<PAGE>

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

                      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 June 30, 1999

[ ]  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 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 5,501,359 shares of the Registrant's Common Stock outstanding as of
the close of business on August 6, 1999.


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<PAGE>

                                TABLE OF CONTENTS

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


  Item 1.  Financial Statements                                            3

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

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

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

                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                       REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors
OYO Geospace Corporation and Subsidiaries

  We have reviewed the accompanying consolidated balance sheet of OYO Geospace
Corporation and Subsidiaries as of June 30, 1999, and the related consolidated
statements of operations for the three months and nine months ended June 30,
1999 and 1998, and the consolidated statements of cash flows for the nine months
ended June 30, 1999 and 1998.  These financial statements are the responsibility
of the Company's management.

  We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.

     Based on our review, we are not aware of any material modifications that
should be made to the aforementioned financial statements for them to be in
conformity with generally accepted accounting principles.

     We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of September 30, 1998, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for the year then ended (not presented herein) and, in our report
dated November 17, 1998, we expressed an unqualified opinion on those
consolidated financial statements.  In our opinion, the information set forth in
the accompanying consolidated balance sheet as of September 30, 1998, is fairly
stated, in all material respects, in relation to the consolidated balance sheet
from which it has been derived.



                                              /s/ PricewaterhouseCoopers LLP


Houston, Texas
July 23, 1999

                                       3
<PAGE>

                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>

                         ASSETS                             JUNE 30, 1999    SEPTEMBER 30, 1998
                                                            --------------   -------------------
                                                             (unaudited)
<S>                                                         <C>              <C>
Current assets:
  Cash and cash equivalents..............................         $   868               $ 3,970
  Trade accounts and notes receivable, net...............           8,618                11,946
  Inventories............................................          22,264                19,660
  Deferred income tax....................................           2,114                 1,827
  Prepaid expenses and other.............................           1,957                   783
                                                                  -------               -------

     Total current assets................................          35,821                38,186

Rental equipment, net....................................           1,734                 2,615
Property, plant and equipment, net.......................          17,670                16,763
Goodwill and other intangible assets, net................           5,697                 4,510
Deferred income tax......................................             818                   818
Other assets.............................................             121                   396
                                                                  -------               -------

     Total assets........................................         $61,861               $63,288
                                                                  =======               =======

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt and notes payable....         $   581               $    38
  Accounts payable.......................................           1,228                 5,516
  Accrued expenses and other.............................           2,412                 5,276
  Income tax payable.....................................             385                   506
                                                                  -------               -------

     Total current liabilities...........................           4,606                11,336

Long-term debt...........................................           4,229                   956
Deferred income tax......................................           1,918                 1,613
                                                                  -------               -------

     Total liabilities...................................          10,753                13,905
                                                                  -------               -------

Commitments and contingencies............................               -                     -

Stockholders' equity:
  Preferred stock........................................               -                     -
  Common stock...........................................              55                    54
  Additional paid-in capital.............................          29,898                29,280
  Retained earnings......................................          22,968                22,228
  Accumulated other comprehensive income.................            (522)                 (509)
  Unearned compensation-restricted stock awards..........          (1,291)               (1,670)
                                                                  -------               -------

     Total stockholders' equity..........................          51,108                49,383
                                                                  -------               -------

     Total liabilities and stockholders' equity..........         $61,861               $63,288
                                                                  =======               =======
</TABLE>
   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       4
<PAGE>

                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
               (in thousands, except share and per share amounts)
                                  (unaudited)
<TABLE>
<CAPTION>


                                                         THREE MONTHS ENDED                NINE MONTHS ENDED
                                                   ------------------------------   -------------------------------
                                                   JUNE 30, 1999    JUNE 30, 1998   JUNE 30, 1999    JUNE 30, 1998
                                                   --------------   -------------   --------------   --------------
<S>                                                <C>              <C>             <C>              <C>

Sales                                                 $    9,564       $   18,484      $   32,773       $   50,047
Cost of sales                                              5,773           11,057          19,317           29,161
                                                      ----------       ----------      ----------       ----------

Gross profit                                               3,791            7,427          13,456           20,886

Operating expenses:
  Selling, general and administrative                      2,252            3,086           7,770            8,921
  Research and development                                 1,401            1,833           4,627            3,854
                                                      ----------       ----------      ----------       ----------

