---



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



Form 10-Q/A

(Amendment No. 1)

XQuarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 For the quarterly period ended March 31, 2004

Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 For the transition period  to ______

Commission File Number 0-28316

TRICO MARINE SERVICES, INC.

(Exact name of registrant as specified in its charter)

_____________________



|Delaware
    (State or other jurisdiction of
    incorporation
    or organization)    | 72-1252405
    (I.R.S.
    Employer
    Identification No.)
|-------------------------------------------------------------------------------------- | -----------------------------------------------------------
|250 North American Court
Houma, Louisiana
    (Address of principal executive offices) | 70363
    (Zip Code)                                       

Registrants telephone number, including area code (985)
851-3833

______________________

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, 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 Exchange Act Rule 12b-2.)

| | Yes | X | No |  | 
| | --- | - | -- |  | 



The number of shares of the Registrants common stock, $0.01 par value per
share, outstanding at April 30, 2004 was 36,935,537.

---

EXPLANATORY NOTE



This Amendment No. 1 to the Registrants Quarterly Report on Form 10-Q for
the period ending March 31, 2004 is being filed solely to revise inadvertent
typographical errors in two paragraphs included in Part I, Item 2 of the
Quarterly Report (Managements Discussion and Analysis of Financial Condition
and Results of Operations). As originally filed with the Securities and Exchange
Commission on May 10, 2004, the paragraphs stated:

During the first quarter of 2004, $0.8 million in funds were used in
    operating activities compared to $0.2 million used in operating activities
    during the first quarter of 2003. Operating cash flows have remained
    negative, due primarily to the continued slowness of drilling activity in
    our market areas. Operating cash flows in the first quarter of 2004
    decreased by $0.6 million primarily due to reduced revenues compared to the
    first quarter of 2003, less cash used for marine inspection costs, and less
    cash provided by changes in accounts receivable, offset by changes in
    accounts payable.

In the first quarter of 2004, $8.9 million was used in investing
    activities, compared with $5.2 million used in investing activities in the
    first quarter of 2003. The increase of funds used in investing activities
    during the first quarter of 2004 was the result of a greater amount of cash
    used for escrow and other restricted purposes and a $2.9 million reduction
    of property and equipment purchases due to no vessels being under
    construction during the first quarter of 2004. The reduction of new property
    purchases is a direct result of the Companys liquidity enhancement plan
    enacted during 2003.

As corrected by this Amendment, the paragraphs read as follows:

During the first quarter of 2004, $0.8 million in
    funds were used in operating activities compared to $0.5 million used in
    operating activities during the first quarter of 2003. Operating cash flows
    have remained negative, due primarily to the continued slowness of drilling
    activity in our market areas. Operating cash flows in the first quarter of
    2004 decreased by $0.3 million primarily due to reduced revenues compared to
    the first quarter of 2003, less cash used for marine inspection costs, and
    less cash provided by changes in accounts receivable, offset by changes in
    accounts payable.

In the first quarter of 2004, $8.9 million was used in investing
    activities, compared with $4.8 million used in investing activities in the
    first quarter of 2003. The increase of funds used in investing activities
    during the first quarter of 2004 was the result of a greater amount of cash
    used for escrow and other restricted purposes and a $2.9 million reduction
    of property and equipment purchases due to no vessels being under
    construction during the first quarter of 2004. The reduction of new property
    purchases is a direct result of the Companys liquidity enhancement plan
    enacted during 2003.

The historical 2003 figures referenced above were correctly reported on the
Registrants condensed consolidated statement of cash flows (unaudited) for the
three months ended March 31, 2003 and 2004 that was included in Part I, Item 1
of the Quarterly Report, as originally filed.

The complete text of Part I, Item 2, as amended, appears below:

PART I.  FINANCIAL INFORMATION

ITEM 2. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS
OF OPERATIONS

Overview and Significant Events

During the first quarter of 2004, activity in the Companys key markets
continued to be depressed. The Companys operations in the North Sea and Gulf of
Mexico continued to return negative operating results.

As a result, our day rates and utilization in these areas are at three year
lows, and first quarter revenues in 2004 are approximately 19% lower than the
comparable quarter in 2003. We cannot provide any assurance that market
conditions in its key markets will improve in the future to a level that will
allow the Company to record day rates and achieve utilization levels that will
provide sufficient cash flow to allow it to repay its existing debt as it comes
due and provide sufficient funding to permit fleet replacement and renewal.

