<PAGE>

================================================================================
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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[X]      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the Quarterly Period Ended December 31, 2001

[ ]      Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934



                        Commission file number 001-13601

                            OYO GEOSPACE CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)


           Delaware                                              76-0447780
(State or Other Jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)



                         12750 South Kirkwood, Suite 200
                              Stafford, Texas 77477
                    (Address of Principal Executive Offices)



                                 (281) 494-8282
              (Registrant's telephone number, including area code)



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

Yes [X]   No [ ]

There were 5,544,705 shares of the Registrant's Common Stock outstanding as of
the close of business on February 11, 2002.

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================================================================================

<PAGE>


                                Table of Contents

                                                                            Page

PART I.  FINANCIAL INFORMATION                                            Number
------------------------------                                            ------

     Item 1.  Financial Statements                                           3

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

     Item 3.  Quantitative and Qualitative Disclosures about Market Risks   21


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

     Item 6.  Exhibits and Reports on Form 8-K                              22


                                        2

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

<TABLE>
<CAPTION>

                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                 (in thousands)

                           ASSETS                               December 31, 2001   September 30, 2001
                                                                -----------------   ------------------
                                                                   (unaudited)
<S>                                                                 <C>                  <C>
Current assets:
   Cash and cash equivalents ................................       $  1,007             $    882
   Trade accounts and notes receivable, net .................         13,550               11,539
   Inventories ..............................................         31,270               28,737
   Deferred income tax ......................................          1,345                1,152
   Prepaid expenses and other ...............................          1,400                1,299
                                                                    --------             --------

      Total current assets ..................................         48,572               43,609

Rental equipment, net .......................................          2,676                2,075
Property, plant and equipment, net ..........................         19,972               20,307
Goodwill and other intangible assets, net ...................          4,668                4,775
Deferred income tax .........................................            283                  340
Other assets ................................................          1,569                1,982
                                                                    --------             --------

      Total assets ..........................................       $ 77,740             $ 73,088
                                                                    ========             ========

            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Notes payable and current maturities of long-term debt ...       $    216             $  1,033
   Accounts payable .........................................          3,395                4,984
   Accrued expenses and other ...............................          4,051                4,047
   Deferred revenue .........................................          4,859                4,859
   Income tax payable .......................................             88                  235
                                                                    --------             --------

      Total current liabilities .............................         12,609               15,158

Long-term debt ..............................................          9,987                3,772
Deferred income tax .........................................          1,475                1,367
                                                                    --------             --------

      Total liabilities .....................................         24,071               20,297
                                                                    --------             --------

Minority interest in consolidated subsidiary ................            204                   --

Stockholders' equity:
   Preferred stock ..........................................             --                   --
   Common stock .............................................             55                   55
   Additional paid-in capital ...............................         30,525               30,530
   Retained earnings ........................................         23,860               23,213
   Accumulated other comprehensive loss .....................           (931)                (865)
   Unearned compensation-restricted stock awards ............            (44)                (142)
                                                                    --------             --------

      Total stockholders' equity ............................         53,465               52,791
                                                                    --------             --------

      Total liabilities and stockholders' equity ............       $ 77,740             $ 73,088
                                                                    ========             ========

</TABLE>

      The accompanying notes are an integral part of the consolidated financial
statements.


                                        3

<PAGE>
<TABLE>
<CAPTION>

                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (in thousands, except share and per share amounts)
                                   (unaudited)

                                                         Three Months         Three Months
                                                             Ended                Ended
                                                       December 31, 2001    December 31, 2000
                                                       -----------------    -----------------
<S>                                                       <C>                  <C>
Sales ..............................................      $    12,900          $    14,967
Cost of sales ......................................            8,865               10,108
                                                          -----------          -----------

Gross profit .......................................            4,035                4,859

Operating expenses:
   Selling, general and administrative expenses ....            2,876                2,982
   Research and development expenses ...............            1,080                1,469
                                                          -----------          -----------

      Total operating expenses .....................            3,956                4,451
                                                          -----------          -----------

Income from operations .............................               79                  408

Other income (expense):
   Interest expense ................................             (151)                 (80)
   Interest income .................................               50                   34
   Other, net ......................................                5                   24
                                                          -----------          -----------

      Total other expense, net .....................              (96)                 (22)
                                                          -----------          -----------

Income (loss) before income taxes, minority interest
   and extraordinary gain ..........................              (17)                 386
Income tax expense (benefit) .......................               (7)                 115
                                                          -----------          -----------

Income (loss) before minority interest
   and extraordinary gain ..........................              (10)                 271
Minority interest ..................................              (29)                  --
                                                          -----------          -----------

Income (loss) before extraordinary gain ............              (39)                 271
Extraordinary gain, net of tax of $85 ..............              686                   --
                                                          -----------          -----------

Net income .........................................      $       647          $       271
                                                          ===========          ===========

Basic earnings per share:
   Income (loss) before extraordinary item .........      $     (0.01)         $      0.05
   Extraordinary gain ..............................             0.13                   --
                                                          -----------          -----------
   Net income ......................................      $      0.12          $      0.05
                                                          ===========          ===========

Diluted earnings per share:
   Income (loss) before extraordinary item .........      $     (0.01)         $      0.05
   Extraordinary gain ..............................             0.13                   --
                                                          -----------          -----------
   Net income ......................................      $      0.12          $      0.05
                                                          ===========          ===========

Weighted average shares outstanding - Basic ........        5,515,642            5,463,152
Weighted average shares outstanding - Diluted ......        5,535,978            5,577,984

      The accompanying notes are an integral part of the consolidated financial
statements.

