<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                            _______________________

                                   FORM 10-Q


(Mark One)

[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 1997

                                 OR

[   ]    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   33-6967
                                              -----------


                           HALTER MARINE GROUP, INC.
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


                Delaware                                  75-2656828
--------------------------------------------------------------------------------
 (State or Other Jurisdiction of Incorporation         (I.R.S. Employer
                  or Organization)                     Identification No.)
 
 3085 Industrial Seaway Road, Gulfport, Mississippi                 39503
--------------------------------------------------------------------------------
    (Address of principal executive offices)                     (Zip Code) 

Registrant's Telephone Number, Including Area Code:  (601)896-0029
--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report


     Indicate by check mark whether the registrant:(1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or 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
             ----      ----

                     APPLICABLE ONLY TO CORPORATE ISSUERS

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date. 28,515,061
                                                  --------------
<PAGE>
 
                                    PART I
                             FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.


                           HALTER MARINE GROUP, INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (IN MILLIONS)
<TABLE>
<CAPTION>
 
 
                                        SEPTEMBER 30     MARCH 31
                                            1997           1997
                                        ------------     --------
                                         (UNAUDITED)
<S>                                     <C>              <C>
             Assets
             ------                    
Current Assets:
   Cash and cash equivalents                  $ 62.1       $  7.1
   Contract receivables                         62.8         36.1
   Due from affiliate                              -         11.5
   Costs and estimated earnings
     in excess of billings on
     uncompleted contracts                     105.8         77.7
   Inventories                                  12.8         10.8
   Other current assets                          3.6          4.5
                                              ------       ------
      Total current assets                     247.1        147.7
 
Property, plant and equipment, net             102.0         61.4
Excess of cost over net assets
  acquired                                      27.6            -
Other assets                                     5.3          0.3
                                              ------       ------
                                              $382.0       $209.4
                                              ======       ======
 
 
Liabilities and Stockholders' Equity
--------------------------------------
Current Liabilities:
   Accounts payable and accrued
     liabilities                              $ 44.2       $ 30.6
   Billings in excess of costs and
     estimated earnings on
     uncompleted contracts                      31.9         19.9
   Notes payable and current
     portion of long-term debt                   4.8          8.7
   Deferred income taxes                         4.0          2.9
                                              ------       ------
      Total current liabilities                 84.9         62.1
 
Long-term debt, less current portion           188.7         52.0
Other noncurrent liabilities                     1.9          2.0
                                              ------       ------
      Total  liabilities                       275.5        116.1
 
Stockholders' equity:
   Common stock                                  0.2          0.2
   Additional paid-in capital                   84.2         84.2
   Retained earnings                            22.1          8.9
                                              ------       ------
      Total  stockholders' equity              106.5         93.3
                                              ------       ------
                                              $382.0       $209.4
                                              ======       ======
 
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
 
                           HALTER MARINE GROUP, INC.
                        CONSOLIDATED INCOME STATEMENTS
                                  (UNAUDITED)
                     (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
 
 
                                            SIX MONTHS
                                        ENDED SEPTEMBER 30
                                       -------------------     
                                           1997     1996
                                       ----------- -------
<S>                                    <C>         <C> 
Contract revenue earned                   $300.2   $180.4
 
Cost of revenue earned                     260.0    156.3
                                          ------   ------
 
   Gross profit                             40.2     24.1
 
Selling, general and
 administrative expenses                    16.4     10.4
Amortization of excess of
 cost over net assets acquired               0.7        -
                                          ------   ------
 
  Operating income                          23.1     13.7
Other expenses:
  Interest expense, net                      3.1      1.7
  Other, net                                 1.1        -
                                          ------   ------
                                             4.2      1.7
                                          ------   ------
 
 Income before income taxes                 18.9     12.0
 
Income taxes                                 5.7      4.8
                                          ------   ------
 
Net income                                $ 13.2   $  7.2
                                          ======   ======
 
Net income per share
 (pro forma for 1996)*                    $ 0.46   $ 0.27
                                          ======   ======
 
Weighted average shares
 outstanding (pro forma for 1996)*          28.6     27.0
 
</TABLE>

*As adjusted for three-for-two stock split.  See Note 2.


