<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 March 31, 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 5,499,359 shares of the Registrant's Common Stock outstanding as of
the close of business on May 14, 1999.
<PAGE>
 
                                TABLE OF CONTENTS

 
PART I.  FINANCIAL INFORMATION                                          Page
                                                                        Number
                                                                        ------
 
  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 4.  Submission of Matters to a Vote of Security Holders             16
 
  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 March 31, 1999, and the related consolidated
statements of operations for the three months and six months ended March 31,
1999 and 1998, and the consolidated statements of cash flows for the six months
ended March 31, 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
April 28, 1999

                                       3
<PAGE>
 
                   OYO GEOSPACE CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>
 
                         ASSETS                             MARCH 31, 1999    SEPTEMBER 30, 1998
                                                            ---------------   ------------------
                                                              (unaudited)
<S>                                                         <C>               <C>
Current assets:
  Cash and cash equivalents..............................          $ 1,438               $ 3,970
  Trade accounts and notes receivable, net...............            8,625                11,946
  Inventories............................................           24,156                19,660
  Deferred income tax....................................            2,027                 1,827
  Prepaid expenses and other.............................            1,580                   783
                                                                   -------               -------
 
     Total current assets................................           37,826                38,186
 
Rental equipment, net....................................            1,657                 2,615
Property, plant and equipment, net.......................           18,321                16,763
Goodwill and other intangible assets, net................            5,788                 4,510
Deferred income tax......................................              818                   818
Other assets.............................................              285                   396
                                                                   -------               -------
     Total assets........................................          $64,695               $63,288
                                                                   =======               =======
 
                  LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
  Current portion of long-term debt and notes payable....          $   175               $    38
  Accounts payable.......................................            3,557                 5,516
  Accrued expenses and other.............................            3,068                 5,276
  Income tax payable.....................................              315                   506
                                                                   -------               -------
 
     Total current liabilities...........................            7,115                11,336
 
Long-term debt...........................................            5,278                   956
Deferred income tax......................................            1,550                 1,613
                                                                   -------               -------
 
     Total liabilities...................................           13,943                13,905
                                                                   -------               -------
 
Commitments and contingencies............................                -                     -
 
Stockholders' equity:
  Preferred stock........................................                -                     -
  Common stock...........................................               55                    54
  Additional paid-in capital.............................           29,898                29,280
  Retained earnings......................................           22,765                22,228
  Accumulated other comprehensive income.................             (565)                 (509)
  Unearned compensation-restricted stock awards..........           (1,401)               (1,670)
                                                                   -------               -------
 
     Total stockholders' equity..........................           50,752                49,383
                                                                   -------               -------
 
     Total liabilities and stockholders' equity..........          $64,695               $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                   Six Months Ended
                                                   ---------------------------------   ---------------------------------
                                                   March 31, 1999     March 31, 1998    March 31, 1999    March 31, 1998
                                                   ---------------   ---------------   ---------------   ---------------
<S>                                                <C>               <C>               <C>               <C>
Sales                                                  $   12,133        $   19,028        $   23,209        $   31,563
Cost of sales                                               6,792            10,577            13,544            18,104
                                                       ----------        ----------        ----------        ----------

Gross profit                                                5,341             8,451             9,665            13,459
 
Operating expenses:
  Selling, general and administrative                       3,001             3,180             5,516             5,835
  Research and development                                  1,569             1,164             3,227             2,021
                                                       ----------        ----------        ----------        ----------
 
     Total operating expenses                               4,570             4,344             8,743             7,856
                                                       ----------        ----------        ----------        ----------
 
Income from operations                                        771             4,107               922             5,603
 
Other income (expense):
  Interest expense                                           (110)               (6)             (161)              (28)
  Interest income                                              69               139                99               214
  Other, net                                                  (81)               94               (34)              115
                                                       ----------        ----------        ----------        ----------
 
     Total other income (expense), net                       (122)              227               (96)              301
                                                       ----------        ----------        ----------        ----------
 