</TABLE>

                                        4

<PAGE>
<TABLE>
<CAPTION>

                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (in thousands)
                                   (unaudited)

                                                                    Three Months         Three Months
                                                                        Ended                Ended
                                                                  December 31, 2001    December 31, 2000
                                                                  -----------------    -----------------
<S>                                                                    <C>                  <C>
Cash flows from operating activities:
   Net income .................................................        $   647              $   271
   Adjustments to reconcile net income to net cash
     used in operating activities:
     Deferred income tax expense (benefit) ....................            (27)                 130
     Depreciation and amortization ............................          1,107                  957
     Amortization of restricted stock awards ..................             90                  119
     Extraordinary gain .......................................           (686)                  --
     Minority interest ........................................             29                   --
     Bad debt expense .........................................            221                   55
     Effects of changes in operating assets and liabilities:
     Trade accounts and notes receivable ......................         (1,667)              (2,725)
     Inventories ..............................................         (1,847)                (679)
     Prepaid expenses and other assets ........................            126                  (73)
     Accounts payable .........................................         (1,681)                (426)
     Accrued expenses and other ...............................         (1,046)                 640
     Income tax payable .......................................           (232)                 153
                                                                       -------              -------

       Net cash used in operating activities ..................         (4,966)              (1,578)
                                                                       -------              -------

Cash flows from investing activities:

   Capital expenditures .......................................         (1,167)              (1,384)
   Investment in business acquisition, net of cash acquired ...            913                   --
   Proceeds from sale of equipment ............................              8                    1
                                                                       -------              -------

       Net cash used in investing activities ..................           (246)              (1,383)
                                                                       -------              -------

Cash flows from financing activities:

   Increase in notes payable ..................................          9,068                3,816
   Principal payments on notes payable ........................         (3,669)              (3,863)
   Proceeds from exercise of stock options ....................              4                   77
                                                                       -------              -------

       Net cash provided by financing activities ..............          5,403                   30
                                                                       -------              -------

Effect of exchange rate changes on cash .......................            (66)                  16
                                                                       -------              -------

Increase (decrease) in cash and cash equivalents ..............            125               (2,915)

Cash and cash equivalents, beginning of period ................            882                3,989
                                                                       -------              -------

Cash and cash equivalents, end of period ......................        $ 1,007              $ 1,074
                                                                       =======              =======

      The accompanying notes are an integral part of the consolidated financial
statements.

</TABLE>

                                        5

<PAGE>


                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1.   Basis of Presentation

     The consolidated balance sheet of OYO Geospace Corporation and its
subsidiaries (the "Company") at September 30, 2001 has been derived from the
Company's audited consolidated financial statements at that date. The
consolidated balance sheet at December 31, 2001 and the consolidated statements
of operations for the three months ended December 31, 2001 and 2000, and the
consolidated statements of cash flows for the three months ended December 31,
2001 and 2000, have been prepared by the Company, without audit. In the opinion
of management, all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the consolidated financial position, results of
operations and cash flows have been made. The results of operations for the
three months ended December 31, 2001 are not necessarily indicative of the
operating results for a full year or of future operations.

     Certain information and footnote disclosures normally included in financial
statements presented in accordance with accounting principles generally accepted
in the United States of America have been omitted. The accompanying consolidated
financial statements should be read in conjunction with the financial statements
and notes thereto contained in the Company's Annual Report on Form 10-K for the
year ended September 30, 2001.

     The Company has embarked on a long-term project to develop a deepwater
seabed seismic array. The Company recognizes revenue when such long-term
projects are completed and placed in-service; therefore, progress payments are
classified as deferred revenue.

     In November 2001, the Company acquired an additional equity interest in a
Russian joint venture; thereby, increasing its ownership percentage from 44% to
85%. As a result of this acquisition, the Company will record minority interest
expense or income, reflecting the portion of earnings or loss, respectively, of
the majority-owned operations allocated to the minority interest partners. For
additional information, see Note 6 to the Consolidated Financial Statements
contained in this Report on Form 10-Q.

     In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations ("SFAS 141"). SFAS
141 requires all business combinations initiated after June 30, 2001 to be
accounted for using the purchase method. The Company adopted the provisions of
SFAS 141 effective October 1, 2001. Among the provisions of SFAS 141 is the
requirement to record as an extraordinary gain all negative goodwill resulting
from new business combinations. As a result, the Company recorded an
extraordinary gain of $686,000 relating to the acquisition of the Russian joint
venture in November 2001.

     Also in July 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets ("SFAS 142"). Under SFAS 142, goodwill and intangible assets
with indefinite lives are no longer amortized but are reviewed annually for
impairment; or more frequently if impairment is indicated. Intangible assets
that are not deemed to have indefinite lives will continue to be amortized over
their useful lives; however, no maximum life applies. The Company will adopt the
provisions of SFAS 142 effective in its fiscal year beginning October 1, 2002.
At December 31, 2001, the Company had goodwill, net of accumulated amortization,
of $2.0 million.

                                        6

<PAGE>


                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

2.   Earnings Per Common Share

     The following table summarizes the calculation of net earnings and weighted
average common shares and common equivalent shares outstanding for purposes of
the computation of earnings per share (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                     --------------------------------------
                                                     December 31, 2001    December 31, 2000
                                                     -----------------    -----------------

<S>                                                     <C>                  <C>
     Income (loss) before extraordinary gain .....      $      (39)          $      271
     Extraordinary gain ..........................             686                   --
                                                        ----------           ----------

     Net earnings available to common
       stockholders ..............................      $      647           $      271
                                                        ==========           ==========

     Weighted average common shares outstanding ..       5,515,642            5,463,152
     Weighted average common share equivalents
       outstanding ...............................          20,336              114,832
                                                        ----------           ----------

     Weighted average common shares and common
        share equivalents outstanding ............       5,535,978            5,577,984
                                                        ==========           ==========

     Basic Earnings Per Share:
     Income (loss) before extraordinary gain .....      $    (0.01)          $     0.05
     Extraordinary gain ..........................            0.13                   --
                                                        ----------           ----------

     Net income ..................................      $     0.12           $     0.05
                                                        ==========           ==========

     Diluted Earnings Per Share:
     Income (loss) before extraordinary gain .....      $    (0.01)          $     0.05
     Extraordinary gain ..........................            0.13                   --
                                                        ----------           ----------

     Net income ..................................      $     0.12           $     0.05
                                                        ==========           ==========
</TABLE>

3.   Comprehensive Income

     Comprehensive income includes all changes in a company's equity, except
those resulting from investments by and distributions to owners. The following
table summarizes the components of comprehensive income (in thousands):

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                     --------------------------------------
                                                     December 31, 2001    December 31, 2000
                                                     -----------------    -----------------

<S>                                                     <C>                  <C>
     Net income ..................................      $      647           $      271
     Foreign currency translation adjustments.....             (66)                  16
                                                        ----------           ----------

     Total comprehensive income...................      $      581           $      287
                                                        ==========           ==========
</TABLE>

                                        7

<PAGE>

                    OYO GEOSPACE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

4.   Trade Accounts and Notes Receivable

     Trade accounts and notes receivable consisted of the following (in
thousands):

<TABLE>
<CAPTION>

                                                     December 31, 2001    September 30, 2001
                                                     -----------------    ------------------

<S>                                                     <C>                   <C>
     Trade accounts receivable....................      $   12,297            $    9,566
     Trade notes receivable.......................           1,990                 2,443
     Allowance for doubtful accounts and notes....            (737)                 (470)
                                                        ----------            ----------

