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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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For the quarterly period ended June 30, 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 August 8, 2003:   19,973,357.

(Exhibit Index Located on Page 18)

PART I   FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

     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.

(2)     EARNINGS PER SHARE ("EPS")

     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 six months ended June 30, 2003, all options are excluded as their effect is anti-dilutive. The details of the EPS calculations for three months ended June 30, 2003 and the three and six months ended June 30, 2002 are as follows (in thousands except per share data):

(3)     NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equities", which becomes effective for the Company during the third quarter of 2003. Adoption of this statement will not have a material impact on the Company's consolidated results of operations and financial position.

     In January 2003, the Financial Accounting Standards Board issued Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements" for certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 requires that variable interest entities, as defined, should be consolidated by the primary beneficiary, which is defined as the entity that is expected to absorb the majority of the expected losses, receive the majority of the gains, or both. The Interpretation requires that companies disclose certain information about a variable interest entity created prior to February 1, 2003 if it is reasonably possible that t he enterprise will be required to consolidate that entity. The application of this Interpretation is required on July 1, 2003 for entities created prior to February 1, 2003 and immediately for any variable interest entities created subsequent to January 31, 2003. The Company is currently analyzing the impact this interpretation will have on its consolidated results of operations and its financial position, with respect to entities acquired before February 1, 2003.

(4)     COMPREHENSIVE INCOME

     The components of comprehensive income, net of related tax, for the three and six months ended June 30, 2003 and 2002 are as follows:

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

(5)     VESSEL ACQUISITIONS/DISPOSITIONS

     The Company has an ongoing construction program in Norway and Brazil. 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 $62.6 million, including the final payments for the Highland Monarch and Highland Valour which were delivered in early July. An additional $9.5 million is due in 2004.

     Interest is capitalized in connection with the construction of vessels. During the three months ended June 30, 2003, $0.4 million was capitalized in connection with the construction of these vessels.

     The 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 June 30, 2003, an unrealized gain of $16.8 million is reflected in the consolidated balance sheets as Fair Value Hedge and Unrealized Gain on Fair Value Hedge.

(6)      STOCK BASED COMPENSATION

     As described more fully in the Company's Annual Report on Form 10-K, the Company measures compensation expense for its stock-based compensation plans using the intrinsic value method. The following table illustrates the pro forma effect on net income and earnings per share if the Company had used the alternative fair value method to recognize stock-based employee compensation expense. (in thousands, except per share data):

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS

     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 38 vessels operating in the area. We also have 4 vessels operating in Brazil, 12 vessels in Southeast Asia, 2 in India and 1 in West Africa. Our fleet has grown in both size and capability from an original 11 vessels acquired in late 1990 to our present level of 57 vessels, including the two new vessels delivered on July 3, 2003, through strategic acquisitions and new construction of technologically advanced vessels, partially offset by dispositions of certain older, less profitable vessels. Our fleet includes 46 owned vessels, 2 bareboat chartered vessels, and 9 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 $5.4 million during the six months ended June 30, 2003 compared to $4.6 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 June 30, 2003, net income was $2.6 million, or $0.13 per diluted share, on revenues of $34.3 million. Net income during the same period in 2002 was $8.1 million or $0.40 per diluted share on revenues of $34.6 million.

     The decrease of $0.3 million in revenues compared to the same quarter a year ago was mainly due to the decreases in utilization experienced in the North Sea and Brazil. Partially offsetting this effect was the delivery of three vessels from our newbuild program, the Highland Bugler and Highland Courage delivered in the fourth quarter of last year and the Highland Eagle delivered at the end of the first quarter of this year. Company-wide utilization decreases led to a reduction in revenue of $2.9 million.

     In the second quarter of 2003, we elected not to contract our vessels under long-term contracts in the belief that the market would rebound during the second half of 2003 and result in higher day rates for long term fixtures. More of our vessels, therefore, were exposed to the spot market and as a result, North Sea utilization decreased from 96.6% in the second quarter of 2002 to 82.0% in the same 2003 quarter as a number of vessels were working in the spot market, resulting in a North Sea revenue decrease of $2.5 million or 9%. North Sea day rates increased from $11,029 in the second quarter of 2002 to $11,805 in the same 2003 quarter.

     Our Brazilian revenues increased $1.4 million, or 53%, primarily as a result of the mobilizations of the Highland Piper and the North Crusader from the North Sea in December 2002 and April 2003. The North Crusader is working as a front-runner to our Brazilian newbuild, due to be delivered in the third quarter of 2004.

     Revenues for our Southeast Asia based fleet increased by $0.9 million, or 21%, as a result of stronger market conditions which resulted in both higher utilization and day rates. The inclusion of the Highland Legend, a higher specification vessel which was mobilized to the region late in 2002 also contributed to higher average day rates in the region.

     Operating income of $6.4 million in the second 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 remained constant when compared to the second quarter in 2002. Depreciation expense increases reflect the fleet growth.

     In the quarter ended June 30, 2002, other expenses included a $0.6 million non-cash foreign currency translation loss related to debt denominated in British Pound Sterling ("GBP") in our Norwegian subsidiary compared with a gain of $1.6 million in the same period in 2002.

     For the six months ended June 30, 2003, we had a net loss of $0.7 million, or $0.03 per diluted share, on revenues of $62.6 million. Net income during the same period in 2002 was $13.5 million or $0.72 per diluted share on revenues of $64.4 million.

