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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-K
 
(MARK ONE)
    /X/          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

                                      OR

    / /          TRANSITION REPORT PURSUANT TO SECTION 13 OR
                 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
                          COMMISSION FILE NUMBER 0-457
 
                         GULF MARK INTERNATIONAL, INC.
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                           <C>
                   DELAWARE                                     74-1203713
       (State or other jurisdiction of             (I.R.S. Employer Identification No.)
        incorporation or organization)

 5 POST OAK PARK, SUITE 1170, HOUSTON, TEXAS                      77027
   (Address of principal executive offices)                     (Zip Code)
</TABLE>
 
       Registrant's telephone number, including area code: (713) 963-9522
 
        Securities registered pursuant to Section 12(b) of the Act: NONE
 
          Securities registered pursuant to Section 12(g) of the Act:
 
                         COMMON STOCK, $1.00 PAR VALUE
                                (Title of class)
 
     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to this
Form 10-K.  /X/
 
     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
 
     Aggregate market value of the voting stock held by nonaffiliates of the
Registrant based upon the price at which the stock was sold as of March 6, 1996:
$56,146,000.
 
     Number of shares of common stock outstanding as of March 6, 1996:
3,336,352.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     The information called for by Part III Items 10, 11, 12 and 13 will be
included in a proxy statement to be filed pursuant to Regulation 14A, and is
incorporated herein by reference.
 
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<PAGE>   2
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>         <C>                                                                            <C>
                                               PART I
Item 1.     Business.....................................................................    3
            General Business.............................................................    3
            Offshore Marine Services.....................................................    4
            Erosion Control..............................................................    8
            Energy Ventures, Inc.........................................................    9
            Employees....................................................................   10
Item 2.     Properties...................................................................   10
Item 3.     Legal Proceedings............................................................   10
Item 4.     Submission of Matters to a Vote of Security Holders..........................   11

                                               PART II
Item 5.     Market for the Registrant's Common Equity and Related Stockholder Matters....   11
Item 6.     Selected Consolidated Financial Data.........................................   12
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of
            Operations...................................................................   12
Item 8.     Consolidated Financial Statements and Supplementary Data.....................   17
Item 9.     Changes in and Disagreements With Accountants on Accounting and Financial
            Disclosure...................................................................   41

                                              PART III
Item 10.    Directors and Executive Officers of the Registrant...........................   40
Item 11.    Executive Compensation.......................................................   40
Item 12.    Security Ownership of Certain Beneficial Owners and Management...............   40
Item 13.    Certain Relationships and Related Transactions...............................   40

                                               PART IV
Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K..............   40
</TABLE>
<PAGE>   3
 
                                     PART I
 
ITEM 1. BUSINESS
 
                                GENERAL BUSINESS
 
     GulfMark International, Inc. (together with its subsidiaries, the
"Company") operates in two principal industry segments: offshore marine services
and erosion control services. In addition, the Company has a 14% ownership
interest in Energy Ventures, Inc. (NYSE:EVI), an international oilfield
equipment and service company. Originally, the Company was a consulting
engineering firm specializing in onshore oil and gas pipelines which expanded
its operations during the 1970's and 1980's into other engineering and
technology fields. As a result of a five year restructuring which was completed
in 1990, all of these operations were disposed of with the exception of erosion
control services.
 
     The Company then entered the business of providing offshore marine services
in the international markets in 1990 through an acquisition of offshore support
vessels operating primarily in the North Sea and Southeast Asia. These offshore
support vessels provide transportation of materials, supplies and personnel to
and from offshore drilling platforms and rigs, production platforms and other
installations. Some of the vessels also perform anchor handling and towing
services. In addition to the vessels, the Company acquired various support
facilities, spare parts inventory and customer and vessel management contracts.
This acquisition marked the Company's expansion into the oilfield service and
equipment industry and signaled the completion of the Company's transition from
what was historically an engineering services oriented company. The Company then
set about the task of expanding and upgrading its marine operations with the
addition of seven vessels, two of which were newly constructed. These
acquisitions were funded with a combination of internal funds and bank debt. In
addition, the Company has three vessels in its fleet under bareboat charters and
has six vessels under management contracts.
 
     The Company was organized as a Delaware corporation in 1953. Its principal
executive offices are located at 5 Post Oak Park, Suite 1170, Houston, Texas,
77027, and its telephone number is (713) 963-9522.
 
RECENT DEVELOPMENTS
 
     The Company has contracted with a shipyard in Norway for the construction
of two UT 755 design vessels for employment in the North Sea. Delivery of the
first vessel, to be named the Highland Piper, is expected in mid-March 1996. The
second vessel is expected to be delivered in early 1997.
 
     In December 1995 the Company purchased the Atlantic Warrior, a 1981 built
pipe carrier/platform supply vessel. This vessel had been bareboat chartered by
the Company since July 1993 when BP Shipping's offshore supply vessel fleet was
acquired.
 
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
 
     Financial information about revenues, operating income and identifiable
assets for each segment and geographic area is contained in Note 10 to the
Consolidated Financial Statements. Financial information about Energy Ventures,
Inc. is contained in Note 3 to the Consolidated Financial Statements.
 
                                        3
<PAGE>   4
 
                            OFFSHORE MARINE SERVICES
 
GENERAL
 
     The Company through its Gulf Offshore Marine Division operates twenty-three
offshore support vessels, principally in two major offshore exploration and
production areas of the world: the North Sea and Southeast Asia. The Company
does not currently operate any vessels in offshore U.S. waters, which includes
the Gulf of Mexico, although it does maintain a warehousing and servicing center
with adjacent docking facilities in Morgan City, Louisiana. Offshore support
vessels are contracted by major oil companies and large independent oil and gas
operators to transport personnel, supplies and material, as well as to move and
position drilling structures in support of the exploration and production of oil
and gas in offshore waters.
 
     Offshore support vessels generally fall into seven functional categories:
(1) supply vessels, (2) anchor handling, towing and supply vessels, (3)
construction support vessels, (4) standby rescue vessels, (5) crewboats, (6)
specialty vessels and (7) utility vessels. It is not unusual for a vessel to
function in more than one of these categories.
 
     - Supply vessels (150' to 200') are used to transport supplies such as
       fuel, water, drilling fluids, equipment and provisions. Large platform
       supply vessels (200' to 275'), because of their large, clear after deck
       and below deck capacities, are well suited for large concentrated
       offshore production centers.
        
     - Anchor handling, towing and supply vessels (150' to 250') are used to set
       anchors for the rigs and to tow mobile drilling rigs and equipment from
       one location to another. In addition, these vessels typically can be
       used as supply vessels when they are not performing anchor handling and
       towing services.
        
     - Construction support vessels can be vessels used in the actual
       construction effort such as pipe laying barges or they can be specially
       designed vessels, such as pipe carriers, used to transport the large
       cargos of material and supplies required to support construction and
       installation of offshore platforms and pipelines.
        
     - Standby rescue vessels perform a safety patrol function for an area and
       are equipped to provide emergency rescue and first aid in the event of
       accidents.
        
     - Crewboats are smaller vessels (75' to 120') used to transport personnel
       and a limited amount of supplies to platforms and rigs.
 
     - Specialty vessels perform diving and seismic support, as well as other
       functions such as well stimulation, oil recovery and oil pollution
       control.
 
     - Utility vessels (90' to 150') provide limited crew transportation, some
       transportation of oilfield support equipment and in some locations
       standby functions.
        
     The Company's vessels are capable of transporting supplies and personnel to
offshore drilling platforms and rigs, production platforms and other
installations. Thirteen of the owned vessels are used primarily for carriage of
cargo. In addition six of these vessels are capable of supporting offshore
construction in the North Sea as well as large capacity platform supply duties
and four others are capable of performing anchor handling and towing services
for moving rigs and platforms between locations. One vessel, the Searunner, is
smaller in length and is used primarily to transport crews to and from offshore
facilities.
 
                                        4
<PAGE>   5
 
VESSELS
 
     Gulf Offshore Marine operates twenty-three vessels, fourteen of which are
owned, three bareboat chartered and six managed. The following table summarizes
information on each vessel as of March 1, 1996:
 
<TABLE>
<CAPTION>
                                                                                           YEAR      LENGTH
                NAME                     LOCATION                CLASSIFICATION            BUILT    (IN FEET)    BHP(3)    DWT(4)
------------------------------------  ---------------   --------------------------------   -----    ---------    ------    ------
<S>                                   <C>               <C>                                <C>      <C>          <C>       <C>
OWNED:
  New build -- To be named(6).......  North Sea         Pipe carrier/platform supply       1997 (6)    221       5,450     2,800
  Highland Piper(5).................  North Sea         Pipe carrier/platform supply       1996 (5)    221       5,450     2,800
  Highland Pride(1).................  North Sea         Pipe carrier/platform supply       1992        265       6,600     4,000
  Highland Star(1)..................  North Sea         Pipe carrier/platform supply       1991        265       6,600     4,000
  Highland Fortress(1)..............  North Sea         Pipe carrier/platform supply       1982        255       6,120     3,200
  Atlantic Warrior(1)...............  North Sea         Pipe carrier/platform supply       1981        265       5,300     3,890
  Highland Champion(1)..............  North Sea         Pipe carrier/platform supply       1979        265       4,800     3,320
  Highland Legend(1)................  North Sea         Supply                             1986        194       3,590     1,442
  Highland Sprite(1)................  North Sea         Supply                             1986        194       3,590     1,442
  Sem Courageous(1).................  Southeast Asia    Anchor handling, towing, supply    1981        191       4,000     1,220
  Sem Valiant(1)....................  Southeast Asia    Anchor handling, towing, supply    1981        191       4,000     1,220
  Seawhip(1)........................  Southeast Asia    Anchor handling, towing, supply    1983        192       3,900     1,200
  Seawitch(1).......................  Southeast Asia    Anchor handling, towing, supply    1983        192       3,900     1,200
  Searunner.........................  Southeast Asia    Crewboat                           1982        120       2,720       126
  Seapower(1).......................  Brazil            Bulk, supply                       1974        222       7,040     1,205
BAREBOAT CHARTERED:
  Atlantic Guardian.................  North Sea         Standby                            1980        189       2,600       950
  SeaMark South Carolina(2).........  Southeast Asia    Anchor handling, towing, supply    1983        180       3,000     1,200
  SeaMark Mississippi(2)............  Southeast Asia    Supply                             1982        180       2,250     1,200
MANAGED:
  Sea Truck.........................  North Sea         Pipe carrier/platform supply       1979        266       4,600     2,477
  North Prince......................  North Sea         Supply                             1978        259       6,000     2,717
  Clwyd Supporter...................  North Sea         Towing, standby, oil recovery      1984        266       10,700    1,400
  Whalley Supporter.................  North Sea         Towing, standby, oil recovery      1984        266       8,700     1,400
  Sefton Supporter..................  North Sea         Standby, oil pollution control     1971        250       1,620     1,233
  Portosalvo........................  North Sea         Anchor handling, towing, supply    1982        227       12,750    2,085
</TABLE>
 
---------------
 
(1) These vessels are mortgaged under certain debt agreements.
 
(2) The SeaMark South Carolina and SeaMark Mississippi are bareboat chartered to
    SeaMark Ltd., a 51% owned joint venture.
 
(3) Break horsepower.
 
(4) Dead weight tons.
 
(5) This vessel is expected to be delivered in mid-March 1996, and will be
    mortgaged under certain debt agreements.
 
(6) This UT-755 design vessel is expected to be delivered in early 1997, and
    will be mortgaged under certain debt agreements.
 
OPERATIONS
 
     Activity in the offshore marine services industry is directly related to
the activity level in international offshore oil and gas exploration,
development and production which in turn is impacted by changes in oil and gas
prices. Declines in oil and gas prices in the early 1980's and concerns relating
to the stability of prices that followed resulted in a significant reduction in
exploration and development activity worldwide. This decline in activity coupled
with the overbuilding of new vessels in the early 1980's resulted in an
oversupply of offshore support vessels. While there is some interchangeability
between geographic markets and vessels, there are barriers such as mobilization
costs and vessel suitability that restrict migration of excess capacity. This is
most notably the case in the North Sea where vessel design requirements dictated
by the harsh operating environment restrict migration of vessels into that
market and, to a lesser degree, high operating costs restrict migration out of
the market. As a result, major segments of the world market were impacted
differently by these forces because of each area's unique blend of political,
operating and economic factors.
 
                                        5
<PAGE>   6
 
  North Sea
 
     The operating environment in the North Sea area is such that exploration
and development projects tend to be fewer in number but larger in scope and
therefore require longer planning horizons. Consequently, demand for support
vessels in this market is generally easier to forecast and less susceptible to
abrupt swings. This market requires vessels that are generally larger and more
sophisticated technically. Such equipment constraints require larger capital
commitments that restrict the number of participants to entities that are larger
and better capitalized.
 
     Vessel demand began to decline late in 1991 and continued to remain low as
oil companies reduced exploration activity in reaction to lower world oil prices
and changes in certain United Kingdom tax incentives. Anticipated improvements
in demand in 1994 were delayed when oil prices declined to their lowest level
since the end of the Iraqi war. The decline in prices related to a number of
factors, including a continued sluggish world economy, an inability of the
Organization of Petroleum Exporting Companies ("OPEC") to reach an agreement on
production levels and prices and uncertainty surrounding the resumption of Iraqi
oil exports. Oil prices recovered somewhat during 1995; however, the recovery is
somewhat tenuous because of continued uncertainty about exports of Iraqi oil.
Exploration activity has strengthened with particular emphasis in the West of
Shetlands. A number of long-term drilling contracts were signed during 1995 and
should result in continued market improvement during 1996, and if such market
improvement is sustained, sharply improved activity in 1997. Construction
seasons since 1992 have been unusually short and this further contributed to the
soft market since 1991. Current contract activity indicates only a slight
improvement in 1996, but establishes a strong market in 1997 and consistent
demand through 1999 and potentially 2000.
 
