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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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For the quarterly period ended March 31, 2003

GULFMARK OFFSHORE, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-22853
(Commission file number)

76-0526032
(I.R.S. Employer Identification No.)

4400 Post Oak Parkway, Suite 1170, Houston, Texas     77027
                    (Address of principal executive offices)                               (Zip Code)

(713) 963-9522
(Registrant's telephone number, including area code)

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

YES /X/          NO /   /

     Number of shares of Common Stock, $0.01 Par Value, outstanding as of May 12, 2003:   19,967,356.

(Exhibit Index Located on Page 16)

PART I   FINANCIAL INFORMATION

     The unaudited condensed consolidated financial statements included herein have been prepared by the Company. In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the financial statements for the periods indicated have been made. Certain information relating to the Company's organization and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted in this Form 10-Q pursuant to such rules and regulations. However, the Company believes that the disclosures herein are adequate to make the information presented not misleading. It is recommended that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

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

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

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

(1)     GENERAL

     The consolidated financial statements include the accounts of GulfMark Offshore, Inc and its majority owned subsidiaries ("GulfMark" or the "Company"). Investments in unconsolidated subsidiaries are accounted for using the equity method. All significant intercompany accounts and transactions between GulfMark and its subsidiaries have been eliminated. Certain reclassifications of previously reported information have been made to conform with current year presentation. The balance sheet at December 31, 2002, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

     The Company operates offshore support vessels, principally in the North Sea, Southeast Asia and Brazil. The vessels provide transportation of materials, supplies and personnel to and from offshore platforms and drilling rigs. Some of these vessels also perform anchor handling and towing services.

      Certain reclassifications of previously reported information have been made to conform to current year presentation.

     Basic EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed using the treasury stock method for common stock equivalents. For the three months ended March 31, 2003, all options are excluded as their effect is anti-dilutive. The details of the EPS calculations for three months ended March 31, 2002 are as follows (in thousands except per share data):

(3)     NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In December 2002, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", which provides optional transition guidance for those companies electing to voluntarily adopt the accounting

provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". In addition, SFAS 148 amends the disclosure requirements of SFAS 123 and requires certain disclosures in both annual and interim financial statements. The Company will continue to account for stock-based compensation in accordance with APB 25. As such, this standard did not have a material impact on its consolidated financial position or results of operations. The Company has adopted the disclosure provisions of SFAS 148 at March 31, 2003.

(4)     COMPREHENSIVE INCOME

     The components of comprehensive income, net of related tax, for the three months ended March 31, 2003 and 2002 are as follows:

     The Company's only accumulated comprehensive income item relates to its cumulative foreign currency translation adjustment.

      The Company has an ongoing construction program in Norway and Brazil. During the quarter ended March 31, 2003, the Company took delivery of the Highland Eagle, a platform supply vessel in Norway. There are three remaining vessels to be built in Norway and one in Brazil. The remaining deliveries are scheduled as follows:

     Remaining payments during 2003 related to this program are estimated at $66.8 million with an additional $9.5 million in 2004.

     Interest is capitalized in connection with the construction of vessels. During the three months ended March 31, 2003, $0.5 million was capitalized in connection with the construction of these vessels.

     The three remaining vessels to be delivered in 2003 are being constructed in a Norwegian shipyard and the construction contract is denominated in Norwegian Kroner ("NOK"). The Company has entered into forward contracts to hedge the progress payments related to these vessels to limit the effect of exchange rate fluctuations on its acquisition price for these vessels. These forward contracts are designated as fair value hedges and are expected to be highly effective as the terms of the forward contracts are generally the same as the purchase commitments. Any gains or losses resulting from changes in fair value would be recognized in income with an offsetting adjustment to income for changes in the fair value of the hedged item. As of March 31, 2003, an unrealized gain of $16.6 million is reflected in the consolidated balance sheets as Fair Value Hedge and Unrealized Gain on Fair Value Hedge.

     On June 26, 2002, the Company finalized an agreement with a group of five banks for a new $100 million secured credit facility. The facility will be available for acquisition of assets as well as for general corporate purposes, including the completion of the Company's newbuild program. Collateral provided to the lenders by the Company will determine the borrowing availability under the terms of the agreement. The facility will reduce by $4 million per quarter beginning September 30, 2004, with a final maturity of $44 million on March 31, 2008. As of March 31, 2003, $19.0 was outstanding on the credit facility.

     On June 28, 2002, the Company effected a two-for-one stock split of common stock in the form of a 100% stock dividend. As a result of the stock split, stockholders of record at the close of business of June 10, 2002 received one additional share of GulfMark Offshore, Inc. common stock for every one share owned. The unaudited quarterly information for the three months ended March 31, 2002, reflect the split number of shares outstanding as if the split had occurred to arrive at the updated results conforming with the current year presentation.

