UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

Commission File Number: 0-28316

Trico Marine Services, Inc.

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (985) 851-3833

Securities registered pursuant to Section 12(b) of the Act:

None.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value per share
Preferred Stock Purchase Rights

            The aggregate market value of the voting stock held by non-affiliates of the Registrant at February 28, 2002 was approximately $196,273,000 .

            The number of shares of the Registrant's common stock, $0.01 par value per share, outstanding at February 28, 2002 was 36,254,335.

DOCUMENTS INCORPORATED BY REFERENCE

            We are a leading provider of marine support vessels to the oil and gas industry primarily in the U.S. Gulf of Mexico, the North Sea and Latin America. The services provided by our diversified fleet include the transportation of drilling materials, supplies and crews to drilling rigs and other offshore facilities; towing drilling rigs and equipment from one location to another; and support for the construction, installation and maintenance of offshore facilities. Using our larger and more sophisticated vessels, we also provide support for deepwater ROV (remotely operated vehicle) and well stimulation and maintenance services. We currently have a total fleet of 85 vessels, including 48 supply vessels, 11 large capacity platform supply vessels, seven large anchor handling, towing and supply vessels, 10 crew boats and nine line-handling vessels. We also have five vessels under construction that we expect to place into service during 2002 and the first quarter of 2003. Two are large capacity platform supply vessels being built in Norway and three are large crew boats being built at a U.S. Gulf Coast shipyard.

            Demand for our services is primarily affected by expenditures for oil and gas exploration, development and production in the markets where we operate. We experienced increases in our vessel day rates and utilization from late 1999 through the first half of 2001. This increase was primarily due to the increased drilling activity and a reduction in the number of vessels in our markets, which was partially caused by the stacking or retirement of older vessels by some of our competitors and us. In the third quarter of 2001, we began to experience decreases in day rates and lower utilization for our Gulf fleet due to decreased oil and gas prices and the resulting decrease in offshore drilling activity in the Gulf.

            Typically, marine support vessels are priced to the customer on the basis of a daily rate, or "day rate," regardless of whether a charter contract is for several days or several years. The average vessel day rate of a vessel, or class of vessel, is calculated by dividing its revenues by the total number of days such vessel was under contract during a given period. A vessel's utilization is the number of days in a period the vessel is under contract as a percentage of the total number of days in such period. In addition to those factors which affect vessel demand, such as oil and gas prices and drilling activity, a vessel's day rate and utilization are also determined by factors such as vessel size, capacity, horse power, age and whether a vessel has sophisticated positioning and fire-fighting systems.

            Marine support vessels are used primarily to transport equipment, supplies, and personnel to drilling rigs, to support the construction and operation of offshore oil and gas production platforms, as work platforms for offshore construction and platform maintenance and for towing services for drilling rigs and equipment. The principal types of vessels that we operate can be summarized as follows:

            We operate primarily in the Gulf, the North Sea, offshore Brazil, Trinidad and, most recently, West Africa. Financial data, including revenues, expenses, and assets by market area/operating segment are detailed in note 18 of our consolidated financial statements. Our primary market areas are summarized below.

            Gulf of Mexico. Our vessels support exploration and development activities in the Gulf as well as existing oil and gas production platforms. Demand for our supply boats is primarily impacted by the level of offshore oil and gas drilling activity. Drilling activity is influenced by a number of factors, primarily including oil and gas prices and drilling budgets of oil and gas companies. As a result, utilization and day rates traditionally have had a close relationship to oil and gas prices and drilling activity. Day rates and utilization rates in the Gulf have traditionally been volatile as a result of fluctuations in oil and gas prices and drilling activity.

            We experienced increases in our vessel day rates and fleet utilization in the Gulf from late 1999 through the first half of 2001. This was primarily due to increased drilling activity and a reduction in the number of vessels caused by the stacking or retirement of older vessels by some of our competitors and us. The utilization of our Gulf fleet also improved during that period because we completed all vessel upgrade projects and had reduced downtime from vessel dry-dockings. In the third quarter of 2001, we began to experience decreases in day rates and lower utilization for our Gulf fleet due to decreased oil and gas prices and the resulting decrease in offshore drilling activity in the Gulf.