                                                        $   13,550            $   11,539
                                                        ==========            ==========
</TABLE>

5.   Inventories

     Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                                     December 31, 2001    September 30, 2001
                                                     -----------------    ------------------

<S>                                                     <C>                   <C>
     Finished goods...............................      $    4,415            $    3,649
     Work-in-process..............................          12,142                 9,653
     Raw materials................................          14,713                15,435
                                                        ----------            ----------

                                                        $   31,270            $   28,737
                                                        ==========            ==========
</TABLE>

     The Company has received a large order and strong indications of interest
for additional orders from customers to deliver deepwater reservoir
characterization systems. Such orders and indications have a combined sales
price of approximately $24 million. The expected delivery for these orders and
indications is the spring and summer of 2002. To date, these orders and
indications have not been formalized into written definitive contracts. In the
case of the large order, the Company has been operating on the assumption that
its agreements are reflected in a letter of intent and numerous subsequent
exchanges of communication, and has received a substantial progress payment on
the order. Because the Company has not formalized this order into a single,
definitive written contract, it faces the risk that any disputes arising out of
the order will be resolved in a manner and with a reference to terms that it did
not agree to and which are unfavorable to the Company. The Company is not aware
of any disputes or basis for any dispute at this time.

     Because of the scale and nature of these projects, there may be delays in
their implementation and uncertainties about their final course. As a result,
the Company is unable at present to predict the impact of such projects on its
business and financial results and condition. The Company continues to believe,
however, that its reservoir characterization systems, including the systems
related to this matter, are important new technologies in its industry and will
be important to its success in the future.

     At December 31, 2001, the Company capitalized inventory work-in-process
costs of $9.7 million in connection with these projects. The Company received a
$4.9 million progress payment from the customer in connection with the large
order; this payment is classified as deferred revenues on its balance sheet.

     The terms of the large order require the customer to make periodic cash
payments to the Company during various phases of the project. Significant
payments, constituting approximately one-half of the large order, expected to be
received after installation of the system are potentially refundable to the
customer if the system significantly fails to perform its intended function over
an agreed-upon term. If the system performs its intended function for the
agreed-upon term, a significant amount of revenues from this order will be
deferred to future accounting periods. If the

                                        8

<PAGE>


system significantly fails to perform its intended function, however, the
Company may forfeit the refundable cash payments specified above.

6.   Acquisition

     Effective November 8, 2001, the Company increased its equity ownership from
44% to 85% in a Russian joint venture formed more than ten years ago with
Geophyspribor Ufa Production Association, Bank Vostock and Chori Co., Ltd. Since
the increase in ownership, the operating results of the reorganized entity, now
known as OYO-GEO Impulse International LLC ("OYO-GEO Impulse"), have been
consolidated with those of the Company. Geophyspibor Ufa Production Association
and Chori Co., Ltd. will continue as minority equity holders of OYO-GEO Impulse.

     In exchange for the additional equity ownership, the Company forgave a debt
of $1.2 million owed to it by OYO-GEO Impulse. At the time of the acquisition,
the Company's basis in the receivable and related equity investment was $0 as
such items were written-off in 1994.

     In accordance with the provision of SFAS 141, the Company recorded an
extraordinary gain of $686,000, net of income taxes of $85,000. This
extraordinary gain resulted from the write-off of negative goodwill associated
with the acquisition of the additional equity interest of OYO-GEO Impulse.

     The allocation of the purchase price and a reconciliation of the purchase
price to the cash provided by business acquisitions is as follows:

         Fair values of assets and liabilities
              Accounts receivable....................................  $   185
              Inventories............................................      686
              Prepaid expenses and other ............................      263
              Accounts payable.......................................      (92)
              Accrued expenses.......................................   (1,009)
              Income taxes payable...................................      (85)
              Minority interest......................................     (175)
              Negative goodwill......................................     (686)
                                                                       -------
              Total allocated purchase price ........................     (913)
              Less consideration paid................................       --
                                                                       -------
              Cash provided by business acquisition..................  $  (913)
                                                                       =======

7.   Segment and Geographic Information

     The Company evaluates financial performance based on two business segments:
Seismic and Commercial Graphics. The seismic product lines currently consist of
geophones and hydrophones, including multi-component geophones and hydrophones,
seismic leader wire, geophone string connectors, seismic telemetry cable, high
definition reservoir characterization products and services, marine seismic
cable retrieval devices and small data acquisition systems targeted at niche
markets. Commercial graphic products include thermal imaging equipment and dry
thermal film.

                                        9

<PAGE>


     The following tables summarize the Company's segment information:

<TABLE>
<CAPTION>

                                                Three Months Ended    Three Months Ended
                                                ------------------    ------------------
                                                 December 31, 2001     December 31, 2000
                                                ------------------    ------------------
<S>                                                  <C>                   <C>
Net sales:
   Seismic....................................       $  9,963              $ 11,885
   Commercial Graphics........................          3,001                 3,100
   Eliminations...............................            (64)                  (18)
                                                     --------              --------

   Total                                             $ 12,900              $ 14,967
                                                     ========              ========

Income  from operations:
   Seismic....................................       $    656              $    915
   Commercial Graphics........................            352                   351
   Corporate..................................           (929)                 (858)
                                                     --------              --------

   Total......................................       $     79              $    408
                                                     ========              ========
</TABLE>

<TABLE>
<CAPTION>

                                                 December 31, 2001    September 30, 2001
                                                 -----------------    ------------------
<S>                                                  <C>                   <C>
Total assets:
   Seismic....................................       $ 63,212              $ 56,968
   Commercial Graphics........................         10,316                11,059
   Corporate..................................          4,212                 5,061
                                                     --------              --------

                                                     $ 77,740              $ 73,088
                                                     ========              ========
</TABLE>

8.   Line of Credit

     The Company has a working line of credit pursuant to which it can borrow up
to $10.0 million secured by its accounts receivable and inventory (the "Credit
Agreement"). The Credit Agreement, as amended, expires in January 2003.
Borrowings under the Credit Agreement are subject to borrowing base restrictions
based on (i) consolidated net income plus consolidated interest expense, income
taxes, depreciation and amortization and (ii) levels of eligible accounts
receivable and inventories. The Credit Agreement limits the incurrence of
additional indebtedness, requires the maintenance of certain financial amounts
and contains other covenants customary in agreements of this type. As of
December 31, 2001 there were borrowings of $6.3 million outstanding under the
Credit Agreement, and additional borrowings available under the Credit Agreement
of $2.3 million. The borrowing interest rate at December 31, 2001 was 4.75%.