      In December 2002, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", which provides optional transition guidance for those companies electing to voluntarily adopt the accounting provisions of SFAS No. 123, "Accounting for Stock-Based Compensation". In addition, SFAS 148 amends the disclosure requirements of SFAS 123 and requires certain disclosures in both annual and interim financial statements. The Company will continue to account for stock-based compensation in accordance with Accounting Principles Board ("APB") Opinion No. 25. Accordingly, no compensation expense has been recognized for the options granted to employees under the plan. The Company has adopted the disclosure provisions of SFAS 148 at March 31, 2003. Had compensation expense for the Company's stock options been recognized using the methodology prescribed by SFAS No. 123, the Comp any's net income (loss) and earnings (loss) per share would have been as follows (in thousands, except per share data):

     We provide marine support and transportation services to companies involved in the offshore exploration and production of oil and natural gas. Our vessels transport drilling materials, supplies and personnel to offshore facilities, as well as move and position drilling structures. The majority of our operations are conducted in the North Sea with 37 vessels operating in the area. We also have 5 vessels operating in Brazil, 12 vessels in Southeast Asia and 1 each in West Africa the Mediterranean Sea. Our fleet has grown in both size and capability from an original 11 vessels acquired in late 1990 to our present level of 56 vessels through strategic acquisitions and new construction of technologically advanced vessels, partially offset by dispositions of certain older, less profitable vessels. Our fleet includes 44 owned vessels, 4 bareboat chartered vessels, and 8 managed vessels.

     Our results of operations are affected primarily by day rates, fleet utilization and the number and type of vessels in our fleet. Utilization and day rates, in turn, are influenced principally by the demand for vessel services from the exploration and production sectors of the oil and natural gas industry. This demand has historically been a function of the prices for oil and natural gas, with increased activity when prices are higher and decreased activity when prices fall. The supply of vessels to meet this fluctuating demand is related directly to the perception of future activity in both the drilling and production phases of the oil and natural gas industry as well as the availability of capital to build new vessels to meet the changing market requirements.

     We bareboat charter vessels with revenues and operating expenses reported in the same income/expense categories as our owned vessels. The chartered vessels, however, incur bareboat charter fees instead of depreciation expense. Bareboat charter fees are generally higher than the depreciation expense on owned vessels of similar age and specification. The operating income realized from these vessels is therefore adversely affected by the higher costs associated with the bareboat charter fees. These vessels are included in calculating fleet day rates and utilization in the applicable periods.

     In addition, we provide management services to other vessel owners for a fee. We do not include charter revenues and vessel expenses of these vessels in our operating results. However, management fees are included in operating revenues. These vessels have been excluded for purposes of calculating fleet rates per day worked and utilization in the applicable periods.

     Our operating costs are primarily a function of fleet configuration and utilization levels. The most significant direct operating costs are wages paid to vessel crews, maintenance and repairs, and marine insurance. Generally, fluctuations in vessel utilization have little effect on fixed cost, but rather, affect only that portion of our direct operating costs we incur when the vessels are active. As a result, direct operating costs as a percentage of revenues may vary substantially due to changes in day rates and utilization.

     In addition to these variable costs, we incur fixed charges related to the depreciation of our fleet and costs for routine drydock inspections, maintenance and repairs designed to ensure compliance with applicable regulations and maintaining certifications for our vessels with various international classifications. Maintenance and repair expenses and marine inspection amortization charges are generally determined by the aggregate number of drydockings and other repairs undertaken in a given period. Costs incurred for drydock inspection and regulatory compliance are capitalized and amortized over 30 months, which approximates the period between drydockings.

     Under applicable maritime regulations, vessels must be drydocked twice in a five-year period for inspection and routine maintenance and repair. The total expenditures for drydockings may vary from quarter to quarter based on the number of drydockings undertaken and the complexity of the work to be performed. Expenditures for drydockings totaled $2.2 million during the three months ended March 31, 2003 compared to $1.5 million during the same period in 2002.

     The table below sets forth, by region, the average day rates and utilization for our vessels and the average number of vessels owned or chartered during the periods indicated. These vessels generate substantially all of our revenues and operating profit. We use the information that follows to evaluate the performance of the business.

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(a)  Includes all owned or bareboat chartered vessels.

     There have been no changes to the critical accounting policies used in our reporting of results of operations and financial position. For a discussion of our critical accounting policies see Management's Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K.

     For the quarter ended March 31, 2003, we had a net loss of $3.3 million, or $0.16 per share, on revenues of $28.3 million. The net income during the same period in 2002 was $5.4 million or $0.31 per diluted share on revenues of $29.8 million.