     Total operating expenses                              3,653            4,919          12,397           12,775
                                                      ----------       ----------      ----------       ----------

Income from operations                                       138            2,508           1,059            8,111

Other income (expense):
  Interest expense                                           (97)               -            (258)             (28)
  Interest income                                             35               86             134              300
  Other, net                                                 (41)              65             (75)             180
                                                      ----------       ----------      ----------       ----------

     Total other income (expense), net                      (103)             151            (199)             452
                                                      ----------       ----------      ----------       ----------

Income before income tax expense (benefit)                    35            2,659             860            8,563

Income tax expense (benefit)                                (168)             816             120            2,997
                                                      ----------       ----------      ----------       ----------

Net income                                            $      203       $    1,843      $      740       $    5,566
                                                      ==========       ==========      ==========       ==========

Basic earnings per share                                   $0.04            $0.35           $0.14            $1.12
                                                      ==========       ==========      ==========       ==========

Diluted earnings per share                                 $0.04            $0.34           $0.14            $1.10
                                                      ==========       ==========      ==========       ==========

Weighted average shares outstanding - Basic            5,402,642        5,309,790       5,377,929        4,991,798

Weighted average shares outstanding - Diluted          5,468,062        5,438,377       5,441,141        5,082,983

</TABLE>
   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                       5
<PAGE>

                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                 NINE MONTHS      NINE MONTHS
                                                                    ENDED            ENDED
                                                                JUNE 30, 1999    JUNE 30, 1998
                                                                --------------   --------------
<S>                                                             <C>              <C>

Cash flows from operating expenses:
 Net income..................................................         $   740         $  5,566
 Adjustments to reconcile net income to net cash used
   in operating activities:
   Deferred income tax.......................................              37             (874)
   Depreciation and amortization.............................           2,778            1,747
   Amortization of restricted stock awards...................             387              241
   Bad debt expense..........................................             642              109
   Effects of changes in operating assets and liabilities:
   Trade accounts and notes receivable.......................           3,373           (8,100)
   Inventories...............................................            (856)          (2,575)
   Prepaid expenses and other assets.........................            (311)            (503)
   Accounts payable..........................................          (5,081)           3,508
   Accrued expenses and other................................          (3,084)             184
   Income tax payable........................................            (122)            (156)
                                                                      -------         --------

     Net cash used in operating activities...................          (1,497)            (853)
                                                                      -------         --------

Cash flows from investing activities:
 Capital expenditures........................................          (3,049)          (9,426)
 Purchase of business, net of cash acquired..................          (1,259)          (2,688)
 Proceeds from sale of equipment.............................             753              249
                                                                      -------         --------

     Net cash used in investing activities...................          (3,555)         (11,865)
                                                                      -------         --------

Cash flows from financing activities:
 Net proceeds from initial public offering...................               -           14,627
 Proceeds from long-term debt and notes payable..............           9,500            1,000
 Repayment of long-term debt and notes payable...............          (7,577)          (2,407)
                                                                      -------         --------

     Net cash provided by financing activities...............           1,923           13,220
                                                                      -------         --------

Effect of exchange rate changes on cash......................              27              (54)
                                                                      -------         --------

Increase (decrease) in cash and cash equivalents.............          (3,102)             448

Cash and cash equivalents, beginning of period...............           3,970            2,488
                                                                      -------         --------

Cash and cash equivalents, end of period.....................         $   868         $  2,936
                                                                      =======         ========
</TABLE>
       The accompanying notes are an integral part of the consolidated
                             financial statements.

                                       6
<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, 1998, has been derived from the
Company's audited consolidated financial statements at that date. The
consolidated balance sheet at June 30, 1999, and the consolidated statements of
operations for the three months and nine months ended June 30, 1999 and 1998,
and the consolidated statements of cash flows for the nine months ended June 30,
1999 and 1998, 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 and nine months ended June 30, 1999, 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 generally accepted accounting principles
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, 1998.