See accompanying notes to consolidated financial statements.
<PAGE>
 
                           HALTER MARINE GROUP, INC.
                        CONSOLIDATED INCOME STATEMENTS
                                    (UNAUDITED)
                     (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
 
 
                                        THREE MONTHS
                                     ENDED SEPTEMBER 30
                                 -------------------------
                                       1997        1996
                                 --------------  ---------
<S>                                   <C>      <C> 
Contract revenue earned                $151.2    $94.5
 
Cost of revenue earned                  129.5     81.7
                                       ------    -----
 
   Gross profit                          21.7     12.8
 
Selling, general and
 administrative expenses                  8.7      5.6
Amortization of excess of
 cost over net assets acquired            0.3        -
                                       ------    -----
 
  Operating income                       12.7      7.2
Other expenses:
  Interest expense, net                   1.7      0.8
  Other, net                              0.9        -
                                       ------    -----
                                          2.6      0.8
                                       ------    -----
 
 Income before income taxes              10.1      6.4
 
Income taxes                              2.3      2.5
                                       ------    -----
 
Net income                             $  7.8    $ 3.9
                                       ======    =====
 
Net income per share
 (pro forma for 1996)*                 $ 0.27    $0.14
                                       ======    =====
 
Weighted average shares
 outstanding (pro forma for 1996)*       29.0     27.0
 
</TABLE>

*As adjusted for three-for-two stock split.  See Note 2.



See accompanying notes to consolidated financial statements.
<PAGE>
 
                           HALTER MARINE GROUP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                 (IN MILLIONS)

<TABLE>
<CAPTION>
 
 
                                                 SIX MONTHS
                                             ENDED SEPTEMBER 30
                                             ------------------       
                                              1997        1996
                                             -------     ------  
<S>                                          <C>          <C>
Net cash provided (required) by
 operating activities                        $  12.4     $ (7.0)
Cash flows from investing activities:
  Purchase of subsidiaries, net
   of cash acquired                            (54.8)         -
  Capital expenditures                         (21.0)      (4.6)
  Proceeds from disposals of equipment             -        0.6
                                             -------     ------
     Net cash required by
      investing activities                     (75.8)      (4.0)
 
Cash flows from financing activities:
  Net borrowing from parent                        -       11.0
  Additions to debt                            243.5          -
  Debt issuance costs                           (5.1)         -
  Principal Payments on debt                  (120.0)         -     
                                             -------     ------
  Net cash provided  by
    financing activities                       118.4       11.0
                                             -------     ------
Net increase in cash                            55.0          -
Cash at beginning of period                      7.1        0.7
                                             -------     ------
Cash and cash equivalents at end of 
  period                                     $  62.1     $  0.7
                                             =======     ======
 
</TABLE>


See accompanying notes to consolidated financial statements.
<PAGE>
 
                  HALTER MARINE GROUP, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
                              SEPTEMBER 30, 1997




NOTE 1--BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month and three month periods ended
September 30, 1997 are not necessarily indicative of the results that may be
expected for the year ended March 31, 1998. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Halter Marine Group, Inc. and Subsidiaries' Annual Report on Form 10-K for the
year ended March 31, 1997.



NOTE 2--STOCK SPLIT

     On September 29, 1997, the Board of Directors declared a three-for-two
split of the Company's common stock, to be effectuated in the form of a stock
dividend payable October 31, 1997 to shareholders of record as of October 15,
1997. As a result, earnings per share computations and related weighted average
shares outstanding for all periods presented in the foregoing financial
statements have been adjusted to reflect the stock split.



NOTE 3--ACQUISITION OF TEXAS DRYDOCK, INC.

     On April 4, 1997, the Company acquired a 51% interest in and obtained an
option to acquire the remaining 49% of Texas Drydock, Inc. (TDI), a company
engaged principally in the construction, conversion and repair of offshore oil
drilling rigs. The purchase price was approximately $19.4 million and coincident
with the acquisition, the Company advanced TDI approximately $4.5 million for
working capital and a fixed asset acquisition. All amounts were paid in cash. On
May 16, 1997, the Company acquired the remaining 49% of TDI by the issuance of
promissory notes payable to the sellers in the amount of $27 million bearing
interest at the rate of seven and one-tenth percent (7.1%) per annum, both
principal and interest due January 15, 1998. A substantial 
<PAGE>
 
portion of the total purchase price was allocated to cost in excess of net
assets acquired. The pro forma unaudited results of operations for six months
and three months ended September 30, 1996, assuming consummation of the purchase
as of April 1, 1996, are as follows:

<TABLE>
<CAPTION>
 
                                                SIX MONTHS   THREE MONTHS
                                                   ENDED        ENDED
                                                  9/30/96       9/30/96
                                                 ---------     ---------
                                         (in millions, except per share data)
<S>                                              <C>            <C> 
Net Contract revenue earned                       $234.3       $127.2
Net Income                                        $  4.7       $  1.6
Net Income per share*                             $  .17       $  .06
Pro forma weighted average
  number of shares outstanding*                     27.0         27.0
</TABLE>

*After adjusting for three-for-two stock split.  See Note 2.