     The single largest factor affecting the decrease in revenues compared to the same quarter a year ago was the decrease in utilization for our North Sea fleet from 92.7% to 76.7% as a number of vessels were working in the spot market and two vessels were in layup. Company-wide utilization decreases led to a reduction in revenue of $5.7 million. These reductions were partially offset by increases in average day rates and $3.8 million in revenue from vessel capacity added to the fleet through deliveries of newbuild vessels. In the first quarter of 2003, we made efforts to maintain rates while giving up some utilization in order to be in a position to take advantage of improvements in market conditions as the year progressed. Due to the factors discussed above, North Sea revenue decreased by $2.1 million or 9%. This decrease included the transfer of two vessels that mobilized to Southeast Asia and Brazil. The overall growth in the fleet capacity increased by 2.4 vessels compared to the same quarter in the prior year due to the full quarter effect of the addition of the Highland Navigator and North Mariner in February 2002 as well as the additions of the Highland Bugler and Highland Courage in the fourth quarter of 2002 as well as the partial quarter effect of the Highland Eagle which delivered in March 2003. These additions were partially offset by the sale of the crewboat, Searunner, in 2002.

     Our Brazilian revenues increased $1.0 million primarily as a result of the mobilization of the Highland Piper in December of 2002. Utilization increased as this vessel immediately began its term contract upon arrival. Additionally, 2002 utilization was affected by the drydocking of one vessel in the quarter.

     Revenues for our Southeast Asia based fleet decreased by $0.4 million, mainly due to lower utilization, partially offset by the 2002 mobilization of the Highland Legend from the North Sea. The inclusion of this higher specification vessel also contributed to higher average day rates in the region.

     Operating income of $0.4 million in the first quarter of 2003 reflected the revenue decreases discussed above as well as the impact of the growth of the fleet. Other than the impact of the increased fleet size and the effect of a stronger currency, operating costs increased by less than $0.5 million. Depreciation expense increases reflect the fleet growth as well as the increased amortization of drydock charges related to the acceleration of drydockings into the first quarter of 2003.

     The tax rate of the benefit in the quarter reflected pre-tax losses in our lower tax rate jurisdictions of the North Sea and pre-tax profit in the higher tax rate jurisdictions of Brazil and Southeast Asia.

     Our ongoing liquidity requirements are generally associated with our need to service debt, fund working capital, acquire or improve equipment and make other investments. Since our inception, we have been active in the acquisition of additional vessels through both the resale market and new construction. Bank financing and internally generated funds have historically provided funding for these activities.

     During March 2003, we drew an additional $10.0 million from the Company's $100 million credit facility to fund the delivery of the Highland Eagle and repaid $3.0 million of the December 2002 drawdown. As of March 31, 2003, total outstanding under this facility was $19.0 million. On April 30, 2003, we drew an additional $4.0 million in order to fund the progress payment for the Brazilian newbuild.

     At March 31, 2003, we had total long-term debt of $175.5 million, consisting of approximately $129.8 million of Senior Notes, $19.9 million related to Norwegian vessels, $6.8 million of debt on certain U.K. vessels and $19.0 under the $100 million credit facility.

     Net working capital for the first quarter of 2003 was $12.1 million, including $8.1 million in cash and cash equivalents. Net cash provided by operating activities increased to $12.3 million from $6.6 million for the three month period ended March 31, 2002. This increase was due to the increase in depreciation expense as well as other reconciliations from net income to operating cash flow such as the decrease in accounts receivable and prepaid expenses.

     Net cash used in investing activities was $18.9 million and $37.0 million for the three months ended March 31, 2003 and 2002, respectively. The 2002 period includes $31.2 million associated with the delivery of the newbuild vessels, the Highland Navigator and the North Mariner, and $5.8 million related to progress payments under our newbuild program and other expenditures, including a deposit on the Brazilian newbuild. The 2003 period reflects the final payment of the Highland Eagle and other progress payments under the newbuild program as well as expenditures related to modifications to the North Crusader related to its contract in Brazil.

     During the three months ended March 31, 2003, financing transactions included the drawdown of $10.0 million from the credit facility associated with the delivery of the Highland Eagle in March 2003 and repayment of $3.0 million from operating cash flows. Additional repayments of $1.5 million were made on the Norwegian and U.K. debt.

     Expenditures related to the vessels under construction in Norway and Brazil are expected to be approximately $66.8 million during the remainder of 2003, including final payments in July for the newbuild UT755L Highland Monarch and the UT722L Highland Courage. One final UT722L newbuild, the Highland Endurance, is scheduled for delivery in December 2003. Drydocking expenditures subsequent to March 31, 2003 are expected to be approximately $4.8 million.

     Substantially all of our tax provision is for deferred taxes. The tonnage tax regimes in both Norway and the U.K. reduces the cash required for taxes in each of these regions. In other regions, accelerated depreciation has minimized the cash requirements for income taxes.

