UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

   [X]      Quarterly Report Pursuant Section 13 or 15(d) of
                    the Securities Exchange Act of 1934

               For the quarterly period ended September 28, 2003

   [ ]      Transition Report Pursuant to Section 13 or 15(d) of
                   the Securities Exchange Act of 1934

               For the transition period from ____ to ____

                     Commission File Number 1-5109

                     TODD SHIPYARDS CORPORATION
      (Exact name of registrant as specified in its charter)

                DELAWARE                       91-1506719
      (State or other jurisdiction of    (IRS Employer I.D. No.)
      incorporation or  organization)

      1801- 16th AVENUE SW, SEATTLE, WASHINGTON   98134-1089
      (Street address of principal executive offices - Zip Code)

      Registrant's telephone number: (206) 623-1635

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.       Yes         No(X)

There were 5,303,656 shares of the corporation's $.01 par value common stock
outstanding at October 24, 2003.

PART I - FINANCIAL INFORMATION

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

Statements contained in this Report which are not historical facts or
information are "forward-looking statements."  Words such as "believe,"
"expect," "intend," "will," "should," and other expressions that indicate
future events and trends identify such forward-looking statements.  These
forward-looking statements involve risks and uncertainties which could cause
the outcome to be materially different than stated.  Such risks and
uncertainties include both general economic risks and uncertainties and
matters discussed in the Company's annual report on Form 10-K which relate
directly to the Company's operations and properties.  The Company cautions
that any forward-looking statement reflects only the belief of the Company or
its management at the time the statement was made.  Although the Company
believes such forward-looking statements are based upon reasonable
assumptions, such assumptions may ultimately prove to be inaccurate or
incomplete.  The Company undertakes no obligation to update any forward-
looking statement to reflect events or circumstances after the date on which
the statement was made.

ITEM 1.  FINANCIAL STATEMENTS

TODD SHIPYARDS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
 (In thousands of dollars, except per share data)

	                                     Quarter Ended     Six Months Ended
                                  09/28/03  09/29/02  09/28/03  09/29/02

Revenues                           $44,433  $40,583    $65,571  $89,843

Operating expenses:
 Cost of revenue                    31,092   28,542     48,700   62,335

 Administrative and
  manufacturing overhead
  expense                           10,758    9,298     18,176   21,650

  Other insurance settlements          (36)       -       (204)    (125)

Total operating expenses            41,814   37,840     66,672   83,860

Operating income (loss)              2,619    2,743     (1,101)   5,983

Investment and other income            234      312        549      609

Gain on sale of securities             168        2        186       31

Income (loss) before income taxes    3,021    3,057       (366)   6,623

Income tax (expense) benefit        (1,041)  (1,084)       126   (2,344)

Net income (loss)                  $ 1,980  $ 1,973    $  (240) $ 4,279

Net income (loss) per Common Share:
  Basic                            $  0.37  $  0.37    $ (0.05) $  0.81
  Diluted                          $  0.35  $  0.36    $ (0.05) $  0.77

Dividends declared                 $  0.10  $  0.00    $  0.30  $  0.00

Weighted Average Shares Outstanding:
  Basic                              5,304    5,290      5,286    5,286
  Diluted                            5,586    5,556      5,286    5,559

Retained earnings at
 beginning of period               $75,289  $76,769    $78,573  $74,463

Net Income (loss)                    1,980    1,973       (240)   4,279

Dividends declared per common stock   (530)       -     (1,594)       -

Retained earnings at
 end of period                     $76,739  $78,742    $76,739  $78,742

The accompanying notes are an integral part of this statement.

TODD SHIPYARDS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
                                                  09/28/03   03/30/03
                                                (Unaudited)  (Audited)
ASSETS
Cash and cash equivalents                         $  2,944  $  9,053
Securities available-for-sale                       32,595    32,126
Accounts receivable, less allowance for
 doubtful accounts of $77 and $98, respectively
  U.S. Government                                    7,460     4,322
  Other                                              3,451     3,928
Costs and estimated profits in excess of
 billings on incomplete contracts                   10,907     6,251
Inventory, less obsolescence
 reserve of $237 and $237, respectively              1,791     1,434
Other current assets                                 1,180     1,268
Total current assets                                60,328    58,382

Property, plant and equipment, net                  21,183    16,634

Restricted cash                                      2,809     3,030
Deferred pension asset                              29,194    29,709
Insurance receivable                                31,044    32,427
Other long-term assets                               1,400     1,398
Total assets                                      $145,958  $141,580

LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accruals                     $ 14,106  $  9,244
Accrued payroll and related liabilities              2,791     2,606
Billings in excess of costs and estimated
 profits on incomplete contracts                     1,521     1,357
Taxes payable other than income taxes                1,467     1,417
Income taxes payable                                 2,480       787
Deferred Taxes                                         168       446
Total current liabilities                           22,533    15,857

