Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days.    YES [X] NO [   ].

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of Act). Yes [  ]    NO [X]

Common stock outstanding as of April 30, 2004 was 9,732,148 shares.

PART I. Financial Information	Page No.
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of            March 31, 2004 and December 31, 2003	**
Condensed Consolidated Statements of Operations for the            Three Months ended March 31, 2004 and 2003	**
Condensed Consolidated Statements of Cash Flows for the            Three Months ended March 31, 2004 and 2003	**
Notes to Condensed Consolidated Financial Statements	**
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	**
Item 3. Quantitative and Qualitative Disclosures About Market Risk	**
Item 4. Controls and Procedures	**
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K	**
Signatures	**

SCIENTIFIC TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in thousands, except for per share data)

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

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in thousands, except per share data)

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

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)

	For the three months ended
	Mar. 31, 2004	Mar. 31, 2003
Cash flows from operating activities
Net income	$ 324	$ 90
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization	625	658
Changes in assets and liabilities
Accounts receivable	(793)	244
Inventories	(956)	(1,005)
Receivable from Parent	359	(31)
Prepaid expense and other assets	253	71
Accounts payable	864	47
Accrued expenses	637	205
Cash flows provided by operating activities	1,313	279
Cash flows from investing activities
Purchase of property and equipment	(162)	(398)
Cash flows used in investing activities	(162)	(398)
Cash flows from financing activities
Repayment of capital lease with Parent	(17)	(17)
Issuance of common stock	32	14
Cash flows provided by (used in) financing activities	15	(3)
Change in cash and cash equivalents	1,166	(122)
Cash and cash equivalents at beginning of period	2,312	2,620
Cash and cash equivalents at end of period	$ 3,478	$ 2,498
Supplemental disclosure of cash flow information:
Cash paid to Parent for income taxes	$ 199	$ 55

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

SCIENTIFIC TECHNOLOGIES INCORPORATED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. INTERIM FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements for the three months ended March 31, 2004 and 2003 are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States of America for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of Scientific Technologies Inc. (the "Company") and its subsidiaries for all periods presented.

To prepare these condensed consolidated financial statements in conformity with generally accepted accounting principles, management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates.

The results of operations are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with the Company's audited consolidated financial statements and the notes thereto included in its 2003 Annual Report on Form 10-K.

STOCK-BASED COMPENSATION

Statement of Financial Accounting Standards ("SFAS") No. 148, issued in December 2002, amends SFAS No. 123 to require that disclosures of the pro forma effect of using the fair value method of accounting for stock-based employee compensation be presented on a quarterly basis and displayed more prominently and in a tabular format. The following table sets forth the effect on the Company's net income and net income per share as if the Company had recorded compensation costs based on the estimated grant date fair value as defined by SFAS No. 123 for all granted stock-based awards (in thousands, except per share amounts).

	Three Months Ended March 31,
	2004	2003
Net income, as reported	$ 324	$ 90
Deduct: Stock-based employee compensation expense determined under fair value based method for all awards, net of tax	23	26
Pro forma net income	$ 301	$ 64
Net income per share - basic and diluted:
As reported	$ 0.03	$ 0.01
Pro forma	$ 0.03	$ 0.01

2. INVENTORIES

Inventories consist of the following (in thousands):

	Mar. 31, 2004		Dec. 31, 2003
Raw materials	$ 3,616		$4,692
Subassemblies	1,072		911
Work in process	2,771		1,225
Finished goods	2,778		2,453
	$10,237		$9,281

3. NET INCOME PER SHARE

A reconciliation of the numerators and denominators used to compute basic and diluted income per common share is provided below.

	(In thousands)
	Income	Shares	(Per share) Amount
Three months ended March 31, 2004
Basic earnings per share calculation	$ 324	9,723	$ 0.03
Effect of dilutive securities    Stock options		70
Diluted earnings per share calculation	$ 324	9,793	$ 0.03
Three months ended March 31, 2003
Basic earnings per share calculation	$ 90	9,685	$ 0.01
Effect of dilutive securities    Stock options		35
Diluted earnings per share calculation	$ 90	9,720	$ 0.01

4. COMPREHENSIVE INCOME

For the three months ended March 31, 2004 and 2003, there is no difference between net income and comprehensive income.

5. SEGMENT REPORTING AND OTHER INFORMATION

Financial information for each product group is as follows: (in thousands)

The Company operates principally in the United States. The Company's operations in Germany are less than 10% of total operations. Sales to foreign customers represented less than 12% of total sales in the three months ended March 31, 2004 and 2003.

6. COMMITMENTS AND CONTINGENCIES

The Company offers warranties on certain products and records a liability for the estimated future costs associated with warranty claims, which is based upon historical experience and the Company's estimate of the level of future costs. A reconciliation of the changes in the Company's warranty liability follows (in thousands):

As permitted under Oregon law the Company has agreements whereby the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was serving at the Company's request in such capacity. The indemnification term is for the period that the officer or director is serving in such capacity or is subject to any possible claim or action by reason of the fact that the Indemnitee was serving in that capacity. The maximum potential amount of future payments by the Company could be unlimited; however the Company has a director and officer insurance policy that limits the Company's exposure and enables the Company to recover a portion of any future amounts paid. As a result of the insurance policy coverage, the Company believes that the estimated fair value of these agreements is minimal.

This interim report on Form 10-Q contains trend analysis and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such statements include expectations, beliefs, intentions or strategies regarding future operating results, future expenditures, future cash requirements and future industry conditions that involve risks and uncertainties. The Company's actual results could differ materially from those projected in such forward-looking statements as a result of many factors, including, without limitation, those set forth under this section, the section entitled "Business Factors" below and elsewhere in this report on Form 10-Q.