Income before provision for income taxes                      649             4,334               826             5,904
 
Provision for income taxes                                    227             1,584               289             2,181
                                                       ----------        ----------        ----------        ----------
 
Net income                                             $      422        $    2,750        $      537        $    3,723
                                                       ==========        ==========        ==========        ==========
 
Basic earnings per share                               $     0.08        $     0.52        $     0.10        $     0.77
                                                       ==========        ==========        ==========        ==========
 
Diluted earnings per share                              $    0.08        $     0.51        $     0.10        $     0.76
                                                       ==========        ==========        ==========        ==========
 
Weighted average shares outstanding - Basic             5,394,859         5,250,776         5,365,572         4,832,801
 
Weighted average shares outstanding - Diluted           5,458,050         5,341,348         5,428,620         4,887,301
 
</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>
 
                                                                  Six Months        Six Months
                                                                     Ended             Ended
                                                                March 31, 1999     March 31, 1998
                                                                ---------------   ---------------
<S>                                                             <C>               <C>
 
Cash flows from operating expenses:
 Net income..................................................          $   537           $ 3,723
 Adjustments to reconcile net income to net cash used
   in operating activities:
   Deferred income tax.......................................             (260)             (451)
   Depreciation and amortization.............................            2,081             1,072
   Amortization of restricted stock awards...................              277               120
   Bad debt expense..........................................              736                41
   Effects of changes in operating assets and liabilities:
   Trade accounts and notes receivable.......................            3,249            (3,432)
   Inventories...............................................           (2,748)           (1,423)
   Prepaid expenses and other assets.........................               65              (213)
   Accounts payable..........................................           (2,753)            1,423
   Accrued expenses and other................................           (2,652)             (129)
   Income tax payable........................................             (192)             (606)
                                                                       -------           -------
 
     Net cash provided by (used in) operating activities.....           (1,660)              125
                                                                       -------           -------
 
Cash flows from investing activities:
 Capital expenditures........................................           (2,848)           (5,428)
 Purchase of business, net of cash acquired..................           (1,259)           (2,101)
 Proceeds from sale of equipment.............................              686               130
                                                                       -------           -------
 
     Net cash used in investing activities...................           (3,421)           (7,399)
                                                                       -------           -------
 
Cash flows from financing activities:
 Net proceeds from initial public offering...................               --            14,627
 Increase in long-term debt and notes payable................            9,500                --
 Decrease in long-term debt and notes payable................           (6,934)           (2,407)
                                                                       -------           -------
 
     Net cash provided by financing activities...............            2,566            12,220
                                                                       -------           -------
 
Effect of exchange rate changes on cash......................              (17)              (49)
                                                                       -------           -------
 
Increase (decrease) in cash and cash equivalents.............           (2,532)            4,897
 
Cash and cash equivalents, beginning of period...............            3,970             2,488
                                                                       -------           -------
 
Cash and cash equivalents, end of period.....................          $ 1,438           $ 7,385
                                                                       =======           =======
</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 March 31, 1999, and the consolidated statements of
operations for the three months and six months ended March 31, 1999 and 1998,
and the consolidated statements of cash flows for the six months ended March 31,
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 six months ended March 31, 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                 Six Months Ended
                                                  -------------------------------   -------------------------------
                                                  March 31, 1999   March 31, 1998    March 31, 1999  March 31, 1998
                                                  --------------   --------------   ---------------  --------------
<S>                                               <C>              <C>              <C>              <C>
  Net earnings available to common
    stockholders (in thousands)                       $      422       $    2,750       $      537       $    3,723
                                                      ==========       ==========       ==========       ==========
 
  Weighted average common shares outstanding           5,394,859        5,250,776        5,365,572        4,832,801
  Weighted average common share equivalents
    outstanding                                           63,191           90,572           63,048           54,500
                                                      ----------       ----------       ----------       ----------
 