Environmental and other reserves                    33,878    35,055
Accrued post retirement health benefits             16,188    16,588
Deferred taxes                                       2,149     3,025
Other non-current liabilities                        3,444     1,521
Total liabilities                                   78,192    72,046

Commitments and contingencies

Stockholders' equity:
Common stock $.01 par value-authorized
  19,500,000 shares, issued 11,956,033
  shares at September 28, 2003 and March 30, 2003,
  and outstanding 5,303,656 at September 28, 2003
  and 5,271,056 at March 30, 2003                      120       120
Paid-in capital                                     38,199    38,405
Retained earnings                                   76,739    78,573
Accumulated other comprehensive income                 595       429
Treasury stock                                     (47,887)  (47,993)
Total stockholders' equity                          67,766    69,534
Total liabilities and stockholders' equity        $145,958  $141,580

The accompanying notes are an integral part of this statement.
TODD SHIPYARDS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Month Periods Ended September 28, 2003 and September 29, 2002
(in thousands of dollars)
                                                      Period Ended
                                                  09/28/03    09/29/02
OPERATING ACTIVITIES:
Net income                                       $   (240)   $  4,279
Adjustments to reconcile net income to net
 cash used in operating activities:
  Depreciation                                      1,396       1,517
  Deferred pension asset                              515         200
  Post retirement health benefits                    (400)       (300)
  Deferred income taxes                            (1,154)       (316)
  Stock based compensation                            101          58
Decrease (increase) in operating assets:
  Costs and estimated profits in excess of
   billings on incomplete contracts                (4,656)         56
  Inventory                                          (357)        172
  Accounts receivable                              (2,661)        489
  Insurance receivable                              1,383      (1,938)
  Other (net)                                          86         (68)
Increase (decrease) in operating liabilities:
  Accounts payable and accruals                     4,332      (2,015)
  Accrued payroll and related liabilities           2,041        (352)
  Billings in excess of costs and estimated
   profits on incomplete contracts                    164         836
  Environmental and other reserves                 (1,177)      1,586
  Income taxes payable                              1,693         428
  Other (net)                                          50        (423)
Net cash provided by
 operating activities                               1,116       4,209

INVESTING ACTIVITIES:
Purchases of marketable securities                 (3,324)    (17,825)
Maturities of marketable securities                 2,000       1,300
Sales of marketable securities                      1,021       3,017
Capital expenditures                               (5,945)     (1,049)
Other                                                   -          58
Net cash used in investing
 activities                                        (6,248)    (14,499)

FINANCING ACTIVITIES:
Restricted cash                                       221          97
Purchase of treasury stock                           (290)          -
Proceeds from exercise of stock options               156          47
Dividends paid on common stock                     (1,064)          -
Net cash provided by (used in)
 financing activities                                (977)        144

Net decrease in cash and cash equivalents          (6,109)    (10,146)
Cash and cash equivalents at beginning of period    9,053      17,545
Cash and cash equivalents at end of period          2,944       7,399

Supplemental disclosures of cash flow information:
 Cash paid during the period for:
 Interest                                               -           -
 Income taxes                                    $      -   $   2,000

The accompanying notes are an integral part of this statement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Todd Shipyards Corporation (the "Company") filed its Consolidated Financial
Statements for the fiscal year ended March 30, 2003 with the Securities and
Exchange Commission on Form 10-K.  The Consolidated Financial Statements,
Notes to Consolidated Financial Statements and Management's Discussion and
Analysis contained in that report should be read in connection with this Form
10-Q.

1.  BASIS OF PRESENTATION

The accompanying Consolidated Financial Statements are unaudited but in the
opinion of management reflect all adjustments, consisting of normal recurring
accruals, necessary for a fair presentation of the Company's financial
position and results of operations in accordance with accounting principles
generally accepted in the United States applied on a consistent basis.  The
accompanying consolidated balance sheet as of March 30, 2003 is derived from
audited financial statements included in the Company's Annual Report on Form
10-K for the year then ended.

2.  NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin
No. 51 ("FIN 46"). FIN 46 establishes accounting guidance for consolidation of
variable interest entities that function to support the activities of the
primary beneficiary. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31, 2003. The
consolidation requirements of FIN 46 apply to older entities in the first
fiscal year or interim period ending after December 15, 2003. Disclosure
requirements apply to any financial statements issued after January 31, 2003.
FIN 46 applies to any business enterprise, public or private, that has a
controlling interest, contractual relationship or other business relationship
with a variable interest entity. Since the Company has no contractual
relationship or other business relationship with a variable interest entity,
the adoption of FIN 46 is not anticipated to have any effect on its
consolidated financial position or results of operations.

On May 15, 2003, the FASB issued SFAS No. 150 (FAS No. 150), Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity.  FAS No. 150 requires that certain financial instruments, which under
previous guidance could be accounted for as equity, be classified as
liabilities in statements of financial position. FAS No. 150 represents a
significant change in practice in accounting for a number of financial
instruments, including mandatorily redeemable equity instruments and certain
equity derivatives that frequently are used in connection with share
repurchase programs.  FAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003, and is otherwise effective for
the Company at the beginning of our second quarter ended September 28, 2003.
The adaptation of SFAS No. 150 had no material impact on the Company's
financial position, results of operations, or cash flows.

3.  STOCK-BASED COMPENSATION

Beginning in fiscal year 2003, the Company elected to apply the expense
recognition provisions of FAS No. 123.  The recognition provisions are applied
to stock option grants awarded subsequent to March 31, 2002.  The Company has
adopted FAS No. 123 as it is designated as the preferred method of accounting
for stock-based compensation.

Previously, the Company had applied the disclosure only provisions of FAS No.
123 and accounted for stock-based compensation using the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25 (APB No. 25),
"Accounting for Stock Issued to Employees" and related interpretations.  Under
APB No. 25, compensation cost for stock options is measured as the excess, if
any, of the fair value of the Company's common stock at the date of grant over
the stock option price.

If the Company had elected to apply the expense recognition provision of FAS
No. 123 to options granted prior to March 31, 2002, then the net income (loss)
would have been adjusted as follows (the estimated fair value of the options
is amortized to expense over the options' vesting period):

in thousands,
  except share data)                     Quarter Ended      Six Months Ended
                                      09/28/03 09/29/02     09/28/03 09/29/02
Net income (loss)
  As reported                          $ 1,980  $ 1,973      $ (240)  $ 4,279
  add: Stock compensation
  as recorded                               62       29         101        58
  deduct: Total stock-based
  employee compensation expense
  determined under fair value
  based method for all awards,
  net of related tax effects              (118)     (85)       (213)     (170)
Proforma                               $ 1,924  $ 1,917      $ (352)  $ 4,167

Net income (loss) per share
 Basic
  As reported                          $  0.37  $  0.37     $ (0.05)  $  0.81
  Proforma                             $  0.36  $  0.36     $ (0.07)  $  0.79

 Diluted
  As reported                          $  0.35  $  0.36     $ (0.05)  $  0.77
  Proforma                             $  0.34  $  0.35     $ (0.07)  $  0.75

4.  CONTRACTS

Auxiliary Oiler Explosive ("AOE") Contract
During the first quarter of fiscal year 2002, the Company was awarded a six-
year, sole source cost-type contract for phased maintenance repairs to four
Department of Navy AOE class supply ships.  This contract represents the
fourth consecutive, mutli-year contract that the Company has been awarded by
the Navy on the AOE class vessels.  The notional value of this contract is
expected to be approximately $180 million if all options are exercised.  Work
on this contract is being performed primarily in the Company's Seattle
shipyard, as well as Naval Station Everett depending upon the type of work to
be performed.

During the first quarter of fiscal year 2003, the Navy announced its intention
to decommission AOE 7 and AOE 10 for transfer to the Military Sealift Command
in calendar years 2003 and 2004, respectively.  The transfer of these two
vessels to MSC will reduce the Company's future work under its current cost-
type contract with the Navy.  The Company anticipates that MSC will contract
for future work on these vessels on a competitive basis.

The potential impact of this transfer on the Company's future AOE revenues
cannot be determined at this time, but will depend on factors such as the
realized reduction in AOE revenues upon transfer to MSC, the Company's ability
to bid on future AOE 7 and AOE 10 work once transferred, and the Company's
bidding success if such bids are submitted.

Combatant Maintenance Team ("CMT") Contract
During the first quarter of fiscal year 2001, the Company was awarded, by the
Department of the Navy on a sole source basis, a five year, cost-type contract
for the repair and maintenance of six surface combatant class vessels
(frigates and destroyers) stationed in the Puget Sound area.  Although the
Navy has not released a notional value of the maintenance work, the Company
believes that the value may be approximately $60 million to $75 million if all
options are exercised.  Work on this contract is being performed primarily in
the Company's Seattle shipyard, as well as Naval Station Everett depending on
the type of work to be performed.

Planned Incremental Availability ("PIA")
During the fourth quarter of fiscal year 1999, the Department of the Navy
awarded the Company a five-year cost-type contract for phased maintenance on
three CVN class aircraft carriers.  The notional value for this five-year
contract is approximately $100 million if all options are exercised.  Work on
this contract is currently being performed at the Puget Sound Naval Shipyard,
located in Bremerton, Washington.

With the last year under the existing five-year contract underway, the Navy
issued a Request for Proposal (RFP) in June 2003 requesting bids on a new
five-year contract for similar work.  In August 2003, the Company submitted
its response to the RFP.

5.  REVENUES
The Company's second quarter revenue of $44.4 million reflects an increase of
$3.9 million (9%) from the same period last fiscal year.  The quarter to
quarter increase is primarily attributable to the relative volumes of Navy
repair and overhaul projects.  Revenues for the first six months of fiscal
year 2004 of $65.6 million reflect a decrease of $24.3 million (27%) from
fiscal year 2003 comparable periods.  The decrease in the first six months of
fiscal year 2004 is primarily attributable to the postponement of scheduled
Navy work during the first quarter due to the deployment of ships in support
of the military operations in Iraq.  The Navy ships have started to return
from active duty, and the volume of repair projects for the Navy increased
significantly during the second quarter of fiscal year 2004.

6.  ENVIRONMENTAL AND OTHER RESERVES

As discussed in the Company's Form 10-K for the fiscal year ended March 30,
2003, the Company faces significant potential liabilities in connection with
the alleged presence of hazardous waste materials at its Seattle shipyard and
at one additional site used by the Company for disposal of alleged hazardous
waste.  The Company has also been named as a defendant in civil actions by
parties alleging damages from past exposure to toxic substances at Company
facilities.

The Company continues to analyze environmental matters and associated
liabilities for which it may be responsible.  No assurance can be given as to
the existence or extent of any environmental liabilities until such analysis
has been completed.  The eventual outcome of all environmental matters cannot
be determined at this time, however, the analyses of the known matters have
progressed sufficiently to warrant establishment of reserve provisions in the
accompanying consolidated financial statements.

Harbor Island Site
In fiscal year 2001, the Company entered into a 30-year agreement with an
insurance company that provides broad-based insurance coverage for the
remediation of the Company's operable units at the Harbor Island Superfund
Site ("Site").

The agreement provides coverage for the known liabilities in an amount not to
exceed the policy limits.  As of September 28, 2003 these limits exceed the
Company's current booked reserves of approximately $23.6 million.
Additionally, the Company entered into a 15-year agreement for coverage of any
new environmental conditions discovered at the Seattle shipyard property that
would require environmental remediation.

During the second quarter of fiscal year 2004, the United States Department of
Justice approved the consent decree negotiated between EPA and the Company on
the Todd Shipyards Sediments Operable Unit ("TSSOU").  The consent decree was
then lodged with the United States District Court for the Western District of
Washington ("the Court").  The mandatory 30-day public comment period was
completed in July 2003 with no comments being filed and the Court signed the
consent decree thereafter.  Pursuant to the 95% Design Report, remedial
activities began in the second quarter of fiscal year 2004. Dredging and
removal of sediments is scheduled to begin in August 2004.

Under the Federal Superfund law, potentially responsible parties may have
liability for damages to natural resources in addition to liability for
remediation.  During the second quarter of fiscal year 2003, the Company began
discussions with the natural resource trustees ("Trustees") for the Site and
continued these discussions during the remainder of the Company's fiscal year
2003.  The Company anticipates that the Trustees will file a claim against the
Company at some future date alleging damages to the natural resources at the
Site caused by the release of hazardous substances.  The best estimate of the
Company's natural resource damage liability is included in the environmental
remediation reserve.  The payment of any eventual claim is covered by the
aforementioned insurance policy, provided that aggregate policy limits have
not been exceeded.

Asbestos-Related Claims
As reported in the Company's Form 10-K for its fiscal year 2003, the Company
has been named as a defendant in civil actions by parties alleging damages
from past exposure to toxic substances, generally asbestos, at closed former
Company facilities.

The cases generally include as defendants, in addition to the Company, other
ship builders and repairers, ship owners, asbestos manufacturers, distributors
and installers, and equipment manufacturers and arise from injuries or
illnesses allegedly caused by exposure to asbestos or other toxic substances.
The Company assesses claims as they are filed and as the cases develop,
analyzing them in two different categories based on severity of illness.
Based on current fact patterns, certain diseases including mesothelioma, lung
cancer and fully developed asbestosis are categorized by the Company as
"malignant" claims.  All others of a less medically serious nature are
categorized as "non-malignant".  The Company is currently defending
approximately 39 "malignant" claims and approximately 555 "non-malignant"
claims.  The Company and its insurers are vigorously defending these actions.

During the first half of fiscal year 2004, the Company experienced relatively
minor changes in its bodily injury liabilities and insurance receivables.  As
of September 28, 2003, the Company has recorded a bodily injury liability
reserve of $9.5 million and a bodily injury insurance receivable of $7.1
million.  This compares to a previously recorded bodily injury reserve and
insurance receivable of $9.4 and $7.1, respectively, at March 30, 2003.  These
bodily injury liabilities and receivables are classified within the Company's
Consolidated Balance Sheets as environmental and other reserves, and insurance
receivables, respectively.

Other Reserves
During the first quarter of fiscal year 2004, the Company recorded a reserve
of $2.5 million related to the unanticipated bankruptcy of one of its previous
insurance carriers.  The reserve, which reflects the Company's best estimate
of the known liabilities associated with unpaid worker compensation claims
arising from the two-year coverage period commencing October 1, 1998, is
subject to change as additional facts are uncovered.  These claims have
reverted to the Company due the liquidation of the insurance carrier.
Although the Company expects to recover at least a portion of these costs from
the liquidation and other sources, the amount of any such recovery cannot be
estimated currently and therefore no estimate of amounts recovered is included
in the current financial results.

7.  COMPREHENSIVE INCOME

The Company recorded comprehensive income of $1.9 million for the quarter
ended September 28, 2003, which consisted of net income of $2.0 million offset
by the change in net unrealized gains on available-for-sale marketable
securities of $0.1 million, which is recorded in accumulated other
comprehensive income.  For the six month period then ended, the Company
reported a comprehensive loss of $74 thousand, which consisted of net loss of
$240 thousand offset by the changes in net unrealized gains on available-for-
sale marketable securities of $166 thousand.

During the same periods of fiscal year 2003, the Company reported
comprehensive income of $1.7 million and $3.9 million, respectively.
Comprehensive income for these periods consisted of net income of $2.0 million
and $4.3 million, respectively, offset by the changes in net unrealized gains
on available-for-sale marketable securities of $0.3 million and $0.4 million,
respectively.

8.  TREASURY STOCK

In fiscal year 2003, the Board of Directors approved the purchase of up to
500,000 shares of the Company's common stock in open market or negotiated
transactions.  Under this authorization, the Company purchased an aggregate of
22,400 shares during the first quarter of fiscal year 2004.  The shares were
purchased in open market transactions at an average price of $12.94 per share,
for total consideration of approximately $0.3 million.  This brings the total
number of shares purchased under this authorization to 41,900.  During the
quarter ended September 28, 2003, the Company did not purchase any shares.

9. SUBSEQUENT EVENTS

In October 2003, the Company sustained damage to the smallest of its drydocks
leased from the U.S. Navy during a wind storm.  The Company is currently
assessing the extent of the damage.  The Company does not anticipate that the
event will have a material effect on the Company's financial results.

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

The Notes to Consolidated Financial Statements are an integral part of
Management's Discussion and Analysis of Financial Condition and Results of
Operations and should be read in conjunction herewith.

OVERVIEW

The Company derives a significant portion of its revenues from work performed
under its contracts with the Navy.  Work under such contracts is scheduled by
and at the convenience of the Navy.  Since the beginning of fiscal year 2003,
scheduled work has been impacted by preparations for, and the conduct of, the
Navy's role in "Operation Iraqi Freedom" and related initiatives.  The results
of the second quarter of fiscal year 2004 reflect the increase in volumes of
Navy work that had been previously deferred due to operations in Iraq.

OPERATING RESULTS

All comparisons within the following discussion are with the corresponding
periods in the previous year, unless otherwise stated.

Revenues - The Company's second quarter revenue of $44.4 million reflects an
increase of $3.9 million (9%) from the same period last fiscal year.  The
quarter to quarter increase is primarily attributable to the relative volumes
of Navy repair and overhaul projects.  Revenues for the first six months of
fiscal year 2004 of $65.6 million reflect a decrease of $24.3 million (27%)
from fiscal year 2003 comparable periods.  The decrease in the first six
months of fiscal year 2004 is primarily attributable to the postponement of
scheduled Navy work during the first quarter due to the deployment of ships in
support of the military operations in Iraq.  The Navy ships have started to
return from active duty, and the volume of repair projects for the Navy
increased significantly during the second quarter of fiscal year 2004.

Cost of Revenue - Cost of revenue during the second quarter of fiscal year
2004 was $31.1 million, or 70% of revenue.  Cost of revenue during the second
quarter of fiscal year 2003 was $28.5 million, or 70% of revenue.  The cost of
revenue increase in the second quarter of fiscal year 2004 is primarily
attributable to a significant increase in work volumes.  Cost of revenue as a
percentage of revenue during the second quarter of fiscal year 2004 remains
unchanged from the comparable period of fiscal year 2003.

Cost of revenue during the first six months of fiscal year 2004 was $48.7
million, or 74% of revenue.  During the comparable period in fiscal year 2003,
cost of revenue was $62.3 million, or 69% of revenue.  The $13.6 million
decrease in cost of revenue during the first six months of fiscal year 2004 is
primarily attributable to the significant work volume decreases experienced in
the first quarter.  The increase in the cost of revenue as a percentage of
revenue during the first six months of fiscal year 2004 is primarily due to a
$2.5 million charge related to the unanticipated bankruptcy of one of the
Company's previous insurance carriers.  The charge, which reflects the
Company's best estimate of the known liabilities associated with unpaid worker
compensation claims arising from the two-year coverage period commencing
October 1, 1998, is subject to change as additional facts are uncovered.
These claims have reverted to the Company due to the liquidation of the
insurance carrier.  Although the Company expects to recover at least a portion
of these costs from the liquidation and other sources, the amount of any such
recovery cannot be estimated currently and therefore no estimate of amounts
recoverable is included in the current financial results.

Administrative and manufacturing overhead expense - Overhead costs for
administrative and manufacturing activities were $10.8 million, or 24% of
revenue for the second quarter of fiscal year 2004.  During the same period of
fiscal year 2003, administrative and manufacturing overhead costs were $9.3
million, or 23% of revenue.  The $1.5 million increase in administrative and
manufacturing overhead is primarily attributable to volume increases during
the second quarter of fiscal year 2004.

Administrative and manufacturing overhead costs for the first six months of
fiscal year 2004 were $18.2 million, or 28% of revenue.  During the same
period of fiscal year 2003, administrative and manufacturing overhead costs
were $21.7 million, or 24% of revenue.  The $3.5 million decrease in
administrative and manufacturing overhead costs during the first six months of
fiscal year 2004 is primarily attributable to the significant volume decreases
experienced during the first quarter of fiscal year 2004.  The increase in
administrative and manufacturing overhead expense as a percentage of revenue
during the first six months of fiscal year 2004 is attributable to fixed
overhead expenses that are not affected by reductions in work volume.

LIQUIDITY AND CAPITAL RESOURCES

Based upon its current cash, marketable securities position, anticipated
fiscal year 2004 cash flow, access to credit facilities and capital markets,
the Company believes it has sufficient liquidity to continue to fund
operations.  Accordingly, shipyard capital expenditures are expected to be
financed out of working capital.  A change in the composition or timing of
projected work arising from factors unknown presently, could cause capital
expenditures and repair and maintenance expenditures to be impacted favorably
or unfavorably.

Working Capital
Working capital at September 28, 2003 was $37.8 million, a decrease of $4.7
million (11%) from the working capital reported at the end of fiscal year
2003.  This decrease is primarily attributable to approximately $5.9 million
of spending on improvements to the Seattle shipyard facility and other capital
expenditures.

Capital Expenditures
Capital expenditures for the second quarters of fiscal year 2004 and fiscal
year 2003 were $3.4 million and $0.7 million, respectively.  For the first six
months of fiscal year 2004, capital expenditures were $5.9 million compared to
$1.0 million during the first six months of fiscal year 2003.

The increase reported in the second quarter and first six months of fiscal
year 2004 is primarily attributable to costs associated with planned
improvements to the Seattle shipyard facility.  On April 15, 2003, the Board
of Directors announced these planned improvements, which are expected to total
approximately $13.5 million, and will be incurred in fiscal years 2004 and
2005.

Credit Facility
Todd Pacific Shipyards Corporation ("Todd Pacific"), a wholly owned subsidiary
of the Company has a $10.0 million revolving credit facility available for its
working capital requirements.  Todd Pacific had no outstanding borrowings and
was in compliance with all debt covenants as of September 28, 2003 and
September 29, 2002, respectively.

Stock Repurchase
In fiscal year 2003, the Board of Directors approved the purchase of up to
500,000 shares of the Company's common stock in open market or negotiated
transactions.  Under this authorization, the Company purchased an aggregate of
22,400 shares during the first quarter of fiscal year 2004.  The shares were
purchased in open market transactions at an average price of $12.94 per share,
for total consideration of approximately $0.3 million.  This brings the total
number of shares purchased under this authorization to 41,900.  During the
quarter ended September 28, 2003, the Company did not purchase any shares.

Dividends
On September 23, 2003, the Company paid a dividend of 10 cents ($0.10) per
share to all shareholders of record as of September 8, 2003.  This dividend
was previously declared in the first quarter of fiscal year 2004.  The
approximate amount of the dividend paid was $0.5 million.

Also, on September 12, 2003, the Company declared a dividend of 10 cents
($0.10) per share to be paid December 23, 2003 to all shareholders of record
as of December 8, 2003.  The estimated amount of this dividend is
approximately $0.5 million.

ENVIRONMENTAL MATTERS AND OTHER CONTINGENCIES

The Company has provided total aggregate reserves of $33.9 million as of
September 28, 2003 for its contingent environmental and bodily injury
liabilities.  As of March 30, 2003, the Company had recorded aggregate
reserves of $35.1 million.  The $1.2 million decrease primarily results from
environmental remediation expenses that were charged against the reserves.
Due to the complexities and extensive history of the Company's environmental
and bodily injury matters, the amounts and timing of future expenditures are
uncertain.  As a result, there can be no assurance that the ultimate
resolution of these environmental and bodily injury matters will not have a
material adverse effect on the Company's financial position, cash flows or
results of operations.

The Company has various insurance policies and agreements that provide
coverage on the costs to remediate environmental sites and for the defense and
settlement of bodily injury cases.  These policies and agreements are
primarily with two insurance companies.  Based upon the current credit ratings
of both of these companies, the Company anticipates that both parties will be
able to perform under their respective policy or agreement.

As of September 28, 2003, the Company has recorded aggregate assets of $33.6
million related to its reserves for environmental and other liabilities.  As
of March 30, 2003, the Company had recorded aggregate assets of $35.0 million.
This decrease of $1.4 million reflects recoveries of covered environmental
remediation expenses.  These assets reflect receivables under contractual
arrangements with several insurance companies to share costs for certain
environmental and other matters, as well as amounts deposited to securitize
certain remediation activities.  Amounts recoverable from insurance companies
are recorded within the Company's Consolidated Balance Sheets as insurance
receivables and, in the case of reimbursements currently due, as other current
assets.  Amounts held in security deposits are recorded within the Company's
Consolidated Balance Sheets as restricted cash.

Ongoing Operations
Recurring costs associated with the Company's environmental compliance program
are not material and are expensed as incurred.  Capital expenditures for
fiscal year 2004 will include $4.1 million for capturing and treating
stormwater at the Company's Seattle facility.

Past Activities
The Company faces significant potential liabilities in connection with the
alleged presence of hazardous waste materials at its Seattle shipyard and at
one additional site used by the Company for disposal of alleged hazardous
waste.  The Company has also been named as a defendant in civil actions by
parties alleging damages from past exposure to toxic substances at Company
facilities.

During the second quarter of fiscal year 2004, the United States Department of
Justice approved the consent decree negotiated between EPA and the Company on
the Todd Shipyards Sediments Operable Unit ("TSSOU").  The consent decree was
then lodged with the United States District Court for the Western District of
Washington ("the Court").  The mandatory 30-day public comment period was
completed in July 2003 with no comments being filed and the Court signed the
consent decree thereafter.  Pursuant to the 95% Design Report remedial
activities began in the second quarter of fiscal year 2004. Dredging and
removal of sediments is scheduled to begin in August 2004.

Under the Federal Superfund law, potentially responsible parties may have
liability for damages to natural resources in addition to liability for
remediation.  During the second quarter of fiscal year 2003, the Company began
discussions with the natural resource trustees ("Trustees") for the Site and
continued these discussions during the remainder of the Company's fiscal year
2003.  The Company anticipates that the Trustees will file a claim against the
Company at some future date alleging damages to the natural resources at the
Site caused by the release of hazardous substances.  The best estimate of the
Company's natural resource damage liability is included in the environmental
remediation reserve.  The payment of any eventual claim is covered by the
aforementioned insurance policy, provided that aggregate policy limits have
not been exceeded.

As reported in the Company's Form 10-K for its fiscal year 2003, the Company
has been named as a defendant in civil actions by parties alleging damages
from past exposure to toxic substances, generally asbestos, at closed former
Company facilities.

The cases generally include as defendants, in addition to the Company, other
ship builders and repairers, ship owners, asbestos manufacturers, distributors
and installers, and equipment manufacturers and arise from injuries or
illnesses allegedly caused by exposure to asbestos or other toxic substances.
The Company assesses claims as they are filed and as the cases develop,
analyzing them in two different categories based on severity of illness.
Based on current fact patterns, certain diseases including mesothelioma, lung
cancer and fully developed asbestosis are categorized by the Company as
"malignant" claims.  All others of a less medically serious nature are
categorized as "non-malignant."  The Company is currently defending
approximately 39 "malignant" claims and approximately 555 "non-malignant"
claims.  The Company and its insurers are vigorously defending these actions.

During the first half of fiscal year 2004, the Company experienced relatively
minor changes in its bodily injury liabilities and insurance receivables.  As
of September 28, 2003, the Company has recorded a bodily injury liability
reserve of $9.5 million and a bodily injury insurance receivable of $7.1
million.  This compares to a previously recorded bodily injury reserve and
insurance receivable of $9.4 and $7.1, respectively, at March 30, 2003.  These
bodily injury liabilities and receivables are classified within the Company's
Consolidated Balance Sheets as environmental and other reserves, and insurance
receivables, respectively.

BACKLOG

At September 28, 2003 the Company's firm shipyard backlog including Navy work
consisted of approximately $41 million of repair and overhaul work.  The
Company's repair and overhaul work generally is of short duration with little
advance notice.  The Company's comparable backlog at September 29, 2002 was
approximately $31 million.