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:
<TABLE>
<CAPTION>

                                                       THREE MONTHS ENDED               Nine months Ended
                                                  -----------------------------   -----------------------------
                                                  JUNE 30, 1999   JUNE 30, 1998   JUNE 30, 1999   JUNE 30, 1998
                                                  -------------   -------------   -------------   -------------
<S>                                               <C>             <C>             <C>             <C>

  Net earnings available to common
    stockholders (in thousands)                      $      203      $    1,843      $      740      $    5,566
                                                     ==========      ==========      ==========      ==========

  Weighted average common shares outstanding          5,402,642       5,309,790       5,377,929       4,991,798
  Weighted average common share equivalents
    outstanding                                          65,420         128,587          63,212          91,185
                                                     ----------      ----------      ----------      ----------

  Weighted average common shares and common
     share equivalents outstanding                    5,468,062       5,438,377       5,441,141       5,082,983
                                                     ==========      ==========      ==========      ==========

  Basic earnings per common share                    $     0.04      $     0.35      $     0.14      $     1.12
                                                     ==========      ==========      ==========      ==========

  Diluted earnings per common share                  $     0.04      $     0.34      $     0.14      $     1.10
                                                     ==========      ==========      ==========      ==========
</TABLE>

3.   COMPREHENSIVE INCOME

  Effective October 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income", which
establishes standards for reporting and display of comprehensive income and its
components in a full set of financial statements.  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):

                                       7
<PAGE>

                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED                NINE MONTHS ENDED
                                                ------------------------------   -------------------------------
                                                JUNE 30, 1999   JUNE 30, 1998    JUNE 30, 1999    JUNE 30, 1998
                                                -------------   --------------   --------------   --------------
<S>                                             <C>             <C>              <C>              <C>

  Net income                                             $203          $1,843             $740           $5,566

  Foreign currency translation adjustments                 43            (182)             (13)            (284)
                                                         ----          ------             ----           ------

  Total comprehensive income                             $246          $1,661             $727           $5,282
                                                         ====          ======             ====           ======
</TABLE>

4.   INVENTORIES

  Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
                            JUNE 30, 1999   SEPTEMBER 30, 1998
                            -------------   ------------------
<S>                         <C>             <C>

       Finished goods             $ 3,391              $ 3,282
       Work in process              3,302                3,686
       Raw materials               15,571               12,692
                                  -------              -------

                                  $22,264              $19,660
                                  =======              =======
</TABLE>
5.  LONG-TERM DEBT

  In December 1998, the Company borrowed $3.5 million under the terms of a
fifteen year amortizing mortgage loan collateralized by one of the Company's
manufacturing facilities.  The mortgage loan bears interest at a fixed rate of
7.0% per annum.

6.  ACQUISITION

  On November 30, 1998, the Company acquired certain assets of LTI, Inc. and its
Canadian subsidiary (together, "LTI") for approximately $3.7 million, including
the assumption of approximately $1.9 million of long-term debt. In connection
with the acquisition, the Company issued 55,659 shares of its common stock
valued at $0.6 million.  The Company paid approximately $3.2 million of cash in
connection with the acquisition including the repayment of $1.9 million of long-
term debt.  The operations of LTI include the design and manufacture of land and
marine seismic connectors, which have been combined with the Company's existing
seismic connector manufacturing operations.

  The allocation of the purchase price, including related direct costs, for the
acquisition of LTI's net assets and assumption of related debt, was as follows
(in thousands):

                                       8
<PAGE>

                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>

<S>                                         <C>
       Net current assets................   $ 1,909
       Property, plant and equipment.....       483
       Goodwill..........................     1,348
       Long-term debt....................    (1,893)
                                            -------

       Total purchase price allocation...     1,847

       Common stock issued...............       588
                                            -------

       Cash used for acquisition.........   $ 1,259
                                            =======
</TABLE>
  Goodwill is being amortized using the straight-line method over fifteen years.

7.  SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES

  During the nine months ended June 30, 1999, the Company increased its common
stock and additional paid-in capital by approximately $0.6 million through the
issuance of common stock in connection with the acquisition of certain assets of
LTI.

                                       9
<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.

OVERVIEW

  We design and manufacture instruments and equipment used in the acquisition
and processing of seismic data for the oil and gas industry and for the
commercial graphics industry worldwide.