Negative operating results since 2002 have led the Company to complete steps
to enhance liquidity. As part of this program, the Company refinanced long-term
debt in 2002, sold vessels in September 2003 and refinanced its U.S. revolving
credit facility in February 2004. The Company entered into a senior secured
credit facility (the "2004 Term Loan") which increased available liquidity and
eliminated restrictive performance covenants. With the net proceeds of the 2004
Term Loan of $51.4 million, the Company used $31.0 million to repay and retire
the U.S. revolving credit facility, and will use the remaining funds to fund
operating, capital and debt service requirements.

On July 25, 2003, Moodys Investors Service ("Moodys") downgraded our
long-term senior implied rating to B3 from B1 and lowered our Senior Notes
rating to Caa1 from C2. On January 27, 2004, Moodys downgraded our long-term
senior implied rating to Caa1 from B3 and lowered our Senior Notes rating to
Caa2 from Caa1. On March 15, 2004, Moodys downgraded our long-term senior
implied rating to Caa2 from Caa1 and lowered our Senior Notes rating to Caa3
from Caa2, while changing the outlook for the Company from stable to negative.

On November 24, 2003, Standard & Poors Ratings Services ("S&P"), a division
of The McGraw-Hill Companies, Inc., downgraded our Senior Notes to CCC from CCC+
and placed that credit rating on creditwatch with negative implications. In
addition, S&P lowered our corporate rating to B- from B on the same date. On
March 11, 2004, S&P further downgraded the Senior Notes from CCC to CCC- and the
corporate rating from B- to CCC+. On April 28, 2004, S&P placed the Companys
corporate rating on creditwatch, with negative implications.

The March 11, 2004 S&P downgrade requires the Company to post a $1.7 million
letter of credit to secure the obligations under the Master Charter agreement
within 30 days of demand by the vessel owner. On April 13, 2004, the demand was
made. Under the Companys current letter of credit agreement, this would require
a cash deposit of 105% of the letter of credit amount into a restricted cash
account. However, the Companys primary U.S. subsidiary currently has
approximately $6.6 million in cash pledged to collateralize other letters of
credit, and is restricted to a total of $7.0 million in cash pledged to
collateralize letters of credit by the Companys 2004 Term Loan Facility. The
Company is exploring alternatives to the current letter of credit facility,
which may include placing cash in escrow in lieu of a letter of credit, granting
mortgages on unencumbered vessels in lieu of cash to secure the letter of
credit, or having another subsidiary with the necessary liquidity obtain the
required letter of credit.

As previously reported in our annual report on Form 10-K, the Companys
financial results and position have continued to deteriorate since 2002,
principally due to its leveraged condition and continued operating losses. In
the second quarter of 2004, the Company decided to proactively address its
financial leverage and liquidity situation while it has sufficient cash
resources to allow it to pursue a variety of alternatives. On April 27, 2004,
the Company announced that it had retained legal and financial advisors to
assist in its objective of fundamentally restructuring the Companys capital
structure. As discussed below, this initiative has resulted in an evaluation by
the Companys Board of Directors as to whether or not to make the cash interest
payment on its Senior Notes. In addition and as discussed below, the
restructuring costs associated with this initiative will have a significant
negative impact on our cash flow forecast in the near term.

The Companys Board of Directors, management and advisors have initiated a
review of a wide-range of restructuring alternatives. On May 10, 2004, the
Company announced that it intends to utilize a 30-day grace period with regard
to the $11.1 million interest payment due May 15, 2004 on its Senior Notes (see
Note 8). This non-payment will not constitute an event of default under the
indenture governing the Senior Notes unless such non-payment continues following
the expiration of a 30-day grace period. While the Company currently has
sufficient cash resources to make the payment, the Company is continuing to
review its near-term and long-term liquidity situation and as such, no decision
has been made as to whether the Company will make the interest payment before
the expiration of the grace period.

In the event the Company were to be in default of its Senior Notes Indenture,
it is likely that the maturity of outstanding Senior Notes, together with the
2004 Term Loan would be accelerated, and the Company would be declared in
default under the Master Charter. Accordingly, these amounts would be
reclassified from long term to current at that time. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of
liabilities that might be necessary in the event of such an acceleration.

Other than the decision to utilize the 30-day grace period, no decisions have
been made with regard to any contemplated course of action. Any restructuring
plan could involve various operational restructuring alternatives, asset sales,
a purchase, exchange or amendment to the Senior Notes, equity transactions, or
other potential transactions or decisions to resolve leverage and liquidity
issues.