     Revenue for the North Sea region decreased by $4.6 million, or 9%, primarily as a result of a decrease in utilization, from 94.7% in 2002 to 77.9% in 2003, as a number of vessels were working in the spot market and two vessels were in layup during the first quarter. Partially offsetting this decrease in utilization was an increase in day rates and the expansion of the fleet by an average of 2 vessels.

     Our Brazilian revenues increased by 46%, or $2.4 million. This increase can be attributed to an increase in both day rates and utilization, as the Highland Piper was mobilized to the region late last year and the North Crusader was mobilized and started working during the second quarter.

     Southeast Asia revenues increased by $0.5 million, or 6%. An increase in day rates of $604, from $4,610 in 2002 to $5,214 in 2003 was mainly due to the mobilization of the Highland Legend from the North Sea late last year. Partially offsetting this increase was a decrease in utilization from 82.8% for the first six months of last year to 78.6% for the same period this year.

     Operating income of $6.8 million in the 2003 period decreased by $12.0 million from the same 2002 period. Increases in fleet size were offset by a higher number of vessels working in the spot market, and the layup of two vessels during the first quarter. The market showed significant improvement during the second quarter, and continues to show signs of improvement. Depreciation expense increases reflect the addition of the new vessel deliveries from our newbuild program.

     The changes in other expenses were primarily related to the translation of GBP denominated debt on our Norwegian subsidiary as the GBP strengthened against the NOK in the period.

     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 the six months ended June 2003, we drew an additional $19.0 million from the Company's $100 million credit facility to fund the delivery of the Highland Eagle and the progress payment for the Brazilian newbuild. During the same period we repaid $7.0 million of our earlier drawdown. As of June 30, 2003, total outstanding under this facility was $24.0 million. On July 2, 2003, we drew an additional $34.0 million in order to fund the delivery of the Highland Monarch and Highland Valour. The current weighted average interest rate of our credit facility is 2.34%.

     At June 30, 2003, we had total long-term debt of $175.3 million, consisting of approximately $129.8 million of Senior Notes, $16.9 million related to Norwegian vessels, $4.6 million of debt on certain U.K. vessels and $24.0 under our credit facility.

     Net working capital for the second quarter of 2003 was $17.2 million, including $6.9 million in cash and cash equivalents. Net cash provided by operating activities increased by $1.7 million from $14.2 million for the six month period ended June 30, 2002. This increase was due to the increase in depreciation expense as well as other changes in current assets and liabilities.

     Net cash used in investing activities was $28.9 million and $46.1 million for the six months ended June 30, 2003 and 2002, respectively. The 2003 period reflects the final payment of $12.1 million for the Highland Eagle, as well as other progress payments under the newbuild program and expenditures related to modifications for the North Crusader related to its contract in Brazil. Additionally, we made a progress payment for the Brazil newbuild of $3.6 million in the period. The 2002 period includes $31.2 million associated with the delivery of the newbuild vessels, the Highland Navigator and the North Mariner, and $6.8 million related to progress payments under our newbuild program and other expenditures, including a downpayment on the Brazilian newbuild.

     During the six months ended June 30, 2003, financing transactions included the drawdown of $19.0 million from the credit facility associated primarily with the delivery of the Highland Eagle in March 2003 and a progress payment on the Brazil newbuild. Financing transactions also include a repayment of $7.0 million from operating cash flows, and additional repayments of $2.7 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 $60.9 million during the remainder of 2003, including final payments made in July 2003 for the newbuild UT755L Highland Monarch and the UT722L Highland Valour. One final UT722L newbuild, the Highland Endurance, is scheduled for delivery in December 2003. Drydocking expenditures subsequent to June 30, 2003 are expected to be approximately $2.8 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 June 30, 2003, currency fluctuations in GBP and NOK did not have a material impact on the results of our operations. For the quarter ended June 30, 2003, the average NOK/U.S. dollar exchange rate was 1 USD = NOK 7.0, while the average GBP/U.S. dollar exchange rate was 1 GBP = $1.618. The average exchange rates in the comparable 2002 period were 1 USD = 8.16 NOK and 1 GBP=$1.463. Our North Sea based fleet generated $25.4 million in revenues and $4.1 million in operating income for the three months ended June 30, 2003.

     Reflected in the accompanying balance sheet as of June 30, 2003, is a $20.4 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 primarily attributable to investments in vessels and dollar denominated loans between the parent company and its foreign subsidiaries.

     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.

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Our financial instruments that are potentially sensitive to changes in interest rates include the notes sold in the Senior Notes Offering. As of June 30, 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 June 30, 2003, we have remaining commitments to purchase approximately NOK 541.2 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 9.37.

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

ITEM 4.     CONTROLS AND PROCEDURES

     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 internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

PART II   OTHER INFORMATION

ITEM 4.     Submission of Matters of a Vote of Security Holders

     At the Company's Annual meeting of Stockholders held on May 15, 2003, the stockholders of the Company approved the election of all nominated directors as follows:

     At the Company's Annual meeting of Stockholders held on May 15, 2003, the stockholders of the Company approved the selection of Ernst & Young as the Company's independent auditors for the fiscal year ending December 31, 2003 as follows:

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

(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:   August 8, 2003

     *99.1 - Section 906 Certifications

     *10.1 - Employment Agreement dated June 30, 2003 for Bruce A. Streeter.

     *10.2 - Employment Agreement dated July 6, 2003 for Edward A. Guthrie.

*Filed herewith.