(Amounts in thousands, except percentages)

Scientific Technologies Incorporated designs, manufactures and distributes automation safeguarding and specialty sensor products for the industrial control market. The Company's products include safety light guards, profiling scanners, factory automation sensors, machine safeguarding installation services, safety interlock switches, safety relays, safety edges, safety mats, ultrasonic sensors, level and flow controllers, pressure, displacement and velocity transducers, digital pressure gauges and comparators and other electronic equipment supplied to industrial automation, commercial and defense customers.

Sales for the three months ended March 31, 2004 increased 13% to $14,634 from $12,959 in the comparable period in 2003. During the first quarter of 2004, we experienced an increase in shipments by the Safety Products Group ("SPG") of 12% and the Automation Products Group ("APG") of 21%. The increased sales growth by SPG was primarily related to an increase in project revenue from the Machine Services Division ("MSD") and an increase in the number of safety products sold. APG sales growth was fueled by increased sales of level sensor products and, to a lesser extent, increased volume of pressure products.

Gross margin for the first quarter of 2004 declined to 41% for the first quarter of 2004 from 43% in the first quarter of 2003. This resulted from an increase in the proportion of MSD sales, which carry a higher cost, to total sales in the first quarter of 2004. Gross profit grew $522 or 9% to $6,068 from $5,546 recorded in the first quarter of 2003.

Selling, general and administrative expenses for the three months ended March 31, 2004 increased 8% to $4,407 from $4,084 in the same period of 2003. This was a result of increased printing, insurance, publicity and legal expenses of approximately $131, plus a $59 accounts receivable write-off relating to a single distributor. We were able to keep our selling, general and administrative expense percentage increases in the first quarter of 2004 to approximately 60% of the rate of sales increase. As a percentage of sales for the three months ended March 31, 2004, selling, general and administrative expenses improved to 30% compared to 32% for the same period in 2003.

Research and development expenses for the first quarter of 2004 declined 13% to $1,017 from the $1,173 recorded in the first three months of 2003. This was primarily the result of lower staffing levels, and reduced consulting and material expenses in the first quarter of 2004 compared to the comparable 2003 period. As a percentage of sales for the three months ended March 31, 2004, research and development expenses were 7% compared to 9% for the same period of 2003. We expect research and development expenses to rise as a percentage of sales in subsequent quarters.

Our effective income tax rate for the three months ended March 31, 2004 was 38%. Income taxes payable or receivable are calculated on a stand alone basis and are recorded as a payable to or receivable from our parent, which files a consolidated tax return including our accounts.

At March 31, 2004, our working capital increased 5% to $18,328 compared to $17,526 reported at December 31, 2003. This resulted primarily from increased cash, accounts receivable and inventories partially offset by higher accounts payable and accrued expenses.

Available bank borrowings were $6,100, all of which were unused at March 31, 2004. We believe that cash from operations, together with cash resources and available bank borrowings, will be sufficient to fund working capital requirements for the next twelve months.

A discussion of our critical accounting policies is set forth in our 2003 Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 3l, 2004. There were no material changes in any of our critical accounting estimates or judgments during the first quarter of 2004.

Because of the variety of factors and uncertainties affecting our operating results, past financial performance and historical trends may not be a reliable indicator of future performance. These factors, as well as other factors affecting our operating performance, may result in significant volatility in our common stock price. Among the factors which could affect our future business, financial condition or operating results are the following:

We have experienced fluctuations in annual and quarterly operating results and anticipate that these fluctuations will continue. These fluctuations are caused by a number of factors, including the level and timing of customer orders, fluctuations in complementary third party products with which our products are sold, the mix of products sold and the timing of operating expenditures. Our operating results are also negatively impacted by generally adverse economic conditions throughout the high technology sector. In particular, our pressure products continue to experience low sales volume due to the recent market conditions in the semiconductor industry.

The industrial manufacturing equipment industry in which we compete has historically been subject to seasonality. This is also true with respect to European markets in which we compete where business activity declines due to vacations taken in the summer months. This seasonality, combined with other factors such as the variability in our operating results described above, renders quarter-to-quarter comparisons of our results of operations unreliable as indicia of our overall performance.

The market for industrial sensors is highly competitive. Many competitors have substantially greater name recognition and technical, marketing and financial resources than we have. Competitive pressures could reduce market acceptance of our products and result in price reductions, decreased revenues and increases in expenses.

The market for our products is characterized by changing technology, evolving industry standards, changes in customer needs and new product introductions. Our future success will depend on our ability to respond to emerging industry standards, enhance current products, develop new products, and achieve market acceptance of those products, all on a timely and cost-effective basis. The introduction of new products also requires that we manage the transition from older products in order to minimize disruption of customer orders, avoid excessive levels of older product inventories and ensure that adequate supplies of new products can be delivered to meet customer demands.

A majority of our sales are through third party distributors, system integrators and original equipment manufacturers. These resellers are not required to offer our products exclusively. We cannot assure you that a reseller will continue to offer our products. In addition many of our resellers are privately owned firms which may not be well capitalized, as was demonstrated by the failure of two of our distributors during 2001. If our ability to sell products through these third parties is impaired, our results of operations would likely suffer.

Our international sales may be disrupted by currency fluctuations or other events beyond our control, including political or regulatory changes. If our international sales were disrupted for any reason, our revenue levels would decline.