a contingency  plan in the event we or any of the
third parties with which we have a material  relationship fail to achieve timely
Year 2000 compliance. We will continue to update our assessment of our Year 2000
readiness  as we  receive  updated  information  from our Year  2000  compliance
program and, if necessary, develop an appropriate contingency plan.



<PAGE>
PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         The former  operator of transit  advertising  displays for the Bi-State
Development Agency of the  Missouri-Illinois  Metropolitan District ("Bi-State")
in  metropolitan  St.  Louis  (including  St.  Clair  County,  Illinois),  Heard
Communications, Inc., doing business as Gateway Outdoor Advertising ("Gateway"),
is contesting  both  judicially  and  administratively  Bi-State's  award of the
transit advertising agreement for St. Louis to us. We began operating under such
agreement in July 1999.

         In the judicial  proceeding before the United States District Court for
the Eastern  District of  Missouri  commenced  June 30,  1999,  Gateway  seeks a
declaratory  judgment and an injunction  prohibiting  Bi-State  from  performing
under  the  contract.  We have  intervened  in the  proceeding  as a  defendant.
Gateway's challenge is primarily based on its claim that its final bid documents
relating to the contract  were  mishandled  after being sent to Bi-State in late
April 1999.  The court  denied a motion by Gateway  for a temporary  restraining
order which would have delayed the award of the contract to us.

         In the  administrative  proceedings  before Bi-State  commenced July 2,
1999,  Gateway  protests  Bi-State's  award of the contract to us, alleging that
Bi-State  improperly  evaluated  the bids, by failing,  among other  things,  to
properly  evaluate that  Gateway's bid  guaranteed  greater  minimum  revenue to
Bi-State. Bi-State denied the protest by letter dated July 19, 1999, and Gateway
then  appealed that decision to  Bi-State's  Executive  Director.  The Executive
Director denied Gateway's  appeal. We are informed that the Gateway appealed the
Executive  Director's decision to Federal Transit  Administration  ("FTA").  The
appeal to the FTA is still pending.  In each of the above  actions,  among other
remedies,  Gateway  seeks to have our  contract  with  Bi-State  terminated  and
bidding for the St. Louis  contract  reopened.  These actions are in preliminary
stages.  We intend to vigorously  defend  against  termination  of our St. Louis
contract.


Item 4.  Submission of Matters to Vote of Security Holders

         The Company held its annual meeting of  shareholders  on June 15, 1999.
At the meeting  Delores M. Mord and Wayne P. Schur were  elected to the Board of
Directors  for  three-year  terms.  Voting on the election of  directors  was as
follows:

                              Votes             Votes            Broker
                               For            Withheld          Non-Votes
                            ---------         ---------         ---------
    Delores M. Mord         3,806,733            693                0
    Wayne P. Schur          3,807,426              0                0

         In addition,  the following directors continued in office following the
shareholder  meeting:  Brian B. Obie,  Randall C. Pape,  Stephen A.  Wendell and
Richard C. Williams.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits
     (27)  Financial Data Schedule

(b) No  reports  on Form 8-K were filed by the  Company  during the three months
ended August 31, 1999.




<PAGE>

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, 1999                           By: /s/ James W. Callahan
                                                    James W. Callahan
                                                    Chief Financial Officer

Date October 15, 1999                           By: /s/ Michael E. Hubbard
                                                    Michael E. Hubbard
                                                    Corporate Controller