            As of February 28, 2002, we had 45 supply boats and 9 crew boats operating in the Gulf.

            North Sea. The North Sea market area consists of offshore Norway, Denmark, the Netherlands, Germany, Great Britain and Ireland, and the area west of the Shetlands Islands. Historically, it has been the most demanding of all offshore areas due to harsh weather, erratic sea conditions, significant water depth and long sailing distances. Exploration and production operators in the North Sea are typically large and well capitalized entities (such as major oil companies and state owned oil companies), in large part because of the significant financial commitment required in this market area. In comparison to the Gulf, projects in the region tend to be fewer in number, but larger in scope, with longer planning horizons and more long-term contracts. Consequently, vessel demand in the North Sea is generally slower to react to changes in energy prices and less susceptible to abrupt swings than vessel demand in other regions. Activity in the North Sea generally is at its highest level during the months from April to September and at its lowest level during November to February.

            As of February 28, 2002, we had ten PSVs and seven AHTSs in the North Sea.

            Brazil. The primary customer in the Brazilian market is Petrobras, the Brazilian national oil company. Since 1999, Brazil has permitted foreign oil companies to participate in offshore oil and gas drilling and production. In 2001, we also performed work in Brazil for two foreign oil companies utilizing vessels which had been mobilized from the North Sea and the Gulf. Offshore exploration and production activity in Brazil is concentrated in the deep water Campos Basin, located 60 to 100 miles from the Brazilian coast. A number of fields in the Campos Basin are being produced using floating production facilities. In addition, exploration activity has expanded south to the Santos Basin approximately 100 miles southeast of the city of Rio de Janeiro and to the northeastern and northern continental shelves.

            As of February 28, 2002, we had nine line-handling vessels, our SWATH crew boat and two supply boats operating offshore Brazil. Eleven of our vessels operating offshore Brazil are under charters with Petrobras.

            Existing Fleet. The following table sets forth information regarding the vessels owned by us as of February 28, 2002:

            As of February 28, 2002, the average age of our vessels was 16 years. We believe that our upgrade and refurbishment program, completed in the first half of 1999, has significantly extended the service life of most of our Gulf supply boats.

            Vessel Maintenance. We incur routine dry-dock inspection, maintenance and repair costs under U.S. Coast Guard Regulations and to maintain American Bureau of Shipping certification for our vessels. In addition to complying with these requirements, we also have our own comprehensive vessel maintenance program that we believe helps us to continue to provide our customers with well maintained, reliable vessels. We incurred approximately $11.3 million, $7.7 million and $16.4 million in dry-docking and marine inspection costs for the years ended December 31, 2001, 2000 and 1999, respectively.

            We support our operations in the Gulf from a 62.5 acre docking, maintenance and office facility in Houma, Louisiana located on the intracoastal waterway that provides direct access to the Gulf. We also lease a 3,600 square foot office in Houston, Texas. Our North Sea operations are supported from leased offices in Fosnaväg, Norway, Kristiansand, Norway and Aberdeen, Scotland. Our Brazilian operations are supported from a maintenance and administrative facility in Macae, Brazil and a sales and administrative office in Rio de Janeiro.

            We have entered into master service agreements with substantially all of the major and independent oil companies operating in the Gulf. Most of our charters in the Gulf are short-term contracts (60 to 90 days) or spot contracts (less than 30 days) and are cancelable upon short notice. Because of frequent renewals, the stated duration of charters frequently has little relationship to the actual time vessels are chartered to a particular customer.