LABOR RELATIONS

During the third quarter of fiscal year 2003, the Puget Sound Metal Trades
Council (the bargaining umbrella for all unions at Todd Pacific Shipyards) and
Todd Pacific Shipyards reached an agreement on a new collective bargaining
agreement.  The Todd Pacific Shipyards eligible workforce ratified the
agreement on October 22, 2002.  The parties had been operating under an
extension of the old agreement, which expired on July 31, 2002.  The new
three-year agreement, effective retroactively to August 1, 2002, includes an
annual 3.5% wage and fringe benefit increase.  The Company considers its
relationship with labor to be stable.

FUTURE SHIPYARD OPERATIONS

The Company's future profitability depends largely on the ability of the
shipyard to maintain an adequate volume of repair and overhaul business.  The
Company competes with other northwest and west coast shipyards, some of which
have more modern facilities, lower labor cost structures, or access to greater
financial resources.

NEW ACCOUNTING PRONOUNCEMENTS

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin
No. 51 ("FIN 46"). FIN 46 establishes accounting guidance for consolidation of
variable interest entities that function to support the activities of the
primary beneficiary. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31, 2003. The
consolidation requirements of FIN 46 apply to older entities in the first
fiscal year or interim period ending after December 15, 2003. Disclosure
requirements apply to any financial statements issued after January 31, 2003.
FIN 46 applies to any business enterprise, public or private, that has a
controlling interest, contractual relationship or other business relationship
with a variable interest entity.  Since the Company has no contractual
relationship or other business relationship with a variable interest entity,
the adoption of FIN 46 is not anticipated to have any effect on its
consolidated financial position or results of operations.

On May 15, 2003, the FASB issued SFAS No. 150 (FAS No. 150), Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity.  FAS No. 150 requires that certain financial instruments, which under
previous guidance could be accounted for as equity, be classified as
liabilities in statements of financial position. FAS No. 150 represents a
significant change in practice in accounting for a number of financial
instruments, including mandatorily redeemable equity instruments and certain
equity derivatives that frequently are used in connection with share
repurchase programs.  FAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003, and is otherwise effective for
the Company at the beginning of our second quarter ended September 28, 2003.
The adaptation of SFAS No. 150 had no material impact on the Company's
financial position, results of operations, or cash flows.

ITEM 4. CONTROLS AND PROCEDURES

The Company, under the supervision and with the participation of its
management, including the Chief Executive Officer and the Chief Financial
Officer, evaluated the effectiveness of the design and operation of the
Company's "disclosure controls and procedures" (as defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934 (the Exchange Act)) as of the end of
the period covered by this report.  Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely making know to them
material information relating to the Company and the Company's consolidated
subsidiaries required to be disclosed in the Company's reports filed or
submitted under the Exchange Act.

There has been no change in the Company's internal control over financial
reporting.

PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

No. 31.1    Certification of Chief Executive Officer pursuant to Rule 13a-14a

No. 31.2    Certification of Chief Financial Officer pursuant to Rule 13a-14a

No. 32.1    Certification of Chief Executive Officer pursuant to Rule 13a-
            14(b) and section 906 of the Sarbanes-Oxley Act of 2002
            (subsections (a) and (b) of section 1350, chapter 63 of title 18,
            United States Code. (furnished herewith)*

No. 32.2    Certification of Chief Financial Officer pursuant to Rule 13a-
            14(b) and section 906 of the Sarbanes-Oxley Act of 2002
            (subsections (a) and (b) of section 1350, chapter 63 of title 18,
            United States Code. (furnished herewith)*

No. 99.1    Press Release dated October 28, 2003 announcing financial results
            for the Company's quarterly and six month period ending
            September 28, 2003. (furnished herewith)*

*Notwithstanding any incorporation of this Quarterly Report on Form 10-Q in
any other filing by the Registrant, Exhibits furnished herewith and designated
with an asterisk (*) shall not be deemed incorporated by reference to any
other filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934 unless specifically otherwise set forth therein.

 (b)  Reports on Form 8-K.

On September 15, 2003, the Registrant filed a form 8-K, item 5, announcing the
election of Admiral David E. Jeremiah, U.S. Navy (Ret.) to the Board of
Directors of the Company at its annual meeting of shareholders on September
12, 2003. Also, the Company's Board of Directors declared a cash dividend in
the amount of $.10 per share.

On October 22, 2004, the Registrant filed a form 8-K, item 5, announcing the
hiring of Dale E. Baugh as Director of Ship Repair Processes and Resource
Development for Todd Pacific Shipyards, a wholly owned subsidiary of the
Registrant.

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, thereunto duly authorized.

TODD SHIPYARDS CORPORATION
Registrant

By: /s/Scott H. Wiscomb
   Scott H. Wiscomb
   Chief Financial Officer and Treasurer
   October 28, 2003