     Countering the effect of expected improvements in demand from increased
exploration and construction activity is the increase in new vessel buildings.
New vessel construction has been limited in recent years. 1995 saw the first
significant new vessel construction activity since the orders placed in 1990 and
1991. Orders for one new anchorhandler and upwards of a dozen platform supply
vessels were placed. Financial institutions appear to have sufficient capacity
and interest in supporting new construction projects. A large number of the
vessels are being built against or have been awarded long-term contracts, and
the market appears capable of absorbing the number of vessels currently on
order.
 
     The Company's North Sea fleet includes eight owned vessels, one bareboat
chartered vessel and six managed vessels. These vessels are supported by onshore
bases in Aberdeen and Liverpool. The North Sea fleet accounts for 83% of the
Company's vessel assets measured by net book value.
 
  Southeast Asia
 
     The Company's Southeast Asia activity principally consists of offshore work
in Indonesia, Malaysia and Thailand, but vessels have also worked in China,
India, Vietnam, Cambodia and the Philippines. Historically, the type of vessels
required to service this market were similar in design to those operating in the
Gulf of Mexico. In this regard, past practice has been for U.S. operators to
retire vessels out of the Gulf of Mexico to work out their remaining useful
lives in this market. Recently, there has been pressure (most notably from
Malaysia) to upgrade offshore support vessel capabilities by establishing limits
on the age of vessels working in their waters and by encouraging construction of
new vessels designed particularly to operate in this market.
 
     The Southeast Asia market differs country by country, but generally the
competitive environment is characterized by a large number of small companies in
contrast to many of the other major offshore exploration and production areas of
the world where a few large operators dominate the market. Affiliations and
joint ventures with local companies are necessary to maintain a viable marketing
presence. Therefore, the Company has a 49% ownership in a joint venture in
Malaysia. Vessels in this market are smaller than in other areas. Yet, the
varying weather conditions, annual monsoons and long distances between supply
centers have allowed for a variety of vessel designs, each suited for a
particular set of operating parameters to compete in this market. For certain
situations, contracts in this market require very specialized vessels, and
building specific vessels to contract is more common than in other markets. As a
result, the competitive pressures from having a large number of smaller
operators are lessened because vessels are not as easily interchangeable between
different locations.
 
                                        6
<PAGE>   7
 
     Indonesia is the only major member of OPEC in the region. Exploration
activity in Indonesia has historically focused on oil exploration. Vessel demand
in this country softened in 1992 as exploration activities were reduced while
some of the major oil companies renegotiated their production royalty and tax
structures. This reversed somewhat in 1993 and 1994 as some agreements were
reached. However, the oil companies have attempted to seek further modifications
to their production royalty and tax structures and have reduced exploration
budgets resulting in lower than expected activity in 1995, and only marginal
growth is expected for 1996.
 
     The rapid economic growth for many countries in the Pacific Rim has
resulted in increased demand for energy and a related increase in oil and gas
exploration. Decisions by local governments to implement policies that will
reduce dependence on energy supplies from the Middle East have stimulated
additional interest in exploration in the region to avoid dependence on the
traditional OPEC sources. Virtually every country in the region has known or
potential prospects. However, exploration activity suffered during 1993 and 1994
when oil prices dipped and has been slow to recover. Budgets appear to be higher
for 1996, but there has been a reduction in available drilling rigs as demand
has accelerated faster in other areas of the world.
 
     The Company operates five Company-owned vessels and two bareboat chartered
vessels in the Southeast Asia market from its Singapore support center. The
seven vessels working in this market are Gulf of Mexico designs; however,
several have undergone modifications to fulfill customer requirements. Four of
the Company's vessels operating in this region, the Sem Courageous, Sem Valiant,
Seawitch and Seawhip, have approximately 4,000 BHP and have additional equipment
(firefighting on two vessels, anchor handling and towing on all four vessels)
giving them a competitive advantage over the standard Gulf of Mexico design
vessel that has 2,000 BHP.
 
  Brazil
 
     In May 1995, the Seapower returned to Brazil to begin working under a two
year contract with Petrobras. Brazil has traditionally been a high risk area due
to its highly inflationary economy, changing political environment and harsh
working environment. The country's offshore industry requires a large number of
highly sophisticated vessels, and it is a large user of North Sea class vessels.
 
  Other Considerations
 
     Historically, the expenditures necessary to maintain a vessel to satisfy
international certification standards for vessels approaching twenty years of
age have made it generally prohibitively expensive to continue to operate those
vessels beyond that age. However, survey results on post-1985 built vessels now
suggest that improvements in coating systems and materials may lead to longer
expected useful lives for these vessels. Depressed conditions in the offshore
marine services industry have limited the construction of new vessels, and as a
result the normal replacement of older vessels has been substantially curtailed
since 1983. The average age of the Company's fleet is approximately 9 years.
This fact, coupled with the low level of new vessel construction, gives the
Company an advantageous marketing position with respect to certain of its
competitors. The Company currently expends approximately $1.5 million per year
to maintain its vessels in good operating condition.
 
     Industry conditions, the availability of capital and other factors will
play a part in determining whether the Company will be able to maintain its
fleet through extending the economic life of existing vessels or acquiring new
or used vessels. If the Company is unable to replace its vessels at the end of
their economic useful lives, it could have an adverse effect on the Company's
profitability.
 
CUSTOMERS, CHARTER TERMS AND COMPETITION
 
     Gulf Offshore Marine's principal customers are major and independent oil
and gas exploration and production companies working in international markets,
as well as foreign government owned or controlled organizations. During 1995,
one customer accounted for 10% or more of total consolidated revenues: Aberdeen
Services Company (North Sea) Ltd. at 11%. The loss of a major customer could
have an adverse effect on the Company's financial condition and results of
operations until a new contract is obtained. As of March 1, 1996, eight of the
Company's owned and bareboat chartered vessels are on term charters with initial
charter periods of one year or longer. Three are on charters of less than one
year but over 30 days and four of the vessels are on spot contracts (less than
30 days). One
 
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<PAGE>   8
 
vessel is currently available for charter. The Highland Piper, to be delivered
in mid-March, has been committed to work under a six month charter.
 
     Offshore supply vessel companies compete principally on the basis of
suitability of equipment, price and service. Also in certain foreign countries,
preferences are given to vessels owned by national companies. The Company has
mitigated some of the impact of such preferences through affiliations and joint
ventures with local companies.
 
     The Company competes with approximately 20 similar companies in the North
Sea market and numerous small and large competitors in the Southeast Asia
market. Many of the Company's competitors have greater financial resources than
the Company.
 
GOVERNMENT REGULATION
 
     All of Gulf Offshore Marine's vessels are subject to various international
conventions including certain safety and construction standards. In addition,
the countries under which the vessels are flagged require certain periodic
inspections and drydock examinations. Generally surveys and inspections are
performed by internationally recognized classification societies. Most of the
Company's owned vessels are flagged either in Panama, the United Kingdom or
Malaysia. Among the more significant of the conventions applicable to the
Company are: (i) the International Convention for the Prevention of Pollution of
the Sea, 1973, 1979 Protocol, (ii) the International Convention on the Safety of
Life at Sea, 1974, 1978 and 1981/1983 Protocol, and (iii) the International
Convention on Standards of Training, Certification and Watchkeeping for
Seafarers, 1978. The Company believes that its vessels are in compliance with
the material regulations applicable to them and have all licenses necessary to
conduct their business.
 
OPERATIONAL RISKS AND INSURANCE
 
     The operation of marine service vessels is subject to various risks, such
as catastrophic marine disaster, adverse weather conditions, mechanical failure,
collision and errors in navigation, all of which represent a threat to the
safety of personnel and the Company's vessels, cargo, vessels under tow and
other property, as well as the environment. All of the segment's operations are
in foreign waters and as such are subject to the usual risks inherent in doing
business in foreign countries. Such risks include political changes, possible
vessel seizure, company nationalization or other governmental actions, currency
restrictions and revaluations and import/export restrictions, all of which are
beyond the control of the Company. Any of these events could result in revenue
and casualty loss, increased costs and significant liability to third parties.
 
     The Company maintains various types of insurance that it considers to be
adequate including hull and machinery insurance for its fleet, protection and
indemnity insurance against liabilities to employees and third parties for
injury, damage or pollution and other customary insurance. There can be no
assurance, however, that such insurance coverage would be adequate to cover
losses that the Company may incur or that adequate insurance rates that the
Company considers commercially reasonable will continue to be available.
 
SEASONALITY OF BUSINESS
 
     The operation of the Company's vessels is subject to seasonal factors.
Operations in the North Sea are generally at their highest level during the
months from April to August and at their lowest levels during the winter months.
Vessels operating in Southeast Asia are generally at their highest utilization
rates during the months of May to August and at their lowest utilization rates
during the monsoon season at the end of the year. In addition, operations may be
affected by unusually long or short construction seasons due to, among other
things, abnormal weather conditions.
 
                                EROSION CONTROL
 
     The Company's Erosion Control segment ("Ercon") offers a variety of turnkey
erosion control services and installations including: problem analysis, field
surveys, engineering design, permit acquisition, material procurement and
installation. Site specific systems are designed to protect property such as
pipelines, railroads, buildings, highways, marinas, beaches and fiber optic
cable systems. Each project is reviewed to determine the most cost-effective and
 
                                        8
<PAGE>   9
 
technically acceptable technique for the particular job based on engineering
analysis, research and prior experience. Projects typically take three weeks to
three months to complete and are secured generally through fixed price bids.
 
     A significant portion of the segment's work is related to protection of
waterway crossings for pipeline transmission firms, railroads, utilities, state
highway departments and major oil companies. When soil erosion causes pipeline
exposure on a creek crossing or riverbed, relocating or lowering the pipeline
can be very costly, and may provide only a temporary solution to a potentially
dangerous problem. The segment's proprietary erosion control techniques offer
long-term protection at substantial cost-savings by eliminating pipe relocation.
Additionally, there is no downtime or production loss as the segment's systems
allow the line to remain in operation throughout the installation process. A
similar cost-benefit relationship applies to highway and railroad bridges.
 
     Ercon continues to develop new products and techniques to address
site-specific problems for erosion control. Several patents have been granted
covering methods and systems including a "variable permeability" palisade system
to control water velocity adjacent to eroding river banks. Application has been
made for a patent covering innovations in the Eco-Flex pumped grout mat system
to allow its application where conventional bank armoring systems are losing
acceptability in today's environmentally conscious society. Modification of the
Palisade(TM) system to address certain bridge pier scour problems is being
actively pursued, and an installation of a prototype system is expected for
1996. It is anticipated that a favorable conclusion of these efforts to develop
new products will provide additional marketing opportunities.
 
     Ercon's business is moderately seasonal since many of its products and
systems are installed under field conditions, and projects can be impacted by
inclement weather.
 
                             ENERGY VENTURES, INC.
 
     The Company has a 14% interest in Energy Ventures, Inc. ("Energy
Ventures"), a publicly-traded (NYSE trading symbol "EVI") international oilfield
equipment manufacturer and service company that the Company now accounts for on
the cost method (see Note 3 to the Consolidated Financial Statements). Energy
Ventures has experienced substantial growth since 1986 as a result of
acquisitions and internal development. Acquisitions have focused on
under-utilized assets and proprietary technology used in the tubular, artificial
lift and completion systems and rig contracting businesses. Internal growth has
focused on investment in product development and expansion of geographic markets
through expanded distribution systems.
 
     Energy Ventures' operations are conducted through two business segments:
oilfield equipment and contract drilling. The oilfield equipment manufactured by
Energy Ventures comprises high performance tubulars and a complete line of
artificial lift and completion tool equipment. Energy Ventures' contract
drilling rig fleet consists primarily of barge rigs used by major and large
independent oil and gas companies for exploration and development of natural gas
in the U.S. Gulf Coast area. Energy Ventures' tubular products and contract
drilling rigs provide products and services used primarily for natural gas
exploration and production. The artificial lift and completion tool equipment
product lines are tied to the maturation of oil producing formations.
 
     Tubular products are provided through Energy Ventures' Grant Prideco
tubular products division. This division's products consist of proprietary drill
pipe and premium tubulars. Grant Prideco also designs, manufactures and markets
proprietary premium threaded connections for tubing and casing used in oil and
gas wells. Grant Prideco's products, particularly its premium tubulars, are used
primarily in connection with natural gas exploration and production. Energy
Ventures believes that Grant Prideco is the largest manufacturer and supplier of
drill pipe in the world and is one of the largest manufacturers of premium
tubulars in North America.
 
     Artificial lift and completion tool equipment is provided through Energy
Ventures' newly formed EVI Oil Tools division through the consolidation of the
Highland and Production Oil Tool businesses. EVI Oil Tools manufactures and
services artificial lift and completion tool equipment and parts used for the
production of crude oil. EVI Oil Tools provides a wide variety of proprietary
and patented products, including the RotaFlex(R) pumping unit, the Corod(TM)
continuous sucker rod, progressive cavity pumps, the Fluid Packed(TM) Pumps and
El(TM) sucker rods, Production Oil Tools packers, Engemaq completion tools and
Vitex flow control equipment. Energy Ventures believes that EVI Oil Tools is one
of the two largest manufacturers and distributors of sucker rod lift equipment
in the world. Energy
 
                                        9
<PAGE>   10
 
Ventures further believes that in this class of lift, EVI Oil Tools provides the
only integrated product line from the above ground equipment to the tools
submersed in the producing reservoir.
 
     Contract drilling services are provided through Energy Ventures' Mallard
drilling division. Mallard has 35 barge rigs operating in the U.S. Gulf Coast
area or available for operation in that market. Mallard's domestic barge fleet
is complemented by six offshore platform workover and drilling units.
Internationally, Mallard is currently operating under contract one barge rig in
Nigeria and two platform rigs in Peru. Mallard also owns four land rigs that are
currently chartered to Argentina. Mallard owns a 49% interest in a joint venture
that owns two land rigs in Peru.
 
     The principal customers of Energy Ventures are both domestic and
international oil and gas companies and the companies that service them. Energy
Ventures' business is highly competitive. Revenues and earnings can be affected
by changes in competitive prices, fluctuations in the level of activity in major
markets, general economic conditions and governmental regulations. Energy
Ventures competes with a large number of companies, some of which have greater
resources and more extensive and diversified operations.
 
                                   EMPLOYEES
 
     At March 1, 1996, the Company had 348 employees located in the United
States, the United Kingdom and Southeast Asia. The Company through its contract
with a crewing agency participates in collective bargaining arrangements with
approximately 181 employees working on its North Sea vessels under agreements
covering one to two year periods. The Company has no other collective bargaining
agreements. Relations with the employees are considered satisfactory.
 
ITEM 2. PROPERTIES
 
     The Company's principal executive offices are located in Houston, Texas.
Gulf Offshore Marine has its principal domestic offices in Lafayette, Louisiana
and docking and warehouse facilities in Morgan City, Louisiana. For local
support of its marine operations, Gulf Offshore Marine also has offices and
warehouse facilities in the United Kingdom and Singapore. Ercon maintains an
office and warehouse in Houston, Texas. Each of these facilities is under lease.
The Company's operations generally do not require highly specialized facilities,
and suitable facilities are generally available on a lease basis as required.
 
ITEM 3. LEGAL PROCEEDINGS
 
     On May 4, 1992, a lawsuit styled Vila v. Southern Pacific Railroad, et al,
was filed in the 253rd Judicial District Court of Liberty County, Texas naming
as defendants Southern Pacific Railroad, the Company and others. The Plaintiffs
claim $13.34 million in actual damages and an unspecified amount in punitive
damages resulting from flooding and erosion allegedly caused by Southern Pacific
Railroad and/or the Company. The lawsuit is expected to go to trial or be
resolved some time during 1996. Management of the Company believes the claims
against the Company to be without merit and intends to vigorously contest them.
Based on a review of the merits of the case, defenses available to the Company
and the expectation of insurance coverage, management does not expect this
lawsuit to have a material adverse effect on the Company.
 
     On November 14, 1995, an arbitration panel in Houston awarded a customer of
Ercon Development Co., the Company's subsidiary, $468,000 in connection with an
erosion control system installed on the customer's property. The amount of the
award is reflected in the accompanying statements of income. The Company made a
claim to its insurance carrier for the amount of the award and associated legal
fees; however, the insurance company has denied coverage. Coverage of the claim
and related costs of defense are the subject of ongoing litigation between the
Company and its insurance carrier.
 
     The Company is subject to legal proceedings and claims that arise in the
ordinary course of its business. Management believes, based on discussions with
its legal counsel and in consideration of reserves recorded, that the outcome of
these legal actions will not have a material adverse effect upon the
consolidated financial positions and results of operations of the Company.
 
                                       10
<PAGE>   11
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
     The Company's common stock, $1.00 par value (the "Common Stock"), is traded
in the over-the-counter market on the NASDAQ system under the symbol "GMRK." The
following table shows the range of high and low closing bid prices for the
Company's Common Stock for the periods indicated, as reported by the NASDAQ
Stock Market. Such bid prices reflect interdealer quotations without retail
markup, markdown or commissions and may not represent actual transactions.
 
<TABLE>
<CAPTION>
                                                           1995               1994
                                                       ------------       ------------
                                                       HIGH     LOW       HIGH     LOW
                                                       ----     ---       ----     ---
        <S>                                            <C>      <C>       <C>      <C>
        First quarter................................  17       14 3/4    14 1/4   12
        Second quarter...............................  19 1/4   15 1/2    12 1/2   11 1/2
        Third quarter................................  24       18        16 1/4   12 1/4
        Fourth quarter...............................  27       21        17 1/2   15 1/4
</TABLE>
 
     On March 1, 1996, there were approximately 1,612 record holders of the
Common Stock. The Company has not declared or paid any dividends during the past
five years. The Company currently intends to use cash generated from operations
for further development of its business. Any resumption of dividends will depend
upon future operating conditions, dividend policies of subsidiaries and
investees, financial requirements, general business conditions and other
factors. Currently three of the Company's subsidiaries, Gulf Offshore N.S. Ltd.
(United Kingdom), Gulf Offshore Far East, Inc. (Panama) and Gulf Offshore Marine
International, Inc. (Panama), are restricted under their debt agreements from
paying dividends without the lender's approval. These subsidiaries own eight
vessels operating in the North Sea, four vessels operating in Southeast Asia and
one vessel operating in Brazil, respectively. With respect to investees, Energy
Ventures does not currently pay dividends and has restrictions on its ability to
pay dividends.
 
                                       11
<PAGE>   12
 
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
 
<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                        ----------------------------------------------------------
                                          1995         1994         1993        1992        1991
                                        --------      -------      -------     -------     -------
                                                 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                     <C>           <C>          <C>         <C>         <C>
Revenues..............................  $ 36,077      $34,448      $27,887     $22,955     $17,221
                                        ========      =======      =======     =======     =======
Income before income taxes excluding
  equity in earnings of Energy
  Ventures, Inc. .....................  $  1,017      $ 2,876      $ 1,997     $ 2,445     $ 2,155
Equity in earnings of Energy
  Ventures, Inc. .....................       761 (3)    1,012        1,333         155       1,451
Income tax provision..................    (3,680)(3)   (1,108)        (686)       (732)       (745)
                                        --------      -------      -------     -------     -------
Income (loss) before extraordinary
  item................................    (1,902)       2,780        2,644       1,868       2,861
Extraordinary item attributable to
  Energy Ventures, Inc.(1)............        --         (706)(1)       --          --          --
                                        --------      -------      -------     -------     -------
Net income (loss).....................  $ (1,902)     $ 2,074      $ 2,644     $ 1,868     $ 2,861
                                        ========      =======      =======     =======     =======
Earnings per share:
  Income (loss) before extraordinary
     item.............................  $  (0.57)     $  0.83      $  0.80     $  0.56     $  0.86
  Extraordinary item(1)...............        --        (0.21)(1)       --          --          --
                                        --------      -------      -------     -------     -------
  Net income (loss)...................  $  (0.57)     $  0.62      $  0.80     $  0.56     $  0.86
                                        ========      =======      =======     =======     =======
Assets excluding investment in Energy
  Ventures, Inc.......................  $ 76,614      $67,088      $68,962     $57,320     $56,860
Investment in Energy Ventures,
  Inc. ...............................    34,321       21,588       21,797      20,663      20,752
                                        --------      -------      -------     -------     -------
Total assets..........................  $110,935      $88,676      $90,759     $77,983     $77,612
                                        ========      =======      =======     =======     =======
Long-term debt, excluding current
  portion.............................  $ 33,600      $26,727      $30,169     $18,730     $16,752
Total stockholders' equity(2).........    58,958       53,025       50,388      48,306      50,187
</TABLE>
 
---------------
 
(1) The extraordinary charge of $706,000 or $0.21 per share for the year ended
    December 31, 1994 is attributable to Energy Ventures' prepayment of certain
    debt.
 
(2) The Company has not declared any cash dividends during the past five years.
    Stockholders' equity includes a cumulative translation adjustment of
    $(4,146,000), $(3,773,000), $(4,326,000) and $(3,699,000) in 1995, 1994,
    1993, and 1992, respectively, and an unrealized gain on investment of
    $8,030,000 in 1995.
 
(3) As a result of the Company's interest in Energy Ventures, Inc. being reduced
    below 20% on June 30, 1995, the Company now follows the cost method for this
    investment. Accordingly, the Company no longer reflects its equity in Energy
    Ventures earnings. The Company also included $3,374,000 of additional
    deferred taxes in 1995 associated with its investment in Energy Ventures.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
                        LIQUIDITY AND CAPITAL RESOURCES
 
     At December 31, 1995, the Company had $5.2 million in cash and cash
equivalents as compared to $3.0 million at December 31, 1994. Investing and
financing activities used $5.7 million in cash and cash equivalents in 1995,
while $7.9 million of cash and cash equivalents was generated by operations.
This compared to $8.2 million used for investing and financing activities and
$5.7 million generated by operations in 1994.
 
     The Company has contracted with a shipyard in Norway for the construction
of two UT 755 design vessels for deployment in the North Sea. Delivery of the
first vessel, to be named the Highland Piper, is expected in mid-March 1996. The
second vessel is expected to be delivered in early 1997. The Company made
interim construction payments during 1995 and expects to make payments, net of
government subsidies, of $11,539,000 and $10,709,000 in 1996 and 1997,
respectively. Funding of $11,238,000 in 1996 and $7,845,000 in 1997 will be
provided by additional borrowings under existing credit facilities. On December
21, 1995, the Company acquired the Atlantic
 
                                       12
<PAGE>   13
 
Warrior, a 1981 built pipe carrier/platform supply vessel. The combination of
interim construction payments for the two new vessel buildings and the payment
to purchase the Atlantic Warrior resulted in capital expenditures of $13,301,000
in 1995. Funding for these expenditures were provided through borrowings under a
GBP4,890,000 (approximately $7,594,000) facility agreement with a bank and cash
from operations.
 
     The Company estimates that capital and maintenance expenditures, excluding
any expenditures to build or acquire additional vessels, will be approximately
$1.7 million for 1996, of which $1.3 million relates to drydockings. This
compares to actual expenditures of $2.1 million for 1995, of which $1.1 million
relates to drydockings. These expenditures vary from year to year due to the
scheduling of drydockings, which are generally required twice for every five
year period based on the requirements of classification societies. The remaining
proposed 1996 capital expenditures of $0.4 million relate to vessel upgrades and
non-marine expenditures that are not subject to firm commitments, and the
Company may modify its plans as appropriate.
 
     At December 31, 1995, the Company had outstanding long-term debt of
$36,644,000 borrowed under various facilities. These facilities are secured by
preferred ship mortgages on twelve of the Company's vessels and assignments of
such vessels' earnings. Interest on the borrowings accrues at rates between
LIBOR plus 1 1/4% and LIBOR plus 1 5/8% per annum. Scheduled debt repayments are
expected to total $3,044,000 million for 1996. The loan facility agreements
place certain restrictions on the ability of the subsidiaries subject to these
agreements to pay dividends. Cash held by these subsidiaries was $3,517,000 as
of December 31, 1995. As of March 1, 1996, the Company could borrow up to
$4,185,000 under its short-term credit facility and $500,000 under its long-term
credit facility without providing additional security to its lenders. An
additional $9,283,000 is available under a revolving credit facility with the
provision of further security either through vessel mortgages, securing
long-term charters or a combination thereof.
 
     Substantially all of the Company's tax provision is for deferred taxes. The
Company has net operating loss carryforwards for tax purposes that are available
to offset taxable income generated of $8,021,000 for United States tax purposes
and of $19,498,000 for United Kingdom tax purposes in future years. The net
operating loss available in the United Kingdom is primarily the result of
accelerated depreciation allowances under United Kingdom tax law. The Company
also has foreign tax credits of $387,000 and alternative minimum tax credits of
$284,000 available to offset taxable income generated for United States tax
purposes.
 
     The Company believes that current reserves of cash and short-term
investments, cash flows from operations and access to various credit
arrangements will provide sufficient resources to finance internal operating
requirements. The Company continues, however, to actively seek further
investment opportunities. Such investments may require the expenditure of
significant resources, either in cash, notes, stock or a combination thereof.
 
                             RESULTS OF OPERATIONS
 
GENERAL
 
     The demand and pricing for the Company's services is substantially
dependent on worldwide levels of exploration and production of oil and gas.
Exploration and development activity is in turn largely dependent upon
prevailing oil and natural gas prices. Prices for oil and natural gas have
historically been extremely volatile and have reacted to actual and perceived
changes in demand and supply of oil and natural gas, domestic and worldwide
economic conditions and political instabilities in the oil producing countries.
 
     During 1994, world oil prices declined to their lowest level since the end
of the Iraqi war. The decline in prices related to a number of factors,
including a continued sluggish world economy, an inability of OPEC to reach an
agreement on production levels and prices and uncertainty surrounding the
resumption of Iraqi oil exports. This decline in oil prices affected the demand
for the Company's offshore marine services. Oil prices recovered somewhat and
stabilized in 1995 and natural gas prices in the United States improved during
the course of 1995. However, gas prices in the United Kingdom dropped
significantly and led to reduced activity in the Southern sector of the North
Sea. Results for 1996 will continue to be affected by price levels for oil and
natural gas and other influences on exploration and development, in particular
in the North Sea and Southeast Asia.
 
                                       13
<PAGE>   14
 
YEAR ENDED DECEMBER 31, 1995 COMPARED TO 1994
 
     Revenues increased from $34,448,000 in 1994 to $36,077,000 in 1995 while
operating income declined from $4,225,000 in 1994 to $3,450,000 as earnings in
the Southeast Asia region decreased between 1994 and 1995. Revenues and average
number of owned/bareboat chartered vessels by region and segment compared as
follows (in thousands):
 
<TABLE>
<CAPTION>
                                          EROSION        OFFSHORE MARINE SERVICES
                                          CONTROL     -------------------------------
                                          -------                             BRAZIL
                                          UNITED                    FAR         AND
                                          STATES      EUROPE       EAST        OTHER        TOTAL
                                          -------     -------     -------     -------     ----------
    <S>                                   <C>         <C>         <C>         <C>         <C>
    1995:
      Revenues..........................  $ 8,844     $20,176     $ 6,142      $ 915       $ 36,077
      Average number of owned/bareboat
         chartered vessels..............      N/A           8           7          1             16
    1994:
      Revenues..........................  $ 6,756     $18,685     $ 8,178      $ 829       $ 34,448
      Average number of owned/bareboat
         chartered vessels..............      N/A           8           9          1             18
</TABLE>
 
     Revenues and operating income for the North Sea region improved somewhat
due to a combination of improved dayrates and utilization rates. The decline in
revenues and earnings for Southeast Asia is due primarily to lower utilization
rates as well as the lack of earnings from the Seawind which was sold in late
1994.
 
     Erosion Control segment revenues increased by $2,088,000 in 1995 due to an
increase in the number of jobs that in turn resulted in higher operating income
for the segment of $759,000 in 1995 compared to $567,000 in 1994.
 
     Selling, general and administrative costs increased by $174,000 in 1995
reflecting an award attributable to a customer claim. Interest expense increased
from $2,408,000 in 1994 to $2,801,000 in 1995 as the result of higher overall
interest rates and the writeoff of certain loan costs on debt which was
refinanced through a new facility with a different bank. Other income in 1994
included a gain of $842,000 from the sale of the Highland Sentinel.
 
     In addition to variable expenses associated with the operation of the
Company's fleet, the Company also incurs fixed charges to depreciate its vessels
and amortize certain other assets, including deferred drydocking costs.
Depreciation and amortization for 1995 was $5,571,000, representing an increase
of $425,000 from 1994. This increase was due to increased drydocking
amortization expense.
 
     Several non-recurring, non-cash charges related to the Company's investment
in Energy Ventures contributed to the lack of comparability between 1995 and
1994 net income. The loss of $(1,902,000), or $(0.57) per share, for 1995
includes $3,374,000, or $1.02 per share, for additional deferred taxes related
to the Energy Ventures investment. Secondly, equity in earnings of Energy
Ventures of $761,000 is attributable to earnings prior to June 30, 1995 since
subsequent to such date the Company followed the cost method of accounting for
this investment. This amount compares to $1,012,000 in 1994 which is
attributable to a full year under the equity method. Lastly, net income of
$2,074,000 or $0.62 per share for 1994 includes an extraordinary charge of
$706,000, net of tax, attributable to Energy Ventures' prepayment of certain
debt.
 
     The effective tax rate of the Company was 207% in 1995 as compared to 29%
in 1994. The increase in the effective tax rate is due primarily to additional
deferred taxes associated with the Company's investment in Energy Ventures
discussed above.
 
YEAR ENDED DECEMBER 31, 1994 COMPARED TO 1993
 
     Income before extraordinary item was $2,780,000, or $0.83 per share, for
1994 as compared to $2,644,000, or $0.80 per share, for the prior year. Higher
earnings in the North Sea region were offset by decreased earnings in the
Southeast Asia region and by decreased earnings from the Seapower. Equity in
earnings from Energy Ventures before
 
                                       14
<PAGE>   15
 
extraordinary item decreased by $321,000 from $1,333,000 in 1993 to $1,012,000
in 1994. While Energy Ventures' operating income for 1994 increased 5% over
1993, income before extraordinary item decreased primarily as a result of higher
interest costs from increased borrowing. In addition, the Company recognized in
1994 an extraordinary charge of $706,000, net of tax, attributable to Energy
Ventures' prepayment of certain debt.
 
     Revenues increased from $27,887,000 in 1993 to $34,448,000 in 1994. The
increase in revenues of $6,561,000 is primarily due to a full year's results
from the 1993 additions to the offshore marine services segment's fleet and, to
a lesser degree, an increase in the number and size of jobs performed by the
erosion control segment. Revenues and average number of owned/bareboat chartered
vessels by region and segment compared as follows (in thousands):
 
<TABLE>
<CAPTION>
                                             EROSION
                                             CONTROL        OFFSHORE MARINE SERVICES
                                             -------    --------------------------------
                                             UNITED                             BRAZIL
                                             STATES     EUROPE     FAR EAST    AND OTHER     TOTAL
                                             -------    -------    --------    ---------    -------
    <S>                                      <C>        <C>        <C>         <C>          <C>
    1994:
      Revenues.............................  $ 6,756    $18,685     $ 8,178     $   829     $34,448
      Average number of owned/bareboat
         chartered vessels.................      N/A          8           9           1          18
    1993:
      Revenues.............................  $ 5,323    $13,274     $ 8,082     $ 1,208     $27,887
      Average number of owned/bareboat
         chartered vessels.................      N/A          8           8           1          17
</TABLE>
 
     In the North Sea, the BP Shipping assets acquired in July 1993 contributed
approximately $5.3 million in additional revenue and $1.3 million in additional
operating income with a full year of service. Revenues for the North Sea fleet
also improved as a result of higher average utilization rates for the year.
 
     Market conditions in Southeast Asia for the Company's vessels were more
competitive in 1994 as compared to 1993. The Company was able to keep
utilization rates steady from 1993; however, day rates declined.
 
     Revenues of $1,208,000 earned in Brazil in 1993 are attributable to one
vessel working under a term charter that expired August 7, 1993. During 1994 the
vessel earned $400,000 less in revenues as it worked under several short term
contracts in various locations with more idle time and at lower rates than in
1993. This vessel returned to Brazil in May 1995 and commenced working under a
two year contract with Petrobras.
 
     Erosion Control segment revenues increased by $1,433,000 in 1994 through
increased sales efforts that in turn were reflected in higher operating income
for the segment of $567,000 in 1994 compared to $427,000 in 1993.
 
     Selling, general and administrative costs increased by $1,195,000 as a
result of additional support needed to serve the Company's expanded marine
fleet. Other income included a gain of $842,000 from the sale of the Highland
Sentinel in June 1994.
 
     In addition to variable expenses associated with the operation of the
Company's fleet, the Company also incurs fixed charges to depreciate its vessels
and amortize certain other assets, including deferred drydocking costs.
Depreciation and amortization for 1994 was $5,146,000, representing an increase
of $1,294,000 from 1993. This increase includes $834,000 of additional
depreciation over 1993 related to the acquisition of the BP Shipping assets in
1993. The remainder of the increase was due to increased drydocking
expenditures.
 
     The effective tax rate of the Company was 29% in 1994 as compared to 21% in
1993. The increase in the effective tax rate is due primarily to a lower
percentage of the Company's earnings attributable to the equity investment in
Energy Ventures which is taxed at a lower rate.
 
CURRENCY FLUCTUATIONS AND INFLATION
 
     A significant portion of the Company's operations are overseas, therefore
the Company is potentially exposed to currency fluctuations and exchange risks.
Charters for vessels in the Company's North Sea fleet are primarily denominated
in British Pounds Sterling ("Sterling") and substantially all the operating
costs are in Sterling. North
 
                                       15
<PAGE>   16
 
Sea operations generated $20.2 million in revenues, $4.0 million in operating
income and $6.1 million of cash flows from operations in 1995 in Sterling. In
1995 the Sterling/Dollar exchange rate ranged from a high of GBP = U.S.$1.64 to
a low of GBP = U.S.$1.53 for an average of GBP = U.S.$1.58 for the year. As of
March 1, 1996, the Sterling/Dollar exchange rate was GBP = U.S.$1.53. The
Company hedged the effect on cash flows of these fluctuations in the
Sterling/Dollar exchange rates through Sterling denominated borrowings that
account for 89% or $32,600,000 of total debt and represented $15.7 million or
all of the debt repayments made in 1995.
 
     Reflected in the accompanying balance sheet for December 31, 1995, is a
$(4,146,000) cumulative translation adjustment primarily relating to the lower
Sterling exchange rate as of year end in comparison to the exchange rate when
the Company invested capital in its United Kingdom subsidiaries. Changes in the
cumulative translation adjustment are non-cash items that are primarily
attributable to investments in vessels and are partially offset by the Sterling
denominated debt in the North Sea.
 
     During 1994 and previous years several of the Company's Southeast Asia
charters were denominated in Malaysian ringgits as were a portion of the
operating costs. Cash flows for this currency were much lower in 1995
(approximately $1.1 million). Malaysian currency rates have been relatively
stable in recent years, with the exchange rate for ringgits to U.S. dollars
averaging M$ = U.S.$0.40 during 1995 and the high and low during the year
ranging within 3% of this average. Therefore, the Company does not currently
hedge this currency. Where currency risks are high, as in Brazil, the Company
has generally accepted only a small percentage of charter hire in local currency
and the remainder is paid in U.S. dollars.
 
     In connection with the final payment to a shipyard for the Highland Piper,
the Company entered into a forward contract to hedge approximately $10,915,000
of the commitment to pay in Norwegian Kroner against unfavorable fluctuations in
the exchange rate to Sterling which will be used to fund the payment. The
unrealized gain of $168,000 as of December 31, 1995, is not reflected in the
accompanying financial statements. Upon realization, expected to be mid-March
when the vessel is delivered, any gain or loss will be included in the cost of
the vessel. The Company expects to make additional payments in Norwegian Kroner
of $624,000 and $10,709,000 in 1996 and 1997, respectively.
 
     To date, general inflationary trends have not had a material effect on the
Company's operating revenues or expenses.
 
PENDING ACCOUNTING MATTERS
 
     Management is evaluating the useful life of twenty years currently used for
depreciating vessels in light of recent vessel performance, changes in the
materials available to protect vessel hulls and industry practice. The Company
expects to complete this evaluation in the first quarter of 1996. Based on
information currently available, the Company anticipates that the useful life of
its vessels will be extended effective January 1, 1996. Such revisions are
expected to have the effect of materially improving operating results in 1996.
 
     In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", which is effective for the Company on January 1,
1996. The statement sets forth guidelines regarding when to recognize an
impairment of long-lived assets, including goodwill, and how to measure such
impairment. The Company does not expect the impact of SFAS No. 121 will have a
significant effect on the Company's consolidated financial statements.
 
     As of January 1, 1996, SFAS No. 123, "Accounting for Stock-Based
Compensation", will be effective for the Company. SFAS No. 123 permits, but does
not require, a fair value based method of accounting for employee stock option
plans which results in compensation expense recognition when stock options are
granted. The Company plans to continue the use of its current intrinsic value
based method of accounting for such plans. As required by SFAS No. 123, the
Company will provide pro forma disclosure of net income and earnings per share
in the notes to the consolidated financial statements as if the fair value based
method of accounting had been applied to awards covered by SFAS No. 123.
 
                                       16
<PAGE>   17
 
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To GulfMark International, Inc.:
 
     We have audited the accompanying consolidated balance sheets of GulfMark
International, Inc. (a Delaware corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1995. These financial statements and the schedule referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of GulfMark International, Inc.
and subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
 
     Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule I is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
 
/s/ ARTHUR ANDERSEN LLP
 
Houston, Texas
March 1, 1996
 
                                       17
<PAGE>   18
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                          --------------------
                                                                            1995        1994
                                                                          --------     -------
                                                                             (IN THOUSANDS)
<S>                                                                       <C>          <C>
                                            ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.............................................  $  5,163     $ 2,989
  Accounts receivable...................................................     6,148       7,938
  Inventory, prepaids and other.........................................     1,399       1,781
                                                                          --------     -------
          Total current assets..........................................    12,710      12,708
                                                                          --------     -------
INVESTMENT IN ENERGY VENTURES, INC., including unrealized gain of
  $12,151,000 in 1995...................................................    34,321      21,588
                                                                          --------     -------
PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation of
  $14,959,000 in 1995 and $11,179,000 in 1994...........................    61,582      51,405
                                                                          --------     -------
OTHER ASSETS............................................................     2,322       2,975
                                                                          --------     -------
                                                                          $110,935     $88,676
                                                                          ========     =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term borrowings and current portion of long-term debt...........  $  4,066     $ 1,487
  Accounts payable......................................................     1,779       1,540
  Accrued payroll and related expenses..................................       564       1,009
  Other accrued liabilities.............................................     1,245       1,738
                                                                          --------     -------
          Total current liabilities.....................................     7,654       5,774
                                                                          --------     -------
LONG-TERM DEBT..........................................................    33,600      26,727
                                                                          --------     -------
DEFERRED TAXES AND OTHER................................................    10,308       2,629
                                                                          --------     -------
MINORITY INTEREST.......................................................       415         521
                                                                          --------     -------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Common stock, $1 par value; 10,000,000 shares authorized; issued and
     outstanding 3,336,352 and 3,321,385 shares.........................     3,336       3,321
  Additional paid-in capital............................................    23,501      23,338
  Retained earnings.....................................................    28,237      30,139
  Cumulative translation adjustment.....................................    (4,146)     (3,773)
  Unrealized gain on investment.........................................     8,030          --
                                                                          --------     -------
          Total stockholders' equity....................................    58,958      53,025
                                                                          --------     -------
                                                                          $110,935     $88,676
                                                                          ========     =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       18
<PAGE>   19
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
                       CONSOLIDATED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                              ---------------------------------
                                                               1995         1994         1993
                                                              -------      -------      -------
<S>                                                           <C>          <C>          <C>
                                                               (IN THOUSANDS, EXCEPT PER SHARE
                                                                          AMOUNTS)
REVENUES....................................................  $36,077      $34,448      $27,887
                                                              -------      -------      -------
COST AND EXPENSES:
  Direct operating expenses.................................   26,568       24,338       19,221
  Selling, general and administrative expenses..............    6,059        5,885        4,690
                                                              -------      -------      -------
                                                               32,627       30,223       23,911
                                                              -------      -------      -------
OPERATING INCOME............................................    3,450        4,225        3,976
                                                              -------      -------      -------
OTHER INCOME (EXPENSES):
  Equity in earnings of Energy Ventures, Inc. ..............      761        1,012        1,333
  Interest expense..........................................   (2,801)      (2,408)      (2,237)
  Interest income...........................................      188          229          190
  Minority interest.........................................      106         (124)         (73)
  Gain on sale of vessel....................................       --          842           --
  Other.....................................................       74          112          141
                                                              -------      -------      -------
                                                               (1,672)        (337)        (646)
                                                              -------      -------      -------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM...........    1,778        3,888        3,330
INCOME TAX PROVISION........................................   (3,680)      (1,108)        (686)
                                                              -------      -------      -------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM.....................   (1,902)       2,780        2,644
EXTRAORDINARY ITEM ATTRIBUTABLE TO ENERGY VENTURES, INC.
  (Less applicable tax benefit of $51)......................       --         (706)          --
                                                              -------      -------      -------
NET INCOME (LOSS)...........................................  $(1,902)     $ 2,074      $ 2,644
                                                              =======      =======      =======
EARNINGS PER SHARE:
  Income (loss) before extraordinary item...................  $ (0.57)     $  0.83      $  0.80
  Extraordinary item attributable to Energy Ventures,
     Inc....................................................       --        (0.21)          --
                                                              -------      -------      -------
  Net income (loss).........................................  $ (0.57)     $  0.62      $  0.80
                                                              =======      =======      =======
WEIGHTED AVERAGE SHARES OUTSTANDING.........................    3,322        3,320        3,312
                                                              =======      =======      =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       19
<PAGE>   20
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1995
 
<TABLE>
<CAPTION>
                                  COMMON
                                 STOCK AT    ADDITIONAL                 CUMULATIVE     UNREALIZED         TOTAL
                                  $1 PAR      PAID-IN      RETAINED     TRANSLATION      GAIN ON      STOCKHOLDERS'
                                  VALUE       CAPITAL      EARNINGS     ADJUSTMENT     INVESTMENT        EQUITY
                                 --------    ----------    ---------    -----------    -----------    -------------
                                                                   (IN THOUSANDS)
<S>                              <C>         <C>           <C>          <C>            <C>            <C>
Balance at December 31, 1992...   $ 3,310     $ 23,274      $ 25,421      $(3,699)       $    --         $48,306
  Net income...................        --           --         2,644           --             --           2,644
  Issuance of stock............        10           55            --           --             --              65
  Translation adjustment.......        --           --            --         (627)            --            (627)
                                  -------     --------      --------      -------        -------         -------
Balance at December 31, 1993...     3,320       23,329        28,065       (4,326)            --          50,388
  Net income...................        --           --         2,074           --             --           2,074
  Issuance of stock............         1            9            --           --             --              10
  Translation adjustment.......        --           --            --          553             --             553
                                  -------     --------      --------      -------        -------         -------
Balance at December 31, 1994...     3,321       23,338        30,139       (3,773)            --          53,025
  Net loss.....................        --           --        (1,902)          --             --          (1,902)
  Issuance of stock............        15          163            --           --             --             178
  Translation adjustment.......        --           --            --         (373)            --            (373)
  Unrealized gain on
     investment................        --           --            --           --          8,030           8,030
                                  -------     --------      --------      -------        -------         -------
Balance at December 31, 1995...   $ 3,336     $ 23,501      $ 28,237      $(4,146)       $ 8,030         $58,958
                                  =======     ========      ========      =======        =======         =======
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       20
<PAGE>   21
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                                               ---------------------------------
                                                                 1995        1994         1993
                                                               --------     -------     --------
                                                                        (IN THOUSANDS)
<S>                                                            <C>          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)..........................................  $ (1,902)    $ 2,074     $  2,644
  Adjustments to reconcile net income (loss) to net cash
     provided by operations:
     Depreciation and amortization...........................     5,571       5,146        3,852
     Equity in earnings of Energy Ventures, Inc..............      (761)       (255)      (1,333)
     Deferred and other income tax provision.................     3,571         815          574
     Minority interest.......................................      (106)        124           73
     Gain on sale of assets..................................        --        (842)          --
     Change in assets and liabilities:
       Accounts receivable...................................     1,769        (105)      (3,166)
       Inventory, prepaids and other.........................       (73)       (816)        (153)
       Accounts payable......................................       281        (818)         809
       Accrued payroll and related expenses..................      (449)        259         (108)
       Other accrued liabilities.............................      (498)        394           67
     Other, net..............................................       475        (264)        (158)
                                                               --------     -------     --------
          Net cash provided by operating activities..........     7,878       5,712        3,101
                                                               --------     -------     --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment........................   (14,229)       (816)     (13,247)
  Expenditures for drydocking and main engine overhaul.......    (1,141)     (1,592)      (1,354)
  Proceeds from sales of vessels and other equipment.........       169       2,021           --
  Acquisition of minority interest...........................        --          --       (2,372)
                                                               --------     -------     --------
          Net cash used in investing activities..............   (15,201)       (387)     (16,973)
                                                               --------     -------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt, net of direct financing costs..........    25,188         893       21,476
  Repayments of debt.........................................   (15,709)     (8,873)      (8,917)
  Minority interest investment...............................        --          --          186
  Proceeds from issuance of stock............................       178          10           65
  Other......................................................      (160)        124          (56)
                                                               --------     -------     --------
          Net cash provided by (used in) financing
            activities.......................................     9,497      (7,846)      12,754
                                                               --------     -------     --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.........     2,174      (2,521)      (1,118)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR...............     2,989       5,510        6,628
                                                               --------     -------     --------
CASH AND CASH EQUIVALENTS AT END OF YEAR.....................  $  5,163     $ 2,989     $  5,510
                                                               ========     =======     ========
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid..............................................  $  2,793     $ 2,075     $  1,934
                                                               ========     =======     ========
  Income taxes paid..........................................  $    167     $   360     $     25
                                                               ========     =======     ========
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       21
<PAGE>   22
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
PRINCIPLES OF CONSOLIDATION
 
     The accompanying consolidated financial statements include the accounts of
GulfMark International, Inc. and all majority-owned subsidiaries (the
"Company"). All significant intercompany accounts and transactions between
affiliated companies have been eliminated. Entities in which the Company owns
20%-50% are treated as unconsolidated subsidiaries and are accounted for by the
equity method.
 
STATEMENT OF CASH FLOWS
 
     U.S. Government securities and commercial paper with original maturities of
up to three months are included in cash and cash equivalents in the accompanying
Consolidated Balance Sheets and Consolidated Statements of Cash Flows.
 
PROPERTY AND EQUIPMENT
 
     Property and equipment is stated at cost. Depreciation is provided by the
straight-line method with a salvage value of 10% for vessels. Vessels are
depreciated over a useful life of twenty years. Equipment, furniture and
fixtures are depreciated over two to five years. Maintenance and repairs that do
not extend the useful life of the asset and are not attributable to drydockings
of vessels are charged to operations as incurred. Major renovation costs and
modifications are capitalized and amortized over the estimated remaining useful
life. Included in net income (loss) for 1995, 1994, and 1993 is $1,457,000,
$1,433,000, and $871,000, respectively, of costs for maintenance and repairs.
 
     Management is evaluating the useful life of twenty years currently used for
depreciating vessels in light of recent vessel performance, changes in the
materials available to protect vessel hulls and industry practice. The Company
expects to complete this evaluation in the first quarter of 1996. Based on
information currently available, the Company anticipates that the useful life of
its vessels will be extended effective January 1, 1996. Such revisions are
expected to have the effect of materially improving operating results in 1996.
 
OTHER ASSETS
 
     Other assets primarily consist of deferred drydocking costs and deferred
loan costs. Costs incurred in connection with drydocking are capitalized and
amortized over approximately a 2 1/2 year period which approximates the period
between required drydockings. Deferred loan costs are amortized over the
expected term of the loan.
 
REVENUE RECOGNITION
 
     Revenues from charters for offshore marine services are recognized as
earned based on contractual charter rates. Revenues from long-term contracts for
erosion control services are recognized under the percentage-of-completion
method. Revisions in cost and earnings estimates are reflected in the period
when known. On contracts where an ultimate loss is anticipated upon completion,
the entire amount of the estimated loss is accrued when known. Typically
contracts are short-term in duration.
 
INCOME TAXES
 
     The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes" ("SFAS No.
109"), which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
financial statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement carrying amounts and tax bases of assets and liabilities using enacted
tax rates and laws in effect in the years in which the differences are expected
to reverse. SFAS No. 109 also requires that the likelihood and amount
 
                                       22
<PAGE>   23
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
of future taxable income be included in the criteria used to determine the
timing and amount of tax benefits recognized for net operating losses and tax
credit carryforwards in the financial statements. The adoption of SFAS No. 109
beginning January 1, 1993 had no material effect on the Company's results of
operations.
 
FOREIGN CURRENCY TRANSLATION
 
     Assets and liabilities of the Company's foreign affiliates, other than
those located in highly inflationary countries, are translated at year-end
exchange rates, while income and expenses are translated at average rates for
the period. For entities in highly inflationary countries, a combination of
current and historical rates is used to determine currency gains and losses
resulting from financial statement translation and those resulting from
transactions. Translation gains and losses are reported as a component of
stockholders' equity, except for those associated with highly inflationary
countries that are reported directly in the Consolidated Statements of Income.
Transaction gains and losses are reported directly in the Consolidated
Statements of Income.
 
     In connection with the final payment to a shipyard for the Highland Piper
(see Note 2 below), the Company entered into a forward contract to hedge
approximately $10,915,000 of the commitment to pay in Norwegian Kroner against
unfavorable fluctuations in the exchange rate to Sterling which will be used to
fund the payment. The unrealized gain of $168,000 as of December 31, 1995, is
not reflected in the accompanying financial statements. Upon realization,
expected to be mid-March when the vessel is delivered, any gain or loss will be
included in the cost of the vessel.
 
EARNINGS PER SHARE
 
     Earnings per share is based on the weighted average number of shares of
common stock outstanding. Common stock equivalents have not been included in the
computation of earnings per share since the effect is not significant. Fully
diluted earnings per share is not presented as such amounts do not materially
differ from primary earnings per share.
 
USE OF ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
 
CONCENTRATION OF CREDIT RISK
 
     The Company extends credit to various companies in the energy industry
which may be affected by changes in economic or other external conditions. The
Company's policy is to manage its exposure to credit risk through credit
approvals and limits. Historically write-offs for doubtful accounts have been
insignificant.
 
NATURE OF OPERATIONS
 
     The nature and location of the Company's operations is discussed in Note 10
as well as in Part I. Item I -- Business.
 
PENDING ACCOUNTING PRONOUNCEMENTS
 
     In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", which is effective for the Company on January 1,
1996. The statement sets forth guidelines regarding when to recognize an
impairment of long-lived assets, including goodwill, and how to measure such
impairment. The Company does not expect the impact of SFAS No. 121 will have a
significant effect on the Company's consolidated financial statements.
 
                                       23
<PAGE>   24
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     As of January 1, 1996, SFAS No. 123, "Accounting for Stock-Based
Compensation", will be effective for the Company. SFAS No. 123 permits, but does
not require, a fair value based method of accounting for employee stock option
plans which results in compensation expense recognition when stock options are
granted. The Company plans to continue the use of its current intrinsic value
based method of accounting for such plans. As required by SFAS No. 123, the
Company will provide pro forma disclosure of net income and earnings per share
in the notes to the consolidated financial statements as if the fair value based
method of accounting had been applied to awards covered by SFAS No. 123.
 
(2)  VESSEL ACQUISITIONS
 
     The Company has contracted with a shipyard in Norway for the construction
of two new UT 755 design vessels for deployment in the North Sea. Delivery of
the first vessel to be named the Highland Piper is expected in mid-March 1996.
The second vessel is expected to be delivered in early 1997. On December 21,
1995, the Company acquired the Atlantic Warrior, a 1981 built pipe
carrier/platform supply vessel which had been bareboat chartered by the Company
since July 1993. Included in capital expenditures for 1995 is $13,301,000
related to interim construction payments and the purchase of the Atlantic
Warrior. The Company expects to make further payments, net of government
subsidies, of $11,539,000 and $10,709,000 in 1996 and 1997, respectively,
related to the two vessels under construction. Funding for the 1995 expenditures
was provided through borrowings under a GBP4,890,000 (approximately $7,594,000)
facility. Funds of $19,095,000 for the 1996 and 1997 expenditures are expected
to be provided through additional borrowings under the Company's existing credit
facilities.
 
     On July 9, 1993, the Company acquired from BP Shipping Limited
substantially all of the assets of its offshore supply division for $13.1
million in cash. The acquired assets primarily consisted of two platform supply
vessels, the Balblair, renamed the Highland Champion, and the Northern Fortress,
renamed the Highland Fortress, and management contracts for four platform supply
vessels and four standby rescue vessels. All of the vessels acquired and the
vessels working under the acquired management contracts are managed by the
Company's North Sea operations. Funding for the acquisition was provided through
borrowings under facility agreements with a bank.
 
     On July 30, 1993, the Company acquired the remaining 45% minority interest
in the Highland Pride, a 1992 built pipe carrier/platform supply vessel, for
$2.4 million in cash.
 
     The Company's 51% owned company, SeaMark Ltd., has bareboat chartered
certain vessels from the 49% owner, a U.S. owner/operator, at a combined rate of
less than $2,000 per day.
 
(3)  INVESTMENT IN ENERGY VENTURES, INC.
 
     Energy Ventures, Inc. ("Energy Ventures") is a publicly-traded (NYSE
trading symbol "EVI") international oilfield equipment and service company which
manufactures artificial lift and completion systems, drill pipe and premium
tubulars and provides rig contracting services. At December 31, 1995, the
Company owned 14% of the outstanding stock of Energy Ventures. The Company's
ownership interest was diluted from 20% to 17% on June 30, 1995, as a result of
Energy Ventures issuing 2.25 million shares in connection with an acquisition
and from 17% to 14% in September 1995 with the issuance of 3.45 million shares
through a public stock offering.
 
     The shares of Energy Ventures owned by the Company are held for investment
purposes. Because of, among other things, the Company's 14% ownership of Energy
Ventures as well as the two common directors between the two companies, the
Company may be considered an "affiliate" of Energy Ventures under federal
securities rules and regulations. As such, these shares may not be able to be
sold by the Company absent registering such shares under the Securities Act of
1933 or an exemption therefrom.
 
     Prior to June 30, 1995, the Company accounted for Energy Ventures on the
equity method; however, the reduction in the Company's ownership interest on
June 30, 1995, necessitated a change from the equity method to the cost method
and the application of certain requirements of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS No. 115"). Under the cost
 
                                       24
<PAGE>   25
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
method the Company no longer records its proportionate share of Energy Ventures'
earnings as was done prior to June 30, 1995, under the equity method. Any
dividends paid by an investee under the cost method are reported as income to
the extent that such amounts are not in excess of net accumulated earnings
subsequent to the date the Company began following the cost method.
 
     In addition, under SFAS No. 115, ". . . the portion of the security that
can reasonably be expected to qualify for sale within one year . . ." must be
reported at its "fair value." If the Company is considered an "affiliate" under
the federal securities rules and regulations, approximately 736,000 shares
represents the number of shares which may be sold by the Company without
registration pursuant to Rule 144 promulgated under the Securities Act of 1933.
Accordingly the Company has reflected in the accompanying balance sheet
approximately 736,000 shares of the Energy Ventures holding at the closing price
quoted on the New York Stock Exchange as of December 31, 1995. The related
unrealized gains and losses on those shares, effective June 30, 1995, are
reflected as a separate component of stockholders' equity, net of the related
deferred taxes, until realized. The remaining 1,799,572 shares are carried at
historical cost.
 
     The quoted market value of Energy Ventures' shares held by the Company may
not be the value that would be realized should the Company dispose of some or
all of the shares. As of March 1, 1996, the quoted market value of Energy
Ventures' shares held by the Company was $65,925,000. The equity in earnings of
Energy Ventures and its subsidiaries for the six months ended June 30, 1995 and
the years ended December 31, 1994 and 1993, excluding extraordinary item, was
$761,000, $1,012,000, and $1,333,000, respectively. In addition, the Company
recognized in 1994 an extraordinary charge of $706,000, net of tax, attributable
to the prepayment of certain debt.
 
     The following represents summarized financial information for Energy
Ventures. For more information regarding Energy Ventures' financial condition
and operations, reference is made to the Energy Ventures Form 10-K filed with
the Securities and Exchange Commission.
 
                           SUMMARIZED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                    AS OF DECEMBER 31,
                                   ---------------------
                                     1995         1994
                                   --------     --------
                                      (IN THOUSANDS)
<S>                                <C>          <C>
Current assets...................  $249,574     $164,803
Non-current assets...............   241,486      185,885
                                   --------     --------
                                   $491,060     $350,688
                                   ========     ========
Current liabilities..............  $ 97,116     $ 70,465
Non-current liabilities..........   165,878      169,310
Stockholders' equity.............   228,066      110,913
                                   --------     --------
                                   $491,060     $350,688
                                   ========     ========
</TABLE>
 
                          SUMMARIZED INCOME STATEMENTS
 
<TABLE>
<CAPTION>
                              FOR YEAR ENDED DECEMBER 31,
                          -----------------------------------
                            1995         1994         1993
                          ---------    ---------    ---------
                                    (IN THOUSANDS)
<S>                       <C>          <C>          <C>
Revenues................  $ 351,587    $ 248,537    $ 246,017
Expenses................   (319,147)    (229,068)    (227,462)
Other expenses, net.....    (16,049)     (13,021)      (5,744)
                          ---------    ---------    ---------
Income before taxes.....     16,391        6,448       12,811
Taxes...................     (5,080)      (1,806)      (4,864)
                          ---------    ---------    ---------
Income from continuing
  operations............     11,311        4,642        7,947
Discontinued operations,
  net of taxes..........         --           --       (2,057)
                          ---------    ---------    ---------
Income before
  extraordinary item....     11,311        4,642        5,890
Extraordinary item......         --       (3,784)          --
                          ---------    ---------    ---------
Net income..............  $  11,311    $     858    $   5,890
                           ========     ========     ========
</TABLE>
 
(4)  SHORT-TERM BORROWINGS
 
     On July 8, 1993, the Company entered into a one year loan facility
agreement with a bank under which the Company can borrow up to GBP3,300,000.
During 1994 and again during 1995, this facility was renewed for one additional
year. At December 31, 1995 and 1994, the Company had borrowings of GBP600,000
($932,000) and nil, respectively, under this facility. Interest is charged at
2 1/4% above the lending bank's LIBOR rate. This facility is secured by second
priority mortgages on various vessels as well as second assignments of such
vessels' earnings.
 
                                       25
<PAGE>   26
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     During 1995 and 1994, the Company had average borrowings outstanding of
$431,000 and $3,061,000, respectively, under the facility. The weighted average
interest rate during these periods were 9.0% and 7.4%, respectively.
 
(5)  LONG-TERM DEBT
 
     The Company's long-term debt at December 31, 1995 and 1994, consisted of
the following:
 
<TABLE>
<CAPTION>
                                                                                              1995        1994
                                                                                             -------     -------
                                                                                               (IN THOUSANDS)
    <S>                                                                                      <C>         <C>
    Revolving $25,213,000 credit facility (GBP12,500,000 and $5,800,000 tranches), facility
      reduces by 10% semiannually beginning December 31, 1996, with final payment due in
      2000; interest at 1 5/8% over the lending bank's LIBOR rate (8.25% as of December 31,
      1995)................................................................................  $15,415     $13,503
    Loan facility payable in GBP, quarterly principal payments of GBP395,000 with final
      payment of GBP6,475,000 due in 2001, interest at 1 3/8% over the lending bank's LIBOR
      rates (7.9% as of December 31, 1995).................................................   13,635          --
    Loan facility payable in GBP, semiannual principal payments of GBP350,000 with final
      payment of GBP340,000 due in 2001, interest at 1 1/4% over the lending bank's LIBOR
      rate (7.8% as of December 31, 1995)..................................................    7,594          --
    Loan facilities payable in GBP, interest at 1 3/4% over the lending bank's LIBOR
      rate.................................................................................       --      14,711
                                                                                             -------     -------
                                                                                              36,644      28,214
    Less: Current maturities of long-term debt.............................................    3,044       1,487
                                                                                             -------     -------
                                                                                             $33,600     $26,727
                                                                                             =======     =======
</TABLE>
 
     The following is a summary of scheduled debt maturities by year (in
thousands):
 
<TABLE>
                <S>                                                                         <C>
                1996......................................................................  $ 3,044
                1997......................................................................    3,541
                1998......................................................................    6,349
                1999......................................................................    8,583
                2000......................................................................   11,105
                Thereafter................................................................    4,022
                                                                                            -------
                                                                                            $36,644
                                                                                            =======
</TABLE>
 
     Each of the above facilities is secured by mortgages on various vessels as
well as assignments of such vessels' earnings. The loan facility agreements
restrict Gulf Offshore N.S. Ltd., Gulf Offshore Far East, Inc., and Gulf
Offshore Marine International, Inc., the subsidiaries that own the mortgaged
vessels, from making dividends or other distributions to their parent without
consent of the lenders. The amount of net assets restricted under these loan
provisions was $30,877,000 as of December 31, 1995, and includes cash and cash
equivalents of $3,517,000.
 
(6)  COMMITMENTS AND CONTINGENCIES
 
     At December 31, 1995, the Company had long-term operating leases covering
office space and automobiles. Aggregate lease expense on operating leases for
1995, 1994 and 1993 was $479,000, $328,000, and $293,000, respectively. Future
minimum rental commitments under these operating leases are as follows (in
thousands):
 
<TABLE>
                <S>                                                                           <C>
                1996........................................................................  $364
                1997........................................................................   204
                1998........................................................................    62
                1999........................................................................    48
                2000........................................................................     4
                                                                                              ----
                                                                                              $682
                                                                                              ====
</TABLE>
 
                                       26
<PAGE>   27
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     The Company has contracted with a shipyard in Norway for the construction
of two UT 755 design vessels for deployment in the North Sea. Under such
contracts, the Company expects to make payments to the shipyard of $11,539,000
in 1996 and $10,709,000 in 1997, net of government subsidies.
 
     The Company along with a major railroad has been named in a lawsuit in
which the Plaintiffs are claiming damages resulting from flooding and erosion
allegedly caused by the railroad and/or the Company. The amount of the claim is
$13.34 million in actual damages and an unspecified amount in punitive damages,
and the lawsuit is expected to go to trial or be resolved some time during 1996.
Management of the Company believes the claims against the Company to be without
merit and intends to vigorously contest them. Based on a review of the merits of
the case, defenses available to the Company and the expectation of insurance
coverage, management does not expect this lawsuit to have a material adverse
effect on the Company.
 
     On November 14, 1995, an arbitration panel in Houston awarded a customer of
Ercon Development Co. ("Ercon"), the Company's subsidiary, $468,000 in
connection with an erosion control system installed on the customer's property.
The amount of the award is reflected in the accompanying statements of income.
The Company made a claim to its insurance carrier for the award and associated
legal fees; however, the insurance company has denied coverage. Coverage of the
claim and related costs of defense are the subject of ongoing litigation.
 
     The Company is subject to legal proceedings and claims that arise in the
ordinary course of its business. Management believes, based on discussions with
its legal counsel and in consideration of reserves recorded, that the outcome of
these legal actions will not have a material adverse effect upon the
consolidated financial position and results of operations of the Company.
 
(7)  STOCKHOLDERS' EQUITY
 
STOCK OPTIONS AND STOCK OPTION PLANS
 
     Under the terms of the Company's 1993 Non-Employee Director Stock Option
Plan (the "1993 Plan"), options to purchase 5,000 shares of Common Stock were
granted to each of the Company's five non-employee directors in 1993 and are to
be granted to each new non-employee director upon his or her election. The
exercise price of options granted under the 1993 Plan is fixed at the market
price at the date of grant. As of December 31, 1995, 50,000 shares were reserved
for grant under the 1993 Plan. The options are for a term of ten years.
 
     Under the terms of the Company's 1987 Employee Stock Option Plan (the "1987
Plan"), options may be granted to employees to purchase Common Stock at
specified prices. The 1987 Plan also provides for stock appreciation rights
(SAR's) that give the optionee the right, subject to certain conditions, to
surrender an option and receive cash and/or shares of Common Stock having a
value equal to the appreciation from date of grant of such option. As of
December 31, 1995, 168,333 shares were reserved for grant under the 1987 Plan.
 
     Information with respect to all shares under option is summarized below:
 
<TABLE>
<CAPTION>
                                                                                                       AVERAGE
                                                                                                     OPTION PRICE
                                                                                         SHARES       PER SHARE
                                                                                         -------     ------------
    <S>                                                                                  <C>         <C>
    Options outstanding, December 31, 1992.............................................   71,667        $11.09
      Granted..........................................................................   25,000         14.75
      Exercised........................................................................  (10,000)         6.50
                                                                                         -------
    Options outstanding, December 31, 1993.............................................   86,667         12.67
      Exercised........................................................................   (1,700)         6.50
                                                                                         -------
    Options outstanding, December 31, 1994.............................................   84,967         12.80
      Exercised........................................................................  (14,967)        11.88
                                                                                         -------
    Options outstanding, December 31, 1995.............................................   70,000         12.99
                                                                                         =======
    Exercisable as of December 31, 1995................................................   70,000
    Shares available for future grants as of December 31, 1995.........................  173,333
</TABLE>
 
                                       27
<PAGE>   28
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
PREFERRED STOCK
 
     The Company is authorized by its Articles of Incorporation to issue up to
500,000 shares of $50 par value cumulative preferred stock. As of December 31,
1995, none has been issued.
 
(8)  INCOME TAXES
 
     Income (loss) before income taxes and extraordinary item attributable to
domestic and foreign operations was (in thousands):
 
<TABLE>
<CAPTION>
                                                                                        YEAR ENDED DECEMBER 31,
                                                                                      ----------------------------
                                                                                       1995       1994       1993
                                                                                      ------     ------     ------
    <S>                                                                               <C>        <C>        <C>
    U.S.............................................................................  $1,690     $1,232     $  828
    Foreign.........................................................................      88      2,656      2,502
                                                                                      ------     ------     ------
                                                                                      $1,778     $3,888     $3,330
                                                                                      ======     ======     ======
</TABLE>
 
     The components of the Company's tax provisions attributable to income
before extraordinary item are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                            1995                              1994                           1993
                                -----------------------------     ----------------------------    ---------------------------
                                          DEFERRED                          DEFERRED                        DEFERRED
                                CURRENT   AND OTHER    TOTAL      CURRENT   AND OTHER   TOTAL     CURRENT   AND OTHER   TOTAL
                                -------   ---------    ------     -------   ---------   ------    -------   ---------   -----
    <S>                         <C>       <C>          <C>        <C>       <C>         <C>       <C>       <C>         <C>
    U.S.......................   $  --     $ 3,495     $3,495      $  --      $  69     $   69     $  --      $ 118     $118
    Foreign...................     109          76        185        242        797      1,039       421        147      568
                                  ----      ------     ------       ----       ----     ------      ----       ----     ----
                                 $ 109     $ 3,571     $3,680      $ 242      $ 866     $1,108     $ 421      $ 265     $686
                                  ====      ======     ======       ====       ====     ======      ====       ====     ====
</TABLE>
 
     Included in the 1995 deferred tax provision for the U.S. is $3,374,000 of
additional deferred taxes associated with the Company's investment in Energy
Ventures. A further $4,122,000 of deferred taxes attributable to the unrealized
gain on a portion of the investment in Energy Ventures has been reflected in the
related component of Stockholders' Equity. In addition $51,000 of deferred tax
benefit was recognized in 1994 related to an extraordinary item.
 
                                       28
<PAGE>   29
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Deferred income taxes reflect the impact of temporary differences between
the amount of assets and liabilities for financial reporting purposes and such
amounts as measured by tax laws and regulations. The components of the net
deferred tax liability as of December 31, 1995 and 1994, were (in thousands):
 
<TABLE>
<CAPTION>
                                                                                               DECEMBER 31,
                                                                                           ---------------------
                                                                                             1995         1994
                                                                                           --------      -------
    <S>                                                                                    <C>           <C>
    Deferred tax assets:
      Net operating loss carryforwards...................................................  $  9,152      $ 7,987
      Non-deductible accruals............................................................     1,462        1,385
      Foreign tax credits................................................................       387          512
      Alternative minimum tax credits....................................................       284          292
      Other tax credits..................................................................       175          175
      Other..............................................................................        --            7
      Valuation allowance................................................................      (846)      (2,118)
                                                                                           --------      -------
                                                                                             10,614        8,240
                                                                                           --------      -------
    Deferred tax liabilities:
      Depreciation.......................................................................    (8,400)      (8,438)
      Investment in equity investees.....................................................    (9,929)        (780)
      Foreign income not currently recognizable .........................................      (709)        (204)
      Other..............................................................................      (323)        (280)
                                                                                           --------      -------
                                                                                            (19,361)      (9,702)
                                                                                           --------      -------
    Net deferred tax liability...........................................................  $ (8,747)     $(1,462)
                                                                                           ========      =======
</TABLE>
 
     The difference between the provision at the statutory U.S. federal income
tax rate and the tax provision attributable to income from continuing operations
in the accompanying Consolidated Financial Statements is analyzed below.
 
<TABLE>
<CAPTION>
                                                                                        1995       1994       1993
                                                                                        -----      -----      -----
    <S>                                                                                 <C>        <C>        <C>
    U.S. federal statutory income tax rate............................................   34.0%     34.0%      34.0%
    Differences applicable to income of unconsolidated subsidiaries...................  266.1      (7.1)     (10.9)
    Effect of international operations................................................    2.2      15.8       11.8
    Utilization of U.S. net operating loss carryforwards..............................  (92.0)    (15.9)     (15.6)
    Other.............................................................................   (3.5)      1.7        1.3
                                                                                        -----     -----      -----
                                                                                        206.8%     28.5%      20.6%
                                                                                        =====     =====      =====
</TABLE>
 
     As of December 31, 1995, the Company had available the following
carryforward losses and credits for income tax purposes, that are subject to
certain limitations, to offset future taxable income (in thousands):
 
<TABLE>
<CAPTION>
                                                                                        AMOUNT       EXPIRATION
                                                                                        -------     ------------
    <S>                                                                                 <C>         <C>
    U.S. tax purposes:
      Net operating losses............................................................  $8,021       2001 - 2009
      Foreign tax credits.............................................................     387       1996 - 2000
      Alternative minimum tax credits.................................................     284       Indefinite
      Other tax credits...............................................................     175       1997 - 2000
    Foreign tax purposes:
      Net operating losses............................................................  19,498       Indefinite
</TABLE>
 
                                       29
<PAGE>   30
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
(9)  UNAUDITED QUARTERLY FINANCIAL DATA
 
     The following tabulation sets forth unaudited quarterly information for
1995 and 1994.
 
<TABLE>
<CAPTION>
                                                                                            QUARTER
                                                                           -----------------------------------------
                                                                           FIRST      SECOND       THIRD      FOURTH
                                                                           ------     -------     -------     ------
                                                                           (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
    <S>                                                                    <C>        <C>         <C>        <C>
    1995:
      Revenues...........................................................  $7,500     $ 9,535     $10,547    $8,495
      Income (loss) before income taxes..................................    (273)        916         826       309
      Net income (loss)..................................................    (221)     (2,712)        677       354
      Earnings (loss) per share..........................................   (0.07)      (0.81)       0.20      0.11
    1994:
      Revenues...........................................................  $8,047     $ 8,662     $ 8,033    $9,706
      Income before income taxes and extraordinary item..................     739       1,597         858       694
      Income before extraordinary item...................................     499         924         612       745
      Extraordinary item.................................................    (706)         --          --        --
      Net income (loss)..................................................    (207)        924         612       745
      Earnings per share:
        Income before extraordinary item.................................    0.15        0.28        0.18      0.22
        Extraordinary item...............................................   (0.21)         --          --        --
        Net income (loss)................................................   (0.06)       0.28        0.18      0.22
</TABLE>
 
(10)  OPERATING SEGMENT INFORMATION
 
BUSINESS SEGMENTS
 
     The Company's operations are divided into two segments:

          (a) Offshore marine services

             The offshore marine services subsidiaries operate twenty-three (23)
        vessels principally in the North Sea and Southeast Asia. The vessels
        provide transportation of materials, supplies and personnel to and from
        offshore platforms and drilling rigs.

          (b) Erosion control

             The Company offers a variety of turnkey erosion control services
        and installations including problem analysis, field surveys, engineering
        design, permit acquisition, material procurement and installation. The
        site-specific systems are designed to protect property such as
        railroads, buildings, pipelines, highways, offshore platforms, marinas,
        beaches and dams.
 
                                       30
<PAGE>   31
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
     Segment operating income represents revenues less operating expenses and is
not reduced for interest expense, general corporate expenses and income taxes.
 
<TABLE>
<CAPTION>
                                                                                           DECEMBER 31,
                                                                                ----------------------------------
                                                                                  1995         1994         1993
                                                                                --------      -------      -------
                                                                                          (IN THOUSANDS)
    <S>                                                                         <C>           <C>          <C>
    Revenues:
      Offshore marine services................................................  $ 27,233      $27,692      $22,564
      Erosion control.........................................................     8,844        6,756        5,323
                                                                                --------      -------      -------
            Total revenues....................................................  $ 36,077      $34,448      $27,887
                                                                                ========      =======      =======
    Operating income:
      Offshore marine services................................................  $  3,270      $ 4,993      $ 4,532
      Erosion control.........................................................       759          567          427
      Corporate and other.....................................................      (579)      (1,335)        (983)
                                                                                --------      -------      -------
            Total operating income............................................  $  3,450      $ 4,225      $ 3,976
                                                                                ========      =======      =======
    Identifiable assets:
      Offshore marine services................................................  $ 73,102      $63,604      $65,484
      Erosion control.........................................................     1,612        2,603        1,630
      Corporate and other(1)..................................................    36,221       22,469       23,645
                                                                                --------      -------      -------
            Total assets......................................................  $110,935      $88,676      $90,759
                                                                                ========      =======      =======
    Capital expenditures:
      Offshore marine services................................................  $ 14,518      $   648      $13,110
      Erosion control.........................................................       160          165          132
      Corporate and other.....................................................         9            3            5
                                                                                --------      -------      -------
            Total capital expenditures........................................  $ 14,687      $   816      $13,247
                                                                                ========      =======      =======
    Depreciation and amortization:
      Offshore marine services................................................  $  5,446      $ 5,038      $ 3,752
      Erosion control.........................................................       105           87           70
      Corporate and other.....................................................        20           21           30
                                                                                --------      -------      -------
            Total depreciation and amortization...............................  $  5,571      $ 5,146      $ 3,852
                                                                                ========      =======      =======
</TABLE>
 
---------------
 
(1) Includes the Company's investment in Energy Ventures.
 
     Capital expenditures of the offshore marine services segment include
approximately $13,301,000 related to the purchase of the Atlantic Warrior and
payments to the shipyard on two UT 755 design vessels under construction in
1995, and $13,084,000 in 1993 related to the purchase of substantially all of
the assets of the offshore supply division of BP Shipping Limited. For further
information see Note 2.
 
                                       31
<PAGE>   32
 
                 GULFMARK INTERNATIONAL, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
GEOGRAPHIC REGIONS AND MAJOR CUSTOMERS
 
     Information by geographical area is based on the location where services
were performed. Operating income represents revenues less operating expenses and
is not reduced for interest expense and income taxes. General corporate expenses
incurred in the United States have not been allocated to foreign operations for
purposes of this disclosure.
 
<TABLE>
<CAPTION>
                                                              UNITED                             BRAZIL
                                                              STATES     EUROPE     FAR EAST    AND OTHER     TOTAL
                                                              -------    -------    --------    ---------    --------
                                                                                  (IN THOUSANDS)
    <S>                                                       <C>        <C>        <C>         <C>          <C>
    1995:
      Revenues..............................................  $ 8,844    $20,176    $ 6,142      $   915     $ 36,077
      Operating income (loss)...............................   (1,006)     4,027        639         (210)       3,450
      Identifiable assets...................................   38,184     60,318     10,939        1,494      110,935
    1994:
      Revenues..............................................  $ 6,756    $18,685    $ 8,178      $   829     $ 34,448
      Operating income (loss)...............................   (1,658)     3,699      2,431         (247)       4,225
      Identifiable assets...................................   25,791     43,607     19,278           --       88,676
    1993:
      Revenues..............................................  $ 5,323    $13,274    $ 8,082      $ 1,208     $ 27,887
      Operating income (loss)...............................   (1,483)     2,400      2,701          358        3,976
      Identifiable assets...................................   26,197     42,587     21,975           --       90,759
</TABLE>
 
     Income from operations includes revenues with one major customer comprising
11% of revenues in 1995, and two major customers comprising 12% and 11% of
revenues in 1994 and 13% and 12% of revenues in 1993.
 
                                       32
<PAGE>   33
 
                                                                      SCHEDULE I
 
               CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
 
                          GULFMARK INTERNATIONAL, INC.
                             (PARENT COMPANY ONLY)
 
                            CONDENSED BALANCE SHEETS
 
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                           -------------------
                                                                            1995        1994
                                                                           -------     -------
                                                                             (IN THOUSANDS)
<S>                                                                        <C>         <C>
                                            ASSETS
CURRENT ASSETS:
  Cash and cash equivalents..............................................  $ 1,619     $   464
  Receivables, inventory, prepaids and other.............................      344         362
                                                                           -------     -------
          Total current assets...........................................    1,963         826
                                                                           -------     -------
INVESTMENTS IN SUBSIDIARIES..............................................   56,011      42,895
                                                                           -------     -------
PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation of
  $427,000 in 1995 and $341,000 in 1994..................................      606         742
                                                                           -------     -------
ACCOUNTS AND NOTES RECEIVABLE FROM SUBSIDIARIES..........................    8,807       9,616
                                                                           -------     -------
OTHER ASSETS.............................................................       11           8
                                                                           -------     -------
                                                                           $67,398     $54,087
                                                                           =======     =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities...............................  $   674     $   913
                                                                           -------     -------
DEFERRED TAXES AND OTHER.................................................    7,766         149
                                                                           -------     -------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Common stock, $1 par value; 10,000,000 shares authorized; issued and
     outstanding 3,336,352 and 3,321,385 shares..........................    3,336       3,321
  Additional paid-in capital.............................................   23,501      23,338
  Retained earnings......................................................   28,237      30,139
  Cumulative translation adjustment......................................   (4,146)     (3,773)
  Unrealized gain on investment..........................................    8,030          --
                                                                           -------     -------
          Total stockholders' equity.....................................   58,958      53,025
                                                                           -------     -------
                                                                           $67,398     $54,087
                                                                           =======     =======
</TABLE>
 
    The accompanying notes are an integral part of these condensed financial
                                  statements.
 
                                       33
<PAGE>   34
 
                                                       SCHEDULE I -- (CONTINUED)
 
                          GULFMARK INTERNATIONAL, INC.
                             (PARENT COMPANY ONLY)
 
                         CONDENSED STATEMENTS OF INCOME
 
<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                                  ------------------------------
                                                                   1995        1994       1993
                                                                  -------     ------     -------
                                                                    (IN THOUSANDS, EXCEPT PER
                                                                          SHARE AMOUNTS)
<S>                                                               <C>         <C>        <C>
REVENUES........................................................  $ 1,582     $1,530     $   110
                                                                  -------     ------     -------
COSTS AND EXPENSES:
  Direct operating expenses.....................................       91         90          89
  Selling, general and administrative expenses..................    1,875      2,202       1,781
                                                                  -------     ------     -------
                                                                    1,966      2,292       1,870
                                                                  -------     ------     -------
OPERATING LOSS..................................................     (384)      (762)     (1,760)
                                                                  -------     ------     -------
OTHER INCOME (EXPENSES):
  Equity in earnings of subsidiaries............................    1,338      3,075       3,682
  Interest income...............................................      568        472         678
  Other income (expense), net...................................       71         64         162
                                                                  -------     ------     -------
                                                                    1,977      3,611       4,522
                                                                  -------     ------     -------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM...............    1,593      2,849       2,762
INCOME TAX PROVISION............................................   (3,495)       (69)       (118)
                                                                  -------     ------     -------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM.........................   (1,902)     2,780       2,644
EXTRAORDINARY ITEM ATTRIBUTABLE TO ENERGY VENTURES, INC. (Less
  applicable income tax benefit of $51).........................       --       (706)         --
                                                                  -------     ------     -------
NET INCOME (LOSS)...............................................  $(1,902)    $2,074     $ 2,644
                                                                  =======     ======     =======
EARNINGS PER SHARE:
  Income (loss) before extraordinary item.......................  $ (0.57)    $ 0.83     $  0.80
  Extraordinary item attributable to Energy Ventures, Inc.......       --      (0.21)         --
                                                                  -------     ------     -------
  Net income (loss).............................................  $ (0.57)    $ 0.62     $  0.80
                                                                  =======     ======     =======
WEIGHTED AVERAGE SHARES OUTSTANDING.............................    3,322      3,320       3,312
                                                                  =======     ======     =======
</TABLE>
 
    The accompanying notes are an integral part of these condensed financial
                                  statements.
 
                                       34
<PAGE>   35
 
                                                       SCHEDULE I -- (CONTINUED)
 
                          GULFMARK INTERNATIONAL, INC.
                             (PARENT COMPANY ONLY)
 
                  CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                  FOR THE THREE YEARS ENDED DECEMBER 31, 1995
 
<TABLE>
<CAPTION>
                                   COMMON
                                  STOCK AT    ADDITIONAL                 CUMULATIVE     UNREALIZED         TOTAL
                                   $1 PAR      PAID-IN      RETAINED     TRANSLATION      GAIN ON      STOCKHOLDERS'
                                   VALUE       CAPITAL      EARNINGS     ADJUSTMENT     INVESTMENT        EQUITY
                                  --------    ----------    ---------    -----------    -----------    -------------
                                                                    (IN THOUSANDS)
<S>                               <C>         <C>           <C>          <C>            <C>            <C>
Balance at December 31, 1992...    $ 3,310     $ 23,274      $ 25,421      $(3,699)       $    --         $48,306
  Net income...................         --           --         2,644           --             --           2,644
  Issuance of stock............         10           55            --           --             --              65
  Translation adjustment.......         --           --            --         (627)            --            (627)
                                   -------     --------      --------      -------        -------         -------
Balance at December 31, 1993...      3,320       23,329        28,065       (4,326)            --          50,388
  Net income...................         --           --         2,074           --             --           2,074
  Issuance of stock............          1            9            --           --             --              10
  Translation adjustment.......         --           --            --          553             --             553
                                   -------     --------      --------      -------        -------         -------
Balance at December 31, 1994...      3,321       23,338        30,139       (3,773)            --          53,025
  Net loss.....................         --           --        (1,902)          --             --          (1,902)
  Issuance of stock............         15          163            --           --             --             178
  Translation adjustment.......         --           --            --         (373)            --            (373)
  Unrealized gain on
     investment................         --           --            --           --          8,030           8,030
                                   -------     --------      --------      -------        -------         -------
Balance at December 31, 1995...    $ 3,336     $ 23,501      $ 28,237      $(4,146)       $ 8,030         $58,958
                                   =======     ========      ========      =======        =======         =======
</TABLE>
 
    The accompanying notes are an integral part of these condensed financial
                                  statements.
 
                                       35
<PAGE>   36
 
                                                       SCHEDULE I -- (CONTINUED)
 
                          GULFMARK INTERNATIONAL, INC.
                             (PARENT COMPANY ONLY)
 
                       CONDENSED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                                                 ------------------------------
                                                                  1995       1994        1993
                                                                 ------     -------     -------
<S>                                                              <C>        <C>         <C>
                                                                         (IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operations......................  $   53     $(1,248)    $(1,081)
                                                                 ------     -------     -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in and advances to subsidiaries, net..............     809         447         298
  (Additions to)/sales of property and equipment, net..........     115          45          (8)
  Expenditures for drydocking and main engine overhaul.........      --          --          (8)
                                                                 ------     -------     -------
Net cash provided by investing activities......................     924         492         282
                                                                 ------     -------     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and other, net........................     178          10          65
                                                                 ------     -------     -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...........   1,155        (746)       (734)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.................     464       1,210       1,944
                                                                 ------     -------     -------
CASH AND CASH EQUIVALENTS AT END OF YEAR.......................  $1,619     $   464     $ 1,210
                                                                 ======     =======     =======
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid................................................  $   --     $    --     $    --
  Income taxes paid............................................      --          15           1
</TABLE>
 
    The accompanying notes are an integral part of these condensed financial
                                  statements.
 
                                       36
<PAGE>   37
 
                                                       SCHEDULE I -- (CONTINUED)
 
                          GULFMARK INTERNATIONAL, INC.
                             (PARENT COMPANY ONLY)
 
           NOTES TO CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
 
(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
STATEMENT OF CASH FLOWS
 
     U.S. Government securities and commercial paper with maturities of up to
three months are included in cash and cash equivalents in the accompanying
Condensed Balance Sheets and Condensed Statements of Cash Flows.
 
PROPERTY AND EQUIPMENT
 
     Property and equipment is stated at cost. Depreciation is provided by the
straight-line method with a salvage value of 10% for vessels. Vessels are
depreciated over a useful life of twenty years. Equipment, furniture and
fixtures are depreciated over two to five years. Maintenance and repairs that do
not extend the useful life of the asset and are not attributable to drydockings
of vessels are charged to operations as incurred. Major renovation costs and
modifications are capitalized and amortized over the estimated remaining useful
life.
 
     Management is evaluating the useful life of twenty years currently used for
depreciating vessels in light of recent vessel performance, changes in the
materials available to protect vessel hulls and industry practice. The Company
expects to complete this evaluation in the first quarter of 1996. Based on
information currently available, the Company anticipates that the useful life of
its vessels will be extended effective January 1, 1996. Such revisions are
expected to have the effect of materially improving operating results in 1996.
 
REVENUE RECOGNITION
 
     Revenues from charters for offshore marine services are recognized as
earned based on contractual charter rates.
 
INCOME TAXES
 
     The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes" ("SFAS No.
109"), which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been recognized in the
financial statements or tax returns. Under this method, deferred tax liabilities
and assets are determined based on the difference between the financial
statement carrying amounts and tax bases of assets and liabilities using enacted
tax rates and laws in effect in the years in which the differences are expected
to reverse. SFAS No. 109 also requires that the likelihood and amount of future
taxable income be included in the criteria used to determine the timing and
amount of tax benefits recognized for net operating losses and tax credit
carryforwards in the financial statements. The adoption of SFAS No. 109
beginning January 1, 1993 had no material effect on the Company's results of
operations.
 
EARNINGS PER SHARE
 
     Earnings per share is based on the weighted average number of shares of
common stock outstanding. Common stock equivalents have not been included in the
computation of earnings per share since the effect is not significant. Fully
diluted earnings per share is not presented as such amounts do not materially
differ from primary earnings per share.
 
USE OF ESTIMATES
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
 
                                       37
<PAGE>   38
 
                                                       SCHEDULE I -- (CONTINUED)
 
NATURE OF OPERATIONS
 
     The nature and location of the Company's operations is discussed in Note
(10) as well as in Part I. Item I -- Business.
 
PENDING ACCOUNTING PRONOUNCEMENTS
 
     In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", which is effective for the Company on January 1,
1996. The statement sets forth guidelines regarding when to recognize an
impairment of long-lived assets, including goodwill, and how to measure such
impairment. The Company does not expect the impact of SFAS No. 121 will have a
significant effect on the Company's consolidated financial statements.
 
     As of January 1, 1996, SFAS No. 123, "Accounting for Stock-Based
Compensation", will be effective for the Company. SFAS No. 123 permits, but does
not require, a fair value based method of accounting for employee stock option
plans which results in compensation expense recognition when stock options are
granted. The Company plans to continue the use of its current intrinsic value
based method of accounting for such plans. As required by SFAS No. 123, the
Company will provide pro forma disclosure of net income and earnings per share
in the notes to the consolidated financial statements as if the fair value based
method of accounting had been applied to awards covered by SFAS No. 123.
 
RECLASSIFICATIONS
 
     Certain reclassifications have been made to amounts previously reported to
conform with the current year presentation.
 
(2) CASH DIVIDENDS PAID BY SUBSIDIARIES
 
     Cash dividends from unconsolidated subsidiaries for 1995, 1994 and 1993
were not significant, and the Company's consolidated subsidiaries have not paid
any cash dividends during the most recent three years. Certain loan facility
agreements entered into by the Company's subsidiaries restrict the amount of
distribution that can be made. The amount of net assets that is subject to such
restrictions is $30,877,000 as of December 31, 1995.
 
                                       38
<PAGE>   39
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT(1)
 
ITEM 11. EXECUTIVE COMPENSATION(1)
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT(1)
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS(1)
 
(1) The information required by ITEMS 10, 11, 12 and 13 will be included in the
    Company's definitive proxy statement to be filed with the Securities and
    Exchange Commission within 120 days of the close of its fiscal year and is
    hereby incorporated by reference herein.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
(A) EXHIBITS, FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
 
     (1) AND (2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES.
 
     Consolidated Financial Statements and related Schedule I of the Company are
included in ITEM 8 (Consolidated Financial Statements and Supplementary Data).
All other schedules for the Company have been omitted since the required
information is not present or not present in an amount sufficient to require
submission of the schedule, or because the information required is included in
the Consolidated Financial Statements or the notes thereto.
 
     Financial Statements and Schedules of Energy Ventures, Inc., a significant
investee of the Company, are included as Exhibit 99.1.
 
     (3) EXHIBITS
 
<TABLE>
<CAPTION>
                                                              INCORPORATED BY REFERENCE
                                                                       FROM THE
EXHIBITS                     DESCRIPTION                         FOLLOWING DOCUMENTS
--------   ------------------------------------------------  ----------------------------
<C>        <S>                                               <C>
   2.1     -- Sale and Purchase Agreement dated as of June   -- Form 8-K, July 9, 1993
              29, 1993, made and entered into among BP
              Shipping Limited, Gulf Offshore N.S. Limited
              and Gulf Offshore Marine International, Inc.
   3.1     -- Certificate of Incorporation, with amendments  -- Form 10-K, December 31,
              through March 28, 1991                            1993
   3.2     -- Bylaws                                         -- Form 10-K, December 31,
                                                                1993
  10.1     -- Gulf Applied Technologies, Inc. 1987 Stock     -- Form 10-K, December 31,
              Option Plan*                                      1987
  10.2     -- Loan Facility Agreements dated as of July 8,   -- Form 10-Q, Quarter Ended
              1993, made by and between the Chase Manhattan     June 30, 1993
              Bank N.A. and GulfMark North Sea Limited,
              Gulf Offshore Marine International, Inc.,
              Gulf Offshore North Sea Ltd. and Gulf
              Offshore Far East, Inc.
  10.3     -- GulfMark International, Inc. 1993              -- Form S-8, Registration
              Non-Employee Director Stock Option Plan.*         No. 33-79212
</TABLE>
 
                                       39
<PAGE>   40
 
<TABLE>
<CAPTION>
                                                              INCORPORATED BY REFERENCE
                                                                       FROM THE
EXHIBITS                     DESCRIPTION                         FOLLOWING DOCUMENTS
--------   ------------------------------------------------  ----------------------------
<C>        <S>                                               <C>
  10.4     -- Loan Facility Agreement dated as of June 7,    -- Form 10-Q, Quarter Ended
              1995, made by and between Christiania Bank og     June 30, 1995
              Kreditkasse and Gulf Offshore N.S. Limited
  10.5     -- Agreement dated October 20, 1995 Amending and  -- Filed herewith
              Restating the Loan Facility Agreement dated
              July 8, 1993, made by and between the Chase
              Manhattan Bank N.A. and GulfMark North Sea
              Limited, Gulf Offshore Marine International,
              Inc., Gulf Offshore N.S. Limited and Gulf
              Offshore Far East, Inc.
  10.6     -- Loan Facility Agreement dated December 21,     -- Filed herewith
              1995, made by and between Christiania Bank og
              Kreditkasse and Gulf Offshore N.S. Limited
  21.1     -- Subsidiaries of GulfMark International, Inc.   -- Filed herewith
  23.1     -- Consent of Independent Public Accountants      -- Filed herewith
  27.1     -- Financial Data Schedule                        -- Filed herewith
  99.1     -- Form 10-K for Energy Ventures, Inc.            -- Filed herewith
</TABLE>
 
---------------
 
* This contract is a management contract or compensatory plan.
 
(B) REPORTS ON FORM 8-K
 
          No reports on Form 8-K were required by the Registrant during the last
     quarter of the period covered by this report.
 
                                       40
<PAGE>   41
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
 
                                                GulfMark International, Inc.
                                                        (Registrant)
 
                                            By:   /s/  FRANK R. PIERCE
                                               --------------------------------
                                                      Frank R. Pierce
                                             Executive Vice President, Finance
 
Date: March 20, 1996
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report had been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
 
<TABLE>
<S>                                            <C>                                                <C>
             /s/  FRANK R. PIERCE               Executive Vice President, Finance                March 20, 1996
    ----------------------------------------      (Principal Financial Officer)    
                  Frank R. Pierce                 
                                                                        
             /s/  ELIZABETH D. BRUMLEY                   Controller                              March 20, 1996
    ----------------------------------------   (Principal Accounting Officer) 
                  Elizabeth D. Brumley         

             /s/  DAVID J. BUTTERS                    Director                                   March 20, 1996
    ----------------------------------------
                  David J. Butters

            /s/  NORMAN G. COHEN                      Director                                   March 20, 1996
    ----------------------------------------
                 Norman G. Cohen

            /s/  MARSHALL A. CROWE                    Director                                   March 20, 1996
    ----------------------------------------
                 Marshall A. Crowe

            /s/  LOUIS S. GIMBEL, 3rd                 Director                                   March 20, 1996
    ----------------------------------------
                 Louis S. Gimbel, 3rd

            /s/  ROBERT B. MILLARD                    Director                                   March 20, 1996
    ----------------------------------------
                 Robert B. Millard
</TABLE>
 
                                       41
<PAGE>   42
                  EXHIBIT  INDEX


EXHIBITS                     DESCRIPTION                    
--------   ------------------------------------------------ 
  10.5     -- Agreement dated October 20, 1995 Amending and  
              Restating the Loan Facility Agreement dated
              July 8, 1993, made by and between the Chase
              Manhattan Bank N.A. and GulfMark North Sea
              Limited, Gulf Offshore Marine International,
              Inc., Gulf Offshore N.S. Limited and Gulf
              Offshore Far East, Inc.
  10.6     -- Loan Facility Agreement dated December 21,     
              1995, made by and between Christiania Bank og
              Kreditkasse and Gulf Offshore N.S. Limited
  21.1     -- Subsidiaries of GulfMark International, Inc.   
  23.1     -- Consent of Independent Public Accountants      
  27.1     -- Financial Data Schedule                        
  99.1     -- Form 10-K for Energy Ventures, Inc.