The restructuring process presents inherent material uncertainty. It is not
possible to determine the length of time it will take the Company to complete
its restructuring, or the outcome of the restructuring in general. The Company
anticipates that it will incur significant costs associated with its
restructuring. It is probable that these restructuring costs could have a
significant adverse effect on the results of operations and cash flows. There
can be no assurance that the Company will be successful in restructuring, or
that any measures that are achievable will result in sufficient improvement to
the Companys financial position. While the Company is in the process of
restructuring, investments in its securities will be highly speculative. Shares
of the Companys common stock may have little or no value. The value of its
Senior Notes is impaired, and may be further impaired. If the Company is unable
to accomplish a financial restructuring outside the protection of bankruptcy
laws, it may be forced to seek the protection of the bankruptcy laws.

The Companys liquidity generally depends on cash provided by operating
activities, its NOK credit facility, and the ability to comply with the
long-term credit agreements described in Notes 8 and 9. The ability of the
Company to continue as a going concern, including its ability to meet its
ongoing operational obligations, is dependent upon, among other things, (i) the
Companys ability to maintain adequate cash on hand; (ii) the Companys ability
to generate cash from operations; (iii) the cost, duration and outcome of the
restructuring process; and (iv) the Companys ability to achieve profitability
following a restructuring. The Company, in conjunction with its advisors, is
working to design and implement strategies to ensure the Company maintains
adequate liquidity. However, there can be no assurance as to the success of such
efforts.

The potential adverse publicity associated with the Companys announcements
relating to its financial restructuring and the resulting uncertainty regarding
the Companys future prospects, may hinder the Companys ongoing business
activities and its ability to operate, fund and execute its business plan by,
among other things, (i) impairing relations with existing and potential
customers; (ii) limiting the Companys ability to obtain trade credit on
reasonable and customary terms and conditions: (iii) impairing present and
future relationships with vendors and service providers; and (iv) negatively
impacting the ability of the Company to attract, retain and compensate key
executives, and to retain employees generally. The Company, in conjunction with
its advisors, is working with its current customers, vendors and employees to
minimize the disruption its restructuring will impose on the business. However,
there can be no assurance as to the success of such efforts.

Also, if market conditions in any market in which the Company operates do not
improve or continue to deteriorate, it could require the Company to examine the
recoverability of its long-lived assets in that market. See further discussion
in "Impairment of long-lived assets other than goodwill" in Critical Accounting
Policies. The Companys most recent test was performed as of December 31, 2003
and updated on March 31, 2004, neither of which resulted in impairments.

On April 27, 2004, the Company announced the appointment of Joseph S.
Compofelice as non-executive Chairman of the Board. The Company also announced
that Ronald O. Palmer, the Companys co-founder and former executive Chairman,
has stepped down as an officer and director of the Company, but will continue to
provide services to the Company.

Results of Operations

The table below sets forth by vessel class, the average day rates and
utilization for our vessels and the average number of vessels we operated during
the periods indicated.

|                                   |  | Three months ended
    March 31, |       
|---------------------------------- |  | -------------------------------- | ------
|Average Day Rates:(1)              |  | 2004                             |       
|                                   |  |                                  |       
|Supply (Gulf class)                |  | $                                | 4,287 
|Supply/Anchor Handling (North Sea) |  |                                  | 10,461
|Crew/line handling                 |  |                                  | 2,494 
|                                   |  |                                 
|Utilization:(2)                    |  |                                  |       
|Supply (Gulf class)                |  |                                  | 43    
|Supply/Anchor Handling (North Sea) |  |                                  | 68    
|Crew/line handling                 |  |                                  | 84    
|                                   |  |                                 
|Average number of Vessels:         |  |                                  |       
|Supply (Gulf class)                |  |                                  | 48.0  
|Supply/Anchor Handling (North Sea) |  |                                  | 19.0  
|Crew/line handling                 |  |                                  | 17.0  

______

|(1) | Average vessel day rate is calculated by
    dividing a vessels total revenues in a period by the total number of days
    such vessel was under contract during such period.    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Average vessel utilization is calculated by
    dividing the total number of days for which a vessel is under contract in a
    period by the total number of days in such period.

Comparison of the Quarter Ended March 31, 2004 to the Quarter Ended March 31,
2003

Our revenues for the first quarter of 2004 were $23.6 million compared to
$29.0 million in the first quarter of 2003. The 19% decrease in comparable
period revenues was a result of lower average vessel day rates and utilization,
specifically in the Gulf class supply boats and the North Sea Anchor Handling
Towing and Supply (AHTS) vessels. Also, the Company sold one of its larger North
Sea vessels in September 2003, which generated approximately $0.9 million in
revenues during the first quarter of 2003.