  Demand for our products used in the acquisition and processing of seismic data
is dependent primarily upon the level of worldwide oil and gas exploration
activity.  That activity, in turn, is dependent primarily upon the stability of
prevailing oil and gas prices.  In late 1997 and throughout 1998, oil prices
declined rapidly and, as a result of recent production quotas imposed by OPEC
nations, have subsequently returned to more moderate levels.  The rapid decline
in oil prices throughout 1998 forced most major oil companies to significantly
reduce their exploration budgets in 1999 which, in turn, caused most seismic
contractors (our primary customers) to significantly reduce the number of
operational crews performing seismic related activities.  The crew reduction
resulted in large amounts of under utilized or idle seismic equipment in the
market place.  As a result, we have experienced a decline in demand for most of
our seismic products.  Until the number of operational seismic crews increases
significantly and until idle seismic equipment is again utilized, our seismic
equipment sales may continue to decline.  If oil and gas prices return to lower
levels in future periods, our sales may continue to decline.  However, as it is
impossible to predict future oil and gas price movements with certainty, no
assurance can be given as to the level of future demand for our products.

  As a result of the industry factors referred to above, many of our customers
are experiencing lower revenues and liquidity challenges.  From time to time we
extend credit to certain of our customers, and our credit risks increase when
our customers face a difficult business environment.  As discussed below under
"Liquidity and Capital Resources" and "Forward Looking Statements-Credit Risks
of Customer Financing", current industry conditions could result in additional
bad debt expense in future periods.

  The current industry environment has resulted in, and will continue to result
in, competitive pricing pressures on our land-based seismic products.  We intend
to respond competitively to these market forces in order to maintain, or
improve, our market share.  In addition, the current industry environment has
resulted in, and likely will continue to result in, a greater percentage of our
sales being attributable to products that historically have provided lower gross
margins.  Further, as overall sales decrease, our manufacturing costs per unit
increase as fixed costs are allocated over fewer units.  The combination of
these factors may result in lower gross profit margins in future periods.

RESULTS OF OPERATIONS

  The following table sets forth for the three months and nine months ended June
30, 1999 and 1998, the percentage of certain statement of operations items to
total sales:
<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED JUNE 30,     NINE MONTHS ENDED JUNE 30,
                                                    -----------------------------   ----------------------------
                                                        1999            1998            1999            1998
                                                    -------------   -------------   -------------   ------------
<S>                                                 <C>             <C>             <C>             <C>
Sales                                                      100.0%          100.0%          100.0%         100.0%
Cost of sales                                               60.4%           59.8%           58.9%          58.3%
Gross profit                                                39.6%           40.2%           41.1%          41.7%
Selling, general and administrative                         23.5%           16.7%           23.8%          17.8%
Research and development                                    14.7%            9.9%           14.1%           7.7%
Income from operations                                       1.4%           13.6%            3.2%          16.2%
Other income (expense), net                                (1.0)%            0.8%          (0.6)%           0.9%
Income before income tax expense (benefit)                   0.4%           14.4%            2.6%          17.1%
Income tax expense (benefit)                               (1.7)%            4.4%            0.3%           6.0%
Net income                                                   2.1%           10.0%            2.3%          11.1%
</TABLE>

                                       10
<PAGE>

Fiscal Year 1999 Compared to Fiscal Year 1998.

  Sales for the three months and nine months ended June 30, 1999 decreased $8.9
million, or 48.3%, and $17.3 million, or 34.5%, from the corresponding periods
of the prior year.  The decrease in sales was primarily due to a decline in
product demand and competitive pricing pressures associated with our land-based
seismic products, principally resulting from the decline in worldwide oil and
gas exploration activity.  The decrease in sales resulting from our land-based
seismic products was partially offset by an increase in sales of our products
which are targeted at markets outside the seismic industry.

  Cost of sales for the three months and nine months ended June 30, 1999
decreased $5.3 million, or 47.8%, and $9.8 million, or 33.8%, from the
corresponding period of the prior year. Cost of sales increased as a percentage
of total sales to 60.4% and 58.9% in the three months and nine months ended June
30, 1999 from 59.8% and 58.3% in the corresponding periods of the prior year.
This percentage increase was generally attributable to decreased manufacturing
efficiencies as a result of the lower sales volume and competitive pricing
pressures associated with our land-based seismic products during the three
months and nine months ended June 30, 1999.  This percentage increase was
partially offset by higher gross profit margins on certain of our marine
products.  We could experience significantly lower gross profit margins if our
sales continue to decline or if our sales mix contains a lesser percentage of
marine products, which generally have higher gross profit margins.