     The Company recently amended its Credit Agreement to expire in January
2003. In connection with this amendment, the Company's borrowing interest rate
has become the bank's prime rate with a minimum rate of 5%. In addition, the
Company arranged for an additional promissory note of $2.5 million ("Additional
Note") to assist the Company with the funding of several long-term projects. The
Additional Note has a fixed borrowing rate of 8% and expires on July 15, 2002.

                                       10

<PAGE>


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

     The following analysis of the financial condition and results of operations
of OYO Geospace Corporation should be read in conjunction with the Consolidated
Financial Statements and Notes related thereto included elsewhere in this Form
10-Q.

Industry Overview

     We design and manufacture instruments and equipment used in the acquisition
and processing of seismic data. We have been in the seismic instrument and
equipment business since 1980, marketing our products primarily to the oil and
gas industry worldwide. We also design and manufacture thermal imaging equipment
and distribute dry thermal film products to the commercial graphics industry. We
have been serving the commercial graphics industry since 1995.

Seismic Industry

     Geoscientists use seismic data to map potential or existing oil and gas
bearing formations and the geologic structures that surround them. Seismic data
is used primarily in connection with the exploration, development and production
of oil and gas.

     Seismic data acquisition is conducted on land by combining a seismic energy
source and a data recording system. The energy source imparts seismic waves into
the earth, reflections of which are received and measured by geophones and
hydrophones. Electrical signals generated by the geophones and hydrophones are
simultaneously transmitted through leader wire, geophone and hydrophone string
connectors and telemetric cable to data collection units, which store
information for processing and analysis. Seismic thermal imaging products are
output devices used in the field or office to create a graphic representation of
the seismic data after it has been acquired.

     Marine seismic data acquisition is conducted primarily by large ocean-going
vessels that tow long seismic cables known as "streamers". Usually, the energy
source in marine seismic data acquisition is an airgun, and the reflected
seismic waves are received and measured by hydrophones, which are an integral
part of the streamers. The streamers simultaneously transmit the electrical
impulses back to the vessel via telemetric cable included within the streamers,
and the seismic data is recorded in much the same manner as it is on land.

     An estimated one to two-thirds of the reserves found with every oil and gas
discovery will be left behind in the reservoir, not recoverable economically or
at times even identified. Reservoir characterization and management programs, in
which the reservoir is carefully imaged and monitored throughout the life of the
field by seismic instruments and equipment, are now seen as vital tools for
improving production recovery rates. Seismic surveys repeated over selected time
intervals show dynamic changes within the reservoir and can be used to monitor
the effects of production.

     We expect to incur significant future research and development expenditures
aimed at the development of additional seismic acquisition products and services
used for high definition reservoir characterization for use in both land and
marine environments

     While orders for our products can vary substantially from quarter to
quarter, reservoir characterization projects, especially deepwater projects,
require the use of more equipment over a longer period of time than required by
conventional surface seismic systems. Revenue recognition in accordance with
generally accepted accounting principles for these large-scale projects has the
potential to result in substantial fluctuations in quarterly performance. These
variations may impact our operating results and cash flow, manufacturing
capability and expense levels in any given quarter.

     We have received a large order and strong indications of interest for
additional orders from customers to deliver deepwater reservoir characterization
systems. Such orders and indications have a combined sales price of

                                       11

<PAGE>


approximately $24 million. The expected delivery for these orders and
indications is the spring and summer of 2002. To date, these orders and
indications have not been formalized into written definitive contracts. In the
case of the large order, we have been operating on the assumption that our
agreements are reflected in a letter of intent and numerous subsequent exchanges
of communication, and we have received a substantial progress payment on the
order. Because we have not formalized this order into a single, definitive
written contract, we face the risk that any disputes arising out of the order
will be resolved in a manner and with a reference to terms that we did not agree
to and which are unfavorable to us. We are not aware of any disputes or the
basis for any dispute at this time.

     Because of the scale and nature of these projects, there may be delays in
their implementation and uncertainties about their final course. As a result, we
are unable at present to predict the impact of such projects on our business and
financial results and condition. We continue to believe, however, that our
reservoir characterization systems, including the systems related to this
matter, are important new technologies in our industry and will be important to
our success in the future.

     At December 31, 2001, we have capitalized inventory work-in-process costs
of $9.7 million in connection with these orders and indications. We have
received a $4.9 million progress payment from the customer in connection with
the large order; this payment is classified as deferred revenues on our balance
sheet.

     The terms of the large order require the customer to make periodic cash
payments to us during various phases of the project. Significant payments,
constituting approximately one-half of the large order, expected to be received
after installation of the system are potentially refundable to the customer if
the system significantly fails to perform its intended function over an
agreed-upon term. If the system performs its intended function for the
agreed-upon term, a significant amount of revenues from this order will be
deferred to future accounting periods. If the system significantly fails to
perform its intended function, however, we may forfeit the refundable cash
payments specified above.

Commercial Graphics Industry

     We developed our commercial graphics business segment over time as we
leveraged our thermal imaging product technology, originally designed for
seismic data processing applications, into new markets. With minor product
modifications, we were successful in adapting these products for use in the
commercial graphics industry.

     Our commercial graphics business segment manufactures and sells thermal
imaging equipment and distributes dry thermal film primarily to the screen
print, point of sale, signage and textile market sectors. Our thermal imaging
equipment is capable of producing data images ranging in size from 12 to 54
inches wide. This business segment has some sales to customers in the seismic
industry.

     We expanded this segment last year by acquiring EcoPRO, a dry thermal film
distribution business, and by altering the marketing focus of our European
subsidiary.

                                       12

<PAGE>


Results of Operations

     We report and evaluate financial information for two segments: Seismic and
Commercial Graphics. Summary financial data by business segment follows:

<TABLE>
<CAPTION>

                                                 Three Months Ended    Three Months Ended
                                                 ------------------    ------------------
                                                  December 31, 2001     December 31, 2000
                                                  -----------------     -----------------
<S>                                                   <C>                   <C>
Seismic

   Revenue...................................         $  9,963              $ 11,885
   Operating income..........................              656                   915

Commercial Graphics

   Revenue...................................            3,001                 3,100
   Operating income..........................              352                   351

Corporate

   Revenue...................................               --                    --
   Operating loss............................             (929)                 (858)

Eliminations

   Revenue...................................              (64)                  (18)
   Operating income..........................               --                    --

Consolidated Totals

   Revenue...................................           12,900                14,967
   Operating income..........................               79                   408
</TABLE>

Overview

First Quarter of Fiscal Year 2002 Compared to First Quarter of Fiscal Year 2001.