For the Gulf class supply vessels, average day rates decreased 19% from
$5,277 in the first quarter of 2003 to $4,287 in the first quarter of 2004.
Utilization also decreased for these vessels from 47% in the first quarter of
2003 to 43% in the first quarter of 2004. The decrease in both day rates and
utilization is a direct result of the continued low level of Gulf of Mexico
drilling activity.

For our North Sea platform supply vessels (PSVs) and AHTSs, day rates were
flat when comparing results to the same quarter in the prior year, edging up
slightly from $10,459 in the first quarter of 2003 to $10,461 in the first
quarter of 2004. Utilization decreased from 80% in the first quarter of 2003 to
68% in the first quarter of 2004. The decrease in utilization was due to
continued market pressure from competition and low levels of drilling activity.
Utilization was also affected by a large number of vessels undergoing
inspections during the first quarter of 2004.

The Companys crew boats and line handlers experienced decreased day rates,
but increased utilization when comparing the first quarter of 2004 to the first
quarter of 2003. Day rates decreased 10% from $2,762 in the first quarter of
2003 to $2,494 in the first quarter of 2004, while utilization increased from
68% in the first quarter of 2003 to 84% in the first quarter of 2004. The
reduction in day rates and increase in utilization is largely due to three
vessels bareboat chartered on a long term basis during the third quarter of
2003. For these vessels, the Company achieves only a modest day rate and a
utilization rate of 100% over the charter period. Also, the increase in
utilization is partially due to the Companys line handlers operating in Brazil
at near capacity during the first quarter of 2004.

Direct vessel operating expenses decreased 12% from $20.5 million in the
first quarter of 2003 to $18.1 million in the first quarter of 2004. The
decrease is primarily due to decreases in labor related costs and vessel
maintenance and repairs, offset slightly by an increase in insurance costs
during 2004. The reduction in labor costs is a result of an increase in the
Norwegian governments reimbursement of such costs, and the sale of the large
North Sea vessel in September 2003.

General and administrative expenses decreased 7% from $3.8 million to $3.6
million when comparing the first quarter of 2003 to the first quarter of 2004.
The decrease in general and administrative expenses are primarily related to
decreased legal fees, offset slightly by increased costs associated with the new
sales and operations offices in Mexico and Nigeria.

Amortization of marine inspection costs increased $0.5 million from $2.4
million in the first quarter of 2003 to $2.9 million in the first quarter of
2004. This increase is due to timing of marine inspections during recent years.

The Companys depreciation and amortization expense decreased $0.2 million or
3% from $8.5 million in the first quarter of 2003 to $8.3 million in the first
quarter of 2004. Depreciation and amortization decreased primarily due to the
sale of the Companys large North Sea vessel in September 2003.

In the first quarter of 2004, the Company sold one non-operating supply
vessel for approximately $0.1 million and recognized a minimal loss on the sale.
In February 2003, the Company sold one of its crew boats for approximately $0.6
million and recognized a gain of approximately $0.5 million on the transaction.

Interest expense decreased 5% from $7.9 million in the first quarter of 2003
to $7.4 million in the first quarter of 2004. The decrease is a result of a
lower average debt balance during the first half of the quarter, combined with
lower average variable interest rates on the Companys NOK based debt. These
decreases were offset by a higher average debt balance and increased interest
rates after the addition of the Companys 2004 Term Loan and repayment of the
Bank Credit Facility in February 2004.

The Company recorded a consolidated income tax benefit in the first quarter
of 2004 of $0.6 million, which is primarily related to the Companys Norwegian
operations. The Companys income tax benefit in the first quarter of 2003 was
$1.1 million, also primarily related to the Companys Norwegian operations. The
Company has booked a full valuation allowance against its U.S. net operating
losses and deferred tax assets during 2003 and 2004.

Liquidity and Capital Resources

See further discussion of liquidity and capital resources in the "Overview
and Significant Events" section.

Our ongoing capital requirements arise primarily from our need to service
debt, maintain or improve equipment and provide working capital to support our
operating activities.