            Our principal customers in the North Sea are major integrated oil companies and large independent oil and gas companies as well as foreign government owned or controlled companies that provide logistic, construction and other services to such oil companies and foreign government organizations. The charters with these customers are industry standard time charters. Current charters in the North Sea include periods ranging from spot contracts of just a few days or months to long-term contracts of several years. Seven of our North Sea vessels are on long-term contracts (at least one year in duration). Any charterer can, however, terminate its contract during the period upon payment of agreed compensation. Our remaining North Sea vessels are chartered on a short-term basis.

            Charters are obtained through competitive bidding or, with certain customers, through negotiation. The percentage of revenues attributable to an individual customer varies from time to time, depending on the level of exploration and development activities undertaken by a particular customer, the availability and suitability of our vessels for the customer's projects, and other factors, many of which are beyond our control. For the years ended December 31, 1999 and 2000, approximately 19% and 10%, respectively, of our total revenues were received from Statoil ASA. For 2001, 16% of our total revenues were received from Exxon Mobil Corporation or its subsidiaries on a worldwide basis.

            Our business is highly competitive. Competition in the marine support services industry primarily involves factors such as price, service and reputation of vessel operators and crews, and availability and quality of vessels of the type and size needed by the customer. Although a few of our competitors are larger and have greater financial resources and international experience than us, we believe that our operating capabilities and reputation enable us to compete effectively with other fleets in the market areas in which we operate.

            Our operations are significantly affected by federal, state and local regulation, as well as certain international conventions, private industry organizations and laws and regulations in jurisdictions where our vessels operate and are registered. These regulations govern worker health and safety and the manning, construction and operation of vessels. For example, we are subject to the jurisdiction of the U.S. Coast Guard, the National Transportation Safety Board, the U.S. Customs Service and the Maritime Administration of the U.S. Department of Transportation, as well as private industry organizations such as the American Bureau of Shipping. These organizations establish safety criteria and are authorized to investigate vessel accidents and recommend improved safety standards.

            The U.S. Coast Guard regulates and enforces various aspects of marine offshore vessel operations, such as classification, certification, routes, dry-docking intervals, manning requirements, tonnage requirements and restrictions, hull and shafting requirements and vessel documentation. Coast Guard regulations require that each of our vessels be dry-docked for inspection at least twice within a five-year period. We believe we are in compliance in all material respects with all Coast Guard regulations.

            Under the Merchant Marine Act of 1920, as amended, the privilege of transporting merchandise or passengers in domestic waters extends only to vessels that are owned by U.S. citizens and are built in and registered under the laws of the U.S. A corporation is not considered a U.S. citizen unless, among other things, no more than 25% of any class of its voting securities are owned by non-U.S. citizens. If we should fail to comply with these requirements, during the period of such noncompliance we would not be permitted to continue operating our vessels in coastwise trade.

            Our operations are also subject to a variety of federal and state statutes and regulations regarding the discharge of materials into the environment or otherwise relating to environmental protection. Included among these statutes are the Clean Water Act, the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), the Outer Continental Shelf Lands Act ("OCSLA") and the Oil Pollution Act of 1990 ("OPA").

            The Clean Water Act imposes strict controls on the discharge of pollutants into the navigable waters of the U.S., and imposes potential liability for the costs of remediating releases of petroleum and other substances. The Clean Water Act provides for civil, criminal and administrative penalties for any unauthorized discharge of oil and other hazardous substances in reportable quantities and imposes substantial potential liability for the costs of removal and remediation. Many states have laws that are analogous to the Clean Water Act and also require remediation of accidental releases of petroleum in reportable quantities. Our vessels routinely transport diesel fuel to offshore rigs and platforms, and also carry diesel fuel for their own use. Our supply boats transport bulk chemical materials used in drilling activities, and also transport liquid mud which contains oil and oil by-products. All offshore companies operating in the U.S. are required to have vessel response plans to deal with potential oil spills.

            RCRA regulates the generation, transportation, storage, treatment and disposal of onshore hazardous and non-hazardous wastes, and requires states to develop programs to ensure the safe disposal of wastes. We generate non-hazardous wastes and small quantities of hazardous wastes in connection with routine operations. We believe that all of the wastes that we generate are handled in compliance with RCRA and analogous state statutes.