     Consolidated sales for the three months ended December 31, 2001 decreased
$2.1 million, or 13.8%, from the corresponding period of the prior fiscal year.
The decrease in sales was due to a significant decline in the demand for our
land-based seismic products resulting from a decline in worldwide seismic
activity. This decrease was partially offset by an increase in sales associated
with our acquisition and consolidation of OYO-GEO Impulse.

     Consolidated gross profits for the three months ended December 31, 2001
decreased by $0.8 million, or 17.0%, from the corresponding period of the prior
year. The lower gross profits resulted from lower sales levels primarily
resulting from deterioration in the demand for our land-based seismic products.
The decline in gross profit margins we realized from sales of our land-based
seismic products was partially offset by improved gross profit margins realized
from the sale of our marine-based seismic products and from commercial graphics
products.

     Consolidated operating expenses for the three months ended December 31,
2001 decreased $0.5 million, or 11.1%, from the corresponding periods of the
prior fiscal year. The lower expenses are a result of an effort by the Company
to reduce expenses during a period of declining revenues.

     Our effective tax rate for the three months ended December 31, 2001 was
41.2% compared to a benefit of 29.8% for the three months ended December 31,
2000. The tax rate of the current period includes a benefit resulting from the
resolution of contingent tax matters from prior years.

                                       13

<PAGE>


Seismic

     Our seismic product lines currently consist of geophones and hydrophones,
including multi-component geophones and hydrophones, seismic leader wire,
geophone string connectors, seismic telemetry cable, high definition reservoir
characterization products and services, marine seismic cable retrieval devices
and small data acquisition systems targeted at niche markets.

Revenue

     Sales of our seismic products for the three months ended December 31, 2001
decreased $1.9 million, or 16.2%, from the corresponding period of the prior
year. The decrease in seismic product sales primarily resulted from the decrease
in sales of our land-based products caused by decreasing worldwide oil and gas
exploration activities. This decrease was partially offset by an increase in
sales associated with our (i) acquisition and consolidation of OYO-GEO Impulse,
(ii) reservoir characterization products and services and (iii) marine-based
seismic products.

Operating Income

     Operating income for the three months ended December 31, 2001 was $0.7
million, a decrease of $0.3 million from the corresponding period of the prior
year. The decrease in operating income primarily resulted from decreased gross
profits associated with lower sales levels from our land-based seismic products.
Such decrease in operating income was partially offset by an increase in
operating income from (i) our reservoir characterization products and services,
(ii) our marine-based seismic products and (iii) the acquisition and
consolidation of OYO-GEO Impulse.

International Business Development Initiative

     Effective November 8, 2001, the Company increased its equity ownership from
44% to 85% in a Russian joint venture formed more than ten years ago with
Geophyspribor Ufa Production Association, Bank Vostock and Chori Co., Ltd. Since
the increase in ownership, the operating results of the reorganized entity, now
known as OYO-GEO Impulse International LLC ("OYO-GEO Impulse"), have been
consolidated with those of the Company. Geophyspibor Ufa Production Association
and Chori Co., Ltd. will continue as minority equity holders of OYO-GEO Impulse.

     In exchange for the additional equity ownership, the Company forgave a debt
of $1.2 million owed to it by OYO-GEO Impulse. At the time of the acquisition,
the Company's basis in the receivable and related equity investment was $0 as
such items were written-off in 1994.

     In accordance with the provision of SFAS 141, the Company recorded an
extraordinary gain of $686,000, net of income taxes of $85,000. This
extraordinary gain resulted from the write-off of negative goodwill associated
with the acquisition of the additional equity interest of OYO-GEO Impulse.

Commercial Graphics

     Our commercial graphics business segment manufactures and sells thermal
imaging equipment and distributes dry thermal film primarily to the screen
print, point of sale, signage and textile market sectors. This business segment
has some sales to customers in the seismic industry.

Revenue

     Sales of our commercial graphics products for the three months ended
December 31, 2001 decreased $0.1 million, or 3.2% from the corresponding period
of the prior year. Such decrease is primarily due to decreased sales of
equipment, partially offset by increased sales of dry thermal film products
resulting from the EcoPRO acquisition.

                                       14

<PAGE>


Operating Income

     The operating income for the three months ended December 31, 2001 was
virtually unchanged from the corresponding period of the prior year. The
operating margin improvement resulted from improving gross profits resulting
from increased sales of dry thermal film.

Liquidity and Capital Resources

     At December 31, 2001, we had $1.0 million in cash and cash equivalents. For
the three months ended December 31, 2001, we used approximately $5.0 million of
cash in operating activities principally resulting from increases in accounts
receivable and inventories and decreases in account payable and accrued
expenses.

     For the three months ended December 31, 2001, we used approximately
$246,000 of cash in investing activities primarily resulting from $1.2 million
of capital expenditures. Such amount was offset by $0.9 million of cash we
received through the acquisition of an additional interest in, and consolidation
of, OYO-GEO Impulse. We estimate that our capital expenditures in fiscal year
2002 will range between $4.0 to $5.0 million, which we expect to fund through
operating cash flows and borrowings under our credit facilities.

     For the three months ended December 31, 2001, we generated approximately
$5.4 million of cash from financing activities primarily resulting from
borrowings under our credit facilities with the bank.

     We have a working capital line of credit pursuant to which we can borrow up
to $10.0 million secured by our accounts receivable and inventory (the "Credit
Agreement"). The Credit Agreement, as amended, expires in January 2003.
Borrowings under the Credit Agreement are subject to borrowing base restrictions
based on (i) consolidated net income plus consolidated interest expense, income
taxes, depreciation and amortization and (ii) levels of eligible accounts
receivable and inventories. The Credit Agreement limits the incurrence of
additional indebtedness, requires the maintenance of certain financial amounts
and contains other covenants customary in agreements of this type. As of
December 31, 2001 there were borrowings of $6.3 million outstanding under the
Credit Agreement, and additional borrowings available under the Credit Agreement
of $2.3 million. The borrowing interest rate at December 31, 2001 was 4.75%.

     We recently amended our Credit Agreement to expire in January 2003. In
connection with this amendment, our borrowing interest rate has become the
bank's prime rate with a minimum rate of 5%. In addition, we arranged for an
additional promissory note of $2.5 million ("Additional Note") to assist the
Company with the funding of several long-term projects. The Additional Note has
a fixed borrowing rate of 8% and expires on July 15, 2002.

Purchase of Intellectual Property Rights

     A private corporation headquartered in New York State is currently the
primary supplier of dry thermal film used by our customers in the thermal
imaging equipment we manufacture (the "Primary Film Supplier"). We also have a
secondary supplier of dry thermal film headquartered in Europe. We know of no
other supplier of dry thermal film for our thermal imaging equipment. While
alternate suppliers might be able to provide dry thermal film, such film has not
historically performed as well in our thermal imaging equipment.

     We are presently evaluating and working on an opportunity to purchase
certain intellectual property rights from our Primary Film Supplier for $2.0
million. Such purchase will give us exclusive ownership of all technology used
by the Primary Film Supplier to manufacture dry thermal film used in the thermal
imaging equipment we manufacture. Such purchase includes technology currently
existing and any technology hereinafter developed by the Primary Film Supplier.
In connection with the purchase, we expect to license the technology to the
Primary Film Supplier on a perpetual basis, so long as it can meet predefined
quality and delivery requirements. Should the Primary Film Supplier not meet
such requirements, we expect to have the right to license any third party to
manufacture dry thermal film. Should we conclude the purchase of this
technology, we expect to receive favorable price concessions from the Primary
Film Supplier. The proceeds from the sale are intended to be used by the Primary
Film Supplier to fund its working capital needs, thereby enabling it to continue
supplying dry thermal film to

                                       15

<PAGE>


us for distribution to our customers. We have no assurance that the pending
transaction with the Primary Film Supplier will close or if it does close, that
it will assure us a continued supply of dry thermal film for the foreseeable
future or that our Primary Film Supplier will use the funds for working capital
purposes.

     We have received a large order and strong indications of interest for
additional orders from customers to deliver deepwater reservoir characterization
systems. At December 31, 2001, we have capitalized inventory work-in-process
costs of $9.7 million in connection with these projects. Decisions by customers
regarding the timing, nature and size of purchases for deepwater
characterization systems could significantly impact our liquidity and results of
operations, particularly if orders were cancelled, modified or delayed and if
anticipated orders do not occur as expected.

     We believe that the combination of existing cash reserves, cash flows from
operations and borrowing availability under our existing credit facilities
should provide us sufficient capital resources and liquidity to fund the pending
acquisition of intellectual property rights from our Primary Film Supplier and
our planned operations through fiscal year 2002. However, there can be no
assurance that such sources of capital will be sufficient to support our capital
requirements in the long-term, and we may be required to issue additional debt
or equity securities in the future to meet our capital requirements. There can
be no assurance we would be able to issue additional equity or debt securities
in the future on terms that are acceptable to the Company or at all.

Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations ("SFAS 141"). SFAS
141 requires all business combinations initiated after June 30, 2001 to be
accounted for using the purchase method. The Company adopted the provisions of
SFAS 141 effective October 1, 2001. Among the provisions of SFAS 141 is the
requirement to record as an extraordinary gain all negative goodwill resulting
from new business combinations. As a result, the Company recorded an
extraordinary gain of $686,000 relating to the acquisition of the additional
interest in the Russian joint venture in November 2001.

     Also in July 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets ("SFAS 142"). Under SFAS 142, goodwill and intangible assets
with indefinite lives are no longer amortized but are reviewed annually for
impairment; or more frequently if impairment is indicated. Intangible assets
that are not deemed to have indefinite lives will continue to be amortized over
their useful lives; however, no maximum life applies. The Company will adopt the
provisions of SFAS 142 effective in its fiscal year beginning October 1, 2002.
At December 31, 2001, the Company had goodwill, net of accumulated amortization,
of $2.0 million.

Forward Looking Statements and Risks

     Certain of the statements we make in this document and in documents
incorporated by reference herein, including those made under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," are forward-looking statements for purposes of the Securities Act
of 1933 and the Securities Exchange Act of 1934. Such statements include
projections of our expectations regarding our future capital expenditures,
product lines, growth of product markets and other statements that relate to
future events or circumstances. These statements are subject to known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to differ materially from the future
results, performance or achievements expressed or implied by such
forward-looking statements, including the risks and factors described below. You
are cautioned to consider the following factors and risks in connection with
evaluating any such forward-looking statements or otherwise evaluating an
investment in our company.

Our New Products May Not Achieve Market Acceptance.

     In recent years, we have incurred significant expenditures to fund our
research and development efforts and we intend to continue those expenditures in
the future. However, research and development is by its nature speculative, and
we cannot assure you that these expenditures will result in the development of
new products or services or that

                                       16

<PAGE>


any new products and services we have developed recently or may develop in the
future will be commercially marketable or profitable to us.

     In particular, we have incurred substantial expenditures to develop our
recently introduced HDSeis(TM) product line for borehole and reservoir
characterization applications. For a discussion of particular factors and risks
relating to projects in the reservoir characterization area, see the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Industry Overview" in this Report on Form 10-Q. We cannot
assure you that we will realize our expectations regarding market acceptance and
revenues from these products and services.

A Decline in Industry Conditions Could Affect our Projected Results.

     Any unexpected material changes in oil and gas prices or other market
trends that would impact seismic exploration activity would likely affect the
forward-looking information contained in this document. Our results for fiscal
year 2000 were materially and adversely affected by the downturn in the industry
that began in fiscal year 1999. Although our results for fiscal year 2001 showed
an improvement over fiscal year 2000 due to increases in oil and gas prices, the
oil and gas industry is extremely volatile and subject to change based on
political and economic factors outside our control as evidenced by recent
decreases in oil and gas prices.

     Our estimates as to future results and industry trends described in this
document are based on assumptions regarding the future level of seismic
exploration activity and its effect on the demand and pricing of our products
and services. In analyzing the market and its impact on us, we have made the
following assumptions for fiscal year 2002:

          o    Oil and gas prices will, on average, be weaker than fiscal year
               2001. As a result, seismic exploration activity will decrease.

          o    Demand for seismic instruments and equipment will decline from
               fiscal year 2001 levels.

          o    Demand for our new high definition reservoir characterization
               products and services will increase as those products and
               services become known to the industry and as the need for
               reservoir characterization technology increases.

          o    Deep-water marine seismic activity will remain constrained.

          o    Demand for our products used in the commercial graphics industry
               will increase with continued market acceptance and new product
               introductions.

          o    Pricing for many of our products will continue to be subject to
               pricing pressures due to seismic industry customer consolidations
               and competition as the seismic industry enters another economic
               downturn.

     We have based these assumptions on various macro-economic factors, and
actual market conditions could vary materially from those assumed.

We May Experience Fluctuations in Quarterly Results of Operations.

     Historically, the rate of new orders for our products has varied
substantially from quarter to quarter. Moreover, we typically operate, and
expect to continue to operate, on the basis of orders in hand for our products
before we commence substantial manufacturing "runs"; hence, the completion of
orders, particularly large orders for deepwater reservoir characterization
projects, can significantly impact the operating results and cash flow for any
quarter, and results of operations for any one quarter may not be indicative of
results of operations for future quarters.

                                       17

<PAGE>


Our Credit Risks Could Increase as our Customers Continue to Face Difficult
Economic Circumstances.

     We believe and have assumed that our allowance for bad debts at December
31, 2001 is adequate in light of known circumstances. However, we cannot assure
you that sufficient aggregate amounts of uncollectible receivables and bad debt
write-offs will not have a material adverse effect on our future results of
operations. Many of our customers have suffered from lower revenues and
experienced liquidity challenges resulting from the economic difficulties
throughout our industry. We have in the past incurred significant write-offs in
our accounts receivable due to customer credit problems. We have found it
necessary from time to time to extend trade credit to long-term customers and
others where some risks of nonpayment or late payment exist. Given recent
industry conditions, some of our customers have experienced a liquidity
difficulty, which increases those credit risks. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources", contained in this Report on Form 10-Q.

Demand for Our Products is Volatile.

     Demand for our products depends primarily on the level of worldwide oil and
gas exploration activity. That activity, in turn, depends primarily on
prevailing oil and gas prices. Historically, the markets for oil and gas have
been volatile, and those markets are likely to continue to be volatile. Oil and
gas prices are subject to wide fluctuation in response to relatively minor
changes in the supply of and demand for oil and gas, market uncertainty and a
variety of additional factors that are beyond our control. These factors include
the level of consumer demand, weather conditions, domestic and foreign
governmental regulations, price and availability of alternative fuels, political
conditions in the Middle East and other significant oil-producing regions,
foreign supply of oil and gas, price of foreign imports and overall economic
conditions. Continued low demand for our products could materially and adversely
affect our results of operations and liquidity. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Industry Overview".

We Have a Relatively Small Public Float, and Our Stock Price May be Volatile.

     We have approximately 2.4 million shares outstanding held by nonaffiliates.
This small float results in a relatively illiquid market for our common stock.
Our average daily trading volume during fiscal year 2001 has been around 5,000
shares. Our small float and daily trading volumes may result in greater
volatility of our stock price.

Our Industry is Characterized by Rapid Technological Evolution and Product
Obsolescence.

     Our instruments and equipment are constantly undergoing rapid technological
improvement. Our future success depends on our ability to continue to:

          o  improve our existing product lines;
          o  address the increasingly sophisticated needs of our customers;
          o  maintain a reputation for technological leadership;
          o  maintain market acceptance;
          o  anticipate changes in technology and industry standards; and
          o  respond to technological developments on a timely basis.

     Current competitors or new market entrants may develop new technologies,
products or standards that could render our products obsolete. We cannot assure
you that we will be successful in developing and marketing, on a timely and cost
effective basis, product enhancements or new products that respond to
technological developments, that are accepted in the marketplace or that comply
with industry standards.

We Operate in Highly Competitive Markets.

     The markets for our products are highly competitive. Many of our existing
and potential competitors have substantially greater marketing, financial and
technical resources than we do. Additionally, two competitors in our

                                       18

<PAGE>


seismic business segment currently offer a broader range of instruments and
equipment for sale and market this equipment as a "packaged" data acquisition
system. We do not now offer for sale such a complete "packaged" data acquisition
system. Further, certain of our competitors offer financing arrangements to
customers on terms that we may not be able to match. In addition, new
competitors may enter the market and competition could intensify.

     We cannot assure you that sales of our products will continue at current
volumes or prices if current competitors or new market entrants introduce new
products with better features, performance, price or other characteristics than
our products. Competitive pressures or other factors also may result in
significant price competition that could have a material adverse effect on our
results of operations.

We Have a Limited Market.

     In our seismic business segment, we market our products to contractors and
large, independent and government-owned oil and gas companies. We estimate that,
based on published industry sources, fewer than 100 seismic contracting
companies are currently operating worldwide (excluding those operating in Russia
and the former Soviet Union, India, the People's Republic of China and certain
Eastern European countries, where seismic data acquisition activity is difficult
to verify). We estimate that fewer than ten seismic contractors are engaged in
marine seismic exploration. In November 2001, two of our largest seismic
customers (Petroleum Geo-Services ASA and Veritas DGC Inc.), announced plans to
merge. Due to these market factors, a relatively small number of customers have
accounted for most of our sales. The loss of a small number of these customers
could materially and adversely impact our sales.

We Cannot Be Certain of Patent Protection of Our Products.

     We have applied for and hold certain patents relating to our seismic data
acquisition and other products. We cannot assure you that our patents will prove
enforceable, that any patents will be issued for which we have applied or that
competitors will not develop functionally similar technology outside the
protection of any patents we have or may obtain.

Our Foreign Marketing Efforts Face Additional Risks and Difficulties.

     Net sales outside the United States accounted for approximately 57% of our
net sales during fiscal year 2001. Additionally, our United States subsidiaries
engage in significant export sales. Substantially all of our sales from the
United States are made in U.S. dollars, but from time to time we may make sales
in foreign currencies and may, therefore, be subject to foreign currency
fluctuations on our sales. In addition, net assets reflected on the balance
sheet of our Russian, Canadian and U.K. subsidiaries are subject to currency
fluctuations. Significant foreign currency fluctuations could adversely impact
our results of operations.

     Foreign sales are subject to special risks inherent in doing business
outside of the United States, including the risk of war, terrorist activities,
civil disturbances, embargo and government activities, all of which may disrupt
markets. Foreign sales are also generally subject to the risk of compliance with
additional laws, including tariff regulations and import and export
restrictions. Sales in certain foreign countries require prior United States
government approval in the form of an export license. We cannot assure you that
we will not experience difficulties in connection with future foreign sales.

We Rely on Key Suppliers for Significant Product Components.

     A Japanese manufacturer unaffiliated with us is currently the only supplier
of wide format thermal printheads that we use to manufacture our wide format
thermal imager equipment. We often return significant quantities of these
products to the manufacturer for repair, testing and quality assurance review.
We believe we maintain an adequate inventory of these printheads to continue
production for two to three months.

     The Primary Film Supplier, a private corporation headquartered in New York
State, is currently the primary supplier of dry thermal film used by our
customers in the thermal imaging equipment we manufacture. We also have a
secondary supplier of dry thermal film headquartered in Europe. We know of no
other supplier of dry thermal film

                                       19

<PAGE>


for our thermal imaging equipment. While alternate suppliers might be able to
provide dry thermal film, such film has not historically performed as well in
our thermal imaging equipment.

     We are presently evaluating and working on an opportunity to purchase
certain intellectual property rights from our Primary Film Supplier for $2.0
million. Such purchase will give us exclusive ownership of all technology used
by the Primary Film Supplier to manufacture dry thermal film used in the thermal
imaging equipment we manufacture. Such purchase includes technology currently
existing and any technology hereinafter developed by the Primary Film Supplier.
In connection with the purchase, we expect to license the technology to the
Primary Film Supplier on a perpetual basis, so long as it can meet predefined
quality and delivery requirements. Should the Primary Film Supplier not meet
such requirements, we expect to have the right to license any third party to
manufacture dry thermal film. Should we conclude the purchase of this
technology, we expect to receive favorable price concessions from the Primary
Film Supplier. The proceeds from the sale are intended to be used by the Primary
Film Supplier to fund its working capital needs, thereby enabling it to continue
supplying dry thermal film to us for distribution to our customers. We have no
assurance that the pending transaction with the Primary Film Supplier will close
or if it does close, that it will assure us a continued supply of dry thermal
film for the foreseeable future, or that our Primary Film Supplier will use the
funds for working capital purposes.

     If the Japanese manufacturer were to discontinue supplying these printheads
or was unable or unwilling to supply printheads in sufficient quantities to meet
our requirements, or if our Primary Film Supplier was to discontinue supplying
dry thermal film or was unable or unwilling to supply dry thermal film in
sufficient quantities to meet our requirements, our ability to compete in the
thermal imaging marketplace could be severely damaged, which could adversely
affect our financial performance.

We Are Subject to Control by a Principal Stockholder.

     OYO Corporation, a Japanese corporation, owns indirectly in the aggregate
approximately 51.7% of our common stock. Accordingly, OYO Corporation, through
its wholly owned subsidiary OYO Corporation U.S.A, is able to elect all of our
directors and to control our management, operations and affairs. We currently
have, and may continue to have, a variety of contractual relationships with OYO
Corporation and its affiliates.

Our Success Depends Upon A Limited Number of Key Personnel.

     Our success depends on attracting and retaining highly skilled
professionals. A number of our employees are highly skilled engineers and other
professionals. If we fail to continue to attract and retain such professionals,
our ability to compete in the industry could be adversely effected. In addition,
our success depends to a significant extent upon the abilities and efforts of
several members of our senior management.

Recent Terrorist Attacks on the U.S. Together With the Recent Downturn in the
U.S. Economy May Adversely Affect our Business.

     While we are not yet able to evaluate fully the effect of the recent
terrorist attacks on the U.S., which appear to have coincided with or
contributed to a general downturn in the U.S. economy, both such matters could
adversely affect our business in ways that we cannot yet identify. However, both
may adversely affect the demand for oil and gas generally and therefore, the
demand for our services to the oil and gas industry and related service
industry. They could also affect adversely the demand for consumer products,
which could in turn adversely affect our commercial graphics business. To the
extent these factors adversely affect other seismic companies in the industry,
we could see an oversupply of products and services and downward pressure on
pricing for seismic products and services that would affect us adversely.

                                       20

<PAGE>


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

     The following discussion of our exposure to various market risks contains
"forward looking statements" that involve risks and uncertainties. These
projected results have been prepared utilizing certain assumptions considered
reasonable in light of information currently available to us. Nevertheless,
because of the inherent unpredictability of foreign currency rates, as well as
other factors, actual results could differ materially from those projected in
this forward looking information.

Adoption of New Accounting Pronouncements

     Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"), as amended by SFAS
No. 137 and SFAS No. 138, was issued by the Financial Accounting Standards Board
in June 1998. SFAS 133 requires us to record all derivatives on the balance
sheet at fair value. Changes in derivative fair values will either be recognized
in earnings as offsets to the changes in fair value of related hedged assets,
liabilities and firm commitments or for forecasted transactions, deferred and
recorded as a component of accumulated other comprehensive income until the
hedged transactions occur and are recognized in earnings.

Foreign Currency Exchange Rate Risk

     We purchase printheads from OYO Corporation whereby such purchases are
denominated in Japanese Yen. We routinely attempt to hedge our currency exposure
on these purchases by entering into foreign currency forward contracts with a
bank. The purpose of entering into these forward hedge contracts is to eliminate
variability of cash flows associated with foreign currency exposure risk on
amounts payable in Japanese Yen. Under SFAS No. 133 and related interpretations,
our forward contracts with the bank are considered derivatives. SFAS No. 133,
which is effective for our fiscal year 2001, requires that we record these
foreign currency forward contracts on the balance sheet and mark them to fair
value at each reporting date. Resulting gains and losses are reflected in income
and were not material for our fiscal quarter ended December 31, 2001.

                                       21

<PAGE>


                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)      The following exhibits are filed with this Quarterly Report.

10.1     Second Amendment to Loan Agreement, dated as of January 15, 2002, by
         and between Concord Technologies, LP, Geospace Engineering Resources
         International, LP, Geo Space, LP, OYO Instruments, LP and OYOG
         Operations, LP and Southwest Bank of Texas, N.A.

10.2     Promissory Note A, dated January 15, 2002, made by Concord
         Technologies, LP, Geospace Engineering Resources International, LP, Geo
         Space, LP, OYO Instruments, LP and OYOG Operations, LP payable to the
         order of Southwest Bank of Texas, N.A.

10.3     Promissory Note B, dated January 15, 2002, made by Concord
         Technologies, LP, Geospace Engineering Resources International, LP, Geo
         Space, LP, OYO Instruments, LP and OYOG Operations, LP payable to the
         order of Southwest Bank of Texas, N.A.

(b)      The Company did not file any reports on Form 8-K during the quarter for
         which this report is filed.


                                       22

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       OYO GEOSPACE CORPORATION



Date: February 12, 2002                By: /s/ GARY D. OWENS
                                           -------------------------------------
                                           Gary D. Owens, Chairman of the Board
                                           President and Chief Executive Officer
                                                 (duly authorized officer)




Date: February 12, 2002                By: /s/ THOMAS T. MCENTIRE
                                           -------------------------------------
                                                    Thomas T. McEntire
                                                  Chief Financial Officer
                                               (principal financial officer)


                                       23