NOTE 4--OTHER ACQUISITIONS

     In August 1997, the Company completed the acquisition of Bludworth Bond
Shipyard, Inc. which includes a shipyard in Houston and another in Texas City,
Texas.  Total annual revenue of Bludworth Bond's two shipyards is approximately
$25 million.

     In November 1997, the Company announced the completion of the acquisition
of three companies that have formed the basis of its new Engineered Products
Group. The companies, AmClyde Engineered Products, Inc. of St. Paul, Minnesota;
Utility Steel Fabrication, Inc. of Slidell, Louisiana; and Fritz Culver, Inc. of
Covington, Louisiana, manufacture and market winches, cranes and other related
equipment used in the construction and modification of vessels and drilling
rigs. The combined companies, if reported separately, would have approximately
$90 million in annual revenue. The impact on the Company's revenue will be less,
as intercompany sales will be eliminated in the Company's consolidated financial
statements. The purchase price for the combined companies was $60 million, of
which approximately $30 million was paid in cash and the balance in 835,484 
shares of the Company's common stock.


NOTE 5--ISSUANCE OF DEBT

     On September 15, 1997, the Company completed the issuance and sale of
$185.0 million aggregate principal amount of its 4 1/2% Convertible Subordinated
Notes due in 2004 (the "Notes"). The Notes are convertible, at the election of
the holder, into shares of the Company's common stock at a conversion rate
equivalent to a conversion price of $31.50 per share after being adjusted to
reflect the stock split. A portion of the proceeds from the sale of the Notes
was used to repay the Company's entire indebtedness under its senior credit
facility with the remainder to be used for general corporate purposes.
<PAGE>
 
     The Notes have not been registered under the Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements. On October 22,
1997, the Company filed a registration statement with the Securities and
Exchange Commission (the "SEC") covering resales by holders of the Notes and any
shares of common stock received upon conversion of the Notes. The Note
Registration Statement, once it is declared effective by the SEC, will permit
such resales to be made without any volume limitations or other constraints
normally applicable to sales of "restricted securities."


NOTE 6--CHANGE IN EFFECTIVE INCOME TAX RATE

During the second quarter of fiscal 1998, the Company lowered its estimated
annual effective tax rate to approximately 30% reflecting the anticipated year-
to-date benefit of income tax credits arising from certain of the Company's
construction contracts.  This change in effective tax rate had the effect of
increasing net income for the six month and three month periods ended September
30, 1997 by $1.5 million or $0.05 per share after adjustment for the stock
split.
<PAGE>
 
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS.



     Certain statements (other than statements of historical fact) contained in
this document are forward-looking statements. Forward-looking statements are
generally accompanied by words such as "anticipate," "believe," "estimate" or
"expect" or similar statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove correct. Factors that
could cause the Company's results to differ materially from the results
discussed in such forward-looking statements include risks such as dependence on
U.S. Navy contracts, intense competition and contractual, labor, regulatory and
other risks in the shipbuilding industry and risks related to the market for
offshore support vessels and offshore double hull tank barges. All forward-
looking statements in this document are expressly qualified in their entirety by
the cautionary statements in this paragraph.


Financial Condition
-------------------

     Increases in balance sheet accounts at September 30, 1997 as compared to
March 31, 1997 were primarily the result of the acquisition of Texas Drydock,
Inc. (TDI) and the issuance of convertible subordinated debentures. Increases in
contract receivables ($26.7 million), costs and estimated earnings in excess of
billings on uncompleted contracts ($28.1 million), and excess of cost over net
assets acquired ($27.6 million) were primarily attributable to the TDI
acquisition. Increases in cash ($55.0 million) and long-term debt ($136.7
million) were primarily related to the issuance of the convertible subordinated
debentures. Property, plant and equipment increased by $40.6 million as a result
of the TDI acquisition as well as additions to property and equipment at other
shipyards in response to increased construction activity.