At March 31, 2004, we had approximately $42.1 million in cash, of which $34.4
million was unrestricted. In addition to cash on hand, the Company had NOK 280
million ($40.8 million) of committed capacity under our NOK Credit Facility.
However, available borrowing capacity is limited to NOK 200 million ($29.2
million) as a result of financial covenants under such facility, primarily based
on the ratio of funded debt to operating income plus depreciation and
amortization of our North Sea operations on a rolling 12 month basis. The NOK
Credit Facility availability reduces by NOK 40 million ($5.8 million) every
March and September. If earnings were to decrease on a rolling 12 month basis,
the facilitys availability would be further restricted.

In an effort to repatriate funds from Norway to the U.S. in a tax-efficient
manner to support the cash needs of its U.S. operations, the Company is
undertaking a reduction of its paid-in capital in one of its Norwegian
subsidiaries. Upon completion of this reduction, the Company will be able to
repatriate funds from Norway without incurring withholding taxes for working
capital and other corporate purposes. The Company is currently reviewing its
options and needs with respect to liquidity, and as such, has not made any
determination as to what amount if any would be repatriated upon the reduction
of paid-in capital of the Norwegian subsidiary, or if the reduction of paid-in
capital would be completed. If current activity levels continue in the Gulf of
Mexico and the North Sea, it would require us to depend more heavily on our NOK
Credit Facility. However, if market conditions do not improve, the Companys
operating results will not support any additional indebtedness.

Continued low levels of Gulf of Mexico drilling activity have negatively
impacted Gulf class vessel utilization and day rates in the first quarter of
2004. As indicated by the operating results, the low levels of drilling activity
in the North Sea have continued to prevail during the first quarter of 2004.

During the first quarter of 2004, $0.8 million in funds were used in
operating activities compared to $0.5 million used in operating activities
during the first quarter of 2003. Operating cash flows have remained negative,
due primarily to the continued slowness of drilling activity in our market
areas. Operating cash flows in the first quarter of 2004 decreased by $0.3
million primarily due to reduced revenues compared to the first quarter of 2003,
less cash used for marine inspection costs, and less cash provided by changes in
accounts receivable, offset by changes in accounts payable.

In the first quarter of 2004, $8.9 million was used in investing activities,
compared with $4.8 million used in investing activities in the first quarter of
2003. The increase of funds used in investing activities during the first
quarter of 2004 was the result of a greater amount of cash used for escrow and
other restricted purposes and a $2.9 million reduction of property and equipment
purchases due to no vessels being under construction during the first quarter of
2004. The reduction of new property purchases is a direct result of the
Companys liquidity enhancement plan enacted during 2003.

Cash provided from financing activities was $18.5 million in the first
quarter of 2004 compared to $3.2 million provided by financing activities in the
first quarter of 2003. This increase in cash provided by financing activities is
largely due to the 2004 Term Loan, which generated $51.4 million in net
proceeds, of which $31.0 million was used to repay and retire the Bank Credit
Facility. The 2004 Term Loan does not contain financial maintenance covenants,
and is collateralized by 43 Gulf class supply vessels. Also, the Company
received $2.9 million in cash from financing activities during the first quarter
of 2003 from a sale-leaseback transaction. No such transactions occurred in
2004.

The Companys liquidity generally depends on cash provided by operating
activities and our NOK credit facility. The ability of the Company to continue
as a going concern, including its ability to meet its ongoing operational
obligations, is dependent upon, among other things, (i) the Companys ability to
maintain adequate cash on hand; (ii) the Companys ability to generate cash from
operations; (iii) the duration and outcome of the restructuring process; and
(iv) the Companys ability to achieve profitability following a restructuring.
The Company, in conjunction with its advisors, is working to design and
implement strategies to ensure the Company maintains adequate liquidity.
However, there can be no assurance as to the success of such efforts.

Both Moodys and S&P now categorize the Senior Notes in the lowest tier of
their "poor to default" category. Because of these downgrades, and the potential
of one or both rating agencies continuing to downgrade our debt, it is likely
that we will have difficulty obtaining financing and our cost of obtaining
additional financing or refinancing existing debt may be increased
significantly.

The following table summarizes our contractual commitments, as of March 31,
2004, related to the principal repayments and fixed interest payments on our
debt, leases and other arrangements for the periods indicated below (in
thousands).