            CERCLA contains provisions dealing with remediation of releases of hazardous substances into the environment and imposes strict, joint and several liability for the costs of remediating environmental contamination upon owners and operators of contaminated sites where the release occurred and those companies who transport, dispose of or who arrange for disposal of hazardous substances released at the sites. Although we handle hazardous substances in the ordinary course of business, we are not aware of any hazardous substance contamination for which we may be liable.

            OCSLA provides the federal government with broad discretion in regulating the release of offshore resources of oil and gas production. If the government were to exercise its authority under OCSLA to restrict the availability of offshore oil and gas leases, this could reduce demand for our Gulf vessels and adversely affect utilization and day rates.

            OPA contains provisions specifying responsibility for removal costs and damages resulting from discharges of oil into navigable waters or onto the adjoining shorelines. Among other requirements, OPA requires owners and operators of vessels over 300 gross tons to provide the U.S. Coast Guard with evidence of financial responsibility to cover the costs of cleaning up oil spills from such vessels. We have provided satisfactory evidence of financial responsibility to the U.S. Coast Guard for all of our Gulf vessels over 300 tons.

            We believe we are in compliance in all material respects with all applicable environmental laws and regulations to which we are subject. Our vessels operating in foreign market areas are subject to regulatory controls concerning environmental protection similar to those in force in the Gulf. We believe that compliance with any existing environmental requirements will not materially affect our operations or competitive position.

            The operation of our vessels is subject to various risks, such as catastrophic marine disaster, adverse weather conditions, mechanical failure, collision and navigation errors, all of which represent a threat to personnel safety and to our vessels and cargo. We maintain insurance coverage against certain of these risks, which management considers to be customary in the industry. We believe that our insurance coverage is adequate and we have not experienced a loss in excess of our policy limits. However, there can be no assurance that we will be able to maintain adequate insurance at rates which we consider commercially reasonable, nor can there be any assurance that such coverage will be adequate to cover all claims that may arise.

            Our U.S. employees have not chosen to be represented by a labor union and are not covered by a collective bargaining agreement. We, together with other providers of marine support vessels, have been a target of five maritime labor unions' efforts to organize our Gulf employees since May 2000. An unfair labor practice charge has been filed against us with the National Labor Relations Board (the "NLRB") by the unions seeking an order that we permit their organizers access to our properties. A similar prior charge was withdrawn. If our Gulf employees were to become union represented, we believe that our flexibility in dealing with changing circumstances in our industry or in our own operations could be limited and we could be adversely affected.

            Our Norwegian seamen are covered by three union contracts with three separate Norwegian unions. Our United Kingdom ("U.K.") seamen are covered by two union contracts with two separate unions. We believe our relationships with our employees in Norway and the U.K. are satisfactory. We filed an unfair labor practice charge with the NLRB against two unions in relation to a secondary boycott by a Norwegian union that does not represent our employees. Although the NLRB refused to issue a complaint in that action and our appeal was denied, our motion for rehearing is currently pending before the General Counsel of the NLRB. We filed an action against a union in the U.K., which does not represent our employees, alleging that it illegally interfered with certain of our business relationships and that it is attempting to force us to engage in unfair labor practices. That action is currently pending before a London court.

            As a result of union activity in Southeast Asia, a Singapore-based company with which we negotiated a joint venture arrangement in June 2001 informed us that it no longer wished to proceed with us under that arrangement. We repurchased that company's interest in the joint venture, which effectively terminated the arrangement. Future union activity in our international markets could adversely affect our international business operations.

            Also, you can generally identify forward-looking statements by such terminology as "may," "will," "expect," "believe," "anticipate," "project," "estimate" or similar expressions. We caution you that such statements are only predictions and not guarantees of future performance or events. In evaluating these statements, you should consider various risk factors, including but not limited to the risks listed below. These risk factors may affect the accuracy of the forward-looking statements and the projections on which the statements are based.