  Weighted average common shares and common
     share equivalents outstanding                     5,458,050        5,341,348        5,428,620        4,887,301
                                                      ==========       ==========       ==========       ==========
 
  Basic earnings per common share                     $     0.08       $     0.52       $     0.10       $     0.77
                                                      ==========       ==========       ==========       ==========
 
  Diluted earnings per common share                   $     0.08       $     0.51       $     0.10       $     0.76
                                                      ==========       ==========       ==========       ==========
</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                  Six Months Ended
                                                --------------------------------   ---------------------------------
                                                 March 31, 1999   March 31, 1998    March 31, 1999    March 31, 1998
                                                ---------------   --------------   ---------------   ---------------
<S>                                             <C>               <C>              <C>               <C>
  Net income                                              $422            $2,750             $537            $3,723
 
  Foreign currency translation adjustments                 (24)               78              (56)             (102)
                                                          ----            ------             ----            ------
 
  Total comprehensive income                              $398            $2,828             $481            $3,621
                                                          ====            ======             ====            ======
</TABLE>

4.  INVENTORIES

  Inventories consisted of the following (in thousands):

                              MARCH 31, 1999   SEPTEMBER 30, 1998
                              --------------   ------------------
 
       Finished goods              $ 3,943              $ 3,282
       Work in process               4,018                3,686
       Raw materials                16,195               12,692
                                   -------              -------
 
                                   $24,156              $19,660
                                   =======              =======

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>
 
       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
                                            =======

  Goodwill is being amortized using the straight-line method over fifteen years.

7.     SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES

  During the six months ended March 31, 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 prevailing oil
and gas prices.  Historically, the markets for oil and gas have been volatile,
and such markets are likely to continue to be volatile.  Oil and gas prices have
fallen sharply in recent quarters and continue to be depressed.  This has
resulted in a decline for our land-based seismic products.  If commodity prices
remain low 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.

  Further, the recent decline in oil and gas prices has resulted in decreased
seismic exploration budgets throughout the industry.  As a result, 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 expenses 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 six months ended March
31, 1999 and 1998, the percentage of certain statement of operations items to
total sales:

<TABLE>
<CAPTION>
 
                                               Three Months Ended March 31,     Six Months Ended March 31,
                                              ------------------------------   ----------------------------
                                                   1999            1998            1999            1998
                                              --------------   -------------   -------------   ------------
<S>                                           <C>              <C>             <C>             <C>
Sales                                                 100.0%          100.0%          100.0%         100.0%
Cost of sales                                          56.0%           55.6%           58.4%          57.4%
Gross profit                                           44.0%           44.4%           41.6%          42.6%
Selling, general and administrative                    24.7%           16.7%           23.7%          18.4%
Research and development                               12.9%            6.1%           13.9%           6.4%
Income from operations                                  6.4%           21.6%            4.0%          17.8%
Other income (expense), net                           (1.0)%            1.2%          (0.4)%           0.9%
Income before provision for income taxes                5.4%           22.8%            3.6%          18.7%
Provision for income taxes                              1.9%            8.3%            1.3%           6.9%
Net income                                              3.5%           14.5%            2.3%          11.8%
 
</TABLE>

                                      10
<PAGE>
 
Fiscal Year 1999 Compared to Fiscal Year 1998.

  Sales for the three months and six months ended March 31, 1999 decreased $6.9
million, or 36.2%, and $8.4 million, or 26.5%, 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.

  Cost of sales for the three months and six months ended March 31, 1999
decreased $3.8 million, or 35.8%, and $4.6 million, or 25.2%, from the
corresponding period of the prior year. Cost of sales increased as a percentage
of total sales to 56.0% and 58.4% in the three months and six months ended March
31, 1999 from 55.6% and 57.4% 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 six months ended March 31, 1999.  This percentage increase was
partially offset by higher gross profit margins on certain of our marine
products.  Should sales continue to decline in future quarters, we could
experience lower gross profit margins.