Description
    
    9 Months
    ending
    December 31,
    2004
    
    12 Months
    ending
    December 31,
    2005
    
    12 Months
    ending
    December 31,
    2006
    
    12 Months
    ending
    December 31,
    2007
    
    12 Months
    ending
    December 31,
    2008
    
    12 Months
    ending
    December 31,
    2009
    
    Thereafter
    
    TotalLong-Term Debt
    
    $
    4,520
    
    $
    5,295
    
    $
    20,600
    
    $
    1,858
    
    $
    23,370
    
    $
    90,204
    
    $
    255,658
    
    $
    401,505Interest on fixed    
    rate Long-
    Term Debt
    
    
    23,127
    
    
    22,993
    
    
    22,821
    
    
    22,725
    
    
    22,649
    
    
    22,572
    
    
    56,249
    
    
    193,136Operating
    Leases
    
    
    954
    
    
    1,195
    
    
    1,197
    
    
    1,181
    
    
    1,124
    
    
    1,123
    
    
    3,218
    
    
    9,992Vessel
    Construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    28,601
    
    $
    29,483
    
    $
    44,618
    
    $
    25,764
    
    $
    47,143
    
    $
    113,899
    
    $
    315,125
    
    $
    604,633


As of March 31, 2004, the Company has approximately $401.5 million of debt
outstanding with a weighted average interest rate of 7.5%.

Approximately 20% of the Companys total debt is payable in NOK, while 80% is
payable in U.S. Dollars (USD). At March 31, 2004, the Company had approximately
$266.3 million (or 66%) of fixed rate debt and approximately $135.2 million (or
34%) of variable rate debt. The Companys fixed interest rates range from 6.08%
to 8.875%. The Companys variable rate debts are indexed based on LIBOR (London
Interbank Offered Rate) and NIBOR (Norwegian Interbank Offered Rate), some of
which are subject to floors.

At this time, we believe that the Companys Senior Notes and other long-term
debt facilities are properly classified as noncurrent since there have been no
defaults or decisions made with the intent to default. However, if the Company
were to decide not to pay the $11.1 million interest payment on the Senior Notes
within the 30-day grace period which expires on or about June 15, 2004, the
Company would be in default of the Senior Notes and the 2004 Term Loan, and
those liabilities would be reclassified to current.

The Company has issued standby letters of credit totaling $6.3 million as of
March 31, 2004. As a result of the provisions within the letter of credit
agreements, the Company posted the entire balance of standby letters of credit
plus 5% ($6.6 million) into an escrow deposit fund upon repayment and retirement
of the Bank Credit Facility in February 2004.

At March 31, 2004, the Company does not have any planned capital expenditures
other than approximately $7.4 million to fund the dry docking of vessels and
$2.3 million to fund other improvements, to be incurred during the final nine
month period ending December 31, 2004.

The Company cannot provide any assurance that market conditions in its key
markets will improve in the future to a level that will allow the Company to
record day rates and achieve utilization levels that will provide sufficient
cash flow to allow it to repay its existing debt and provide sufficient funding
to permit fleet replacement and renewal.

Critical Accounting Policies:

Our discussion and analysis of our financial condition and results of
operations are based upon our condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities. On an ongoing basis, we evaluate our estimates, including those
related to bad debts, fixed assets, deferred expenses, inventories, goodwill,
income taxes, pension liabilities, contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

We consider certain accounting policies to be critical policies due to the
significant judgement, estimation processes and uncertainty involved for each in
the preparation of our consolidated financial statements. We believe the
following represent our critical accounting policies.

Accounting for long-lived assets. We have approximately $473.2 million in
net property and equipment at March 31, 2004, which comprises approximately 81%
of total Company assets. In addition to the original cost of these assets, their
recorded value is impacted by a number of policy elections, including the
estimation of useful lives and residual values and when necessary, impairment
charges (see below for discussion of impairment policy).

We record vessels at acquisition cost, upon delivery. Depreciable life is
determined through economic analysis, reviewing existing fleet plans, and
comparing estimated lives to competitors that operate similar fleets.
Depreciation for financial statement purposes is provided on the straight-line
method, assuming a salvage value of between zero and 10% for marine vessels.
Residual values are estimated based on our historical experience with regards to
the sale of both vessels and spare parts, and are established in conjunction
with the estimated useful lives of the vessel. Marine vessels are depreciated
over a useful life of 15 to 30 years from the date of acquisition, estimated
based on historical experience for the particular vessel type. Major
modifications, which extend the useful life of marine vessels, are capitalized
and amortized over the adjusted remaining useful life of the vessel. Buildings
and improvements are depreciated over a useful life of 15 to 40 years.
Transportation and other equipment are depreciated over a useful life of five to
ten years. Both depreciable lives and residual values are revised periodically
to recognize changes in our fleet plan and changes in estimates. When assets are
retired or disposed, the cost and accumulated depreciation thereon are removed,
and any resultant gains or losses are recognized in current operations. We
utilize our judgment in (i) determining whether an expenditure is a maintenance
expense or a capital asset; (ii) determining the estimated useful lives of
assets; (iii) determining the salvage values to be assigned to assets; and (iv)
determining if or when an asset has been impaired. The accuracy of these
estimates affects how much depreciation expense we recognize in our income
statement, whether we have a gain or loss on the disposal of an asset, and
whether or not we record an impairment loss related to an asset.