     We believe that our current reserves of cash and short-term investments, cash flows from operations and access to various credit arrangements will provide sufficient resources to finance our operating requirements. Our ability to fund working capital, capital expenditures and debt service in excess of cash on hand will be dependent upon the success of our operations. To the extent that existing sources are insufficient to meet those cash requirements, we would seek other debt or equity financing; however, we can give no assurances that such debt or equity financing would be available on acceptable terms.

     In areas where currency risks are potentially high, we normally accept only a small percentage of charter hire in local currency. The remainder is paid in U.S. dollars.

     Substantially all of our operations are international; therefore we are exposed to currency fluctuations and exchange rate risks. Charters for vessels in the North Sea fleet are primarily denominated in GBP with a portion denominated in NOK. Operating costs are substantially denominated in the same currency as charter hire in order to reduce the risk of currency fluctuations. For the three months ended March 31, 2003, currency fluctuations in GBP and NOK did not have a

material impact on the results of our operations. For the quarter ended March 31, 2003, the average NOK/U.S. dollar exchange rate was 1 USD = NOK 7.09, while the average GBP/U.S. dollar exchange rate was 1 GBP = $1.603. The average exchange rates in the comparable 2002 period were 1 USD = 8.90 NOK and 1 GBP=$1.426. Our North Sea based fleet generated $21.0 million in revenues and $0.9 million in operating loss for the three months ended March 31, 2003.

     Reflected in the accompanying balance sheet as of March 31, 2003, is a $7.8 million cumulative translation adjustment which fluctuates based on differences in GBP and NOK exchange rates as of each balance sheet date compared to the exchange rates when we invested capital in these markets. Changes in the cumulative translation adjustment are non-cash items that are attributable to investments in vessels and dollar denominated loans between us and our foreign subsidiaries.

     With the completion of our Senior Notes Offering in June 1998, our debt is predominantly denominated in U.S. dollars, while a substantial portion of our revenue is generated in GBP. We have carefully evaluated these conditions and determined that it is in our best interest not to use any financial instruments to hedge this exposure under present conditions. Our decision is based on a number of factors, including among others:

     One or more of these factors may change and we, in response, may choose to use financial instruments to hedge risks of currency fluctuations.

     To date, general inflationary trends have not had a material effect on our operating revenues or expenses.

     This Form 10-Q contains certain forward-looking statements and other statements that are not historical facts concerning, among other things, market conditions, the demand for marine support services and future capital expenditures. These statements are subject to certain risks, uncertainties and assumptions, including, without limitation:

     We cannot assure you that we have accurately identified and properly weighed all of the factors which affect market conditions and demand for our vessels, that the information upon which we have relied is accurate or complete, that our analysis of the market and demand for its vessels is correct, or that the strategy based on that analysis will be successful.

     Our financial instruments that are potentially sensitive to changes in interest rates include the notes sold in the Senior Notes Offering. As of March 31, 2003, the fair value of these notes, based on quoted market prices, was approximately $132.6 million compared to a carrying amount of $129.8 million.

     We operate in a number of international areas and are involved in transactions denominated in currencies other than U.S. dollars, which exposes us to foreign currency exchange risk. At various times we may utilize forward exchange contracts, local currency borrowings and the payment structure of customer contracts to selectively hedge exposure to exchange rate fluctuations in connection with monetary assets, liabilities and cash flows denominated in certain foreign currency. We do not hold or issue forward exchange contracts or other derivative financial instruments for speculative purposes. As of March 31, 2003, we have remaining commitments to purchase approximately NOK 555.2 million in order to satisfy our commitment to make specific NOK shipyard payments for vessels under construction. The average exchange rate of our commitment is 1 USD=NOK 9.41.

     Other information required under Item 3 has been incorporated into Management's Discussion and Analysis of Financial Condition and Results of Operations.

     Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's President and Chief Operating Officer, who is the Company's principal executive officer, and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company's management, including the President and Chief Operating Officer and the Company's Chief Financial Officer, concluded that the Company's disclosure controls and procedures are effective, in design and operation, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic Securities and Exchange Commission filings. There have been no significant changes in the Company's int ernal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

(a)  Exhibits

     See Exhibit Index for list of Exhibits filed herewith

(b)  Reports on Form 8-K.

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

                                                                            GulfMark Offshore, Inc.
                                                                            (Registrant)

                                                                  By:     /s/ Edward A. Guthrie
                                                                            -------------------------------
                                                                            Edward A. Guthrie
                                                                            Executive Vice President and
                                                                            Chief Financial Officer
Date:   May 12, 2003

     *99.1 - Section 906 Certifications

*Filed herewith.