            All phases of our operations are subject to a number of uncertainties, risks and other influences, many of which are beyond our control. Any one of such influences, or a combination, could materially affect the results of our operations and the accuracy of forward-looking statements made by us. Some important factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in our forward-looking statements include the following:

            Many of these factors are beyond our ability to control or predict. We caution investors not to place undue reliance on forward-looking statements. We disclaim any intent or obligation to update the forward-looking statements contained in this Annual Report, whether as a result of receiving new information, the occurrence of future events or otherwise, other than as required by law.

            In addition to the other information in this Annual Report, the following factors should be considered carefully.

            Demand for our services depends heavily on activity in offshore oil and gas exploration, development and production. The level of exploration and development activity typically decreases when oil and natural gas prices decrease. The North Sea market is also susceptible to changes in industry activity due to energy price volatility, although the use of long-term contracts in the North Sea generally delays the reaction to fluctuations in energy prices. A decline in the worldwide demand for oil and gas or prolonged low oil or natural gas prices depress offshore drilling and development activity. A prolonged low level of activity in the Gulf and other areas where we operate will adversely affect the demand for our marine support services and substantially reduce our revenues.

            Charter rates for marine support vessels also depend on the supply of vessels. Excess vessel capacity in the industry can result primarily from the construction of new vessels and the mobilization of vessels between market areas. During the late 1990s there was a significant increase in construction of vessels of the type operated by us, for use both in the Gulf and the North Sea. There are additional new vessels currently under construction in both the Gulf and the North Sea. The addition of new capacity to the worldwide offshore marine fleet increases competition in those markets where we operate. The addition of capacity coupled with a prolonged period of low oil and gas prices increases competition and reduces our day rates and utilization levels.

We operate in a highly competitive industry.

            Our business is highly competitive. Certain of our competitors have significantly greater financial resources than us and more experience operating in international areas. Competition in the marine support services industry primarily involves factors such as:

Operating hazards may increase our operating costs; our insurance coverage is limited.

            Marine support vessels are subject to operating risks such as catastrophic marine disaster, adverse weather conditions, mechanical failure, collisions, oil and hazardous substance spills and navigation errors. The occurrence of any of these events may result in damage to or loss of our vessels and our vessels' tow or cargo or other property and in injury to passengers and personnel. Such occurrences may also result in a significant increase in operating costs or liability to third parties. We maintain insurance coverage against certain of these risks, which our management considers to be customary in the industry. We cannot assure you, however, that we can renew our existing insurance coverage at commercially reasonable rates or that such coverage will be adequate to cover future claims that may arise. In addition, the terrorist attacks that took place in the U.S. on September 11, 2001 have caused an increase in the cost of our insurance coverage and could impact our ability to renew our existing coverage in the future.

            We must comply with federal, state and local regulations, as well as certain international conventions, private industry organizations and agencies and laws and regulations in jurisdictions where our vessels operate and are registered. These regulations govern worker health and safety and the manning, construction and operation of vessels. These organizations establish safety criteria and are authorized to investigate vessel accidents and recommend approved safety standards. If we fail to comply with the requirements of any of these laws or the rules or regulations of these agencies and organizations, we could be subject to substantial fines, penalties or other restrictions.

            Our operations also are subject to federal, state and local laws and regulations that control the discharge of pollutants into the environment and that otherwise relate to environmental protection. While our insurance policies provide coverage for accidental occurrence of seepage and pollution or clean up and containment of the foregoing, pollution and similar environmental risks generally are not fully insurable. We may incur substantial costs in complying with such laws and regulations, and noncompliance can subject us to substantial liabilities. The laws and regulations applicable to us and our operations may change. If we violate any of such laws or regulations, this could result in significant liability to us. In addition, any amendment to such laws or regulations that mandates more stringent compliance standards would likely cause an increase in our vessel operating expenses.