  Selling, general and administrative expenses for the three months and nine
months ended June 30, 1999 decreased $0.8 million, or 27.0%, and $1.2 million,
or 12.9%, from the corresponding periods of the prior year.  Such decreases were
the result of our efforts to reduce costs in response to industry conditions.
These cost reductions were partially offset by increases in bad debt expense
resulting from the difficult business environment facing our customers.
Selling, general and administrative expenses increased as a percentage of total
sales to 23.5% and  23.8% in the three months and nine months ended June 30,
1999 from 16.7% and 17.8% in the corresponding periods of the prior year,
primarily reflecting the impact of fixed general and administrative expenses
over a decline in sales.

  Research and development expenses for the three months ended June 30, 1999
decreased $0.4 million, or 23.6%, from the corresponding period of the prior
year, principally resulting from cost reductions and a decrease in the cost of
materials and supplies consumed in product development activities.  Research and
development expenses for the nine months ended June 30, 1999 increased $0.8
million, or 20.1%, from the corresponding period of the prior year, principally
resulting from an overall increase in activities targeted at new product
development.  Research and development expenses increased as a percentage of
total sales to 14.7% and 14.1% in the three months and nine months ended June
30, 1999 from 9.9% and 7.7% in the corresponding periods of the prior year,
reflecting both an increase in expenditures along with a decline in sales.

  Our effective tax rate for the three months ended June 30, 1999 was a benefit
of 480.0% compared to an expense of 30.7% for the corresponding period of the
prior year.  The effective tax rate for the nine months ended June 30, 1999 was
14.0% compared to 35.0% for the corresponding period of the prior.  The results
for the quarter included a nonrecurring tax benefit relating to utilization of
tax credits and other attributes from prior years.  The effective tax rate for
the three and nine months ended June 30, 1999 would be 35.0% if the effect of
the tax credits and other attributes are excluded.

LIQUIDITY AND CAPITAL RESOURCES

  At June 30, 1999, we had $0.9 million in cash and cash equivalents.  For the
nine months ended June 30, 1999, we used $1.5 million of cash in operating
activities principally resulting from an increase in inventories and from a
decrease in accounts payable and accrued expenses.  The decrease in accrued
expenses is primarily attributable to the payment of fiscal 1998 incentive
compensation.  These uses of cash were offset by our net income, adjustments for
noncash expenses and a decrease in trade accounts and notes receivable.

  For the nine months ended June 30, 1999, we used approximately $3.6 million of
cash in investing activities, including $3.0 million in capital expenditures and
$1.3 million associated with the acquisition of certain assets of LTI, Inc. and
its Canadian subsidiary (together, "LTI").  We estimate that total capital
expenditures in fiscal 1999 will not exceed $5.0 million.

                                       11
<PAGE>

  For the nine months ended June 30, 1999, we generated $1.9 million of cash
from financing activities, principally resulting from a $3.5 million increase in
long-term mortgage notes payable and $0.4 million of net borrowings under our
credit facility offset by the repayment of $1.9 million of long-term debt
assumed in connection with the LTI asset acquisition.

  Current industry conditions have increased our credit risks as our customers
face a difficult business environment.  In the nine months ended June 30, 1999,
we increased our bad debt allowance through the addition of approximately $0.6
million of bad debt expense.  Although we believe this allowance is a fair
representation of our credit risk with respect to outstanding receivables, we
can not assure you that this allowance will be adequate to cover every potential
bad debt exposure.  In addition, current industry conditions could result in
additional bad debt expense in future periods.

  We have a working capital line of credit, under which we are able to borrow up
to $10.0 million.  This credit facility expires in June 2000 and is
collateralized by our accounts receivable and inventory. The credit facility
prohibits us from paying cash dividends on our common stock, limits our capital
expenditures, limits our additional indebtedness to $7.5 million, requires us to
maintain certain financial ratios and contains other covenants customary in
transactions of this type.  There was $0.4 million outstanding at June 30, 1999
under the credit facility, leaving borrowing availability at $9.6 million.  The
credit facility will expire in less than one year; therefore, the $0.4 million
outstanding has been classified as a current liability.

  We obtained a $3.5 million mortgage loan in December 1998 collateralized by
one of our manufacturing facilities.  This mortgage loan bears interest at 7.0%
per annum and matures in December 2013.

  We believe that the combination of cash flow from operations and borrowing
availability under our credit facility should provide us with sufficient capital
resources and liquidity to fund our planned operations through fiscal 1999.
However, there can be no assurance that these 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.

ACQUISITION

  On November 30, 1998, we acquired substantially all of the assets of LTI for
approximately $3.7 million including the assumption of approximately $1.9
million of long-term debt.  In connection with that acquisition, we issued
55,659 shares of our common stock valued at $0.6 million.  We paid approximately
$3.2 million of cash in connection with the acquisition including the repayment
of $1.9 million of long-term debt.  The operations of LTI include the design and
manufacture of land and marine seismic connectors, which have been combined with
our existing seismic connector manufacturing operations.

RECENT ACCOUNTING PRONOUNCEMENTS

  In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
instruments and hedging activities.  It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. SFAS 133 is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000 and is not
expected to have a material impact on the Company's financial statements.

                                       12
<PAGE>

YEAR 2000 ISSUES

  The "Year 2000 problem" is the result of computer programs being written using
two digits rather than four to define the applicable year.  Any programs that
have time-sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000.  This could result in a major system failure or
miscalculations in affected computer and operational systems.

  State of Readiness.  We have substantially completed a program of upgrading
our internal accounting and manufacturing software (information technology
systems) to make those systems more efficient and compatible company-wide (the
"Upgrade"). The suppliers of substantially all of the software we use for
financial purposes following the Upgrade have informed us that all of those
suppliers' software is Year 2000 compliant.  We are in the process of testing
our hardware and software systems for potential Year 2000 problems.  The testing
and necessary enhancements should be completed prior to September 30, 1999.

  Further, we are in the process of reviewing the operational computers built
into certain of our manufacturing equipment, such as milling machines and lathes
(non-information technology), to determine whether or not that equipment may be
effected by the Year 2000 problem.  We have received assurances from the
manufacturers of this equipment that its operation will not be effected by the
Year 2000.

  We have solicited suppliers and vendors with whom we have a material
relationship to determine the readiness of those suppliers and vendors for the
Year 2000.  Most, but not all, of those vendors have responded and indicated
that they do not expect to be materially adversely impacted by Year 2000
problems.

  Expected Costs and Material Risks.  Through June 30, 1999, we have incurred
approximately $50,000 in direct expenses related to investigating our Year 2000
readiness and Year 2000 problems.  We do not maintain a record of internal costs
of our personnel in investigating Year 2000 issues.  We do not expect that we
will incur material additional expenditures in discovering and addressing any
Year 2000 problems we may have.  However, our review of certain of our
manufacturing equipment is ongoing and could result in unexpected expense to
repair Year 2000 problems or upgrade machinery.

  In addition, the Year 2000 problem may impact customers, suppliers, shippers
and other entities with which we transact business, and we cannot predict the
effect of the Year 2000 problem on those entities or how those entities' Year
2000 problems may indirectly effect us.

  Further, our customers use our seismic products in conjunction with data
acquisition systems not manufactured by us.  If those systems were to have Year
2000 problems, it is possible that some of our customers would be temporarily
unable to engage in seismic data acquisition, which could result in a decrease
in demand for our products.

  The sole supplier of the printheads we use in our wide format thermal plotters
has assured us of their readiness for the Year 2000.  However, our reliance on
this sole supplier creates some risk of an interruption in the supply of these
parts if this supplier or its shippers have unresolved Year 2000 issues.

  Contingency Plan.  With respect to the risks associated with the supplier of
printheads for our wide format thermal plotters, we believe we have an adequate
supply of inventory of most of these parts to withstand an interruption in the
supply of these parts for two to three months.  However, we do not have an
excess inventory of all printheads used in our widest-format thermal plotter,
and any interruption in the supply of those parts could result in lost revenue
from our inability to manufacture and fill orders for those plotters.  Further,
we cannot assure that any interruption in the supply of such parts, if it were
to occur, would be temporary.  Excluding printheads for our wide format thermal
printers, we typically have alternative suppliers available for the necessary
parts and supplies.  We have some "off-the shelf" software such as computer-
assisted drafting and design products that we believe could be easily purchased
and installed if potential problems arise.