Results of Operations
---------------------


                    Six Months Ended September 30 ,1997 vs.
                    ---------------------------------------
                      Six Months Ended September 30, 1996
                      -----------------------------------

     Contract revenue earned increased by $119.8 million or 66.4% in the first
six months of fiscal 1998 over the comparable period in fiscal 1997. This
increase was primarily the result of increased revenue from construction and
repair of energy related products ($126.2 million) offset by decreased revenue
from construction and repair of commercial products ($16.2 million). Revenue
from construction and repair of energy related products includes all of TDI-
Halter's revenue for the period. Comparative
<PAGE>
 
revenue by product line for the six months ended September 30 is as follows:

<TABLE>
<CAPTION> 
                                     Six Months Ended
                                       September 30,
                             -------------------------------
                                 1997             1996
                             ------------  -----------------
                                     (in millions)
<S>                            <C>    <C>       <C>      <C>  
 
Government Products           $101.6   33.8%    $ 97.1   53.8%
Commercial Products             25.7    8.6       41.9   23.2
Energy Products                157.0   52.3       30.8   17.1
Other Products                  15.9    5.3       10.6    5.9
                              ------   ----      -----   ----    
 
Total Revenue                 $300.2  100.0%    $180.4  100.0%
                              ======  =====     ======  =====
 
</TABLE>

     The gross profit margin of 13.4% for the first six months of fiscal year
1998 remained stable compared to the same period in fiscal year 1997.

     Selling, general and administrative expenses increased by $6.0 million in
the first six months of fiscal 1998 as compared to the same period last year. As
a percent of contract revenue earned, these expenses decreased to 5.5% for the
six months ended September 30, 1997 from 5.8% for the same period a year ago.
The increase in expenses resulted from inclusion of TDI-Halter's selling,
general and administrative expenses for the six months and from increased
activities related to the overall growth of the Company.

     Interest expense increased $1.4 million in the first six months of fiscal
1998 as compared to the same period in fiscal 1997 principally from the
additional borrowings incurred by the Company in connection with the acquisition
of TDI.

     The decrease in the effective tax rate to approximately 30% for the first
six months of fiscal 1998 as compared to 40.0% in the same period last year
reflects the anticipated benefit of income tax credits arising from certain of
the Company's construction contracts. The availability of these income tax
credits in future periods is uncertain.

    The Company's construction backlog increased to $607.0 million at September
30, 1997, an increase of $150.3 million (32.9%)from September 30, 1996 and
$128.2 million (26.8%)from March 31, 1997. This increase in backlog generally
reflects the growth of the Company's energy backlog which includes that of TDI-
Halter at September 30, 1997.
<PAGE>
 
                   Three Months Ended September 30, 1997 vs.
                   -----------------------------------------
                     Three Months Ended September 30, 1996
                     -------------------------------------


     Contract revenue earned increased by $56.7 million or 60.0% for the three
months ended September 30, 1997 compared to the same period last year. This
increase was primarily the result of increased revenue from construction and
repair of energy related products ($69.7 million) which includes all of TDI-
Halter's revenue for the period offset by decreased revenue from construction
and repair of government products ($12.6 million). Comparative revenue by
product line for the three months ended September 30 is as follows: 

<TABLE>
<CAPTION>
 
 
                                       Three Months Ended
                                          September 30,
                             --------------------------------------
                                   1997                   1996
                             ----------------         -------------
                                          (in millions)
<S>                          <C>      <C>             <C>     <C>
 
Government Products           $ 43.4   28.7%          $56.0   59.3%
Commercial Products             14.3    9.5            17.3   18.3
Energy Products                 85.9   56.8            16.2   17.1
Other Products                   7.6    5.0             5.0    5.3
                              ------   ----           -----  -----
 
Total Revenue                 $151.2  100.0%          $94.5  100.0%
                              ======  =====           =====  =====
 
</TABLE>

     The gross profit margin increased to 14.35% for the second quarter of
fiscal 1998 compared to 13.54% in the second quarter of fiscal 1997. 
The second quarter of fiscal 1998 includes new revenue from the repair and 
conversion of offshore drilling rigs which generated higher margins from that 
experienced by other product lines.

     Selling, general and administrative expenses increased by $3.1 million in
the second quarter of fiscal 1998 as compared to the same quarter in fiscal
1997. As a percent of contract revenue earned, these expenses decreased to 5.8%
for the three months ended September 30, 1997 from 5.9% for the same period a
year ago. The increase in expenses resulted from inclusion of TDI-Halter's
selling, general and administrative expenses for the three months and from
increased activities related to the overall growth of the Company.

     Interest expense increased $0.9 million in the second quarter of fiscal
1998 as compared to the same period in fiscal 1997 principally from the
additional borrowings incurred by the Company in connection with the acquisition
of TDI.