            In the Gulf, we have historically enjoyed our highest utilization rates during the second and third quarters, as mild weather provides favorable conditions for offshore exploration, development and construction. Adverse weather conditions during the winter months generally curtail offshore development operations. Activity in the North Sea is also subject to delays during periods of adverse weather. Accordingly, the results of any one quarter are not necessarily indicative of annual results or continuing trends.

            The average age of our vessels is approximately 16 years. Expenditures required for the repair, certification and maintenance of a vessel typically increase with vessel age. These expenditures may increase to a level at which they are no longer economically justifiable. We cannot assure you that we will be able to maintain our fleet by extending the economic life of existing vessels through major refurbishment or by acquiring new or used vessels.

            Our international operations are subject to a number of risks inherent to any business operating in foreign countries. These risks include, among others:

• Political instability;

• Potential vessel seizure or nationalization of assets;

• Currency restrictions and exchange rate fluctuations; and

• Import and export quotas and other forms of public and governmental regulation.

            We depend on the continued services of our executive officers and other key management personnel, particularly our Chairman and our Chief Executive Officer. If we were to lose any of these officers or other management personnel, such a loss could result in inefficiencies in our operations, lost business opportunities or the loss of one or more customers.

            The terrorist attacks that took place on September 11, 2001 in the U.S. were unprecedented events that have created many economic and political uncertainties, some of which may materially impact our business. The long-term effects of those attacks on our business are unknown. The potential for future terrorist attacks, the national and international response to terrorist attacks, and other acts of war or hostility have created many economic and political uncertainties, which could adversely affect our business for the short or long-term in ways that cannot presently be predicted.

            We are involved in various legal and other proceedings that are incidental to the conduct of our business. We do not believe that any of these proceedings, if adversely determined, would have a material adverse effect on our financial condition, results of operations or cash flows.

            None.

            The name, age and offices held by each of the executive officers of the Company as of February 28, 2002, are as follows:

            Ronald O. Palmer has been a director since October 1993 and Chairman of the Board since May 1997. Mr. Palmer also served as Executive Vice President from February 1995 to May 1997. Mr. Palmer joined Mr. Fairley in founding our predecessor company in 1980 and served as Vice President, Treasurer and Chief Financial Officer until February 1995.

            Thomas E. Fairley, who co-founded our predecessor company with Mr. Palmer in 1980, has been President and Chief Executive Officer and a director since October 1993. From October 1993 to May 1997, Mr. Fairley also served as our Chairman of the Board. Mr. Fairley is also a director of Gulf Island Fabrication, Inc., a leading marine fabricator.

            Victor M. Perez has served as our Vice President, Chief Financial Officer and Treasurer since February 1995.

            Kenneth W. Bourgeois has served as our Vice President and Controller since October 1993. Mr. Bourgeois also served as the controller of our predecessor company from December 1981 to October 1993. Mr. Bourgeois is a Certified Public Accountant.

            Michael D. Cain has served as our Vice President, Marketing since February 1993. From 1986 to 1993, Mr. Cain served as Marketing Manager for our predecessor company.

            Charles M. Hardy has served as our Vice President of Domestic Operations since July 2000. From May 1996 to July 2000, Mr. Hardy served as President of Offshore Towing, Inc. From 1993 to 1996, Mr. Hardy was employed by Tidewater Marine, Inc. as Vice President–Towing Division.

            Charles E. Tizzard has served as our Vice President, Administration since June 1997. From October 1994 to June 1997, Mr. Tizzard served as Manager of Administration and Planning.

            Our common stock is listed for quotation on the Nasdaq National Market under the symbol "TMAR". At February 28, 2002, we had 75 holders of record of our common stock.

            The following table sets forth the range of high and low closing sales prices of our common stock as reported by the Nasdaq National Market for the periods indicated.

            We do not plan to pay cash dividends on our common stock. We intend to retain all of the cash our business generates to meet our working capital requirements and fund future growth. In addition, our debt agreements prohibit us from paying dividends on our common stock.

            The selected financial data presented below for the five fiscal years ended December 31, 2001 is derived from our audited consolidated financial statements. You should read this information, together with the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements.