OYO Geospace Acquire Thermal Printhead

Business From Graphtec Corporation

HOUSTON, Texas - July 14th, 2004

OYO Geospace (NASDAQ:OYOG) announces the signing of an agreement to purchase the thermal printhead production business of Graphtec Corporation located in Yokohama, Japan for a purchase price of 200 million yen (approximately $1.85 million). The acquisition is expected to close on September 30, 2004, and OYO expects to fund the acquisition from its operating cash flows.

Graphtec's printhead production business annually supplies printheads to OYO Geospace's commercial graphics business segment, with annual sales to OYO averaging approximately 160 million yen in recent years. The business also supplies approximately 100 million yen of printheads to other manufacturers of thermal printers.

It is OYO's expectation to relocate the Yokohama facility to OYO's Houston facility in 2005. The transfer of the business is expected to include engineering and manufacturing staff.

"The image quality of a thermal printer is impacted significantly by the interaction of the printhead with the thermal film. Being able to control the technical characteristics of both allows OYO to create the best possible image for its customers. The combination of OYO's design and manufacturing teams for thermal film, printheads and printers will allow OYO to maximize its focus and product quality for the commercial graphics marketplace," said Mr. Gary D. Owens, OYO Geospace's Chairman, President and CEO. Owens continued, "Graphtec's thermal printhead design team is very talented. For many years, this business provided unique thermal printheads for OYO, and they are the world's only wide-format manufacturer of a continuous single substrate printhead with printing widths up to 54 inches. Our design team is looking forward to combining its skills with those of the Graphtec team, resulting in a powerful thermal imaging solution provider. Upon the consolidation of these two groups, we plan to leverage our experience and technologies into new thermal markets by offering our design and manufacturing services to other manufacturers and distributors of thermal printers."

"This is an exciting time for OYO," states Lance Heap, Vice President of OYO Instruments. "While acquiring the technology to manufacture our own thermal printheads, OYO is investing into a technology that grows and diversifies our business. OYO will continue to manufacture thermal printheads for its own use and others that are currently consuming these products in their printer manufacturing. Additionally, it gives us the opportunity to manage development of future products."

Mr. Heap continues, "Bringing into one fold the development and manufacturing teams of thermal film, thermal printhead, and thermal printers offers OYO the unique opportunity of controlling all attributes of our product offering. This will allow OYO to more affectively impact various segments of the thermal printing marketplace."

This press release includes "forward-looking statements" within the meaning 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 regarding potential future products and markets, our potential future revenues, future financial position, business strategy, future expectations and other plans and objectives for future operations, are forward-looking statements. We believe our forward-looking statements are reasonable. However, they are based on certain assumptions about our industry and our business that may in the future prove to be inaccurate. Important factors that could cause actual results to differ materially from our expectations include the level of seismic exploration worldwide, which is influenced primarily by prevailing prices for oil and gas, the extent to which our new products are accepted in the market, the availability of competitive products that may be more technologically advanced or otherwise preferable to our products, the resolution of the situation in the Middle East and other factors disclosed under the heading "Risk Factors" and elsewhere in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities end Exchange Commission. 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.

Artwork and Photographs available upon request.

For More Information Contact:

Mark Evans
F3 Enterprise Way, Luton, Bedfordshire, LU3 4BU, United Kingdom
Tel: +44 (0) 1582 573980
FAX: +44 (0) 1582 574945
Internet: mevans@oyo.co.uk

Last modified: July 20th, 2004