  The foregoing statements are intended to be and are hereby designated "Year
2000 Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Act.

                                       13
<PAGE>

FORWARD LOOKING STATEMENTS

  This Form 10-Q includes "forward-looking" statements which are subject to the
"safe harbor" provisions of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  All statements other than
statements of historical fact included herein, including statements about
potential future products and markets, our future financial position, business
strategy and other plans and objectives for future operations, are forward-
looking statements.  Although we believe the expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to have been correct, and actual results may differ
materially from such forward-looking statements. Important factors that could
cause actual results to differ materially from our expectations are disclosed
below and in our Annual Report on Form 10-K for the year ended September 30,
1998.  Further, all written and verbal forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety
by such factors.

VOLATILITY OF DEMAND FOR OUR PRODUCTS; CURRENT INDUSTRY CONDITIONS

  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, the price and availability of alternative fuels,
political conditions in the Middle East and other significant oil-producing
regions, the foreign supply of oil and gas, the price of foreign imports and
overall economic conditions.

  Oil and gas prices have recently recovered from significantly lower levels.
The recent volatility in oil and gas prices resulted in a reduction of worldwide
oil and gas exploration activities which, in turn, has decreased demand for our
products.  Continued low demand for our products could materially and adversely
affect our results of operations and liquidity.

CREDIT RISKS OF CUSTOMER FINANCING

  We have in the past incurred significant write-offs in our accounts
receivables due to customer credit problems. We are subject to credit risks as
to certain of our customers, as 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 current industry conditions, some of
our customers may experience liquidity difficulties, which increases those
credit risks.  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.

RELIANCE ON SINGLE SUPPLIER AS TO ONE PRODUCT AND ON OTHER VENDORS

  Many of our products incorporate products or technology supplied by third
parties.  To the extent we experience any significant supply or quality control
problems with our vendors, including those associated with the Year 2000 problem
(see "Year 2000 Issues"), those problems could adversely effect our ability to
meet future production and sales commitments.

  A Japanese manufacturer unaffiliated with us is currently the only supplier of
wide format printheads that we use in our wide format thermal plotters.  If this
supplier were to discontinue supplying these printheads or was unable or
unwilling to supply printheads in sufficient quantity to meet our requirements,
our ability to compete in the wide format thermal plotting market could be
severely impeded, which could adversely affect our financial performance.  In
addition, we pay for the printheads in Japanese yen.  Accordingly, we are at
risk that, due to currency fluctuations, the cost of the printheads to us could
increase.

                                       14
<PAGE>

LIMITED MARKET AND CUSTOMER CONCENTRATION

  We market our products to seismic contractors and large, independent and
government-owned oil and gas companies. We estimate, based on published industry
sources, that 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). 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.

RAPID TECHNOLOGICAL EVOLUTION AND PRODUCT OBSOLESCENCE

  Seismic instruments and equipment are constantly undergoing rapid
technological improvement. Our future success depends on our ability to continue
to:
 .  improve our existing product lines;
 .  address the increasingly sophisticated needs of our customers;
 .  maintain a reputation for technological leadership;
 .  maintain market acceptance;
 .  anticipate changes in technology and industry standards; and
 .  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.

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, one of our competitors currently
offers a broader range of seismic instruments and equipment for sale and markets
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.

                                       15
<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  First Amendment to Business Loan Agreement, dated March 18, 1999, made by
      and between the Company and Bank of America.

15.1  Awareness Letter of Independent Accountants

27.1  Financial Data Schedule


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

                                   SIGNATURES


Pursuant to the requirements of the Securities 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:  August 6, 1999                  By:     /s/ Gary D. Owens
                                          -------------------------------------
                                          Gary D. Owens, Chairman of the Board
                                          President and Chief Executive Officer
                                               (duly authorized officer)





Date:  August 6, 1999                  By:      /s/ Thomas T. McEntire
                                          --------------------------------------
                                                   Thomas T. McEntire
                                                 Chief Financial Officer
                                              (principal financial officer)