     The decrease in the effective tax rate to 22.8% for the second quarter of
fiscal 1998 as compared to 39.1% the same period in fiscal 1997 reflects the
anticipated benefit of income tax credits arising from certain of the Company's
construction contracts. The year-to-date estimated impact of these anticipated
benefits was recorded during the current quarter. The availability of these
income tax credits in future periods is uncertain.
<PAGE>
 
Liquidity and Sources of Capital
--------------------------------

     The Company's needs for capital for the six month and three month periods
ending September 30, 1997 resulted primarily from the acquisition of Texas
Drydock, Inc., the acquisition of fixed assets and increased working capital
requirements as a result of the Company's growth. These needs were funded by
borrowing from the Company's existing credit facility and the issuance of
convertible subordinated notes. The Company believes that the cash flow from
operations, the remaining funds available under the existing credit facility and
excess cash generated from the Company's recent debt offering will be sufficient
to fund its requirements for working capital, capital expenditures, acquisitions
and other capital needs for at least the next twelve months.


ITEM 3.       QUALITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


  Not Applicable.


                                    PART II
                               OTHER INFORMATION

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K.

      (a)  Exhibits.
           ---------


  11.1    Statement re Computation of Earnings Per Share.

  27.1    Financial Data Schedule.


      (b)  Reports on Form 8-K. The Registrant filed the following reports on
Form 8-K during the quarter ended September 30, 1997:


Date of Report       Item Number and Subject Matter
--------------       ------------------------------


July 31, 1997        Item 5 - reporting a press release announcing the Company's
                     contemplation of a Rule 144A Offering of debt securities.

July 31, 1997        Item 2 - amending the reporting on Form 8-K, dated April 4,
                     1997, of the purchase of fifty-one percent of the stock of
                     Maritime Holdings, Inc., the primary asset of which is
                     eighty percent of the stock of Texas Drydock, Inc. (TDI)
                     and the simultaneous purchase of fifty-one percent of the
                     other twenty percent of the issued and outstanding capital
                     stock of TDI; and, amending the reporting on Form 8-K,
                     dated May 16, 1997, of the purchase of the remaining forty-
                     nine percent of the issued and outstanding stock of
                     Maritime
<PAGE>
 
                     Holdings, Inc. and the remaining forty-nine percent of the
                     other twenty-percent of TDI (the name of which had been
                     changed to TDI-Halter, Inc.)

August 27, 1997      Item 5 - reporting a press release announcing the Company's
                     intention to make a Rule 144A offering of convertible
                     subordinated debt.

September 10, 1997   Item 5 - reporting a press release announcing the
                     Company's commencement of its Rule 144A offering of
                     convertible subordinated debt.

September 16, 1997   Item 5 - reporting a press release announcing the Company's
                     consummation of its Rule 144A offering of convertible
                     subordinated debt.

September 30, 1997   Item 5 - reporting a press release announcing that the
                     Company's Board of Directors had declared a three-for-two
                     stock split in the form of a stock dividend.

October 7, 1997      Item 5 - reporting a press release announcing the Company's
                     pending acquisition of three companies that will form the
                     basis of its new Engineered Products Group subject to
                     certain conditions, including completion of definitive
                     purchase agreements and the approval of Halter's board of
                     directors.

October 21, 1997     Item 2 - amending the reporting on Form 8-K/A, dated July
                     31, 1997, which amended the reporting on Form 8-K, dated
                     April 4, 1997 of the purchase of fifty-one percent of the
                     stock of Maritime Holdings, Inc., the primary asset of
                     which is eighty percent of the stock of Texas Drydock, Inc.
                     (TDI) and the simultaneous purchase of fifty-one percent of
                     the other twenty percent of the issued and outstanding
                     capital stock of TDI; and, amended the reporting on Form
                     8-K, dated May 16, 1997, of the purchase of the remaining
                     forty-nine percent of the issued and outstanding stock of
                     Maritime Holdings, Inc. and the remaining forty-nine
                     percent of the other twenty-percent of TDI (the name of
                     which had been changed to TDI-Halter, Inc.)

November 12, 1997    Item 5 - Reporting replacement of the Company's existing
                     senior credit facility with a new senior credit facility
                     effective October 31, 1997; and, reporting a press release
                     announcing completion of its acquisition of three companies
                     that have formed the basis of its new Engineered Products
                     Group.
<PAGE>
 
                                  SIGNATURES



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


Date: November 13, 1997      HALTER MARINE GROUP, INC.


                             By: /s/ KEITH L. VOIGTS
                                 -------------------------------
                             Keith L. Voigts
                             Senior Vice President-Finance
                             As a Duly Authorized Officer
                             and Principal Financial 
                             Officer