Impairment of long-lived assets other than goodwill. In accordance with
the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal of
Long Lived Assets," we review long-lived assets for impairment when events or
changes in circumstances indicate that the carrying amount of any such asset may
not be recoverable. The Companys annual test of impairment is as of December
31. We record impairment losses on long-lived assets used in operations when the
net discounted cash flows estimated to be generated by those assets are less
than the carrying amount of those items. Our cash flow estimates are based upon
historical results adjusted to reflect our best estimate of future market rates,
utilization, operating performance and other factors. Our estimates of cash
flows may differ from actual cash flows due to changes in economic conditions or
changes in an assets operating performance, among other things. If the
undiscounted value of the cash flows is less than the carrying value, we
recognize an impairment loss, measured as the amount by which the carrying value
exceeds the net discounted cash flow. While we believe that our estimates of
future cash flows are reasonable, different assumptions regarding future market
rates, utilization and operating performance could materially affect our
evaluations. If market conditions were to decline in any markets in which the
Company operates, it could require the Company to evaluate the recoverability of
its long-lived assets in that market. The Companys most recent test was
performed as of December 31, 2003 and updated on March 31, 2004, neither of
which resulted in impairments.

Impairment of goodwill. At the beginning of 2003, the Companys goodwill
balance of $110.6 million related primarily to the 1997 acquisition of our North
Sea operations, which is considered a reporting unit pursuant to the provisions
of SFAS No. 142, "Goodwill and Other Intangible Assets." The Company tests for
the possible impairment of goodwill at the reporting unit level in accordance
with the requirements of SFAS No. 142. In assessing reporting unit fair value,
we must make assumptions regarding estimated future cash flows and other factors
used to determine fair value. If these estimates or their related assumptions
adversely change in the future, we may be required to record material impairment
charges for these assets. Annually or when market conditions necessitate interim
analysis, the Company calculates reporting unit fair value based on estimated
cash flows, comparable industry financial ratios and other analysis. The
reporting unit fair value is compared to carrying value to determine whether the
goodwill is impaired. The Company performed its annual impairment analysis as of
June 30, 2003 and determined that a goodwill impairment did exist. Therefore,
the Company recorded a charge of approximately $28.6 million during the second
quarter of 2003. After continued deterioration in market conditions in the North
Sea during the third and fourth quarters of 2003, the Company determined that an
additional interim test of impairment was necessary as of December 31, 2003. As
a result of the December 2003 analysis, the Company determined that an
additional impairment was warranted, and recorded an impairment on the remaining
goodwill balance of approximately $84.4 million.

Deferred Tax Valuation Allowance. Income taxes are determined in
accordance with SFAS No. 109, "Accounting for Income Taxes," which requires
recognition of deferred income tax liabilities and assets for the expected
future tax consequences of events that have been included in the consolidated
financial statements or tax returns. Under this method, deferred income tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of liabilities and assets using enacted tax
rates in effect for the year in which the differences are expected to reverse.
SFAS No. 109 also provides for the recognition of deferred tax assets if it is
more likely than not that the assets will be realized in future years. A
valuation allowance was established in the third quarter of 2002 associated with
the U.S. deferred tax asset. Since then, the Company has continued to book a
full valuation allowance against all U.S. deferred tax assets.

Deferred marine inspection costs. We record the cost of major scheduled
drydockings in connection with regulatory marine inspections for our vessels as
deferred charges. We amortize deferred marine inspection costs over the expected
periods of benefit, typically ranging from two to five years. Non-regulatory
drydocking expenditures are either included in vessel improvements or expensed,
depending on the nature of the work being performed.