  Selling, general and administrative expenses for the three months and six
months ended March 31, 1999 decreased $0.2 million, or 5.6%, and $0.3 million,
or 5.5%, from the corresponding periods of the prior year.  Selling, general and
administrative expenses increased as a percentage of total sales to 24.7% and
23.7% in the three months and six months ended March 31, 1999 from 16.7% and
18.4% in the corresponding periods of the prior year, primarily reflecting the
impact of fixed operating expenses over a decline in sales.

  Research and development expenses for the three months and six months ended
March 31, 1999 increased $0.4 million, or 34.8%, and $1.2 million, or 59.7%,
from the corresponding periods of the prior year, principally resulting from an
increase in expenditures targeted at new product development. Research and
development expenses increased as a percentage of total sales to 12.9% and 13.9%
in the three months and six months ended March 31, 1999 from 6.1% and 6.4% 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 and six months ended March 31,
1999 was 35.0% compared to 36.5% and 36.9% for the three months and six months
ended March 31, 1998.  The decrease in the effective tax rate is principally the
result of the implementation of certain tax strategies during fiscal year 1998
designed to reduce domestic and foreign income tax expense.

LIQUIDITY AND CAPITAL RESOURCES

  At March 31, 1999, we had $1.4 million in cash and cash equivalents.  For the
six months ended March 31, 1999, we used $1.7 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 a decrease in trade accounts
and notes receivable.

  For the six months ended March 31, 1999, we used approximately $3.4 million of
cash in investing activities, including $2.8 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 be $5.0 million.

  For the six months ended March 31, 1999, we generated $2.6 million of cash
from financing activities, principally resulting from a $3.5 million increase in
long-term mortgage notes payable and $1.0 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.

  The recent decline in oil and gas prices has increased our credit risks as our
customers face a difficult business environment.  In the six months ended March
31, 1999, we increased our bad debt reserve through the addition of
approximately $0.7 million of bad debt expense.  Although we believe this
reserve is a fair representation of our 

                                      11
<PAGE>
 
credit risk with respect to outstanding receivables, we can not assure you that
this reserve will be adequate to cover every potential bad debt exposure. In
addition, current industry conditions could result in additional bad debt
expenses 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 $1.0 million outstanding at March 31, 1999
under the credit facility, leaving borrowing availability at $9.0 million.

  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 through fiscal 1999 or in the
long-term, and we may be required to issue additional debt or equity securities
in the future to meet our capital requirements.

  Inflation has not had a significant impact on our operations to date.

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, 1999 and is not
expected to have a material impact on the Company's financial statements.

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 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.

  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 most 

                                      12
<PAGE>
 
of this equipment that its operation will not be effected by the Year 2000. We
expect this review will be completed before the end of fiscal 1999.

  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 March 31, 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.

  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.

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.

                                      13
<PAGE>
 
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.

  Currently, oil and gas prices are significantly lower than they have been in
recent history, which 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.  We
believe we maintain an adequate inventory of most of these printheads.  However,
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.

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.

                                      14
<PAGE>
 
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 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     On March 1, 1999, we held our Annual Meeting of Stockholders (the
"Meeting").  At the Meeting, our stockholders approved an amendment to our 1997
Key Employee Stock Option Plan to increase the number of shares available under
the Plan from 425,000 to 625,000.  A total of 5,103,248 shares voted for, 11,714
shares voted against and 1,498 shares abstained from voting on this amendment.
There were no broker non-votes.

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

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

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.

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<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:  May 14, 1999                     By: /s/ Gary D. Owens
                                           ------------------------------
                                              Gary D. Owens, Chairman of 
                                             the Board President and Chief
                                                    Executive Officer
                                                (duly authorized officer)
                                        



Date:  May 14, 1999                     By:  /s/ Thomas T. McEntire
                                           ------------------------------
                                                 Thomas T. McEntire
                                               Chief Financial Officer
                                            (principal financial officer)

                                      17