New Accounting Standards:

In December 2003, the FASB issued a revised version of SFAS No. 132,
"Employers Disclosures about Pensions and Other Postretirement Benefitsan
amendment of FASB Statements No. 87, 88, and 106." This revised statement adds
to the annual disclosures about pensions and other postretirement benefits that
were required by the original statement issued in 1997. The revised statement
also requires certain interim disclosures, effective for the Company beginning
with the quarter ended March 31, 2004. Both the original and the revised
statements address disclosure only and do not address accounting, measurement or
recognition for benefit obligations. With certain limited exceptions, the added
annual disclosures were effective as of December 31, 2003. The Company has
presented the additional interim disclosures in Note 10 of the Notes to
Condensed Consolidated Financial Statements in Item 1.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 clarifies the application
of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. The FASB subsequently revised FIN 46 with FIN 46R.
FIN 46 and FIN 46R apply immediately to variable interest entities created after
January 31, 2003, and to variable interest entities in which an enterprise
obtains an interest after that date. The statements apply in the first fiscal
year or interim period ending after March 15, 2004, to variable interest
entities in which an enterprise holds a variable interest that it acquired
before February 1, 2003. The adoption of the provisions of FIN 46 had no impact
on the Companys financial position or results of operations.

CAUTIONARY STATEMENTS

Certain statements made in this Quarterly Report that are not historical
facts are "forward-looking statements." Such forward-looking statements may
include statements that relate to:

| |  | our objectives, business plans or strategies,
    and projected or anticipated benefits or other consequences of such plans or
    strategies;                
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                               
| |  | projected or anticipated benefits from future
    or past acquisitions; and                                                                                   
| |   |                                                                                                                                                               
| |  | projections involving revenues, operating
    results or cash provided from operations, or our anticipated capital
    expenditures or other capital projects.

Also, you can generally identify forward-looking statements by such
terminology as "may," "will," "expect," "believe," "anticipate," "project,"
"estimate" or similar expressions. We caution you that such statements are only
predictions and not guarantees of future performance or events. In evaluating
these statements, you should consider various risk factors, including but not
limited to the risks listed in the Companys Annual Report on Form 10-K for the
year ended December 31, 2003. The Companys risk factors may affect the accuracy
of the forward-looking statements and the projections on which the statements
are based.

All phases of our operations are subject to a number of uncertainties, risks
and other influences, many of which are beyond our control. Any one of such
influences, or a combination, could materially affect the results of our
operations and the accuracy of forward-looking statements made by us. Some
important factors that could cause actual results to differ materially from the
anticipated results or other expectations expressed in our forward-looking
statements include the following:

| |  | the risks related to our proposed
    restructuring;                                                                                                                                                                                                                               
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                    
| |  | the effect of high levels of debt and the
    effects of downgrading of the Companys debt by rating agencies;                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                    
| |  | dependence on external sources of financing and
    improved cash flow to meet our obligations and reduce our indebtedness;                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                    
| |  | dependence on the oil and gas industry,
    including the volatility of prices of oil and gas, industry perceptions
    about future oil and gas prices and their effect on industry conditions;                                                                                   
| |   |                                                                                                                                                                                                                                                                                    
| |  | industry volatility, including the level of
    offshore drilling and development activity and changes in the size and
    quantity of the offshore vessel fleet in areas where we operate due to new
    vessel construction and the mobilization of vessels between market areas;
| |   |                                                                                                                                                                                                                                                                                    
| |  | operating hazards, including the significant
    possibility of accidents resulting in personal injury, property damage or
    environmental damage;                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                    
| |  | the effect on our performance of regulatory
    programs and environmental matters;                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                    
| |  | the highly competitive nature of the offshore
    vessel industry;                                                                                                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                    
| |  | the age of our fleet;                                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                    
| |  | seasonality of the offshore industry;                                                                                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                    
| |  | the high fixed cost nature of our business;                                                                                                                                                                                                                                        
| |   |                                                                                                                                                                                                                                                                                    
| |  | the risks of international operations,
    including currency fluctuations, risk of vessel seizure and political
    instability; and                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                    
| |  | the continued active participation of our
    executive officers and key operating personnel.                                                                                                                                                                                      

Many of these factors are beyond our ability to control or predict. We
caution investors not to place undue reliance on forward-looking statements. We
disclaim any intent or obligation to update the forward-looking statements
contained in this Quarterly Report, whether as a result of receiving new
information, the occurrence of future events or otherwise, other than as
required by law.

PART II.  OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|(a) | Exhibits:
|--- | ---------
|    |          
|    | 31.1     
|    |          
|    | 31.2     
|    |          
|    | 32.1     

---

SIGNATURE

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.

|                       | TRICO MARINE SERVICES, INC.
|---------------------- | ---------------------------
|                       |                            
|                       |                            
|Date: May
    11, 2004 | By:                        
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